Oakland University Executive MBA Blog

Privacy and Electronic Health Records

2009-08-27T10:44:00.001-04:00

President Obama wants a national electronic health records system up and running in the United States by 2014. There is a lot of skepticism about whether or not it can be set up that quickly, but the point is creating one of these systems is the ultimate goal.

This national health information network will be a large database of medical records that can be accessed from many locations. Professor Thomas Lauer, the Chair of Decision and Information Systems at Oakland University, provides a simple example of how the system would work. “You take a vacation in Aspen and get in a skiing accident, the doctor in Aspen can look at your records [from your hometown] to make the most accurate diagnosis for you.”

Creating this centralized network would obviously make the system far more efficient if it is implemented effectively, but what if it isn’t? Having all of that health information in one location raises some serious privacy issues. “If you have so much data in one location the risk of loss is far greater than if data is dispersed. With paper records the most someone could get is a few records, if someone gets into this system they own the whole thing,” professor Lauer says. It could be like Fort Knox in the movie Goldfinger.

Aside from someone hacking into the system, there are simpler, everyday privacy questions. We will need to determine what 3^rd parties get access to the information, and how much information these 3^rd parties are allowed to see. Should employers be able to see the information? What about health insurance companies? These are issues professor Lauer is particularly concerned about. “A lot of privacy issues have to do with power asymmetry, you are weak, others are strong,” he says. If a person wants a credit card or insurance, he has to give up certain private information, and “if you’re not comfortable giving out that information, the powerful can demand it.” The individual really doesn’t have an option. If they need the service, they need to give up the information.

After determining which people should be able to access which information, there is the potential problem of onward transfer. “I collect your information and you feel confident in me, but I have to give it to someone else, and so on. You may trust my ability, but these other people I gave the information to you can’t be so sure about,” professor Lauer explains. Credit bureaus used to engage in this type of behavior. They would collect secret databases on people, and then sell them.

This also happened in the medical area, with an organization called the Medical Information Bureau, which is similar to the credit reporting agencies. They would collect data, wouldn’t let individuals see their data, and wouldn’t tell them what was in the data. If something in the data was inaccurate, too bad, nothing could be done about it. This information was sold to the MIB’s member insurance companies. Nowadays, patients are able to look at their report once a year, but most people still don’t know this organization exists. This type of onward transfer is a major issue, and with a national database, it could conceivably become much easier.

Finally, there is the issue of what professor Lauer calls “function creep.” The goal of the health information network is to help doctors make a more accurate diagnosis. However, at some point down the line, this can change to “wouldn’t it be great to study the relationship between physical disease and mental disease.” So it’s important to know who controls the data, and whether or not people should have a say in what their private information is used for.

Some people may say, ‘what’s the big deal, I don’t really care what they do with my information.’ Professor Lauer sees this as a side effect of the culture that we live in. “A lot of privacy has to do with personal dignity, and this is a value in society we should protect,” he says. “I think society is seriously compromised in many areas, so not much thought is given to areas like dignity. I believe that’s a problem.”

Whether people care or not, professor Lauer says the most important thing is that people know about these issues. “I really think it's important to raise awareness on the subject of privacy in general, and health information privacy more specifically. In my view, informed dialog that represents a public viewpoint is critical to enacting good policy.”

Do Video Games Have Health Benefits?

2009-08-25T12:25:00.002-04:00

Some people think video games are the bane of society, saying they make kids fat, lazy, and violent. The CDC just released a report that says the average video game player is 35, overweight, and may be depressed. However, with the advent of products like the Wii Fit, there are those out there who argue that video games are actually beneficial to people’s health. Is this actually true?

Let’s start out with the issue of mental health. The CDC study says that older video game players use games as a form of ‘digital self medication.’ Other research put a different spin on that concept. One study said that people who played the game Bejeweled, showed “improved mood and heart rhythms compared with volunteers who weren’t playing.” They argue that this is because people in our society find it difficult to relax, and require a certain level of stress at all times. It’s possible that video games offer just the right balance between stress and relaxation. The catch is, this study was commissioned by Popcap games (the maker of Bejeweled), and it was just a preliminary study.

