Archive for March 18th, 2010

What if doctors and pharmacies stopped taking Medicaid patients ? (Psst, they have already …)

March 18, 2010

Punchline: First, the Mayo Clinic in Arizona stopped accepting Medicare patients.  Now, Walgreens drugstores across the state of Washington won’t take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement.

Isolated instances or the start of a trend ? I’ll bet trend …

* * * * *

Excerpted from Seattle Times: Walgreens – no new Medicaid patients, March 17, 2010

Effective April 16, Walgreens drugstores across the state won’t take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement.

In a news release, Walgreens said its decision to not take new Medicaid patients stemmed from a “continued reduction in reimbursement” under the state’s Medicaid program, which reimburses it at less than the break-even point for 95 percent of brand-name medications dispensed to Medicaid patents.

Walgreens follows Bartell Drugs, which stopped taking new Medicaid patients last month and Ritzville Drug Company in Adams County announced in November that it would stop participating in Medicaid.

Doug Porter, the state’s director of Medicaid, said Medicaid recipients should be able to readily find another pharmacy because “we have many more pharmacy providers in our network than we need” for the state’s 1 million Medicaid clients.

Fred Meyer and Safeway said their pharmacies would continue to serve existing Medicaid patients and to take new ones, though both expressed concern that the reimbursement rate is too low for pharmacies to make a profit.

Washington was reimbursing pharmacies 86 percent of a drug’s average wholesale price until July, when it began paying them just 84 percent.

“Washington state Medicaid is now reimbursing pharmacies less than their cost of participation,” said Jeff Rochon, CEO of the Washington State Pharmacy Association.

Pharmacies that continue to fill Medicaid prescriptions at the current state reimbursement rate are “at risk of putting themselves out of business altogether,” he said.

Full article:
http://seattletimes.nwsource.com/html/localnews/2011367936_walgreens18m.html

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Please stop saying “deficit neutral” !

March 18, 2010

Next to “systemic risk” — which loosely translates to “don’t hold anybody accountable” … my top hair-pulling buzz-phrase is “deficit neutral” … which loosely translates to “there’s a tax increase even bigger than the spending increase” …  clever word-smithing that has people’s eyes largely off the flood of new and increased taxes.

Posted in Health Care / Medical Insurance | Leave a Comment »

15 reasons why … need more ?

March 18, 2010

From IBD, 15 reasons why a government takeover of the finest medical system in the world makes no sense at all:

1. The people don’t want it!

This should have some bearing on decision-making.  In the latest Rasmussen poll, 53% opposed Obama’s reform while 42% were in favor. More than four in 10 “strongly” opposed; just two in 10 “strongly” favored. This jibes with other surveys.

2. Doctors don’t want it!

A survey of 1,376 practicing physicians found that 45% of all doctors would consider leaving their practices or taking early retirements if the proposed reforms became law … nearly 30% said they’d quit the profession under the plans being considered.

3. Half the Congress doesn’t want it!

Not a single Republican backed the health care bill that cleared the Senate on Christmas Eve 60-39.  The lone Republican “aye” in the House has since switched to “no.”  Adjusting for reps who are no longer in Congress, the House vote today at 216-215 in favor.

Note: Members of Congress have already exempted themselves from whatever they inflict on us.

4. People are happy with the health care they’ve got!

Polls show that 84% of Americans have health insurance and satisfaction rates average 87%.

5. It doesn’t even cover all the people they set out to cover!

Supporters of government-run health care say there are as many as 47 million Americans — 9 million to 10 million of them illegal aliens — without medical insurance. The plans, however, will put only 31 million of the uninsured under coverage.

6. Costs will go up, not down!

Democrats say their plans will cost less than $1 trillion over the first decade, but independent analysts put the cost at $2.5 trillion over the first 10 years.

