Jaan Sidorov has written a fascinating analysis of the Affordable Care Act and Paul Ryan’s Medicare privatization proposal, contextualizing both plans within the concept of “transferring risk” from one party to another. He argues that if the ACA lowers costs by transferring some of the risk of paying Medicare’s medical bills to hospitals and doctors — by lowering their reimbursement rates and encouraging them to become more efficient (i.e. do more with less), the Republicans are shifting risk to insurers and beneficiaries. Ryan’s plan “is an example of transferring some of the risk to commercial insurers in the form of ‘premium support vouchers,’” Sidorov explains. “[B]eneficiaries will use their vouchers to ‘shop’ Medicare’s monetized risk around to insurers. What’s more, because the Ryan Plan will cap the vouchers, beneficiaries are also being asked to reassume a fraction of their monetized risk. As a result, it is likely that they will need to also transfer that to insurers in the form of additional out-of-pocket premium expenses.”

Policymakers on both sides of the aisle agree that the risk should transferred from the government to another party, but disagree about the “where.” Sidorov offers the following insights:

1) Given Medicare’s looming insolvency, it is no accident that the U.S. government is intensely interested in transferring its risk and that it wants to do so at the lowest possible price. This undoubtedly accounts for lingering suspicions among patient advocates as well as health provider trade groups that that the current health reform proposals are attempting to transfer too much risk for too little money.

2) As risk is transferred, so is the responsibility for managing it. Whether it’s up to beneficiaries to find the best deal or providers to find the best cost-effective care paths, the end result for Medicare is the same. Despite partisan debate on the “role of government in health care,” everyone ironically agrees that CMS cannot price or manage risk and that its responsibility in a key dimension of health insurance – even if there are consumer protections and quality bonuses – is ironically destined to decline.

3) Since risk transfer is ultimately a gamble, acceptors of risk need to plan for the possibility that future costs will exceed today’s original price. For commercial health insurers, that has meant keeping a “surplus” in place to guard against this possibility. For providers assuming increasing levels of risk under the ACA, that will mean uncharacteristically keeping financial reserves, untapped beds and personnel on hand, just in case, despite their best efforts, there are greater than expected “never events,” hospital acquired conditions, or care deviations. How well providers will plan for or absorb the losses that could occasionally occur remains to be seen.

4) Finally, risk transfer has been the logic underlying the Medicare Advantage (MA) program, in which risk has been directly transferred to commercial insurers. Politics aside, critics charge that the Medicare beneficiaries that typically enroll in MA have lower than average risk at too high a price and that denials of health care services are all too common. While some of this may be true, it’s doubly ironic that the one policy option that is specifically configured to accept and manage risk is going largely unmentioned in the 2012 debates.

Rick Perry took a shot at Mitt Romney’s Massachusetts health care law this morning during his first one-on-one sit down interview with Laura Ingraham. The 2006 measure, which has extended health care coverage to some 98 percent of state residents, is a “huge problem,” Perry predicted, saying that the plan paved the way for Obamacare:

INGRAHAM: What makes you a better decision-maker on health care issues than he is?

PERRY: I think he’s finally recognizing that the Massachusetts health care plan that he passed is a huge problem for him. And yea, it was not almost perfect. I truly believe that you have to have the free market in play with out health care. I think Obamacare, which was modeled after the Massachusetts plan, was an absolute debacle.

Listen:

But the Bay State’s landmark legislation is only problematic if Republican primary voters believe that extending private health care coverage to state residents is a liability. As a result of the law, almost every child is covered, more private companies are offering insurance, and state spending on uncompensated care is decreasing (the state spent $405 million on uncompensated care in 2010, nearly $300 million less than before reform was enacted in 2006.)

Instead, Perry is suggesting that his own health care record is an asset. That a state with the highest uninsured rate in the nation — 26 percent — health premiums well above the national average, drastic cuts in reimbursement rates to hospitals, and severe doctor shortages, has a health care system to be envied? The comparison of the top-line indicators is less than flattering:

Still, Perry believes that he, not Romney, should serve as a model for health care reform. In July 2010, he proclaimed that Texas has “the best health care in the country,” and if Republican primary voters agree with his assessment, it will only underscore the party’s animosity towards the millions of Americans who can’t afford insurance.

Rick Perry’s campaign has laid out a very preliminary outline of his health care proposal. The plan is a boilerplate concoction of GOP “consumer-driven” ideology that seeks to repeal the Affordable Care Act, deregulate the health insurance marketplace, and shift the responsibility of dealing with the health care crisis to the states. Below are Perry’s four main proposals and my analysis of each:

1) Work with Congress to repeal “Obamacare”: The Congressional Budget Office estimates that eliminating the law would increase the deficit by $230 billion over 10 years, raise the number of uninsured by 32 million, eliminate subsidies and force millions of American families to pay higher premiums, and increase premiums for employer-based coverage.

