In his NYT blog, economist Uwe Rheinhart expresses serious doubts as to the effectiveness of Republican costs control measures.  He writes:

,,, replace the term "cost control" ... with "constraining and possibly reducing the future incomes of doctors, hospitals, pharmaceutical companies, medical device companies and so on."

Given our system of governance, in which political favors can be purchased retail, the task of constraining or reducing the incomes of American health care providers will be a long and arduous battle with powerful, moneyed interest groups. American voters will have to become yet more desperate over the cost of health care before any politician will vigorously confront this powerful armada.

He further explains that tort reform, small business alliances, interstate insurance competition, and pricing transparency would have little effect on overall costs.

Medicare private insurance premiums are increasing from 14 to 31.2 percent.

In a February 10 Op Ed in the Wall Street Journal, Curt Levey  of the "Washington-based Committee for Justice" argued that healthcare reform should be opposed, because it will increase wasteful litigation.  This  argument is now spreading around the  blogosphere.

The problem with this theory is that it  is like saying that hospitals should be closed to save electricity. There is no doubt that litigation is far too wasteful and needs reform (in healthcare and all other fields). The notion, though, that a speculative risk of incremental lawsuits should forestall efforts to address exploding medical and insurance costs (98 percent of which have nothing to do with litigation) and provide coverage to at least some part of the now more than 50 million uninsured Americans is ridiculous.

For example, Mr. Levey expresses concern about the cost of "court battles [that] will focus on the constitutionality of requiring individuals to buy health insurance." In addition to the fact that such lawsuits would be utterly meritless--(have you ever heard of compulsory auto-insurance?)--the cost of such cases, however inflated, would not even rise to the level of insignificant in comparison to national healthcare costs.

Last week, we learned that healthcare now accounts for 17.3 percent of the GDP, and more than half of healthcare costs will soon be paid by government programs. Meanwhile, one of the nation's largest healthcare insurers is increasing some rates from 30 to 39 percent, which will doubtless force more of its subscribers to drop coverage (and lead to still higher rates for those that can afford to continue). At this rate, we will eventually end up with a near single-payor healthcare system--evenin the absence of reform--but one that is incapable of meeting increased demands of an ever-more impoverished public."

P.S.  Having never heard of the Committee for Justice, I checked out their website.  During the Bush years, the organization bemoaned procedural delays affecting republican judicial nominations.  Now, the group is applauding Republican filibusters.  Draw your own conclusions.

The president of AHIP (the American Health Insurance Plans) issued a statement today blaming everyone else for the high cost of health care and declaring the need for comprehensive health reform.  Among other things, the statement reiterates the premium death spiral (i.e., Health insurance premiums are increasing in the individual market because of soaring medical costs and because younger and healthier people are dropping their coverage due to the economy) and bemoans the health plans relatively small profit margins (relative to other segments of the market).

The first problem is that the profit margin numbers are pretty meaningless, because they are not adjusted for risk.  Given the ability to raise prices every year to cover actuarial changes, its far from clear that this margin is low.  Second, this is the group that brought us "Harry and Louise" who helped sink the Clinton reform efforts and doubtless prevented the Senate from adopting an entirely reasonable plan to drop the age for Medicare eligiblity to 55.

AHIP has a seat at the table simply because it can spend enormous sums on lobbying.  The notion that the Healthplans are somehow powerless victims is a bit hard to take.

The president of AHIP (the American Health Insurance) issued a statement today blaming everyone else for the high cost of health care and declaring the need for comprehensive health reform.  Among other things, the statement reiterates the premium death spiral (i.e., Health insurance premiums are increasing in the individual market because of soaring medical costs and because younger and healthier people are dropping their coverage due to the economy) and bemoans the health plans relatively small profit margins (relative to other segments of the market).

The first problem is that the profit margin numbers are pretty meaningless, because they are not adjusted for risk.  Given the ability to raise prices every year to cover actuarial changes, its far from clear that this margin is low.  Second, this is the group that brought us "Harry and Louise" who helped sink the Clinton reform efforts and doubtless prevented the Senate from adopting an entirely reasonable plan to drop the age for Medicare eligiblity to 55.

AHIP has a seat at the table simply because it can spend enormous sums on lobbying.  The notion that the Healthplans are somehow powerless victims is a bit hard to take.

The Pittsburgh Post Gazette Reports that  group of Braddock residents and activists from neighboring areas, and the group Save Our Community Hospitals, has filed a new action challenging the hospital system's tax-exempt status and demanding that it re-open the Braddock hospital it closed last month.  The action is notable in that it asks the Pennsylvania Supreme Court to  use its King's Bench power to take immediate jurisdiction over the case.  Braddock earlier rejected a proposal to demolish the building and create a mixed use facility with financial support from UPMC, as described in a PG Editorial. The case raises interesting and difficult policy issues that I hope to comment on after having a chance to review the 80 page complaint.

Carl Mecurio, of Corporate Research Group, shows that Wellpoint is not alone in seeking substantial rate increases.  Eventually, the spiral of adverse selection (i.e., fewer healthy patients in the pool means higher costs for the remaining subscribers means fewer healthy patients and so on) may make private insurance a thing of the past.  (The demise of the Soviet Union as the result of internal, rather than external, forces may be a good analogy).

HHS today announced a total of nearly $1 billion in ARRA awards to provote meaningful use of health information technology (IT) and train workers . Over $750 million are intended to build capacity to enable widespread meaningful use of health IT; $386 million will go to 40 states and qualified State Designated Entities (SDEs) to facilitate health information exchange (HIE) at the state level, while $375 million will go to an initial 32 non-profit organizations to support the development of regional extension centers (RECs) that will aid health professionals as they work to implement and use health information technology - with additional HIE and REC awards to be announced in the near future. The HHS Press Release includes a full list of the awards.  The award include $17,140,446 for the Pennsylvania Governor's Office of Health Care Reform.  I presume funds will be allocated to Pennsylvania program to develop its planned  Health Information Exchange (PHIX) .

According the Speaker of the House's blog:

WellPoint reported a staggering $2,740,000,000 in profits for the fourth quarter of 2009 alone – eight times more than the last quarter of 2008 – and more than $4,750,000,000 for all of 2009. In fact, the company reaped these record profits even as it lost more than 1.4 million members. Other health insurance company figures recently released show the same trend.

Wellpoint, one of the country's largest health insurers, has announced a 39% increase in some coverage rates, which has led to widespread criticism and a call for a congressional hearing.  The sad part, as pointed out in Bob Laszewski's Health Policy and Marketplace Blog, is that the increase is probably justified (in actuarial terms).  The crippled economy has doubtless led (or forced) healthier plan members to drop coverage, which in turn has led to a less healthy insurance pool and, therefore, higher rates.  Since a 39% increase will led more individuals who can risk going without insurance to drop coverage, the spiral will continue next year.

If there is a hearing, perhaps it will drive home the utter necessity of reform.

Meanwhile, it was reported this week that healthcare costs now account for 17.3% of the United States GDP, up from 16.2% last year.  In addition, the government will account for more than 50% of all US healthcare payments by 2012.   Here is a report from the WSJ's Marketwatch.  At this rate, even without healthcare reform we will end up with a single payor.  By that time, however, not even the government will be able to afford coverage.