7. Real cost controls are nowhere to be found!

The Democrats are offering no meaningful tort reform that will help push down the high malpractice insurance premiums that are a burden to doctors and their patients. Nor are they considering any other cost-saving provisions, such as allowing the sale of individual health plans across state lines or easing health insurance mandates.

8. Insurance premiums will rise, not fall!

One goal of nationalizing health care is to lower costs, to bend the spending curve downward. Yet, as Democratic Sen. Dick Durbin acknowledged Wednesday, that won’t be the case.

“Anyone who would stand before you and say, ‘Well, if you pass health care reform, next year’s health care premiums are going down,’ I don’t think is telling the truth,I think it is likely they would go up.”

9. Medicare is already bankrupting us!

The Medicare trust fund, which has unfunded obligations of $37.8 trillion, will be insolvent in 2017.

10. There aren’t enough doctors now!

Last month, 26% of physicians said they had been forced to close, or were considering closing, their solo practices. Providing coverage for an additional 31 million Americans when the number of doctors is shrinking won’t improve our health care.

11. The doctor-patient relationship will be wrecked!

The latest IBD/TIPP Poll, taken just last week, found that Americans, by a wide 48% to 26% margin, believe the doctor-patient relationship will decline if the Democrats’ plan is passed.

12. Medical care will also deteriorate!

IBD/TIPP has also found that 51% of Americans believe care would get worse under government control. … 72% disagreed with administration claims that the government could cover 47 million more people with better-quality care at lower cost.

13. Rationing of care is inevitable!

Health care is not an unlimited resource and must be rationed, either by the individual, providers or government. In Britain and Canada, where the government does the rationing, medical treatment waiting lists are sometimes deadly and quite often excessively long.

14. Private health insurers will be destroyed!

Added mandates and price controls will force many insurers to simply get out of the health plan business because it will no longer be profitable.

15. It’s probably unconstitutional!

One way to help bring down the number of uninsured is to demand that those without coverage buy health plans.  Constitutional scholars say any such mandate would likely draw a legal challenge.

Sourced from IBD: Why Health Bill Makes No Sense, 03/12/2010
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=527217

Posted in Health Care / Medical Insurance | 1 Comment »

AP Fact Check: Premiums would rise under Obama plan

March 18, 2010

Punchline: Buyers, beware: President Barack Obama says his health care overhaul will lower premiums by double digits, but check the fine print.

Note: from the left-leaning AP, not FNN.

* * * * * 

Excerpted from Associated Press: Fact Check Premiums would rise under Obama plan, Mar 16, 2010

Visiting a Cleveland suburb this week, the president described how individuals and small businesses will be able to buy coverage in a new kind of health insurance marketplace, gaining the same strength in numbers that federal employees have.

“You’ll be able to buy in, or a small business will be able to buy into this pool,” Obama said.

“And that will lower rates, it’s estimated, by up to 14 to 20 percent over what you’re currently getting. That’s money out of pocket.”

And that’s not all.

Obama asked his audience for a show of hands from people with employer-provided coverage, what most Americans have.

“Your employer, it’s estimated, would see premiums fall by as much as 3,000 percent,” said the president, “which means they could give you a raise.”

A White House press spokesman later said the president misspoke.

* * *

Premiums are likely to keep going up even if the health care bill passes, experts say.

If cost controls work as advertised, annual increases would level off with time. But don’t look for a rollback.

Instead, the main reason premiums would be more affordable is that new government tax credits would help cover the cost for millions of people.

Listening to Obama pitch his plan, you might not realize that’s how it works.

“There’s no question premiums are still going to keep going up. There are pieces of reform that will hopefully keep them from going up as fast. But it would be miraculous if premiums actually went down relative to where they are today.”

The statistics Obama based his claims on come from two sources. In both cases, the caveats got left out.

An analysis by the Congressional Budget Office found that large employers would see premium savings of at most 3 percent compared with what their costs would have been without the legislation. That would be more like a few hundred dollars instead of several thousand.