2) Stabilize the country’s economy for employers, “free states from federal mandates and empower them to develop innovative solutions”: Perry had 11 years to develop an “innovative” state solution, but all we see from his tenure is skyrocketing uninsurance rates in Texas and premiums that are higher than the national average. Still, some states are genuinely interested in lowering costs and expanding coverage, and the Affordable Care Act allows them to do just that — it waives some of the requirements of the law and permits states to design their own reforms, as long as they can meet the same coverage and cost benchmarks.

3) Lower skyrocketing health care costs “through the proven, market-based strategies of transparency, choice and competition”: Again, it’s unclear what kind of policy he’s proposing, since the insurance exchanges that are part of the Affordable Care Act already offer “choice and competition.” But if past Republican proposals are any indication, he’s likely considering allowing insurers to circumvent state consumer protections and sell their policies across state lines. Under this approach, companies would have little incentive to do business in states that require coverage for cancer screenings or have guaranteed issue protections and will instead sell plans across the country that deny coverage altogether to high-cost beneficiaries.

4) Implement Texas-style health care reform: The current health care law already includes similar demonstration projects, even if the Congressional Budget Office has concluded that malpractice reforms could at most save $54 billion over 10 years. When Texas capped non-economic medical malpractice damages to $250,000 in 2003, most conservatives argued that the reform would free doctors from having to prescribe unnecessary treatment to avoid lawsuits. It didn’t work out that way. In fact, Texas’ Medicare spending seems to have actually gone up faster than the nation’s since 2003.

Yesterday at a health conference in Sioux Falls, South Dakota, former Senate Majority Leader Bil Frist (R-TN) predicted that the Affordable Care Act would survive, even if the individual mandate is declared unconstitutional by the Supreme Court:

“I think the individual mandate is unconstitutional. It’s not the bill I would have written,” Frist said. “But it’s not going to fall. The law will be shaped by these elections.” [...] But Frist said state insurance exchanges and a mandate on businesses to provide employee health coverage will bring in substantial revenue to build on the foundation that already has 150 million Americans carrying group insurance through their employers. [...]

He called the reform law 70 percent good and 30 percent bad. He had been out of Congress for three years when the law came up for a vote last year, but he urged Republicans to support it.

Frist supported the mandate back in 2009, when, in an op-ed for U.S. News and World Report, he wrote, “It is time for an individual health insurance mandate for a minimum level of health coverage.” “It is a conservative approach that would affordably achieve necessary goals,” he added.

In April 2010, Frist also gave an “A” grade to the provisions in the law aimed at expanding insurance to an additional 32 million people, but argued that the administration could have done more to control spending.

Last month, a federal judge temporarily blocked Kansas from enforcing a new state law imposing overly rigorous licensing standards on abortion providers pending the resolution of a lawsuit filed by two doctors who perform abortions in the state. Proponents of the new standards — which are far more stringent and specific than what the state currently requires of hospitals and ambulatory surgical centers — argued that stricter licensing requirements would help improve women’s safety, even though the health department issued the new rules hastily, without independently compiling data or studies on how the standards “would make the procedures safer for the women seeking them.” The goal of the licensing law is to regulate abortion clinics out of existence, and that’s precisely what lawmakers in Virginia are now trying to accomplish.

This spring, the General Assembly passed a similar measure, requiring the state’s Board of Health to adopt new regulations “in an unprovoked ‘emergency’ process that bypasses the normal public notice and comment periods for changes in state regulations, and reduces opportunities for input from the trained professionals at the state agencies who know the most about the issues at hand.” As the Richmond Times-Dispatch reports, the draft rules will be released on Friday:

The new rules are mandated to follow an amended Republican-backed bill, Senate Bill 924, which narrowly passed the General Assembly this year on a tie-breaking vote cast by Lt. Gov. Bill Bolling. Anti-abortion advocates at the time hailed it as a victory for women’s health, while abortion-rights advocates said the law — which compels the board to regulate the clinics like hospitals — is really a move to close the clinics, considering it would compel them to undergo retrofitting of their facilities that most could not afford.

Currently the clinics, which handle only first-trimester abortions, are subject to the same regulations as physician practices that perform any number of invasive procedures, such as cataract surgery; colonoscopies; ear, nose and throat procedures; spinal taps; and dental and plastic surgery. Abortion-rights advocates say the new regulations would threaten the closure of 15 or more of the clinics because of the costs involved in retro-fitting their facilities to meet the new requirements.

The state also has more than 40 independent obstetrics and gynecology clinics that would be subject to the regulations if they perform five or more abortions a month.

As Dr. James Kenley, the former commissioner of health in Virginia, explains, the rules “will propose emergency regulations to require abortion clinics to meet hospital-like standards of care, even though abortion is one of the safest medical procedures available in this country and is already heavily controlled by state and federal regulations.” It is also difficult to access in the Commonwealth, “with 86 percent of Virginia’s counties lacking any abortion providers at all.” “The new regulations could make abortions both harder to get and more expensive, possibly taking us back to something akin to that time I recall with such great dismay, when every abortion was a health risk,” Kenley warns.