Tag: Costs

Should Your Doctor Be Thinking About Society’s Healthcare Costs?

Jan 17, 2012• 5

By David Shaywitz

You probably want your doctor to care about people, but how much do you want her to care about all of them? That’s the question I ask when I read articles – generally by bioethicists, often respectable ones – asserting that one of the moral responsibilities of physicians is to be responsible stewards of the healthcare dollar.

This rhetoric concerns me, because I worry it may ultimately degrade the already-challenged physician-patient relationship.

The cornerstone of medicine, the most fundamental principle, in my mind, is the absolute, rock-solid belief that your doctor is your unqualified advocate and will work as hard as possible to provide you with the best medical treatment possible, as if you were a member of her own family (Dr. Marty Samuels and I originally described this as “The Uncle Marvin Test”).

To be clear: this doesn’t mean the most expensive pills – by all means prescribe or substitute an equivalent generic, when available. This doesn’t mean the most expensive diagnostic studies – it’s generally in the patient’s medical interest to avoid unnecessary procedures that usually carry some intrinsic risk and also can lead to false positive results that can in turn lead to needless anxiety — and on occasion, permanent harm. This doesn’t mean extra days in the hospital – a hospital is one of the world’s most dangerous places, and it’s often in a patient’s best interest to be discharged as soon as possible (see here if you need more convincing).

Teaching Residents about Costs: The Price is Right

Jan 3, 2012• 8

By Shilpa Iyer

It all started while out to dinner with a couple of my fellow Brigham/Massachusetts General Hospital OB/Gyn residents. We were discussing our favorite old TV shows and one fellow resident’s love of The Price Is Right with Bob Barker. After talking about the game show, a light bulb went off in my head and I thought, “Why can’t we play The Price is Right with hospital charges to our patients?”

With further discussion we realized that none of us knew the hospital charge, or the cost to our patients for routine workups we routinely order in our gynecology clinic. We really had no idea.

After asking around, I realized that I was not alone in my lack of knowledge, or the idea to play The Price is Right with hospital charges. A couple of years prior the Massachusetts General Hospital Internal Medicine residents had played a similar game with the goal to create awareness of the costs associated with routine workups.

San Francisco’s Universal Health Plan Reaches Tens of Thousands, but Rests on Unstable Funding

Dec 28, 2011• 4

By Barbara Grady

Four years ago, San Francisco launched a grand experiment, becoming the first city in the nation to offer comprehensive health care to its growing ranks of uninsured.

Stitching together two-dozen neighborhood health clinics and an array of hospitals, the city bet that two reforms — emphasis on primary care and a common electronic enrollment system — could improve outcomes and buffer the city against soaring health care costs.Continue reading…

Legislative Pressures

Dec 20, 2011• 2

By PAUL LEVY

As financial pressures impinge the health care system, the various players sometimes seek legislation to protect their interests. I have heard of two such situations in Massachusetts, and I offer them for your consideration and your comments.

The first involves emergency ambulance service. Earlier this year, several of the major insurers in the state stopped reimbursing out-of-network ambulance providers, and instead started to send the checks to patients who used those ambulances. Those ambulance companies now have to try to collect from people for payments, and they are losing hundreds of thousands of dollars.

(This only relates to emergency calls, not routine transfers. For routine transfers, ambulance providers already agreed to be reimbursed at agreed-upon rates with insurers and municipalities.)

I can understand why the insurers want to use lower cost ambulance services, but I have trouble imagining a more cruel thing than approaching a patient or a patient’s family after an emergency situation (which perhaps led to long-lasting disability or death) to collect funds that the insurers have sent to the family. It is also inherently inefficient and adds costs if the ambulance companies have to try collect funds from hundreds of individual patients rather than the few insurance companies.

Rep. Jim Cantwell of Marshfield has filed a bill to force insurers to pay EMS providers, and it has a cost-control provision that would give ultimate rate-setting power to local selectmen. The Fire Chiefs Association, Massachusetts Municipal Association and Massachusetts Hospital Association support this bill. This sounds like one that, in legislative parlance, “ought to pass.”