The claim that people buying coverage individually would save 14 percent to 20 percent comes from the same budget office report. But the presidential sound bite fails to convey the full picture.

The budget office concluded that premiums for people buying their own coverage would go up by an average of 10 percent to 13 percent, compared with the levels they’d reach without the legislation. That’s mainly because policies in the individual insurance market would provide more comprehensive benefits than they do today.

The premium reduction of 14 percent to 20 percent that Obama cites would apply only to a portion of the people buying coverage on their own — those who decide they want to keep the skimpier kinds of policies available today. The president usually alludes to that distinction in his health care stump speech, saying the savings would accrue to those people who continue to buy “comparable” coverage to what they have today.

And, those costs would only go down if, in fact, swarms of currently healthy uninsured young people join the risk pool — reducing average payouts and spreading insurance company overhead costs.

Full article:
http://news.yahoo.com/s/ap/20100317/ap_on_bi_ge/us_health_overhaul_fact_check

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Why we make mistakes: Men shoot first, then …

March 18, 2010

In this and a couple of preceding and subsequent posts, i’ll be excerpting  the 13 reasons from:

Why We Make Mistakes, Joseph T. Hallinanm, Broadway Books 2009

Today, we add reason #9 to the list.

* * * * * *

The errors we make can be explained through 13 lessons:

1. We look but don’t always see.

2. We all search for meaning.

3. We connect the dots.

4. We wear rose-colored glasses.

5. We can walk and chew gum — but not much else.

6. We’re in the wrong frame of mind.

7. We skim.

8. We like things tidy.

* * * * *

9. Men shoot first.

Aspects of our personalities predispose many of us toward certain kinds of errors. Overconfidence is a leading source of human error and, across a wide field of endeavors.

Both men and women have been shown to be overconfident. However, men, as a rule, tend to be more overconfident than women are, and this difference explains much about the kinds of mistakes men and women make.

When men and women are asked to estimate their IQs, men, on average, will give higher estimates than women will. However, men aren’t as smart as they think they are; their IQs turn out to be lower than they had guessed. Women, on the other hand, turn out to be smarter than they think they are; their IQs are, on average, higher than their estimates. In other words, men overestimate their IQs and women underestimate theirs.

Throughout their lives, for example, men report having more confidence about their sense of direction than women do — even though there is little evidence that they actually have a better sense of direction.

When it comes to making mistakes, women appear to be harder on themselves than men are.

* * * * *
Next up: We’re all above average … yeah, right.

Posted in Decision-making, Problem solving, Psychology | Leave a Comment »

Uninsureds will be healthier under ObamaCare … not so fast

March 18, 2010

Punchline: the uninsured already receive about 50 percent to 70 percent of the care of the insured from hospitals, clinics and doctors

* * * * *
Excerpted from Newsweek: The Illusion of ‘Reform, March 15, 2010

You probably heard that insuring the uninsured will dramatically improve the nation’s health.

The uninsured don’t get care or don’t get it soon enough. With insurance, they won’t be shortchanged; they’ll be healthier. Simple.

Think again.

Expanding health insurance would result, at best, in modest health gains.

Why ? 

  • many uninsured are fairly healthy — about two-fifths are between 18 and 34;
  • some are too sick to be helped;
  • some have problems rooted in personal behaviors — smoking, diet, drinking or drug abuse; and
  • the uninsured already receive about 50 percent to 70 percent of the care of the insured from hospitals, clinics and doctors.

* * * * *

Whatever their sins, insurers are mainly intermediaries; they pass along the costs of the delivery system.

In 2009, the largest 14 insurers had profits of roughly $9 billion; that approached 0.4 percent of total health spending of $2.472 trillion.

This hardly explains high health costs.

Full article:
http://www.realclearpolitics.com/articles/2010/03/15/obamas_health_proposal_is_the_illusion_of_reform.html

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McKinsey: A marketer’s guide to applying behavioral economics

March 18, 2010

TakeAway: Marketers have been applying behavioral economics—often unknowingly—for years. A more systematic approach can unlock significant value.