The researchers at Popcap games are not the only ones who believe that games can help with relaxation though. There is another company, called HeartMath, which offers a computer program called the emWave that is supposed to “prevent, manage and reverse the negative effects of stress, anxiety, fatigue, depression and more.” The program offers “three colorful games designed to help you transform stress into creative energy.” The software works like this: the user attaches a finger or ear sensor to their body and the program tracks their pulse. Information about your heart rhythms are then shown with “friendly graphics.” This product can be yours for the low low price of $300, or $200 for a handheld version. Maybe that’s a steep price, but hey, the website says the research behind this product is peer reviewed.

Even the health insurance company Humana is in on this healthy games idea. They have a website called Humana Games for Health. This website points to some truly interesting research in defense of video games, although the source of the research is not always mentioned. They say that surgeons who play video games three hours a week commit fewer errors, and work faster than those who don’t. It argues that children who play disease management games understand their disease better. In the case of asthma patients who used these games, emergency room visits dropped by 40%. I will just quickly run down the other benefits they mentioned. Video games can improve senior’s cognitive abilities and reaction time, playing shooting games can improve vision, and video games are often used for physical therapy (including at Walter Reed Army Medical Center). As for the actual games on the website, they have some interesting games for mental stimulation, but I’m not sure the one where I’m simulating riding a bike with my fingertips will have much effect on my physical activity level.

It does seem pretty clear that video games can actually have health benefits, and this idea is becoming fairly mainstream. Whether it is Wii fit or Dance Dance Revolution for physical activity, Brain Age for mental stimulation, or some remedial game for disease management, there are benefits to playing video games. Maybe the health care reform bill should include a stipulation requiring all surgeons to play Grand Theft Auto three hours a week as well.

Massachusetts Universal Health Care: Problems and Solutions

2009-08-20T12:09:00.003-04:00

In 2006, Massachusetts passed a law with the goal of making sure every resident of the state had health insurance. Today, the state has almost reached that goal, as 97% of Massachusetts residents have health insurance. That is the highest percentage in the country.

In Massachusetts, all residents are required to buy insurance or pay a tax penalty. The insurance is offered through an independent public organization called Commonwealth Care. One of my relatives lives in Massachusetts, and she gave the system rave reviews. She got to choose her own doctor, her health care costs were much lower, and she can’t think of many bad things to say about it. She only says that some people didn’t understand how to use the system because it was complicated.

Although some have had a great experience with the system, there are some problems that need to be addressed. Firstly, there is an average wait time of 36 to 50 days for new patients, and around half of internal medicine physicians are not accepting new patients. This is according to an editorial on cnn.com, which cites the Massachusetts Medical Society as the source of these statistics. The editorial also points out that there has been a 7% increase in emergency room usage, and if this system was national the wait times would be worse, because Massachusetts has the highest concentration of doctors in the nation.

Secondly, there is the cost. “The program is broke. Part of it is because of recession, part of it is because there’s no cost controls,” Democratic Party Chairman Howard Dean said on NPR Tuesday night. Dean said that to combat the cost issue, Massachusetts should be moving toward a system of global medical payments.

Under a global payment system, doctors would be paid a fixed price for routine medical care over a given period of time, instead of paying doctors for individual procedures. This would mean doctors would no longer have a financial incentive to perform unnecessary treatments and tests. On the other hand, it might also give them a financial incentive to cut corners on borderline situations.

Insurance companies will set budgets for doctors, if the doctors are under budget they and the insurance company will pocket some of the savings. If they go over budget, the insurance companies and health care providers will cover the excess. In theory, this excess will be covered by other patients who are under budget, and it will all even out.

Either way, a global payment system is not going to solve the cost problem in the short run, it is meant to benefit in the long run. For more on the potential global payment system in Massachusetts, read this article.

Health Insurance Co-ops as an Alternative to the Public Option

2009-08-18T13:14:00.005-04:00

Conventional political wisdom now says that President Obama is backing off of the public option as a part of the health care reform bill. This seems to stem from an answer he gave at a town hall last week, where he said that having a public option is not the only element of health care reform, and there are other important elements to the reform effort.

While the public option might be losing steam for the moment, another idea to create competition seems to be gaining in popularity: health insurance co-ops. Even ultra conservative Republican Richard Shelby (R-AL) is not completely opposed to it, saying “We ought to look at it. I think it’s a far cry from the original proposals.” Kent Conrad (D-ND) is behind the co-op proposal, which would likely offer several billion in loans and grants to help set up cooperative networks. There was a good article in the Kansas City Star explaining what a co-op would look like:

What’s a health insurance co-op? A private, nonprofit organization — most likely one in every state — would compete with for-profit companies to offer coverage to individuals and perhaps businesses.

