THCB

Categories

Tag: Costs

If Doctors Lead, Will Health Care Costs Follow?

• 1

By NAOMI FREUNDLICH

Can doctors and other health care providers be the driving force in achieving cost-effective health care? In their commentary in the New England Journal of Medicine, Stanford professors Victor Fuchs and Arnold Milstein, call this the “$640 billion question.” That figure represents the savings to the national health care bill if all U.S. physicians and health care organizations could follow the example of individual providers who already deliver high-quality care at a costroughly 20% lower than the average.

The authors ask “Why don’t cost-effective models diffuse rapidly in health care, as they do in other industries?” The answer, according to Fuchs and Milstein, is that a long list of stakeholders has interests that are effectively blocking the “diffusion of cost-effective care.” These include drug and medical device-makers who tout their new, more expensive products as always better than older (and cheaper) alternatives; insurance companies with high administrative costs; employers who offer just one or two benefit plans to workers; legislators who accept donations from health industry insiders, academic health centers that tolerate cost inefficiency as the price of training residents; and others whose vested interests keep them from fully embracing cost-effective care.

The media is also to blame, write the authors, by publishing articles that tout miracle cures and treatments to boost newsstand sales and failing to convey risk/benefit information accurately.

Trying to cut health care costs has often been compared to squeezing a balloon; pinch the air out of one end and it will fill up the other. Or as the Canadian economist Robert G. Evans recently told a Group Health audience, “look carefully at so-called ‘waste’ in the U.S. health care system. ‘Nothing is ever wasted… Every dollar ‘always goes somewhere, which is what makes it so difficult to bend the (cost) curve.’ In other words, one person’s waste is another person’s income.”

Continue reading…

Are We Ready for Global Payments?

• 2

By DAVID HARLOW

Massachusetts Attorney General Martha Coakley released her office’s second annual report, An Examination of Health Care Cost Trends and Drivers (PDF; see also press release), which contains a wealth of critical data analysis — and also highlights how little we know about certain things — providing some important context for the discussion of the proposed Part III of Massachusetts health reform, a bill filed by Governor Patrick which would create all-payor ACOs and a system of global payments.

At this late date, few would argue against a move a way from fee-for-service reimbursement for health care, or adding quality metrics to the mix, and tying financial rewards to providers to their performance measured against these metrics.  (Consider the Massachusetts Blue Cross Blue Shield ACQ (alternative quality contract) experience.)  The AG’s report, however, highlights the wide disparities in payments to providers based on negotiating strength, rather than quality or cost of care (as noted in last year’s AG report; check out the 2009 special commission report, too).

Continue reading…

Lessons Learned from my Uncle’s Sacrifice

• 6

By JOHN MAA, MD

My uncle’s tale illustrates the fundamentally American tragedy of experiencing financial and medical catastrophes simultaneously, and having to choose between rationing one’s own care or depleting precious financial resources for potentially lifesaving treatment that could as well be futile.

From my perspective as a surgeon, an additional tragedy is that my uncle never got the chance to know his cause of death with certainty. There is a small chance (approximately 5 percent) that his jaundice arose from a benign or treatable condition such as lymphoma, an autoimmune process, or another noncancerous condition, and that if he had received full treatment he would be alive and well today. But a diagnostic surgery would likely have added $100,000 to his final medical costs. Thus my uncle weighed the odds and rationed his own care to preserve his daughters’ inheritance for their future benefit.

To answer the question I posed at the end of the previous article, I do not believe that my uncle was treated fairly by the system. Sadly, he was just a few years too young to receive Medicare benefits, despite having paid into the system for decades. I was especially struck by the feedback about my uncle’s story from readers in France, Poland, Canada, Cyprus, and other countries with universal health care who were stunned to read of the dreadful timing in this desperate situation.

 

Continue reading…

All the Care that Money Will Buy

• 8

By JOHN GOODMAN

I believe we could spend our entire national income on health care. Not by frittering money away, but by spending it on goods and services that even in small ways could improve the odds of better health. (Examples below.)

