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Kaiser Health News reported on the government of California adopting policies to help promote more engagement by health insurers. For one, it has offered state-level subsidies (in addition to the federal subsidies) so that more people would find health insurance premiums affordable. The success of insurance plans depend on pools large enough so that the premiums from the policyholders that do not need payouts cover the payouts of the policyholders that do. When premiums are too expensive, healthy individuals might drop out, forcing insurance companies to raise premiums, which in turn causes more people to drop out. California has also adopted a financial penalty to those who opt out of health coverage. Such a penalty was part of the original Affordable Care Act, but was later cancelled.

Kaiser Health News reported on the government of California adopting policies to help promote more engagement by health insurers. For one, it has offered state-level subsidies (in addition to the federal subsidies) so that more people would find health insurance premiums affordable. The success of insurance plans depend on pools large enough so that the premiums from the policyholders that do not need payouts cover the payouts of the policyholders that do. When premiums are too expensive, healthy individuals might drop out, forcing insurance companies to raise premiums, which in turn causes more people to drop out. California has also adopted a financial penalty to those who opt out of health coverage. Such a penalty was part of the original Affordable Care Act, but was later cancelled.

Interestingly, the executive director of California's ACA health exchange said that nearly 90% of Californians will have three or more carriers to choose from in 2020; apparently three options is a minimum threshold for meaningful competition. Other states also appear to be experiencing healthier exchanges as well.

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Following up on an executive order signed earlier in the year, Kaiser Health News recently reported on a proposed rule by the Centers for Medicare & Medicaid Services (CMS, also known as Medicare) that hospitals disclose prices for common procedures (mandated last year), including negotiated prices (new). The proposed rule requires "payer-specific negotiated charges" so a procedure should have multiple prices listed (one for the cash rate, and one per insurer). We are pleased that CMS is proposing that the prices are to be published in a machine-readable format, which should make it easier for websites to incorporate the data. Even more powerful would be if this regulation applied to clinics as well, where a number of outpatient procedures may occur.

Following up on an executive order signed earlier in the year, Kaiser Health News recently reported on a proposed rule by the Centers for Medicare & Medicaid Services (CMS, also known as Medicare) that hospitals disclose prices for common procedures (mandated last year), including negotiated prices (new). The proposed rule requires "payer-specific negotiated charges" so a procedure should have multiple prices listed (one for the cash rate, and one per insurer). We are pleased that CMS is proposing that the prices are to be published in a machine-readable format, which should make it easier for websites to incorporate the data. Even more powerful would be if this regulation applied to clinics as well, where a number of outpatient procedures may occur.

Understandably, the American Hospital Association was not happy about the proposal. Interestingly, America's Health Insurance Plans was also against the proposal, suggesting that insurers feel confident about the effectiveness of their negotiations. If this proposal goes through (legal action to prevent it is expected), I think we will find that some insurers had been more successful than others in negotiating prices.

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Dr. Ezekiel Emanuel, frequently consulted as an expert on health policy, wrote an opinion piece in the New York Times outlining four suggestions to make health care more affordable. The piece starts out by framing the Democratic presidential candidates as debating the wrong question (what type of national healthcare plan should US adopt versus how do we get healthcare expenses under control). A surprising statistic is that while the US has about 4 percent of the world's population, it accounts for nearly half of the global drug spending. The US has been paying more per dose of medication than others around the world, effectively subsidizing the world's research and development of medication.

Dr. Ezekiel Emanuel, frequently consulted as an expert on health policy, wrote an opinion piece in the New York Times outlining four suggestions to make health care more affordable. The piece starts out by framing the Democratic presidential candidates as debating the wrong question (what type of national healthcare plan should US adopt versus how do we get healthcare expenses under control). A surprising statistic is that while the US has about 4 percent of the world's population, it accounts for nearly half of the global drug spending. The US has been paying more per dose of medication than others around the world, effectively subsidizing the world's research and development of medication.

Dr. Emanuel takes aim at all the major players in the healthcare industry with a variety of ideas: national negotiations to curb drug pricing, a cap on hospital prices (he blames mergers of hospital systems as the root of soaring prices), and standardization in the insurance industry. Taken as a whole, the healthcare industry is surely not happy about his proposals; taken separately, different parts of the industry might be thrilled at different proposals. Dr. Emanuel lists a fourth option which has been gaining momentum over the last decade: shifting away from fee-for-service compensation for doctors and moving towards value-based payments (in other words, paying for patients' health and good outcomes, rather than paying for amount of work done). These are all sweeping changes that Dr. Emanuel groups as "four simple policies."

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Starting in 2014, we integrated procedure information from Medicare. Procedure volume can be a crude but helpful proxy for many surgeries, with research showing that surgeons who have experience performing a procedure often have better outcomes for the procedure. Likewise, patients who need to pay out-of-pocket or who have a high-deductible might be interested in estimates of what a provider might charge. Medicare provides average price submitted by providers for a variety of procedures. To get a sense of how this looks on the search results page, try searching for a procedure like "hip replacement" or "x-ray" in a major city.

Starting in 2014, we integrated procedure information from Medicare. Procedure volume can be a crude but helpful proxy for many surgeries, with research showing that surgeons who have experience performing a procedure often have better outcomes for the procedure. Likewise, patients who need to pay out-of-pocket or who have a high-deductible might be interested in estimates of what a provider might charge. Medicare provides average price submitted by providers for a variety of procedures. To get a sense of how this looks on the search results page, try searching for a procedure like "hip replacement" or "x-ray" in a major city.

Over the last eighteen months, we have re-worked how we stored the data, and for several months, had removed the procedure information from the search results page during the transition. We are pleased to announce that the procedure information is now available on the search results page again, with the ability to sort by procedure volume or price.

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WBUR reported on a study showing positive results from a change in provider compensation. The overall idea is that health insurers specify a target level of health spending, and providers who are responsible for patients share in both the savings (when the patients incur less health expenses than the target level) or in the cost (when health expenses exceed the target level). Under a compensation system like this, providers will have incentives to treat patients more holistically, theoretically resulting in lower overall health spending.

WBUR reported on a study showing positive results from a change in provider compensation. The overall idea is that health insurers specify a target level of health spending, and providers who are responsible for patients share in both the savings (when the patients incur less health expenses than the target level) or in the cost (when health expenses exceed the target level). Under a compensation system like this, providers will have incentives to treat patients more holistically, theoretically resulting in lower overall health spending.

Programs like this have been tried before (often known as pay-for-performance), and results have been mixed. Earlier programs often targeted primary care physicians (who can have a bigger-than-expected influence by coordinating care across different specialists); this program appears to target larger multi-specialty medical practices. This program also appears to have an initial component in which insurance companies paid an amount that providers could use to upgrade infrastructure, making them better able to provider higher-quality care.

Although the results from any particular program or study might be unclear, I expect that more physician compensation will be tied to performance metrics as the industry moves more towards value-based medicine.

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