"A Showdown of Corporate Oligopolies"?

UnitedHealth Group versus a consortium of New York hospitals: My take at StateHouseCall.

A California Cash Cow or New York Pork With Your Cornhusker Kickback?

The latest Capital Ideas, in which I address the plaintiff wails of Governor Schwarzenegger and Governor Paterson, who demand even more federal bailouts of their Medicaid programs.

New York's Insurance Regs Hurt the Sick

As I discuss over at State House Call.

New York's Monopolist Medical Price Fixer

NY Attorney-General Andrew Cuomo has chartered a state-sanctioned monopolist to fix prices of medical services: Read more at StateHouseCall.

"Fishy" Rumors About New York Health Insurance

A recent interview on MSNBC reveals the depth of confusion the mainstream media has over the current regulation of health insurance. Read more at StateHouseCall.

Medicaid "Reform" Will Devour Us

Last Friday, the House Energy & Commerce Committee marked up HR 3200, the government take-over of Americans' access to medical services. The Blue Dog Democrats inserted an amendment that they figure will insert some fiscal responsibility into this monstrous bill.

Boy, are they wrong. The Medicaid amendment that they passed will cause states to accelerate their already out-of-control spending on Medicaid.

Medicaid is a program for low-income households that is jointly financed by the federal and state governments. It has always contained a flawed incentive that causes states to overspend: the FMAP, which is the percentage of total Medicaid costs paid by the federal government. Because FMAP has been at least 50%, state politicians have an incentive to spend one dollar to pull down at least one dollar from the residents of the other 49 states (as laundered by the federal government).

This has caused Medicaid spending to increase even faster than the bankrupt Medicare program for seniors. President Obama made it worse in February, when he signed the so-called "stimulus" bill, which significantly increased the federal match.

The Blue Dog deal would make states finance 7% of the proposed, permanent, Medicaid expansion. They appear to believe that by forcing states to swallow some of the cost of the Medicaid expansion (which was originally 100% federal) they could dampen it somewhat.

No way! If states only have to spend $7 of their own residents' money to pull down $93 of federal money, they will go into a feeding frenzy the likes of which we've never seen in the history of Medicaid.

(In case you doubt that the FMAP already creates horrible incentives for states, you might have missed the $540 million settlement that the U.S. Department of Justice made last month with two Medicaid fraudsters who wrongly billed the program for school-based health services. The busted scammers? New York State and New York City.)

Wall Street Journal Cites Graham in Review of Failing States

Today's Wall Street Journal noted yours truly's U.S. Index of Health Ownerhip in its lead editorial. Describing the "Albany-Trenton-Sacramento disease" of high-rolling state governments, bloated with tax revenue but in continuous budgetary crises, the editorial fingered bad health policies as a key element of the problem.

New York, New Jersey, and California are all in the tank of IHOP's measurements of individual ownership versus government control over health care. The editorial quotes IHOP's diagnosis that "New York suffers from government health programs that are out of control, a grossly overregulated private insurance market and almost completely uncompetitive provider markets."

IHOP edition 3 is due to be published later this summer. I don't want to leak the results, but if you are a betting man, I would not recommend putting any money on New York moving up the rankings.

Health "Reform" in New York: Cost Shifting & Higher Taxes

Does New York Medicaid pay too much for hospitals' inpatient procedures, like governor Paterson asserts? Well, maybe - but if so, that would be a truly remarkable devation from the national average, for which various estimates show significant underpayment by Medicaid and other government programs, which hospitals subsidize by shifting costs to private payers. (See here and here.)

I find it hard to believe that the Empire State, alone among the states, is somehow overpaying its hospitals for appropriate procedures. But NY has a recent history (under former gov. Spitzer) of shutting down hospitals via state diktat, in order to reduce health-care costs. Mr. Spitzer also pressed a wrong-headed attack against Medicaid beneficaries' use of prescription drugs, which generally reduce expensive inpatient treatment more effectively than government command.
There is a good case that NY Medicaid overpays for long-term care, but that is because it does not have a grip on self-styled eldercare lawyers and accountants who execute asset-transfers for middle-class seniors so that they can qualify for Medicaid LTC. It's also well-known that NY Medicaid is a cesspool of corruption, which drives costs up maddeningly.

Gov. Paterson's solution? A tax-hike in order to make health-care providers even more dependent on the state, by paying community clinics, doctors, & nurse practitioners, in the vain hope that more primary, preventive care, will reduce costs.

How about returning health-care dollars to New Yorkers, so that they can spend them on care of their choice? Or doing anything that might lift NY from the bottom of the U.S. Index of Health Ownership? Nope: Those options are just not in the cards.

Class-Action Lawsuits Gone Wild

By itself, this isn't such a big deal: A non-profit hospital system in upstate New York settles a class-action lawsuit brought by a couple of nurses for $1.25 million. Plaintiffs alleged that the hospitals conspired to artificially lower nurses' wages.

The Wall Street Journal reports that the settlement will be filed today at the U.S. District Court for the Northern District of New York. Another paper reports that the suit was duplicated in Detroit, Chicago, Memphis, & San Antonio.

I have previously written, in a related context, that federal anti-trust law should not apply to contracts between hospitals and health professionals. I think that this case confirms the flaw.

Generally speaking, I think anti-trust law is nonsensical. However, if it must exist, state anti-trust law should suffice in these cases. Hospitals and health professions are regulated by the states, so states' laws should respond to the consequences of that power. There is no reason to believe that federal anti-trust laws are superior, especially when these cases do not bleed across state lines.

On the other hand, the scope for lawyers' mischief-making is high. What benefit would it be to a hospital in Albany, NY, to conspire with hospitals in Memphis or Detroit to fix nurses' wages? Very little, surely, given that the conditions of work and cost of living, and even scope of practice of the profession, varies across regions.

On the other hand, what a jackpot for the lawyers if they can lead nurses nationwide on a fishing expedition! This appears to be the case, as Northeast Health has agreed to spill the beans on other hospitals, too.