Then there is a proposal that comes out of the growth of tiered networks, in which insurers charge higher co-pays or otherwise limit coverage to patients who choose higher cost providers. Well, it turns out that some of those high-cost providers are seeking legislation that would require insurers to include them in the low-cost tier of the network. The two fields at play are pediatrics and cancer care. The providers’ argument is that they offer essential services not available at other providers, or that they offer similar services but at higher quality.Continue reading…

The Wyden-Ryan Plan

Dec 15, 2011• 30

By ROBERT LASZEWSKI

House Budget Chair Paul Ryan (R-WI) and Senator Ron Wyden (D-OR) have embraced a Medicare reform plan that in concept borrows heavily from one championed by former New Mexico Senator Pete Domenici and former Clinton budget chief Alice Rivlin.

Specifically, Wyden and Ryan are proposing to alter the earlier Ryan Medicare plan by:

Continuing to offer the traditional Medicare plan—Ryan would have eliminated it—in addition to a range of private Medicare plans offered by health insurers.
Tying federal Medicare premium support to an amount equal to the second lowest cost Medicare plan—public or private—available to seniors in each market. Ryan would have set a flat premium support amount in year-one and increased that only at the rate of inflation.
Instituting a series of consumer protections and medical underwriting rules designed to protect seniors.
Instituting an annual cap on what the federal government could pay for Medicare at an amount equal to the increase in the nation’s GDP + 1%—Ryan would have capped annual increases in the federal premium support amount at the increase in the consumer price index.

On this blog I have been arguing that the risk for health care costs rising too quickly should not be borne entirely by seniors–that the stakeholders who really run the system should be most accountable. And, that is what the Wyden-Ryan plan would do: “Any increase over that cap will be reflected in reduced support for the sectors most responsible for cost growth, including providers, drug companies, and means-tested premiums,” their plan states.
Continue reading…

Florida’s Problem: Cutting Medicaid May Cost More

Dec 14, 2011

By David Williams

Florida is concerned that it spends too much on Medicaid. Unfortunately for policymakers, proposed cuts to Medicaid are likely to be self-defeating according to an Orlando Sentinel article. They may result in more spending as well as boosting the number of people with no coverage – especially children. Components introduced under the guise of personal responsibility –such as charging $10 per month per beneficiary or $100 for non-emergency use of the emergency department– have great intuitive appeal to taxpayers and legislators, yet can backfire in practice.

Experience from Oregon suggests that even modest, sliding scale premiums result in huge drops in coverage. A report from the Health Policy Institute at Georgetown University suggests 82 percent of those who leave coverage would be children, of whom 98 percent would be below the poverty level.

There are clear examples of emergency room overuse, but what’s crystal clear in retrospect is not always evident up front. In any case, hospitals can do their part with effective triage that sends patients to lower acuity settings or back home when patients who shouldn’t be there show up.

Do We Really Spend More and Get Less?

Dec 1, 2011• 106

By John Goodman

The conventional wisdom in health policy is that the United States spends far more than any other country and enjoys mediocre health outcomes. This judgment is repeated so often and so forcefully that you will almost never see it questioned. And yet it may not be true.

Indeed, the reverse may be true. We may be spending less and getting more.

The case for the critics was bolstered last week by a new OECD report that concluded:

The United States spends two-and-a-half times more than the OECD average health expenditure per person … It even spends twice as much as France, for example, a country which is generally accepted as having very good health services. At 17.4% of GDP in 2009, U.S. health spending is half as much again as any other country, and nearly twice the average.

Similar claims were made recently in The New York Times by former White House health advisor, Zeke Emanuel, who added that we are not getting better health care as a result. The same charge was aired at the Health Affairs blog the other day by Obama Social Security Advisory Board appointee Henry Aaron and health economist Paul Ginsburg. It is standard fare at Ezra Klein’s blog, at The Incidental Economist and at the Commonwealth Fund. It is also unquestioned dogma for New York Times columnist, Paul Krugman.

What are all these people missing? On the spending side, they are overlooking one of the most basic concepts in all of economics.

The Doc Fix

Nov 28, 2011• 15

By Merrill Goozner

Holiday cheer and bipartisan bonhomie are still possible on Capitol Hill.

For evidence, one need only look at the so-called “doc fix,” where Congress every year overrides a previous effort at health care cost control to ensure physicians get paid at least as much as they did the year before. Expect another present to arrive at physicians’ offices sometime between Thanksgiving and Christmas, now that the Super Committee has failed to permanently resolve the issue as part of Medicare’s contribution to long-term deficit control.

