This post was written by Maggie Mahar & Niko Karvounis

On Monday, the Bush Administration announced that next year payments to private insurers who offer Medicare to seniors will rise by 3.6 percent. This is a mistake. The last thing that the Medicare Advantage (MA) program needs is more money thrown at it. Indeed, MA has turned out to be a money-eating monster—in large part because the government gave it a blank check when the program was born, under the cover of darkness, in 2003.

It’s worth pausing to remember this breech birth. The Medicare Prescription Drug, Improvement, and Modernization Act (also known as the Medicare Modernization Act) came to the House for final approval at 3:30 a.m. on November 22, 2003.  It was losing, 219-215, until the House Leadership, in a very unusual move, held the vote open for hours while the Leaders twisted arms. At 5:50 a.m. the legislation passed the House 220 to 215.

Representative Nick Smith later claimed that he was offered campaign funds for his son, who was running to replace him, in return for changing his vote from "nay" to "yea. " He subsequently recanted this statement. Nevertheless, the House Ethics Committee and the FBI launched investigations into whether members of the House had in fact offered  Smith a bribe to vote for the measure.

In October 2004, the Committee  issued its report, revealing that “Majority Leader Tom DeLay  admitted that he offered to endorse Smith’s son Brad, who was running for Congress at the time, in exchange for Smith’s "yea" vote on the Medicare bill,” though the investigation couldn’t find out who offered Smith the money.

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Recently, I’ve been reading less-well known health care blogs—and finding some provocative stories.

Below, Edwin Leap–who is a physician and a blogger–tells a story about trying to find a specialist for a very sick child in the middle of the night.

Let me preface Dr. Leap’s story by explaining that, in the past, specialists who had “privileges” at a hospital (to treat patients there and to use the hospital’s very expensive equipment and operating rooms) were routinely “on call” to treat emergency patients. But these days, more and more entrepreneurial doctors are refusing to fulfill what was once seen as a traditional duty—unless they are paid.

In Money-Driven Medicine, I quote the chief operating officer of a rural community hospital who recalls a conversation with a young doctor who walked into his office and informed him that he would no longer be willing to be on call for the ER. When the doctor had signed on with the hospital, he, like all of the other physicians, had agreed to be available to treat ER patients one week a month. Typically that might mean coming into the ER two or three times during that week. But now, he explained, he wanted to spend more time at home with his children. He was not willing to continue answering the calls unless the hospital would pay him $80,000 a year.

The COO was nonplussed. He knew that an additional $80,000 would work out to $2,200-$3,300 each time the physician came in ( He did not ask how the doctor had calculated that quality time with his children was worth $80,000).

“But we have a contract,” he protested.

The doctor nodded: “Times change,” he said easily.

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This week, I have written two posts for TPM Cafe, where I am a regular contributor.

They are part of what will be a three-part series (with the third part going up early next week) titled “The Politics of Health Care Reform.”

I have written about some of this here, on HealthBeat, but I’ve been refining my thoughts, and have added some new material after reading a brilliant piece in the Journal of the American Medical Association  by Dr. Ezekiel Emanuel, director of Bioethics at the National Institute of Health (and, as it happens, the brother of Representative Rahm Emanuel of Illinois, the leader of the House Democratic Caucus).

If you go to TPMCafe, you will find part 2, which I just put up today, at or near the top of the page. At the bottom of that post, you’ll find a link to part 1. (I suggest reading part 1 first).

You may also be interested in the reader’s comments . . .

Should People in Iowa Pay for Spacious Rooms in Northeastern Suburbs?

In part I of this post, I took on the conventional wisdom that an aging population is driving U.S. hospital bills higher. The truth is that a combination of spending on new construction and hi-tech equipment pushed the nation’s hospital bill to $648.2 billion in 2006 —up 7 percent from 2005. The uptick was part of a trend:  since 2000, outlays for hospital care have climbed anywhere from 5.2 percent (2000) to 8 percent (2003) each and every year. As a result, by 2006, spending on hospitals represented nearly one-third of the $2.1 trillion we shelled out for health care that year.

In recent years, much new construction has been designed to house new technology or upgrade amenities rather than add to the number of hospital beds.  There is just one exception to that rule: the suburbs.

“When hospitals do increase inpatient beds,” Paul Ginsburg, the president of the Center for Health System Change notes, “the new construction typically occurs in rapidly growing suburbs, where well-insured patients live.”

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Kevin M.D. has begun publishing op-eds from readers on his site www.kevinmd.com.

Below a “reader take” by WhiteCoat,  an emergency physician who blogs at WhiteCoat Rant.  I think he raises some good questions.

