By John Ballard
Cass Sunstein is leaving his role as administator of the Office of Information and Regulatory Affairs, otherwise know as the Regulatory Czar.
[He] came to Washington to test his theories of human behavior and economic efficiency in the laboratory of the federal government. Now he is departing with a record that left many business interests disappointed and environmental, health and consumer advocates even more unhappy.
Mr. Sunstein, 57, who projected an air of disheveled academic detachment while becoming one of the Obama administration's most provocative figures, announced Friday that he was leaving government to return to Harvard Law School.
Applying a cost-benefit analysis to his reviews of proposed rules, he said his goal was simply to make the nation's regulatory system "as sensible as possible."
His critics saw it differently.
"Cass Sunstein is the most well-connected and smartest guy who's ever held the job," said Rena Steinzor, president of the Center for Progressive Reform and a professor at the University of Maryland Carey School of Law. "But he's also done untold damage."
Since we haven't heard much about him and he appears to have pissed off allies and opponents alike he must have done a pretty good job. I put together a post about the guy a couple years ago and nothing in his leaving comes as any surprise to me. He and the boss are reported to be long-time friends and the "nudge" approach has been a hallmark of this administration's management style from the start. Except for a few targeted assassinations, most people would agree that kicking ass isn't the president's strong suit. Nudging is not the same as letting others step on you. Think wrestling. Graeco-Roman has an array of straqtegic moves but Sumo takes nudging to an art form.
Two examples of how nudging works come to mind...
The phrase leading from behind has never before, to my knowledge, been applied to a president or anyone else in a position of leadership. But that phrase has popped up repeatedly over the last two or three years, most prominently regarding Libya.
And just yesterday Maggie Mahar put together a great summary of how the impact of PPACA is already being felt and how that "aircraft carrier" is starting to turn.
The evidence is building: As we move toward making the Affordable Care Act a reality, Medicare spending in slowing, and even in the private sector, for the first time in more than a decade, insurers are focusing on reining in health care costs .
The passage of reform legislation two years ago prompted a change in how both health care providers and payers think about care. The ACA told insurers that they would no longer be able to shun the sick by refusing to cover those suffering from pre-existing conditions. They also won't be allowed to cap how much ithey will pay out to an desperately ill patient over the course of a year -or a lifetime. Perhaps most importantly, going forward, insurance companies selling policies to individuals and small companies will have to reimburse for all of the "essential benefits" outlined in the ACA-benefits that are not now covered by most policies. This means that, if they hope to stay in business, they will have to find a way to "manage" the cost of care-but they won't be able to do it by denying needed care.
That's a subject for another post if I get around to it. (Maggie trimmed this down to a mere 3000+ words.) But the point is that nudging has started a process of long-overdue change. I sensed as much a couple months ago when I posted this.
The word unsustainable is more than a political nostrum. The train is leaving the station. The political types with their polls, weathervanes and double-talk will eventually figure out what needs to be done. But improvements to the system are already happening, with or without Obamacare.
That's what I call nudging in action.
" The ACA told insurers that they would no longer be able to shun the sick by refusing to cover those suffering from pre-existing conditions. They also won't be allowed to cap how much ithey will pay out to an desperately ill patient over the course of a year -or a lifetime. Perhaps most importantly, going forward, insurance companies selling policies to individuals and small companies will have to reimburse for all of the "essential benefits" outlined in the ACA-benefits that are not now covered by most policies. This means that, if they hope to stay in business, they will have to find a way to "manage" the cost of care-but they won't be able to do it by denying needed care."
ReplyDeleteDoes no one realize how this defies reason? "The insurance companies must find a way to manage the cost of care." Somehow the responsibility of regulating the cost of treatment lies not with the companies providing the treatment and charging for it, but with the companies who are paying for the treatment. We say to the sellers, charge anything you want, and to the buyers, you are responsible for the rising costs, so bring those costs down. Bring down the costs that are being billed to you for procedures that you did not initiate. In what universe does that make any sense?
It's counter intuitive, I agree. And that was exactly the problem with the HMO experiences about thirty years ago. This time two variables have changed (not counting the new insurance rules that Maggie points out in her longer post).
ReplyDeleteFirst, the medical/loss ratio means that insurance companies no longer get a blank check determining premiums. A fixed percent of the premium dollars must be used for medical costs and the amount they get to keep for all other "overhead" is not limited. This makes other insurance products (life, casualty, accident, etc.) more lucrative and causes health care policies to be more competitive based on how much they can save the beneficiary -- or in the case of group insurance, the client company.
I look for the individual insurance market to blossom with more variants on HSAs and MSAs. Insurers which save more for their customers will take business from those who don't. Market incentive, plain and simple.
Second, with Medicare now having control over reimbursements, that becomes the driver for billing as providers are now competing for a shrinking revenue stream. Maggie's following paragraph spells it out...
As for providers, they, too, will be under pressure. A growing number will no longer be paid "fee for service" that rewards them for "volume"-i.e. "doing more." Bonuses will depend on better outcomes, and keeping patients out of the hospital-which means doing a better job of managing chronic illnesses. Meanwhile, Medicare will be shaving 1% a year from annual increases in payments to hospitals. If medical centers want to stay in the black, they, too, will have to provide greater "value" for health care dollars- better outcomes at a lower cost.
It's more than counter-intuitive, it's nonsense. If a provider is told he will not be paid for service, he will not provide service. To suggest that the provider will pull some magic pony out of his behind to find better and less expensive ways to "compete for the shrinking payment dollars" without reducing the services being rendered is the most wild eyed unicorn-seeking kind of fantasy.
ReplyDeleteAs we speak, doctors in increasing numbers are deciding that they will no longer accept Medicare patients. With the present shortage of dooctors, making that decision is not exactly going to drive them out of business.
My neurologist is saying that he is urging his children not to enter the practice of medicine, and at age 53 is considering retirement himself because of the "cost control emphasis" on health care.
Keeping patients out of the hospital is all well and good, except when the result is that the patient has a stroke or bleeds out because he was at home and no one was monitoring his well being. I had a minor surgery that would normally be outpatient, but because of my history and risk of bleeding issues I was kept overnight. During the night I had a stroke. The cost saving of "keeping patients out of hospitals" would have killed me.
Fee for service is not the curse that it is assumed to be. If the fee is based on diagnosis you are urging the provider to do as little as possible for the patient because the same fee is paid whether one service is rendered or fifty. The less the provider does the more money he makes. That is an utterly ridiculous model.
"Paying for outcomes" is equally ridiculous. The course of a disease has many factors, most of which are completely beyond the power of any physician to control. Basing the physician's payment on the cooperation of the patient, and other highly intangible factors beyond the physician's control is insane. Especially when you are "keeping the patient out of the hospital" where the physician at least has a chance to monitor and control those other factors.
I have had twelve strokes. Based on your "outcomes model" my neorologist should not be paid, but I might very well have been killed by one of those strokes without his treatment. Based on your "diagnosis model" he should be paid the same for treating me as for treating a person who has had one stroke. In either case, ridiculous.
I don't want to be responsible for your having another stroke. If you tell me it will help I will delete the post.
ReplyDelete"My neurologist is saying that he is urging his children not to enter the practice of medicine..."
ReplyDeleteSomewhere I missed the part where medicine became a hereditary occupation.