I find that most people in health policy agree with that assessment, but rarely do they see its logical (and I would say obvious) implication. If we spent all our income on health, we would have nothing to eat, nothing to wear, no place to sleep. There would be only health care. Since that’s clearly an undesirable state of affairs, it must be good for people to refrain from obtaining all the useful care that money will buy. Further, such restraint needs to be exercised quite often.

What brings this to mind is a new RAND study finding that people with Health Savings Account plans consume less care than people with conventional insurance and have lower health care costs. The people who were studied cut back on such “useful care” as mammograms, screenings for cervical and colorectal cancer and even childhood vaccinations.

Some critics pounced on this result and claimed that consumer-directed care is bad for patients. The critics are, of course, very wrong.Continue reading…

Inconvenient Facts (For Both Republicans and Democrats)

• 6

By ROBERT LASZEWSKI

I call your attention to Ezra Klein’s column in the Washington Post this morning.

In it he cites data that has been out there for a long time but Ezra puts some perspective on it that never occurred to me before.

Examining the Kaiser Family Foundation brief, “Health Care Spending in the United States and Selected OECD Countries” he points out, “Our government spends more [as a percentage of GDP] on health care than the governments of Japan, Australia, Norway, the United Kingdom, Spain, Italy, Canada, or Switzerland.”

The data would seem to indicate that even our single payer government-run American health care programs, Medicare and Medicaid, cost way more than similar health plans in these nations.

The argument is often made that we should adopt a single payer—or perhaps a “public option”—health plan in the United States in order to control costs and cover everyone. But it would appear that even those programs in America are way too expensive when compared to similar programs in other industrialized nations.

As for the Republican market-based approach, Klein also points out that those programs have been ineffective at cost control. House Republican Paul Ryan often cites the Medicare Part D drug benefit as proof his proposals to privatize Medicare would work better than what we have. But as Klein points out, Part D premiums have risen 57% since 2006 and the program is on track to see nearly 10% growth in annual costs over the next decade.Continue reading…

Some of My Best Friends are in Private Equity

• 3

By PAUL LEVY

Like moths to a flame, private equity investors are quick to pounce on those sectors of the economy that have the potential for higher than average returns. Such investors also have an appetite for the higher risk that accompanies those sectors. In this manner, private equity can serve a useful role in capital formation for the economy. It also helps money managers who want a portion of their portfolio to be in that part of the risk-reward spectrum.

Health care is a fertile field for private equity. You might not think so because of concern about rising costs, but as someone once said, “One person’s costs are another person’s income.” Let’s look at it this way. First, more people will have access to insurance to pay for diagnosis and treatment because they will be newly eligible for private insurance under the national health care reform law. Second, demographic changes in society are producing an ever-increasing demand for health care services. Longer lifespans and the aging population offer a growing number of people with cancer and the other diseases that are more likely to occur with age. The number of Medicare beneficiaries is projected to rise from 46.6 million today to 78 million in 2030. (It was 40 million in the year 2000.)

It is with this background that we should consider the growing interest by private equity in proton beam facilities. You have heard before about my real concern about the cost impact of rapid expansion of the number of such facilities.

I want to expand on that today and give you a sense of how the dollars work in this kind of investment. I have pointed out how the Medicare rate-setting process contributes to its profitability. Let’s look at this in very rough form.Continue reading…

Costs are Up…Because They’re Higher Than They Were

• 5

By EVAN FALCHUK

In perhaps no other country is there a greater abundance of data about health care than there is in the United States.  And in perhaps no other country is there more confusion as to what’s really going on.

Take the recent report by powerhouse actuarial firm Milliman (disclosure:  Best Doctors uses Milliman for actuarial work).  It’s a fascinating report with some of the best information on American health care there is.

The major take-away:  U.S. health care costs continue going up.

But when people start interpreting the data, well, that’s where the trouble starts.