How would a co-op work? Individuals seeking insurance would go to an “exchange” that would list available health care plans, both from private companies and the co-op. The customer could compare prices and coverage and choose a carrier. The co-op, as a nonprofit enterprise, would in theory provide the same coverage as the private companies at a slightly lower price. That would force private insurers to lower their prices to compete.

The article also mentioned one of the most famous health co-ops that currently exists, the Group Health Cooperative in Washington State. I looked into what kind of coverage they offered to individuals in their low income program. According to the website, those in the program pay a $150 annual deductible, get free preventative care (such as physicals), a $15 co-pay for other office visits, and $10 co-pay for generic prescriptions. However, the Group Health Cooperative is having some issues with their low income program. They are being forced to raise rates due to recent legislation, including raising the deductible from $150 to $250, and have instituted a wait list for new applicants (certain individuals are able to bypass the wait list).

Although the Group Health Cooperative is relatively successful, many efforts to establish co-ops in the past have failed. A notable example being the attempt made in Iowa, home state of swing vote Senator Chuck Grassley (R-IA), which saw it's co-op program fail in two years. According to an article in The Washington Post, a co-op needs 25,000 members to be financially viable, and over 500,000 to be able to negotiate rates with doctors and hospitals. The Washington Post article also mentioned other major drawbacks to this idea:

"Co-ops would lack perhaps the main advantage of the public option: reimbursement rates for doctors and hospitals set by federal law, like those paid by Medicare, the program for older Americans. Federally determined reimbursement rates were central to the cost-saving promise of a government-run health plan and a potentially powerful competitive advantage… [They would also] lack the ability to piggyback onto existing government institutions, like the ones that help administer Medicare."

However, since these co-ops would be non-profit, they would not be motivated to maximize returns for shareholders like public insurance companies. This would theoretically allow them to reduce premiums or reinvest money to improve care. So it’s not all bad news.

Economics Professor Addresses Common Questions About Health Care Reform

2009-08-13T10:54:00.000-04:00

Oakland University economics professor Miron Stano is co-author of the textbook Economics of Health and Health Care, The (6th Edition). I asked him these four common questions about health care reform, in hopes that he could provide some clarity on these complicated issues.

1. Would government run health care cause costs to get out of control, and lead to the government rationing care because of a large increase in demand for health care?

There is no question that national health expenditures will be substantially higher than otherwise. This is due principally to two factors: (1) the uninsured will have coverage and consume more heath care; and (2) many others will have more comprehensive coverage resulting from the minimal benefit standards that Congress will establish. It is also possible that health care prices will increase faster as a result of the additional demand. At the moment, it is not clear how the added expenditures will be financed. Projected cost savings from improved coordination of care, greater use of electronic medical records, and greater emphasis on preventive care are very tenuous. The various revenue enhancing proposals are unlikely to generate substantial dollars. This will result in growing budgetary gaps that will probably require implementation of utilization controls or guidelines. Bear in mind though that some of this is already happening through managed care and other cost containment programs. If implemented properly, the “rationing” actually adds to society’s welfare by eliminating cost-ineffective procedures and treatments.

2. Would passing health care reform now slow down or stop the economic recovery?

A sudden restructuring of 1/6 of the U.S. economy would be a shock to the economy especially in its current fragile state. The health care reform package ultimately approved by Congress will be phased in. I hope that a recovery would be well underway within the next two quarters. While an additional $100+ billion or so per year when the health program is fully implemented is more than pocket change even for the U.S. economy, the potentially negative work and savings effects resulting from the redistributions from higher to lower income households, in my judgment, are unlikely to be large.

3. Is it impossible for the government to run a health care program (or any program) as well as or better than private industry?

A government “run” program can take on different forms. For example, goods or services could be produced by government, e.g, national defense, NASA, police and fire protection, water; or government could outsource administration of the good or service to the private sector, e.g., prisons in some states and Medicare, the largest health program. Private insurance companies, known as Medicare carriers, handle the claims processing and all the attendant issues that are associated with traditional Medicare. There is even a private insurance market for the Medicare Advantage component (Part C of Medicare).

