California may become a distributor of generics
by jerry on September 12, 2020
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by jerry on September 12, 2020
Kaiser Health News earlier reported that the California legislature approved a measure to pave the way for California to become a distributor of generic drugs. The article reports that this is a separate effort from the governor's earlier effort.
The startup funding -- reported to be less than $2 million -- along with the operating costs seems to be fairly small for the effort. If this measure is signed into law, it will be interesting to see if the costs remain as low as projected and how effective the state will be in lowering drug costs for its residents.
by jerry on September 05, 2020
Kaiser Health News reports that California approved legislation to relax restrictions in how nurse practitioners can practice. There has been a long-running disagreement as to the extent to which nurse practitioners can practice medicine independently. Not surprisingly, nurse practitioners believe they can practice medicine mostly independently in a variety of primary care settings, while many doctors believe that nurse practitioners require more oversight.
Nurse practitioners argue that allowing them to practice more independently allows society to benefit from more providers, particularly at a time when many areas face a shortage of primary care providers. Doctors frequently counter that nurse practitioners are not as extensively trained and therefore provide a lower quality of care. Not surprisingly, there may be a substantial financial impact at stake for both sides.
by jerry on August 30, 2020
Kaiser Health News reported on public sentiment regarding the Affordable Care Act (ACA) changing. Soon after the ACA passed, a number of Republican legislators campaigned on the idea of overturning or limiting the impact of the ACA. Several years later, especially in a time of great economic uncertainty, polls show public sentiment being supportive of the ACA.
The article reports that "The foundation's polling found that, in July 2014, 55% of voters opposed the law, while 36% favored it. By July 2020, that had flipped, with 51% favoring the law and 38% opposing it." Now, Republican candidates seem to find their opposition to the ACA a liability instead of an asset.
by jerry on August 23, 2020
Kaiser Health News published an interesting article describing how more states are planning on running their own insurance exchanges. The motivation seems to largely come down to financial savings: apparently, states pay the federal insurance exchange a surcharge of around 3% of the premiums collected. For larger states, that surcharge can amount to over one hundred million dollars per year, and some states think they can operate their own exchange for less. States that run their own exchanges might also advertise enrollment more, perhaps leading to fewer uninsured individuals.
The article reports that some states encountered technical difficulties and ended up reverting to the federal exchange, so it remains to be seen how successful these efforts will be. It is interesting how many tens of millions of dollars (or more) it takes to run these changes.
by jerry on August 15, 2020
Physician compensation has changed over the years. For example, decades ago, compensation changed from fee-for-service (where physicians are paid per procedure or per service) to capitation (where primary care physicians are paid a monthly fee for each patient they see). The idea behind capitation was that physicians who were successful in managing the health of their patients would end up having to work less since healthier patients need fewer services; at the same time, healthier patients would mean that insurers would need to pay less, thus, theoretically leading to a win-win situation (plus a win for patients who themselves were healthier). Under the capitation payment model, doctors could be penalized if they had an excessive number of patients who needed more services. Many physicians complained about this risk, citing cases that were both out of their control and very expensive (e.g. a patient ends up with cancer). Physician compensation then moved back towards fee-for-service. Unfortunately, under this model, physicians frequently have a financial incentive to favor expensive treatments over inexpensive preventative measures. Over the last decade, Medicare has been trying to introduce more risk-based payments so that doctors with healthy patients could receive financial rewards for healthier patients. Some physicians rightfully have had reservations. Kaiser Health News reported on how the pandemic might be changing some physician attitudes.
Notably, many physician offices have had to shut down during the pandemic, but instead would have fared better financially if they received per-member per-month payments that doctors received under capitation payment models. Medicare will be launching a Primary Care First program in this vein, offering bonuses and penalties depending on how a doctor's patients rate on various criteria. The risk-based payment model may have its own risks, such as physicians becoming pickier when deciding whether to accept a patient (a patient mix that skews unhealthy could have a substantial financial impact). Nevertheless, the current trend lines appear to point towards risk-based payments.