Health care mega-system for Vermont

On Jan. 19 Prof. William Hsiao of the Harvard School of Public Health unveiled his recommendations for this year's version of health care reform in Vermont. The 2010 legislature defined and paid for Dr. Hsiao's work to support the final all-out push to make Vermont the first American state ever to install a taxpayer-financed single payer system.

Before plunging into the Hsaio report itself, it's worth looking at the track record of the report's principal authors, to understand how they approach health care reform issues.

Dr. Hsiao rose to fame for devising the Resource-Based Relative Value Scale (RBRVS) to control Medicare payments to physicians, adopted by Congress in 1991.

Writes Pacific Research Institute health policy expert John R. Graham, "[Hsiao] put together a large team that interviewed thousands of physicians from almost two dozen specialties. They analyzed what was involved in everything from 45 minutes of psychotherapy for a patient with panic attacks to a hysterectomy for a woman with cervical cancer. They determined that the hysterectomy takes about twice as much time as the psychotherapy session, 3.8 times as much mental effort, 4.47 times as much technical skill and physical effort, and 4.24 times as much risk. The total calculation: 4.99 times as much work. Eventually, Hsiao and his team arrived at a relative value for every single thing doctors do."

"Today," Graham continues, "Medicare's RBRVS and Sustainable Growth Rate rules for fixing prices are so flawed that the Congress that consistently champions this price-setting process is annually engaged in a routine effort to change, modify, or even stop the progress of its own pricing machinery before it inflicts damage on the public and the medical profession."

This annual exercise is called "the doc fix". It played an important part of last year's debate over ObamaCare (because the Democrat leadership took it out of the ObamaCare legislation, in a desperate attempt to keep that legislation's ten year price tag under $1 trillion.)

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