The cost and efficiency issues associated with government programs are very complex but there are circumstances in which well conceived programs “run” by government can be very efficient. As an example that is easy to relate to, I will use the single waste hauler program adopted recently by Rochester Hills, [Michigan] after years of debate over the issue. Rochester Hills contracted with Allied Waste to provide [waste management] services that are mandated for property owners who are billed directly by Allied Waste at a rate negotiated by the City. A private market, in which households contracted with private haulers at unregulated rate, existed prior to this program. My subdivision had three trucks (waste, compost, recycling) for each hauler coming on several different days of the week creating all sorts of nuisances (noise, road deterioration, and garbage on display almost every day). Some liked the system arguing they had more choices regarding their own collection day and whether to have full or partial service. I’m sure that some Rochester Hills residents even illegally dumped garbage to avoid paying for service. And all of these negative “externalities” came at a high price. My current rate for full service is nearly one-half the rate I was previously paying for the same level of services with the same hauler.”

4. Do you think the way health insurance companies currently run their business is good, bad, or neither. I am thinking in terms of denying claims, and not taking people with pre existing conditions.

Insurance in general is associated with two important concepts: moral hazard and adverse selection. Moral hazard refers to the idea that one doesn’t take care of one’s property as carefully as otherwise with insurance coverage. There is reason to believe that behavior with regard to health also follows this pattern Moral hazard is why more health plans and employers are developing wellness and other incentive programs to get people to adopt healthier lifestyle behaviors. Adverse selection refers to the idea that a higher risk person would likely be part of a lower risk group and pay a lower premium than reflected in his actual risk. Private insurance tries to mitigate both phenomena. Deductibles, penalties for frequent claims, and incentives for alarm systems help reduce moral hazard in property insurance. Risk rating is used by insurers to deal with adverse selection.

The insurance system will break down unless there are mechanisms to deal with adverse selection. For example, there would be very little reason for healthy people to buy health insurance if they could get it at low rates once they have a serious disease. By its very nature, a national health system avoids adverse selection. In its absence, a mandate for individuals to have insurance reduces the adverse selection phenomenon. This is why the insurance industry now supports reform legislation.

Obama Fights Back Against Health Care Critics

2009-08-11T15:15:00.001-04:00

The health care debate has become increasingly intense in recent weeks, with furious protesters disrupting town hall meetings, and former Vice Presidential Candidate Sarah Palin alleging that health care reform will lead to the establishment of “death panels.”

In an attempt to combat these critics, President Obama will be holding three town hall meetings of his own this week, and has established a new section about health care reform on the White House website, entitled ‘Reality Check.’

At today’s town hall, Obama directly addressed the death panel claims (From the ABC News Blog):

“It turns out that this I guess rose out of a provision in one of the House bills that allowed Medicare to reimburse people for consultations about end of life care” as well as living wills, hospice care, and the like. The “intention,” the president said, was to help patients prepare for “end of life on their own terms.”

President Obama said the “irony” is that one of the chief sponsors of this idea was Sen. Johnny Isakson, R-Ga., who “sensibly thought this would expand peoples’ options.”

Teva Pharmaceutical: Number One in Generic Drugs

2009-08-06T11:25:00.006-04:00

According to the FDA, around 44% of all prescriptions are filled with generic drugs. Recently, Fortune Magazine had two interesting articles on the topic. The first was an article about the number one manufacturer of generic drugs, Israeli company Teva Pharmaceutical, and the second about the top generic drugs in terms of sales.

Generic drug companies make their money by reverse engineering patented drugs made by other companies, and then selling them for less when the patent expires. Currently Teva Pharmaceuticals is number one in the segment, receiving 22% of all generic prescriptions in the US, and making $11 billion in revenues last year. Teva’s top selling generics include one for high blood pressure, and one for epilepsy/bipolar disorder.

There are two things that separate Teva from competitors, and make them number one. First, they have a “blockbuster” drug of their own, for multiple sclerosis, which accounts for $2 billion in revenue. They are the only generic company with such a drug. Second, Teva often begins selling generic versions of drugs while they are still supposed to be under patent. They are able to do this by proving another companies patent is ‘unenforceable.’ In 2004, they argued that the patent on a blockbuster blood pressure drug was ‘obvious,’ and in 2007 they were able to begin producing a generic version of it. The patent wasn’t supposed to expire until 2017.

