Logrolling and market power in contract talks

Typically, full service health insurance companies will have several clusters of business. There is the low cost government cluster of Medicaid and SNP managed care. There is the medium cost government supported sector of Medicare Advantage, CHIP and low cost Exchange plans. And then there is the higher premium cluster of employer sponsored fully insured (ESI) plans and Administrative Services Only (ASO) self-insured employer plans. I worked at a full service firm. I was on the Medicaid geek team for the last three years.

Recently, I brought up the Rogers, Chernew and McWilliams Health Affairs paper on the impact of market power on local level provider and insurer pricing. They were only looking at employer sponsored insurance market power. They found what was to be expected. Entities with high relative market power got “better” rates from their point of view compared to entities with low market power. This was a good set of results as they were able to math up the trade-offs and attach some real numbers to the intuition.

My question though is how to account for the results if we are to assume that log-rolling in negotiations occurs?

An insurer might have a low market share for the high premium ESI/ASO market in a region. That same carrier could have a very high market share of the Medicare Advantage market. If that carrier is talking with a hospital that has never been in network to sign a comprehensive, all products contract, does the negotiation’s plausible agreement region get defined by each line of business’s relative market share or is the plausible agreement region defined solely by a blended dollar weighed market share?

More practically, does a hospital say that in order to get a stream of the Medicare Advantage money they’ll take lower than anticipated by RCM commercial rates or the carrier offer slightly higher Medicare Advantage rates to buy access for the employer side plans?

My intuition is that this type of log-rolling happens a lot. So how does it get measured and evaluated?

I don’t know.

April 21st blogging the last 4 years

Austin Frakt was asking what he should blog about on twitter last night, and most of the suggestions were interesting (and important) questions that don’t really have an evidence based answer. I thought, I wonder what I was blogging about on April 21st (or nearest date in April) the past 4 years (my blog started summer 2009). Here goes.

  • 2013. Text of the North Carolina Medicaid reform bill was released. The so called Partnership for a Healthy North Carolina is a phrase still used, but the plan has shifted away from straight privatization of Medicaid.
  • 2012. The next bubble college tuition? was the post nearest April 21. The nearest health policy post was one Looking at the future of payroll taxes v general fund financing of Medicare, given that Part B has a statutory proportion of Part B expenses that must come from general tax revenue, but not a cap on the amount flowing in like payroll taxes do.
  • 2011. A post on the State of the Health Reform debate, coming after a week in which I say I dropped totally out of the discussion during a spring break trip. I claim to have been depressed by the lack of actual policy discussion leading to a deal between the two sides for the next step after the ACA.
  • 2010. On the old blog, a quick hit piece on CLASS Act and Long Term Care, and use of genetic markers to underwrite private long term care insurance. And I announced I got tenure at Duke! Yay team and all that.

My New Year’s Day Menu

I was watching Anthony Bourdain “Parts Unknown-Sicily” the other night, and was amazed at how similar the scene where they slaughtered the pig and then prepared the meat was to the time-honored Eastern North Carolina tradition of “hog killin” on New Year’s Day. I am not planning to slaughter any hogs in the back yard tomorrow, but will have a traditional menu going.

  • Pork Shoulder, cooked low and slow on the grill. I am cooking a relatively small one tomorrow (6 lbs), and will do it with a 3 gas burner with the meat over a burner that is off, and the one furthest from the meat on high and the middle one on low. Aiming for ~225 degrees for around 6 hours. It is better with charcoal, and even better with dried oak wood (I am not a fan of mesquite), but lots more work.
  • Rub for the shoulder. I am constantly tweaking my recipe and rubbed the shoulder with the following about 24 hours before I will put it on the grill. One quarter cup of brown sugar; 3 Tablespoons of Cayenne pepper; 3 Tablespoons of crushed red pepper; 2 tablespoons salt; 1 tablespoon cumin; 1 tablespoon sage. 2 tablespoons minced garlic. Mix it all together by hand and then rub it on the meat side (I only salt lightly the fat side). Then put the meat in the fridge in a pan covered by foil.
  • Sauce for cooking. The following sauce is applied during cooking ~ every hour. The main reason is to cool the meat during cooking and to keep it from drying out. This sauce is also good on cooked meat, but others like other finishing sauces. To each his own. Cooking sauce: Apple Cider vinegar, with cayenne pepper, crushed red pepper and minced garlic. Quantities to taste. Bring the ingredients to a boil in a pot for 5 minutes and then turn it off covered. Bottle it to save. Note: this will be like tear gas if you bring it to a boil it in your house, so do it on a grill or otherwise outside. You can just add these ingredients sans boiling, but the cooking fuses them.
  • Collards (cooked on the back porch because the smell they make in the house is well, distinctive, shall we say). I have cooked them once in the house in 21.5 years of marriage (emphasis on once). Today I am slow boiling a ham hock all day and will then cook the collards in the morning in the pot liquor. You bring collards to a boil and hold there for around 15 minutes, then put the top on the pot and turn them off and let them sit for about an hour. I like them fairly chunky (some put them into food processor, but too mushy for me).
  • Black eyed peas are soaking and will do so overnight. Then bring to a boil and simmer around 1 hour. Serve with chopped red onions and fresh jalapenos.
  • Cornbread. A twist I like is to add a can of corn to two packages of mix, with 2 tablespoons of sugar added in. It will take a bit longer to cook with the corn it, but it is worth it.
  • Baked sweet potatoes served with butter and cinnamon for dessert.