For example, NPR reports on why costs are going up:

For three straight years, outpatient care has led all other categories of care in cost increases. Ninety percent of the increase is in more types of care being delivered in outpatient settings.

Factually, of course, this is correct.  More and more care is being delivered in outpatient settings.Continue reading…

Do We Have Any Clue How to Cut the Cost of Healthcare?

• 60

By ROBERT WACHTER, MD

At the Society of Hospital Medicine’s annual meeting last week in Dallas, Lenny Feldman of Johns Hopkins presented the results of a neat little study. His hypothesis: physicians given information about the costs of their laboratory tests would order fewer of them.

Feldman randomized 62 tests either to be displayed per usual on the computerized order entry screen or to have the cost of the test appear next to the test’s name. Some of these were relatively inexpensive and frequently performed tests. After randomization, for example, the costs of hemoglobins ($3.46) and comprehensive metabolic panels ($15.44) were displayed, while TSHs ($24.53) and blood gases ($28.25) were not. He also randomized more expensive tests: the costs of BNPs ($49.56) were displayed, while hepatitis C genotypes ($238.62) were not.

The educational intervention was surprisingly powerful. Over the six-month study, the aggregate expenditures for each test whose costs were displayed went down by $15,692, while non-displayed tests had a mean increase of $1,718. Over the entire group of 31 tests whose costs were shown to physicians, costs fell by nearly $500,000.

Coincidentally, last week’s Archives of Surgery reported the results of an intervention aimed at decreasing lab ordering on the surgical services of Rhode Island Hospital. There, simply announcing the service’s overall expenditures on non-ICU laboratory tests for the prior week at a house staff conference led to significant savings: $55,000 over an 11-week study period.

Have we found the Holy Grail, the key to flattening the cost curve? A little physician education leads to increased awareness of the cost consequences of their choices and, voila, our economy is rescued from the brink of disaster. How nice.Continue reading…

The Quest for Price Transparency

• 48

By ERIC LESPIN

A torn meniscus. It did not disable but it impaired, and unpredictably. My stomach learned quickly to tighten at the sound of A’s peculiar whimper in response to a crippling pain that would shoot through her at seemingly innocuous movements of the afflicted leg. We have health insurance of sorts, the type that will help you keep your home if tragedy strikes, but that does not shield you from the brunt of what most of day-to-day health care cost is about. We’re well practiced in deferring and foregoing care. Here however, we reluctantly acknowledged that a hospital would need to be visited and a doctor consulted.

Tests and a physical examination made clear that an operation was unavoidable. The doctor was a thoughtful man who conscientiously went through what the operation would entail. Surgery would take half a day, then back home by afternoon, convalescence over the following few weeks, with complete recovery the usual outcome. While not painless, the procedure seemed reassuringly routine. His tone was caring and his outlook about our case optimistic.

The admirable candor with which medical personnel have learned to speak about difficult topics concerning our bodies and our care did not extend to the costs involved. The question of what the procedure would cost, gently broached, initially baffled the staff, eliciting answer-deflecting counter-questions about the adequacy of our insurance coverage, but resulted in no quotes or estimates. Continue reading…

There Aren’t Enough Rich People To Pay For Medicare And Medicaid

• 80

By ROBERT LASZEWSKI

I hear more and more of my progressive friends arguing, in the context of deficit reduction, that we should be raising taxes before getting aggressive about reducing the cost of Medicare and Medicaid — as well as Social Security.

To a point, I agree.

This country is in such a hole that it is senseless to deny that at least some new taxes will be needed to pay for all of the nation’s bailouts and accumulated debts.

For instance, progressives would like to end the $1 trillion cost over ten years of the Bush tax cuts for those making more than $250,000 a year.

I also believe that ending those tax cuts is necessary.

But if you’re looking to better understand the budget policy choices we face, I highly recommend the March 2011 Congressional Budget Office study, “Reducing the Deficit: Spending and Revenue Options.” The CBO prices out about all of the budget options.Continue reading…

assetto corsa mods