This is incredibly annoying to the big pharmaceutical companies. As a result, they are beginning to form their own generic divisions, making competition in the generic space intense. This could be bad news for Teva, but more competition and more interest in generic drugs can only be good news for the consumer.

Opinion Polls and Health Care Reform

2009-08-04T10:18:00.010-04:00

Many times in political debates, people will use opinion polls as an argument for their position. One can argue for health care reform by pointing to the most recent Time poll, which says 46% of Americans think we need health care reform. Or one can argue against it by citing the most recent NBC/Wall Street Journal poll, which says 46% of Americans oppose the way Obama is handling health care reform. The point is, are public opinion polls even valid at all when it comes to complicated issues like health care reform?

Former Senior Editor of the Gallup Poll David W. Moore is very skeptical of polling. Last year he published a book called The Opinion Makers, where he talked about how polling can be affected by various factors such as how well informed the individual taking the poll is, or how the pollster phrases the question.

He recently wrote an article about the topic of health care reform polling, which is best summed up with these two paragraphs:

"The question on approval of Obama's handling of health care is a classic case of how polls sometimes mislead more than they enlighten. The public's response to the question is not based solely on the president's behavior, but on the general issue.
The truth is that probably about a third to a half of all Americans have little to no idea of what exactly Obama is proposing, nor how engaged he is in getting the legislation passed. But most can hardly be unaware of the controversy surrounding the issue. Typically, polls show that the more coverage an issue receives in the news media, the lower the approval rating for anyone associated with it. That's because people generally react negatively to press coverage of issues when the major focus of that coverage is on how much legislators disagree."

Incidentally, according to the most recent Gallup poll, 48% of Americans believe they have a good understanding of the issues in the current health care debate, but only 27% believe the members of Congress do.

Social Networking and Health Care

2009-07-31T14:31:00.000-04:00

Social networking has taken over the world. Facebook and YouTube are two of the most trafficked sites in the world, with MySpace and Twitter not far behind. Aside from these major sites there are an infinite number of smaller forums, where people get involved in ‘virtual communities.’ Some of them, like patientslikeme.com, are about people’s health. I spoke with Oakland University Professor of Management Information Systems Balaji Rajagopolan, about the good and the bad when it comes to this type of virtual community.

Professor Rajagopolan is currently beginning research on health related social networks for a new study about the interaction between virtual communities and health information. “We chose to study health care because of the extent to which people are relying on the internet for health information,” he says. According to a recent Pew Internet study 61% of Americans are looking online for health information, 60% of these say what they read affected their decision about how to treat an illness or condition, and 53% said it led them to ask their doctor new questions or get a second opinion.

Obviously the amount of information out there to inform patients is very useful, especially coming from a trusted website. When the information is coming from a social network, where anyone can say anything, it’s harder to know what information is trustworthy. Individuals who are ignorant but sound knowledgeable could be giving out bad advice, or a corporation itself could use employees to create fake users to subtly promote their own products. “There is an opportunity for an organization to come in and set standards, to see how communities are maintained, so erroneous info is not part of the content,” the professor says. Something like a Better Business Bureau for social networks.

Aside from the risks of bad information, what about privacy? “The extent to which people are willing to share personal information on social networks is astonishingly high,” Professor Rajagopalan says. Anyone can go on the incredibly interesting website patientslikeme.com, and find out what diseases a random user has, or how depressed they are feeling that day, within seconds. The users don’t usually reveal their real names, but many of them do put their (seemingly) real pictures up. In addition to that, patientslikeme.com makes money by selling aggregated information to drug companies, and its partner Novartis uses the site to recruit for clinical trials. This does raise some ethical questions as this information is not clearly made known to the user at sign up.

However, in the end these issues may not be very important to those who frequent these virtual communities, because the main reason people join is to connect with others who are facing similar challenges. With the virtual communities, it’s possible someone who was just diagnosed will find another person who is in the exact same situation they are, who can give them very specific advice. “If you look at their physical network, it is very unlikely they will find this kind of support in their real life relationships,” the professor says, “Participating in virtual communities opens the doors and provides great benefits.” The question is, when it comes to information on the internet, do people just make low risk decisions based on what they read, or are they willing to make high risk decisions based on it? Finding the answer to this question is one of the goals of Professor Rajagopalan’s research.