The heretical thought that the salaries of physicians who treat Medicare patients could be held in check dates from the mid-1990s. The optimistically entitled 1997 Balanced Budget Act created a “sustainable growth rate” (SGR) for physician reimbursement that said any increase in total pay for physicians could not exceed the growth rate of the rest of the economy.

That was wishful thinking, as it turned out. Health care costs and physician pay far exceeded economic growth, largely because of Medicare’s fee-for-service system. While the Center for Medicare and Medicaid Services could fix the reimbursement rate for the 7,000 price-controlled services offered by physicians, it could not put a brake on the quantity that physicians ordered.

“This system, which ties annual updates to cumulative expenditures, has failed to restrain volume growth and, in fact, may have exacerbated it,” the Medicare Payment Advisory Commission (MedPAC) noted in its non-binding recommendations to Congress in mid-October.

FTC Commissioner: Accountable Care Organizations Will Likely Lead to ‘Higher Costs and Lower Quality Health Care’

Nov 23, 2011• 6

By Avik Roy

In August, I wrote about how hospital monopolies are the biggest driver of health costs that nobody talks about. These powerful hospital chains know that insurers have no choice but to accept their jacked-up rates, and the cost of health insurance goes up whenever it suits their needs. Now, according to remarks by Federal Trade Commissioner J. Thomas Rosch, it turns out that accountable care organizations—one of Obamacare’s most touted policy gizmos—could make this problem far worse. “The net result” of ACOs, says Rosch, “may therefore be higher costs and lower quality health care—precisely the opposite of its goal.”

Rosch spoke last Thursday before the American Bar Association’s Antitrust Fall Forum, where he lambasted the “unintended consequences” of Obamacare’s headlong rush into the buzzword-filled land of accountable care organizations. ACOs, you will recall, are meant to improve the degree to which various physicians treating the same patient cooperate with one another. In theory, this would lead to better, more integrated care and reduced waste. In reality, ACOs will also stimulate mergers between hospitals and physician groups, worsening the problem of provider consolidation.

ACO’s purported savings shift costs to private insurers

The Congressional Budget Office, much to the dismay of Obamacare’s advocates, didn’t put much stock in ACOs, projecting that the law’s new Medicare ACO initiative would save $5.3 billion over ten years: eight-hundredths of one percent of Medicare’s projected spending over that period. “In other words,” Rosch points out, “the savings to Medicare from the ACO program are no more than a rounding error. Yet even the CBO’s modest cost savings projections are likely overstated.”

Rethinking Medical Education

Nov 11, 2011• 25

By Victor R. Fuchs

Last spring, in his elegant commencement address to the Harvard Medical School, Dr. Atul Gawande appealed for a dramatic change in the organization and delivery of medical care. His reason, “medicine’s complexity has exceeded our individual capabilities as doctors.” He accepts the necessity of specialization, but he criticizes a system of care that emphasizes the independence of each specialist. Dr. Gawande is not alone in thinking that scientific, technologic, and economic changes require reorganization of care. Larry Casalino and Steve Shortell have proposed Accountable Care Organizations (ACOs); Fisher, Skinner, Wennberg and colleagues at the Dartmouth Medical School have focused on reforming Medicare, and many others have also called for major changes.

I expressed similar concerns in 1974 in my book Who Shall Live?, but at that time I rejected the claim that the problems of medical care had reached crisis proportion. In 2011, however, I agree with those who say the need for comprehensive reform must be marked URGENT. The high and rapidly rising cost of health care threaten the financial credibility of the federal and state governments. The former finances much of its share of health care by borrowing from abroad; the states fund health care by cutting support of education, maintenance of infrastructure, and other essential functions. These are stop-gap measures; neither borrowing from abroad nor cutting essential functions are long-run solutions. The private sector is equally distressed. Surging health insurance premiums have captured most of the productivity gains of the past thirty years, leaving most workers with stagnant wages. Not only is there a pressing need for changes in organization and delivery, but Ezekiel Emanuel and I, in our proposal for universal vouchers funded by a dedicated value-added tax, argue that such changes must be accompanied by comprehensive reform of the financing of medical care (Brookings paper).

But that’s not what I want to talk to you about today. My subject is the urgent need to change the structure of medical education. It seems to me that such change is necessary, and perhaps inevitable, given the revolution in medicine over the past half century, and given the changes in organization and delivery of care that lie on the horizon.