I urge everyone to read this story by David Leonhardt in this Sunday’s (November 8) New York Times. (Thanks to reader Lisa Lindel for spotting it. )
Leonhardt profiles Intermountain Healthcare, a network of hospitals and clinics in Utah and Idaho that President Obama and others have described as a model for health reform.
“If you simply looked at Intermountain’s overall results — the good outcomes and low costs — you might be tempted to dismiss them as a product of the environment. Utah has the youngest population of any state, as well one of the lowest rates of alcohol and tobacco use. More than half of the state’s residents are Mormons. This homogeneity creates a noticeable sense of community, even a sense of mission, among many Intermountain doctors and nurses.
“The places that spend far more on medical care and get worse results — south Texas, south Florida, New York City and its suburbs — don’t have those advantages. They tend to have more diverse populations and a more diverse set of medical needs. None of these places is ever likely to reduce its costs, or raise its life expectancy, to Utah’s levels.
“But once you acknowledge all this, you are still left with some fairly striking facts. There is nothing inherently Mormon about waiting until the 39th week to deliver a baby. Nor is there something unique to Utah that allows doctors there to analyze their results and systematically try to improve them. There is no reason, really, that a hospital anywhere else cannot do the same. Maybe more hospitals will begin to do so on their own, pushed by the same internal forces that remade medicine a century ago. But maybe not. The economic incentives in health care are still pointing in the other direction. As long as doctors and hospitals are paid for each extra test and treatment, they will err on the side of more care and not always better care. No doctor or no single hospital can change that. It requires action by the government.”
Leonhardt then asks: “How much will health care reform do on this front?”
He suggests that we should not scoff the Medicare pilot programs that have made their way into the health-reform bills now being considered by Congress. During President Bush’s tenure, there was little chance that these projects would ever see the light of day. But, Leonhardt points out, under the Obama administration, if they work, it’s likely that they will become mandatory.
Leonhardt describes a few of the Medicare reforms that the legislation calls for: “One is a bundling program, in which Medicare would pay hospitals a set fee for certain operations or chronic illnesses, rather than paying piecemeal for every aspect of the treatment. Hospitals would then have an incentive to avoid complications and readmissions, because they would no longer be automatically reimbursed for them. The hospitals that did the best job of keeping their patients healthy would end up helping their bottom lines. The details are still being fleshed out, but Medicare or private hospital groups would most likely monitor outcomes to make sure the incentives didn’t lead hospitals to skimp on care or turn away the sickest patients.
“These pilot programs have been largely overlooked in the public discussion of health reform, because they start small. At first, they would be voluntary. Places like Intermountain would presumably sign up for them, and high-cost hospitals would not. But the Obama administration is hoping to make the pilot programs national — and mandatory — if they are successful. In that case, the program would suddenly not be so small. It would begin to attack medicine’s most upside-down incentives.”
Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in the New York Times, Barron’s and Institutional Investor. She is the author of “Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the health care system. A fellow at the Century Foundation, Maggie is also the author the increasingly influential HealthBeat blog, one of our favorite health care reads, where this piece first appeared.