Best wishes for a prosperous New Year.


My sister Tiffany and I are going with my Dad to Normandy, France tomorrow for 6 days to see the D Day beaches and related cultural sites.My dad has always wanted to see this part of the world, and earlier this year he had some health issues that made it obvious that this Fall was the time for us to go ahead and do this and not put it off. I am teaching my class on Tuesday, giving an exam proctored by my TA on Thursday, and back in time for next Tuesday’s class. A whirlwind trip, for sure, but time well spent. I won’t be blogging while gone.

Gone fishing

I will likely not be blogging until July 10.

Role of religion/faith and views of death and treatment

Andrew Sullivan links to an excerpt from a book (I haven’t read) “What you don’t know about religion but should” by Ryan Craqun on why people who are religious seem to have a harder time facing death:

A growing body of evidence seems to support the idea that the nonreligious have an easier time coping with death than do the religious, at least with their own mortality. Religious people appear to be more afraid of death than are nonreligious people. Nonreligious people are less likely to use aggressive means to extend their lives and exhibit less anxiety about dying than do religious people. That seems remarkably counterintuitive since the nonreligious are much less likely to believe in an afterlife, which is supposed to help people cope with death. But factor in that religious people are contemplating their eternal fate and it begins to make more sense. Even if they have done everything their religion says they are supposed to do, there is always a bit of uncertainty about where they might end up. As a result, religious people appear to have a greater fear of dying than do nonreligious people.

As a Christian who over the years has had quite a lot of experience at being the most liberal (or one of them anyway) person in a given Church, etc. I have long been fascinated by the seeming disconnect between stated beliefs and fear of death–especially as these fears relate to worries about whether one might have care “rationed” or denied to them. My awareness of this paradox was acute during the “death panel” lie/brouhaha during health reform.

I wrote a letter of intent for a proposal competition with Raymond Barfield, and oncologist at Duke to try and study this (Letter of Inquiry.NIHCM.DonTaylor.8.15.12 if anyone wants to run with it). We were going to develop a series of health care scenarios and have members of different groups discuss them (both faith groups and non faith groups; hypothesis was that the more religiously conservative, the more fearful of death and being denied last ditch treatments) and were going to observe the differences in the language and judgments that different groups used. Alas, it was not funded….this is likely one of those things I will never get around to studying. However, understanding the role of faith/religion in talking about limits in medicine and how to address same is a difficult issue in a polarized nation. If you are interested in this topic look up Charles Camosy at Fordham.

Backyard BBQ recipe

One of the truly tragic aspects of modern life is the use of the term “Bar B Que” as a verb, as in come over and we will “Bar B Que” some hot dogs. No.

Bar B Que is a noun, or a specific  thing: pork cooked slowly over indirect heat and adorned with a variety of sauces. I am not going to engage the Eastern v. Western North Carolina sauce thing here, but simply say that I grew up in Goldsboro, East of I-95 (aka God’s Country), and below I share my favorite version of Bar B Que sauce. The directions below are for the typical backyard gas grill.

  • 8 pound Pork Shoulder (Boston Butt it will likely be called; has some of the shoulder blade intact; you can use a full shoulder picnic as well but will take a big longer). 8 pound Butt will feed ~10 people
  • Dry rub a fully thawed Boston Butt with: Crushed Red Pepper, Cayenne Pepper, Minced Garlic, Salt and very light Cumin. Put the skin side down on the grill.
  • Cook with indirect heat by placing the meat over an unlit burner (I have a 3 burner grill; furthest away on high, middle one on low with meat over unlit third burner)
  • Cook for 4-6 hours depending on how hot your grill might be.
  • Baste at 1 hour intervals using the sauce noted below
  • Bring Apple Cider Vinegar to a rolling boil with the following ingredients in descending magnitudes, to taste: Crushed Red Pepper, Cayenne Pepper, Minced Garlic, very little Cumin. Once it boils, cut off the heat and use it or store it, most easily in a now emptied vinegar jug (it will last forever). Note: this mixture boiled in your house will approximate tear gas, so I do it on the eye beside my grill.
  • Use this sauce to baste as noted, as well as to serve with the meat. The basting is key because it cools the meat and keeps it from drying out.
  • If you insist on putting tomato based sauce on the finished product, well don’t, but if you follow the directions above, the meat will be great just before you ruin it.
  • You can do the same thing (indirect) with charcoal or wood, you just have to tend the fire more. It is best with cured oak wood, but that is much more work. The key is the indirect heat for a long time.
  • I have no idea what a meat thermometer should say, but if the shoulder blade in the cut noted above can be twisted and is pulled away from the meat, it is done. If cooking a full shoulder picnic, the bones in the top of the leg joint will easily pull out by hand when done.

And thank someone who served in the Armed Forces or who lost a dad, husband, brother, daughter, child, etc. doing so this Weekend.