Tag Archives: SB 08-217

Pay for Performance Perils

Last year’s Senate Bill 217‘s (enacted in June ’08) would have “value benefit plans” that would “encourage the use of a pay-for-performance system for reimbursing health care providers, where appropriate.”  Barack Obama’s health care czar Tom Daschle  has written that “one way for Washington to spark improvement would be to tie payment to performance, instead of basing it soley on the services rendered.”

Do we really want politicians to design insurance plans in this manner?  Not only does this violate the rights of insurance companies to design products as they see fit, pay-for-performance (“P4P”) has disturbing consequences, as Linda Gorman points out:

Targets create incentives to manipulate patient records and official statistics, corrupting data used to measure system performance. Spot checks of NHS hospitals show that they extensively manipulated the data that were supposed to be used to compile waiting lists. Techniques included deliberately booking operations on days patients were known to be on vacation (thus creating an excuse to suspend them from waiting lists in their absence [link], excluding patients from lists if they had waited “too long” and arbitrarily reclassifying patients so that they were shifted to lists that were not monitored [link].

Government targets for waiting times in accident and emergency departments were fulfilled by re-designating corridors and treatment rooms as “pre-admission units” [link]. Wheels were removed from gurneys in order to reclassify them as beds. Hospitals also “stack” ambulances, making patients wait in them until they think that a patient can be seen within the 4 hour target specified by the government [link].

Linda also addresses problems with electronic medical records.  See the whole post here.  See Michael Cannon’s post on other issues with pay for performance.

This is not to say that P4P has no place, but if anyone is going to figure out a better way, don’t expect it to be politicians.

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Filed under Colorado health care, physicians & medical quality

Politicians for potholes & expensive insurance

Previous posts on legislation mentioned here: SB 217 (here , here, here, here), HB 1389 (here, here, here).

Linda Gorman shows how politicians support potholes and expensive insurance in her latest article at the Independence Institute’s Health Care Policy Center (also at StateHouseCall.org). Some excerpts:

Colorado legislators say they want to fix the roads and cut health care costs. What they actually do is divert money from roads to increase health care costs. …

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“Kisses of death” attack SB-217’s “Value Benefit Plans”

The core of Senate Bill 217 (previous posts here ) are so-called "Value Benefit Plans" that are supposed to be taxpayer-subsidized plans for low-income individuals and families. These plans are free from the dozens of mandated benefits that drive up the cost of insurance in the individual and small group market. Insurance companies would submit such plans to the legislature, who would give the companies permission to sell them – but only to "low-income" individuals.

Kiss of Death (movie poster)
During the April 9 hearing on SB-217, Senator Hagedorn himself admits that the "kiss of death" to his Value Benefit Plans would be "to load up mandates."1 Ironically, as Mark Hillman has noted, there were about a dozen of them in Hagedorn’s original proposal.

This is a real risk. As Ari Armstrong notes in his excellent overview of what’s wrong with health care policy,

once politicians force you to buy something, special-interest groups will constantly fight to include their pet service as part of the forced package, whether you want it or not. The result will be continual pressure to expand the scope of the forced insurance and make it ever more costly.

Indeed. The Denver Business Journal reports that this is already happening:

Another House provision would direct the panel to consider plans that cover hospice and palliative care, which specializes in the relief of pain from serious illnesses. Critics say that will drive up the costs of the plans, which were originally conceived as a low-cost option for people who need minimal coverage. Hagedorn is said to be unhappy with the House’s changes to the bill.

1 Source: Personal notes from the hearing. I have not acquired the recording.

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Gorman on SB-217 & Compulsory Insurance

Last Sunday the Pueblo Chieftain published a commentary on Senate Bill 217 and compulsory insurance by Linda Gorman , Director of the Independence Institute’s Health Care Policy Center. Some highlights:

With Senate Bill 217, which has passed the Colorado Senate and awaits House action, state lawmakers who believe that higher taxes and more spending constitute health care reform have sunk to new depths of legislative trickery. …

SB217 creates a Connector program, “health marts” “through which an individual eligible for the state subsidy may select” one of the state designed “Value Benefit Plans (VBP).” The health insurance offered through VBPs would be designed by a government committee. …

If the governor agrees with the expert recommendations, and he will, SB217 would require that they be submitted to the Legislature on the “third legislative day” of the 2010 session. They then would pass through the Legislature like grass through a goose. People in favor of tax and spend health care reform know that the more voters know the less they like tax and spend reform. Speedy passage limits public debate.

Speedy passage reduces the possibility that people might find out that individual mandates are failing in Massachusetts, where about 20 percent of the uninsured already have been exempted because buying insurance costs them too much. They might be reminded that insurance is not health care, especially when Massachusetts controls costs by cutting payments to doctors, creating a shortage of doctors in the program and ridiculously long waits for care.

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Hagedorn: My bill isn’t like Massachusetts, honest!

Since all things are the same, except for the differences, and different except for the similarities, it is always possible to make things look similar verbally, however different they are in the real world.
— Thomas Sowell, The Vision of the Anointed (p. 93 , 102 )

Sowell has recently pointed this out in reference to Barack Obama. In this case, it’s another Democrat, Bob Hagedorn. He’s trying to make his Senate Bill 217 sound different from government-controlled health care in Massachusetts health plan, however similar they are in the real world.

Senator Bob Hagedorn claims that his proposed Senate Bill 217 is “the antithesis of what Massachusetts has done.” (Hat tip, Ari Armstrong ) Sounds a bit defensive, no?

As the Grand Junction Sentinel reports , “ Senate Bill 217 would have carriers submit plans to the state rather than have the state dictate the kinds of plans it would require carriers to offer, Hagedorn said.”

So in Massachusetts, politicians tell insurance companies what policies they must sell, and then makes it a crime for citizens not to buy them. Senate Bill 217 proposes that insurance companies submit plans that comply with a dozen politician-defined criteria, and then (in the original bill) would make it a crime for some citizens not to buy them.

Both the Colorado and Massachusetts plans involve confiscating wealth earned by one group of people for the purpose of buying politician-defined insurance for others.

Ooh, big difference!

The antithesis of the Massachusetts plan would be for state government to stop dictating how patients, doctors, and insurance companies may or may not voluntarily trade for goods and services. It would also realize that there’s no compassion in forced giving, that monopolistic charities are not effective, and reform Medicaid in accordance with these facts.

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Filed under Colorado health care, mandatory insurance

Patients to Senator Hagedorn: Please do nothing!

Senator Bob Hagedorn is obsessed with not “doing nothing” about health care in Colorado. On March 28 the Denver Post quoted him as saying “I believe it is immoral for us to sit on our hands and do nothing.” At an April 9 meeting of the Senate Health and Human Services meeting that I attended, he said “The alternative to this bill is to do nothing, and I do not find that acceptable.”

So to “do something,” Hagedorn along with Senator Steve Johnson and Represenatives Anne McGihon, Tom Massey, and Ellen Roberts are sponsoring Senate Bill 217 , which continues the failed traditions of bureaucrats telling consumers what products insurance companies can or cannot offer them.
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Filed under Colorado health care, mandatory insurance