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Highlights of the important and the interesting from the world of health care:
Obama finally gets tough with insurers: Many supporters will respond to President Obama’s newest health care proposal by saying, “What took so long?” Nonetheless, seeking to capitalize on public anger about skyrocketing insurance rates, Obama intends to introduce legislation that would make such huge rate increases much tougher to pull off. Details are sketchy, but Obama’s plan could follow a proposal from California Sen. Dianne Feinstein. That proposal would establish a “national Medical Insurance Rate Authority” that would allow the Secretary of Health and Human Services to review and deny insurers’ rate-hike requests. Already, at least 25 states give their Insurance Commissioners some type of authority to review or regulate premium hikes and other charges, Feinstein says. Still, Feinstein’s legislation would leave no doubt that insurers in any state would need to think twice before looking at double-digit increases.
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In addition, Feinstein’s legislation would create a seven-person panel to advice the HHS Secretary. Here’s that panel’s make-up: two consumer representatives, one insurance industry representative, one physician, and three additional experts. Sounds like a very consumer-friendly idea. However, the question, as always, is whether industry lobbyists are able to tear the bill apart before it goes anywhere. It’ll be a long road, but with Obama’s backing, these new rules may actually have a chance.
Hospital mergers on the way: With health reform efforts stalling, relief from uninsured patients that some hospitals expected may not show up. That could lead some financially strapped nonprofit hospitals to jump into the arms of well-capitalized hospital chains, the Tennessean reports. And as Medicare rates fall, small hospitals may not be able to absorb the blow to their top-lines the way huge chains can. It’s not all bad for the small nonprofits, though. If they’re going to be forced into sales, they should at least command decent prices as competition among the big chains heats up.
“The difference between today and a year ago is buyers have interest in acquisitions and have access to capital,” said one analyst. “A year ago, they might have been interested, but the credit market has just begun to open up again.”
Why fewer IPOs isn’t such a bad thing: The initial public offering craze is gone and it’s not coming back, says San Jose Mercury-News columnist Chris O’ Brien. And that’s a good thing for Silicon Valley as far as O’Brien is concerned. Acquisitions are now king, O’Brien says, noting that the number of IPOs has declined each year since 2000. IPOs have “distorted the ethics and economics” of Silicon Valley, leading entrepreneurs and investors to value the short term over the long term. Further, fewer IPOs mean fewer venture capitalists, meaning an industry “shakeout” is inevitable, as the ranks of VCs thin, according to O’Brien. He seems to believe “a return to sanity” is in the Valley’s future, as money and VCs retreat, perhaps shifting the Valley’s focus back to innovation.
Physician prices jump: Physician prices posted their biggest one-month increase in seven years, Modern Healthcare reports. Consumer prices for physician services jumped 1.1 percent in January, after moving up only 0.1 percent the prior month. Prices hadn’t grown that much since July 2002. What’s it mean? Hard to say whether it’s anything more than a statistical anomaly at this point, but it could be yet another sign that access to health care will continue to grow more difficult for the middle class.