Comments on: The Achilles Heel Of Health Reform: Risk Adjustment Mechanisms

By: gamd521

gamd521 — Tue, 03 Nov 2009 03:07:40 +0000

I think that we are on firmer ground when we speak of cost rather than risk when dealing with health care costs (after all). Risk has a statistical meaning, it is borne out in a groups not in an individual.

The health cost burden for a given population can be assumed by distributing it equally or disproportionately, or somewhere in between. Here you have to apply some standard of fairness. But by focusing on costs alone, risk becomes irrelevant and people are not stigmatized by it, many times unfairly since for any individual the risk is only borne out after the fact.

When we say that people will flock to the PO it is because they are already sick not because they are at risk of it. It is pretty clear that paying the cost for a group that is predominantly sick will be costlier than for one that isn’t. The question is how do you manage that cost effciently.

This is really just a matter of math and fairness and it has been pretty abundantly shown that widely sharing of the cost is the most efficient way to go. One of the main problems, that has to be overcome in the U.S., is that people have a business mentality that has been crammed down their throat. Everything even parlance is in term of losses and gains.
I think that this is the biggest obstacle to managing health costs rationally

By: Jon Walker

Jon Walker — Tue, 03 Nov 2009 02:00:47 +0000

The regulations for the risk adjuster were part of large reform law and several follow up improvements. The Dutch system went through a big revamp in 2006 and the Swiss did in 1994.

By: thenextguy

thenextguy — Tue, 03 Nov 2009 01:27:57 +0000

In the Netherlands, some insurers advertise their network’s ability to treat people with certain chronic diseases. In other words, the risk adjustment works so well that insurers seek out sick patients.

Can you imagine something like that every happening here? Instead of looking for ways to dump the sick, insurers seek them out! Crazy.

By: OrganicGeorge

OrganicGeorge — Tue, 03 Nov 2009 00:56:03 +0000

That’s my point exactly.

The argument being made by is post is that the regulatory language, on the risk adjustment mechanism, used in other countries, needs to be included with the current bill.

…”On probably the single most important issue determining the success or failure of reform, all three bills are practically silence. It will be the job of the Secretary of HHS to make sure reform does not fail do to adverse selection.”..

When the law passes HHS will have the job of promulgating the rules, with all the public hearings, drafts, comments more drafts and finally a rule on the risk adjustment mechanism. I’m sure a similar legislative path was taken by these countries the author admires.

If I’m correct then what is the purpose of this post?

By: Scarecrow

Scarecrow — Tue, 03 Nov 2009 00:31:12 +0000

The risk adjustment mechanism is required by statute but implemented and enforced by regulatorsm who fill in the details of how it will work and acquire the information to determine who much to reallocate and to whom.

By: OrganicGeorge

OrganicGeorge — Mon, 02 Nov 2009 23:17:48 +0000

I cannot follow this post.

You talk about the regulations other countries have imposed on the insurance companies. But you don’t specifically state that their regulations were part of a health law passed by these countries.

Are the risk adjustment mechanisms, currently being used by other countries, a result of legislation or regulation?

Your entire argument rest on the answer.

By: selise

selise — Mon, 02 Nov 2009 23:13:19 +0000

a po is not a requirement for universal healthcare. good regulation or single payer appears to be (at least both have worked in multiple cases). to my knowledge, a public option in a weakly regulated multi payer system has never worked. does anyone have better info than me on that?

By: selise

selise — Mon, 02 Nov 2009 23:09:11 +0000

yes. in fact he was asked to advise taiwan. they went single payer.

By: marcopolo

marcopolo — Mon, 02 Nov 2009 22:46:14 +0000

Sorry about that 2nd post…didn’t see the 1st had gone through.

Uwe in a previous life as a nuclear expert at 2:01 mins:

http://www.youtube.com/watch?v=ZTstgN8ReTo&feature=related

By: marcopolo

marcopolo — Mon, 02 Nov 2009 22:37:04 +0000

Uwe Reinhardt, the Princeton economist, has written a lot about this. He should really be on any Federal level team that is looking at PO design. Very knowledgeable, has a sense of humor, as a Canadian citizen, sees the logic of single payer.