Jennifer Granholm Speaks on Health Care

2009-07-28T10:18:00.005-04:00

Last night CNBC aired a special entitled "Meeting of the Minds: The Future of Healthcare," which featured Michigan Governor Jennifer Granholm as one of seven panelists. She was the representative of the Democratic Party on the panel. Other panelists included the President of the AMA, the CEO of WellPoint, and the Chairman of the Cleveland Clinic.

Here is a short clip of her appearance. The entire special re-airs Sunday night at 8pm, and Monday night at 9pm on CNBC.

Health Insurance Reform not Health Care Reform

2009-07-23T10:21:00.004-04:00

One of the more interesting things about President Obama's news conference last night was his decision to try to reframe the debate on health care reform. The administration is no longer calling it health care reform at all, they are calling it health insurance reform. Newsweek's 'The Gaggle' blog claims the reasoning behind the change is that people don't exactly know what health care reform is, but they do know they don't like health insurance companies.

Aside from that, there was only one other thing I thought was noteworthy. This was when Obama mentioned single-payer health care, "I want to cover everybody. Now, the truth is that, unless you have a -- what's called a single-payer system, in which everybody is automatically covered, then you're probably not going to reach every single individual."

In the past, one of the main attacks on Obama's health care policy was that it was just the first step on a slippery slope to single-payer health care. So I figured this innocuous comment would definitely restart that line of attacks, but from what I have seen not many people cared, I did find a few liberal blogs mentioning it, but I haven't found many mentions of it in my searching of the Internet.

Finally, I mentioned intrade.com before, and I decided to see if the Obama press conference moved the needle with the 'traders' on that website, and it has. Currently intrade.com places the odds of health care reform passing this year at 50/50. Last time I mentioned it, there was only a 39% chance.

How To Lower Health Care Costs Without Doctors

2009-07-21T11:32:00.002-04:00

What is the best possible way to lower health care costs? Many people, including Oakland University Marketing Professor Mukesh Bhargava, believe that it is wellness programs. Wellness programs, and social engineering.

Currently two thirds of all companies have some sort of wellness program, which can range from flu shots, to health screenings to fitness programs. These programs are supposed to motivate people to take care of themselves, leading to a decrease in costs for an organization. Currently, the way organizations reduce costs is by reducing coverage and increasing co-pays.

When Professor Bhargava was part of the wellness program at Oakland University, the employees were measured for vital statistics, told their ideal body measurements, and what exercises they needed to do to reach those goals. There was one advisor for a group of four employees and they kept track of progress. Although Professor Bhargava believes wellness programs are the way to go, he admits he was not serious about it at first. In fact, it wasn’t until he was out of the program that he became serious about his health. He says it got him used to going to the gym, “in the short run the program didn’t work, but a year later I started going to the gym.”

Professor Bhargava eventually began to take the program seriously, but how can employers convince all employees to do this? The Professor uses the example of smoking. People who smoke get their insurance rates bumped up, but usually this negative incentive is not enough to get them to quit. He believes that small positive incentives would be better at motivating employees. What exactly those incentives should be would depend on the situation.

Smoking is also socially unacceptable. Smokers are forced to go outside, people do not like the smell, etc. In order to increase overall health, unhealthy foods need to be equally socially unacceptable. Professor Bhargava reference the book Nudge by Richard H. Thaler and Cass R. Sunstein, which argues for “libertarian paternalism.” He says it is about letting people choose, but choosing among the right things, like choosing from three types of salad. “Depending on the order of the items on the menu people change their choices from 30-40%,” he says.

Why would restaurants bother doing this on their own, won’t it take government action to force restaurants to be health conscious? “The government should not get involved with this,” he says, “McDonald’s doesn’t score in terms of what people want, if they are smart they will do something about it with the young.”

Regardless of whether or not the government should be getting involved, they are. The Senate is working on a bill that would require restaurant chains to post the calorie count on the menu, and this is already the law in New York City.

