Weak reimbursements from Medicare and Medicaid, to cover physicians, is costing employers and consumers; in a phrase – "cost-shifting." In effect, employers (especially small business owners) are struggling to keep up with higher insurance premiums when our system should aid them with incentives to provide insurance for their employees.

Consumers and Employers Paying almost $90 Billion due to Under-Payments by Medicare/Medicaid

Full Report conducted by Milliman

Article Excerpt (source: American Health Insurance Plans)

"The continued underpayment of providers by public programs has devastating consequences for families and employers that are struggling to afford health care coverage. These underpayments create a payment gap to hospitals and physicians that privately insured employers and consumers must close through a “cost shift” or “hidden tax."

"The Milliman study measures the cost shift as the difference between actual payment rates and average payment rates for Medicare, Medicaid and private payers; total payment to hospitals and physicians is held constant.  The study does not assess appropriate levels of payment, but rather the disparities among current payment rates."

"The study found that cost shifting:

• Adds an estimated $1,512, or 10.6 percent, to the average premium for a family of four
• Of this amount, employers pay approximately $1,115 and the employee share is $397
• Families pay an additional $276 more in coinsurance and deductibles due to the cost-shift"

I wanted to update my readers on the ideas and plans being formulated by the new democratic administration. Obama’s administration state that they will make health care reform an "integral part" of efforts to restore the U.S. economy.

Dashcle’s Appointment Puts Obama’s Health Care Reform on the Fast Track

Article Excerpt (source: The Alan Katz Health Care Reform Blog)

"The need to move quickly on health care reform was a central theme of the press conference. After reciting the usual litiany of the current health system’s shortcomings, President-elect Obama said, “We’re on an unsustainable course. The time has come, this year, in this Administration to modernize our health care system for the 21st century, to reduce costs for families and businesses and to finally provide affordable, accessible health care for every single American.” (This statement begins at about the 1:40 mark). "

Does the United States already have "the best health care in the in the world" or are we not ready for "a major overhaul of the health care system?" In their article, S. Brownlee and E. Emanuel address some of the significant issues in our system as well as debunk various myths about reform.

5 Myths About Our Ailing Health-Care System

Article Excerpt (source: WashingtonPost.com)

"With Congress ready to spend $700 billion to prop up the U.S. economy, enacting health-care reform may seem about as likely as the Dow hitting 10,000 again before the end of the year. But it may be more doable than you think, provided we dispel a few myths about how health care works and how much reform Americans are willing to stomach."

"The idea that we could wring billions of dollars in savings this way is seductive, but it wouldn’t really accomplish that much. For one thing, some administrative costs are not only necessary but beneficial."

"As the country faces another economic downturn, many states are scrambling to deal with the impact of poor economic conditions on programs, like Medicaid and the State Children’s Health Insurance Program (SCHIP), that are reliant on state funding.  To be better able to cope, states are looking for fiscal relief from the federal government as well as obtaining a moratorium on federal regulations that would reduce Medicaid funding for states from the Congress.

New analyses project the implications of a downturn for health coverage and state programs.  One report projects the impact of one percentage point rise in the national unemployment rate on Medicaid and SCHIP and the number of uninsured individuals.  Another brief examines results from KCMU’s annual 50-state budget surveys of Medicaid directors from 2003 to 2007 to describe how states adopted a wide array of Medicaid cost containment strategies during the last economic downturn and were assisted by the federal government to avoid deeper Medicaid cuts."

Executive Summary (.pdf)

Full Report (.pdf)

Source: The Henery J. Kaiser Family Foundation

There are apparent inefficiencies in our health care system’s spending. What are some of the reasons?

Addressing an Epidemic of Overtreatment

Article Excerpt (srouce: TheHealthCareBlog.com)

"Health care costs in the U.S. are approaching 17 percent of the GDP and may be as high as 20 percent in the next few years.

What is causing the US to have the highest cost and lowest value for the healthcare dollar? Simple – it’s overtreatment."

Overtreatment takes many forms – from over ordering expensive diagnostic tests to the prescribing of expensive and sometimes unneeded therapeutics."