nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
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Wednesday, February 24, 2010

Update on the President's Health Care Reform Proposal

Two new things I've noticed through a closer reading of the proposal.

1.  I said that the Cornhusker Kickback, giving Nebraska a free ride on Medicaid, was not in the bill.  That's true:  the President's proposal extends the free-ride to all the states.  Wow.  Talk about big federal bucks.
2.  A new element:  the proposal includes a Health Insurance Rate Authority, which will "help States determine how rate review will be enforced and monitor insurance market behavior."  In essence, this will be a price control board.  This must be a political move, since price controls have a bad name among economists.  Nixon once said that the price control list he implemented (hailed by all at the time) was the biggest policy mistake he made:  it feels good for a time, but eventually makes the problem worse.

There's a nice page on "Republican Ideas" included in the bills and Obama's proposal.  Some of the details of what they list there are a little fuzzy for me, but I think you have to take it with a grain of salt:  I seem to recall that some of the items listed were co-sponsored by both parties, and some were minor changes to elements already in the bill.

As you've probably seen from the news media, there's a lot of huffing and puffing in anticipation of the summit tomorrow, and threats of "reconciliation" and "blocking" of voting.  Let's hope for the best.

Doc D

1 comment:

Doc D said...

There are “pilot projects” in tort reform in the bill. Just in case you don’t know what that means, a pilot project puts a little money into an experiment in a small area, sometimes confined to a specific place, to see if it works. You come back and analyze the results in a few years to see if the effort accomplished the goal you had intended.

In principal, I am all for doing things like this. However, 3 decades of government service taught me that the politics of this distort the intent. Most often pilot projects are used to show that you’ve supported something you really don’t want to implement, hoping that in a couple of years, the heat will be off and you can quietly shelve it (that’s what I think is going on here; Democrats do not want tort reform). On the other hand, it give a Congress member who proposed the policy an opportunity to go home and tell constitutents she/he got something done that they wanted, even if the member doesn’t really like it. Finally, even if the pilot goes well, and people are still concerned to implement the policy, you can argue about the analysis, emphasizing that it was a success or a failure, depending on what your goal was originally.

As for the beneficial effects of tort reform in Texas, they have been manifold—from lowering malpractice premiums which lower doctors’ and patients’ costs (they are still going down, most recently this Jan when insurers announced a 3% drop—the sixth rate cut since reform), to funding new clinics, to funding a free clinic in Corpus Christi, to attracting new specialists to Texas. In regard to this last effect, the number of doctors applying for a license in Texas has risen from about 1,000 per year prior to tort reform, to 3,000 per year in 2008. Twenty-nine Texas counties that had no OB specialist prior to reform now have one.

If you want to see more you can go to the Texas Medical Association website here. Just remember that the TMA is all for tort reform, so they will emphasize the good news.

One last thing on tort reform: it doesn’t limit the economic award to the patient, only the “punishment” award, where the lawyers make their big bucks. I read one study that said that patients get only about 15 cents on the dollar from their awards—the lawyers get the rest. I can’t validate this figure, though.

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