What the Blogosphere is Saying About the House's Health Care Proposal

2009-07-16T10:23:00.007-04:00

On Tuesday, the House released their 1,018 pag e health care proposal, so I decided to sum up what the blogosphere has been saying about it. There is a lot more interest among conservative blogs, but this is to be expected since blogs are often used as attack vehicles when it comes to things like this.

Conservative blogs are saying that under this plan an individual who currently has insurance coverage will not be able to change their plan at all, insurance companies will not be able to raise premiums on individuals to adjust for risks, and insurance companies will not be allowed to write new policies after the public option becomes law. They compared this public option to medicare, saying it will similarly destroy private health insurance altogether just like medicare took out health care for seniors. Finally, they attacked the policy on taxes and spending. They say requiring small businesses to provide insurance or face a 8% payroll tax will destroy them, those earning under $350,000 would have to pay a tax as high as 3%, and the total cost of the plan was not mentioned in the entire document. There are also a lot of references to this Investors Business Daily Editorial.

It was not so easy to find everyday liberal blogs talking about this proposal. However, the comment section of this blog argued that nothing is worse than the current system and insurance companies should not be protected because of their past sins. Paul Krugman argued that the estimated $1 trillion cost over the next decade to give people health insurance is a bargain compared to the $1.35 trillion Bush tax cut. Finally, Robert Reich argued that the House got it right, by planning to tax the rich to pay for health care.

People Place Their Bets Against Health Care Reform Happening This Year

2009-07-14T10:19:00.006-04:00

President Obama wants a health care reform bill on his desk by the August recess. As time continues to tick by, it is beginning to seem less likely. Obama has said "“Inaction is not an option. And for those naysayers and cynics who think that this is not going to happen, don't bet against us.”

Well, people are betting against him on the website intrade.com. If you click on this link you will see the "contract" that shows the intrade market predicts a 39% chance of health care reform passing this year. Intrade.com is like the stock market, except instead of stocks it trades things like "will Mahmoud Ahmadinejad win the Iranian election" or "will Harry Potter gross over $70 million." It did a pretty good job predicting the election results last year, so we'll see if the market is right about health care reform as well.

OU Professor Comments on the US and Canadian Health Care Systems

2009-07-09T10:16:00.006-04:00

In the health care debate, saying the United States is headed towards a “Canadian” style health care system is often used as an insult and a nightmarish scenario for Americans. Should this be the case? We have all heard anecdotal horror stories about people in Canada being forced to wait months for surgery , so is the Canadian health care system really that bad? Or is it worse in the US?

Oakland University Marketing and Management Professor Mukesh Bhargava lived in Canada for several years, and experienced both systems. He feels that the Canadian model is superior to the current US system. “It was refreshing that any treatment you want you can get. If it’s a matter of life and death I know I’d get good coverage,” he says. He believes the system as a whole is better in Canada, and in countries with universal coverage in general. In other countries, the doctors decide what sorts of surgeries are critical, and which are not. The doctor decides whether the government should pay for teeth whitening, or not.

He does not believe that health care should be market based, he feels it should be a right and not determined by who has the money. “What does it say about a country if people can’t get minimal access, what if the same thing was applied to education? Only for those who can afford it. What if you could only take your case to court if you are rich, and if not you couldn’t?”

In Canada, pharmaceutical companies are forced to cut prices by 2/3 of what they are here, and the doctors get paid less, but he assures me “they are not doing that poorly.” A common argument against making drug companies cut costs, is that if they had to cut costs like in Canada, then they won’t be able to afford to do the important research to find new drugs. The professor is quick to point out that “pharma spends more on marketing than on research.” The drug company Pfizer spent 8 billion on research and development last year, as opposed to 14.5 billion on selling, general, and administrative expenses.

“In the US it costs a lot to get your message to the doctors,” he says. He is concerned about the way products are marketed to doctors in the United States, worrying that whichever company gives the best perks to the doctor is going to get their drug prescribed. He compares it to the textbook companies, who all send him free books. “When I choose a textbook I badger them about price, I don’t know how many doctors know the cost of medications they prescribe.”

Professor Bhargava supports the Obama plan, and believes the health care system in the United States needs to change. He recommends this New Yorker article about two Texas towns with a large disparity in health care costs. So that makes at least one person who has experienced both systems, and actually thinks the Canadian system is better.

Can Increasing the Role of Primary Care Doctors Help Cut Costs?