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Excerpted from McKinsey Online: A marketer’s guide to behavioral economics, Feb. 2010

Long before behavioral economics had a name, marketers were using it.

“Three for the price of two” offers and extended-payment layaway plans became widespread because they worked — not because marketers had run scientific studies showing that people prefer a supposedly free incentive to an equivalent price discount or that people often behave irrationally when thinking about future consequences.

Here are four practical techniques that should be part of every marketer’s tool kit.

1. Make a product’s cost less painful 
In marketing practice, many factors influence the way consumers value a dollar and how much pain they feel upon spending it.

Retailers know that allowing consumers to delay payment can dramatically increase their willingness to buy.

One reason delayed payments work is perfectly logical: the time value of money makes future payments less costly than immediate ones. But there is a second, less rational basis for this phenomenon. Payments, like all losses, are viscerally unpleasant. Even small delays in payment can soften the immediate sting of parting with your money and remove an important barrier to purchase.

Consumers use different mental accounts for money they obtain from different sources.

Commonly observed mental accounts include windfall gains, pocket money, income, and savings. Windfall gains and pocket money are usually the easiest for consumers to spend. Income is less easy to relinquish, and savings the most difficult of all.

2. Harness the power of a default option
The evidence is overwhelming that presenting one option as a default increases the chance it will be chosen.

Defaults — what you get if you don’t actively make a choice — work partly by instilling a perception of ownership before any purchase takes place, because the pleasure we derive from gains is less intense than the pain from equivalent losses. When we’re “given” something by default, it becomes more valued than it would have been otherwise — and we are more loath to part with it.

An Italian telecom company, for example, increased the acceptance rate of an offer made to customers when they called to cancel their service. Originally, a script informed them that they would receive 100 free calls if they kept their plan. The script was reworded to say, “We have already credited your account with 100 calls—how could you use those?” Many customers did not want to give up free talk time they felt they already owned.

Defaults work best when decision makers are too indifferent, confused, or conflicted to consider their options.

That principle is particularly relevant in a world that’s increasingly awash with choices — a default eliminates the need to make a decision.

3. Don’t overwhelm consumers with choice
When a default option isn’t possible, marketers must be wary of generating “choice overload,” which makes consumers less likely to purchase.

Large in-store assortments work against marketers in at least two ways.

First, these choices make consumers work harder to find their preferred option, a potential barrier to purchase.

Second, large assortments increase the likelihood that each choice will become imbued with a “negative halo” — a heightened awareness that every option requires you to forgo desirable features available in some other product.

Reducing the number of options makes people likelier not only to reach a decision but also to feel more satisfied with their choice.

4. Position your preferred option carefully
Economists assume that everything has a price: your willingness to pay may be higher than mine, but each of us has a maximum price we’d be willing to pay.

How marketers position a product, though, can change the equation.

Marketers sometimes benefit from offering a few clearly inferior options. Even if they don’t sell, they may increase sales of slightly better products the store really wants to move.

Similarly, many restaurants find that the second-most-expensive bottle of wine is very popular — and so is the second-cheapest.

Customers who buy the former feel they are getting something special but not going over the top.

Those who buy the latter feel they are getting a bargain but not being cheap.

Sony found the same thing with headphones: consumers buy them at a given price if there is a more expensive option — but not if they are the most expensive option on offer.

Marketers have long been aware that irrationality helps shape consumer behavior. Behavioral economics can make that irrationality more predictable.

Understanding exactly how small changes to the details of an offer can influence the way people react to it is crucial to unlocking significant value—often at very low cost.

Full article:
https://www.mckinseyquarterly.com/Marketing/Strategy/A_marketers_guide_to_behavioral_economics_2536

Posted in Behavioral Economics, Economics, Mktg - Customer Acquisition | Leave a Comment »