WellPoint and Aetna are now putting into widespread implementation a refusal to pay for what have been deemed "never" events.

The theory for payment denials is that if medical providers are not paid when certain unwanted outcomes occur, situations leading to those unwanted outcomes will be avoided.

Some events on the "never" list legitimately should "never" happen. I can’t think of any way to justify performing surgery on the wrong patient or performing surgery on the right patient, but the wrong body part. The flaw in the insurers’ theory is the determination on whether a "never event" has occurred is retrospective, not prospective. The insurers are focusing on outcomes rather than processes.

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As regular readers know, over the past few months, I’ve been investigating how much we spend on various sectors of health care, and where we might be able to save.

As the chart below shows, 4.5 percent of the $2.1 trillion that we, as a nation, spend on health care goes to private insurers to cover their administrative costs—which include advertising, marketing, underwriting, lobbying, profits for shareholders and  executive salaries that look like telephone numbers. As I discussed in December, that $94.5 billion (4.5 percent of $2.1 trillion) equals the difference between what we pay insurers in premiums, and what they pay out in reimbursements.

The government then takes a sliver of the pie to cover the paperwork involved in funding programs like Medicare, Medicaid and SCHIP. Note that while the government picks up nearly half of our $2.1 trillion  health care tab, and private insurers pay just one-third, the government needs only $52.5 billion (2.5 percent of $2.1 trillion) to cover its administrative costs—significantly less than the $94.5 billion that  private insurers require to cover their profits and overhead.

In January I took a close look at spending on physicians’ services. Not surprisingly, doctors fees account for a large chunk of the pie—22 percent.  Healthcare, after all, is a labor-intensive business; it is not at all clear how much we can save in this sector.

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Health Wonk Review, a compendium of some of the best health care blog posts of the past two weeks, is up at The Health Care Blog. This week’s host, Brian Klepper, has done a superb job of picking out 20 stellar posts. Here are just a few that caught my eye:

“Over at Health Populi,” Klepper writes, “the ever-reliable (and charming) Jane Sarasohn-Kahn reviews new health consumerism data from the Employee Benefits Research Institute/Commonwealth Fund. Enrollment in Consumer Directed Health Plans (CDHPs) is slight but growing, from a mere 1 percent of people with private coverage in 2006, to 2 percent in 2007…Contrary to the hopes and rants of the ideologues on the right, it turns out that the enrollees in these plans tend not to be born-again uninsureds, but the healthy and wealthy.”

“On the Health 2.0 Blog, the always-entertaining veteran health care commentator and Quality Grand Poo-Bah Michael Millenson takes us on a ride that forces some introspection. In the extremely complex world of evolving health information on the Web, do we health observers drink our own Kool-Aid? ‘Are we open to objective data about what we do, or do we prefer to publicize only affirming anecdotes?’ It’s an uncomfortably reasonable question, and a fair warning.”

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A HealthBeat reader sent me an e-mail about a PBS documentary that is airing tonight.  It’s called “Unnatural Causes” and it describes the major cause of sickness in America. I haven’t seen it, but it sounds interesting.  The documentary first aired last Thursday and will be aired again nationally today (April 3) and the next two consecutive Thursdays at 10PM (local dates and times may vary).

Over the weekend, I read a piece by Brian Klepper on “What Worksite and Retail Clinics Mean for the Primary Care Crisis” over at Robert Laszewski’s excellent blog, Health Care Policy and Marketplace Review.

Klepper is a health care analyst based in Atlantic Beach, Florida who often writes for The Health Care Blog. I met him at a healthcare conference in Washington D.C. a few months ago and found his ideas very interesting—although we don’t agree on everything, as you will see.

Intrigued by Brian’s post, I decided to write a comment. Bob Laszewski then got in touch with me and suggested that he turn my comment into a full-fledged post, and asked Brian to reply.

Below, Brian’s original post, my reply and a link to his response.

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Most people who read this blog understand how drug companies use their reps to try to influence the kinds of medications that physicians prescribe. The question is: do they really have an effect on how most doctors practice medicine? 

Below, an insider’s look at how drug reps operate from the Carlat Psychiatry Blog. A former Eli Lilly rep may sum it all up when he says: “Gift giving is the key. You are programmed as a human to reciprocate . . . As a matter of fact, the smaller the gift, the greater the sense of obligation.”

Thursday, March 27, 2008 : A Drug Rep Tells All

Shahram Ahari, former Eli Lilly drug rep, recently spoke to the Tufts Progressive Medical Students Organization. It was a fascinating talk, because Ahari told us about how he and his colleagues used every trick of salesmanship in the book to increase prescriptions of Prozac and Zyprexa and therefore to maximize their bonuses.

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