2009-06-30T11:33:00.004-04:00

There was an article in the most recent issue of Businessweek about the growing popularity of giving primary care doctors a larger role in health care to help cut costs. The idea is that these doctors would serve as a "medical home," and handle almost all health issues instead of referring people to specialists. The problem is only 17% of medical graduates enter this field, and some say many primary care doctors do not have the expertise to handle issues ranging from helping people lose weight to chronic pain management.

One major advocate of this idea is President Obama, who will be holding an online health care forum tomorrow, with questions being submitted via twitter, facebook, and youtube.

Obama Health Care Forum on ABC

2009-06-25T12:05:00.004-04:00

Last night, President Obama appeared on ABC for a health care forum. In case you missed it, and are interested the transcript is available here.

There were two questions that I found to be particularly interesting. The first came from an Epilepsy specialist named Orrin Devinsky, who asked what Obama would do if a member of his family became seriously ill, and the only option to help the family member was to go outside the coverage in the national plan. Obama inferred that he would go outside the system, saying "if it's my family, member, it's my wife, if it's my children, if it's my grandmother, I always want them to get the very best care." He also stated we need to find a way to remove skewed incentives but at the same time not prevent people from getting the care they need.

The other question I thought was interesting was posed by moderator Charlie Gibson, who asked how the health care system will be able to deal with 46 million more patients, when the number of doctors will not grow at that same pace. Obama said that the policy will be phased in over time, and that removing beauracracy, getting nurses more involved, and lowering ER visits through wellness programs will help ease the burden.

OU Economics Professor on Obama Health Care

2009-06-23T10:43:00.004-04:00

Over the past several weeks health care reform has been a major topic of discussion in congress and it has been generating a lot of controversy. As many already know, President Obama will be appearing on ABC in order to discuss his health care policy tomorrow night, so I thought it would be a good time to ask Oakland University professor of Economics and Management Miron Stano what his thoughts were about Obama's policies.

Professor Stano has a few concerns with the Obama plan, mainly revolving around the potential cost and its effectiveness. Obama originally estimated a net additional cost of $50-56 billion for health care reform, but Professor Stano believes this is too low. “One independent estimate projected costs of $1.63 trillion over the 10-year period ending 2018 while still leaving 33 million people uninsured in 2018 compared with the projected 67 million under current policy.” He cites another recent estimate which says full year coverage would cost at least $123 billion per year, and “if more generous plans become the minimal standard, and fees increase as a result of additional demand for health care, the projected costs would be correspondingly greater.”

Obama plans to cut health care expenses by utilizing electronic medical records (EMR), as well as reducing payments to pharmaceutical companies, hospitals, and other health providers. Professor Stano is not convinced that EMR will be effective in the short run, although they have good potential long term. He says that analyses of EMR have only shown minimal improvements to patient safety so far, and that “it may take many years before any IT investment will pay off.” Reducing spending on pharmaceutical companies and hospitals sounds like a great idea at first, but there are drawbacks, and Professor Stano believes that these cutbacks may slow down innovation, and potentially lower the quality of care patients receive.

If health care reform is indeed on the way, and reducing costs or taking on new debt will not be the method of funding, then we will be looking a new tax of some kind to pay for the system. Which tax would be best? Professor Stano says no matter what method of taxation they choose to fund these reforms, ultimately the cost comes back to the individual in the form of lower wages, higher prices, or higher taxes. With this in mind, he believes “It is probably time that we look at a value added tax to deal not only with health care but also Medicare and Social Security. Even though a VAT is regressive, it may well be the best option.” The issue of a regressive tax can be dealt with by offering additional income tax credits to lower income families.

Although there may be problems with Obama’s health care plan, Americans want something to be done with the system. The professor cited a study that showed 16% of Americans thought the US system needed only minor changes, and 34% believed the system should be totally rebuilt. With numbers like these it appears Obama has a mandate to do something, and that “Americans are ready for change.”

Introduction

2009-06-18T10:16:00.002-04:00

My name is Rob, I am a student at OU, and I will be running this blog for the Oakland University Executive MBA program. My goal will be to provide updates on current events in health care and information systems, as well as discussions of the issues with different professors who have taught in the program. I plan to update this blog with new content on Tuesdays and Thursdays. Hopefully I will really kick things off next Tuesday by posting a substantive piece with one of the professors from the program.