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Tag: health care cost

It’s Up To Us …

Levy A conversation with a reporter yesterday helped me clarify my thoughts about federal health care legislation. In my view, the most effective role of the federal government would be to provide national standards by which the health insurance companies operate (e.g., with regard to pre-existing conditions, rescission, and lifetime limits), require the existence of insurance exchanges, and establish the conditions under which universal access to insurance is made possible. Other items I would suggest for federal legislation are summarized below.

I am hoping the US government will not attempt to control the costs of health care by making legislative decisions with regard to clinical matters. Not because we should abandon cost control; but because federal efforts in this sphere are likely to be crude and not clinically appropriate. You just have to look at the process by which the USDA food pyramid is influenced by food product lobbyists to imagine how the government would attempt to regulate the design and provision of care among medical specialties, equipment and supply manufacturers, and pharmaceutical companies.

As should be evident to readers, I think it is possible for the participants in the health care system to accomplish major changes in the rate of medical cost inflation. Two articles have this theme. One is by Business Week’s Catherine Arnst. The other is by Lucien Leape, Don Berwick, and others in Quality and Safety in Health Care. Both are worth reading, and they overlap in recommending several areas — reducing infections and other preventable harm; empowering patients and families to participate in their care; and disclosing and apologizing for mistakes.

Beyond these articles, there is a remarkable consensus on these items, and yet hospitals and doctors often fail to implement them. Even hospitals that house some of the most accomplished authors in these fields often do not follow the advice of those colleagues when it comes to making improvements in the delivery of patient care.

It is not unusual for industries facing structural change to be slow to move. Why? Because the leaders of those industries were promoted based on their success in the past financial, political, and social environment. They were hired for their ability to maintain the status quo, rather than for their ability to make change. Eventually, though, societal forces make themselves felt. If an industry does not adapt, the government will step in. The medical profession has to decide whether it wants to take charge of this process or abdicate to Congress the right to act in its stead.

A Look Inside: The Massachusetts Health Reform Law

The Massachusetts health reform law Part II, enacted in 2008 – laid the groundwork for cost control and  quality improvement, as a follow-on to the initial legislation’s emphasis on achieving near-universal coverage.  The legislation authorized several studies — including a report published a few months back on global payment strategies — and set the stage for hearings on health care cost containment to be held before the state Division of Health Care Finance and Policy (DHCFP), which are scheduled to begin March 16, 2010.

In anticipation of these hearings, and as required by the law, the Attorney General’s office released a report on health care cost trends and cost drivers on January 29.

While the names of providers and payors are not included in this report, it provides a fascinating level of detail regarding what we already knew, or at least suspected: some providers are paid as much as twice as much as others for the same services, with no correlation to improved quality or outcomes.

The AG’s summary conclusions in full:

[O]ur preliminary review has revealed serious system-wide failings in the commercial health care marketplace which, if unaddressed, imperil access to affordable, quality health care. In brief, our investigation has shown:

A. Prices paid by health insurance companies to hospitals and physician groups vary significantly within the same geographic area and amongst providers offering similar levels of service.

B. Price variations are not correlated to (1) quality of care, (2) the sickness or complexity of the population being served, (3) the extent to which a provider is responsible for caring for a large portion of patients on Medicare or Medicaid, or (4) whether a provider is an academic teaching or research facility. Moreover, (5) price variations are not adequately explained by differences in hospital costs of delivering similar services at similar facilities.

C. Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers.

D. Variation in total medical expenses on a per member per month basis is not correlated to the methodology used to pay for health care, with total medical expenses sometimes higher for globally paid providers than for providers paid on a fee-for-service basis.

E. Price increases, not increases in utilization, caused most of the increases in health care costs during the past few years in Massachusetts.

F. The commercial health care marketplace has been distorted by contracting practices that reinforce and perpetuate disparities in pricing.

This report is well worth reading, and it is well-illustrated with clear charts.  While the detail is welcome, many have criticized the AG’s office for leaving out identifying information, and for coming to the party a year after the Boston Globe reported on some of the same issues.

At the end of last week, DHCFP released a series of three reports on health care cost trends as well.  The DHCFP reports are summarized here; they really serve to describe the baseline facts on the ground and explore trends form 2006 through 2008.  Here’s the summary of key findings:

  • The Commonwealth’s health care system is a key employer and driver of economic growth for the region. However, personal health spending per capita is higher in Massachusetts relative to the nation and continues to rise.
  • Some characteristics of the Massachusetts health care marketplace that may be contributing to the high levels of cost growth, include:
    • Most of a health insurance premium goes toward spending on health care services as opposed to administrative and other non-medical services. On average, in Massachusetts more than 88% of premiums are spent on health care expenses (compared to less than 84% nationally).
    • Average monthly health insurance premiums increased 12% from 2006 to 2008.  If employers and individuals had purchased comparable benefits each year, the growth in premiums would have been larger.
    • Premium trends, benefit levels, and trends in health care spending vary across different-sized employer groups.  Small group premiums were higher and grew faster on average than mid-size and large group premiums, when adjusted for differences in benefits, demographics and location.
  • Health care spending in the Commonwealth increased 7.5% per year from 2006 through 2008, a growth rate that is higher than the nation.  The increased spending can be attributed to several factors:
    • Price was an important factor contributing to rising health care spending across all service types.
    • One area of particular concern (and opportunity) is the variation in prices, which was typically greater for facility charges than professional charges.
    • In addition to price increases, care is being provided in more expensive settings over time—more inpatient care is being provided in academic medical centers and there is a decline in the provision of care at stand-alone outpatient facilities.   Much of the growth in outpatient hospital care occurred at academic medical centers located in the metro Boston area.
    • High concentration of physicians (especially specialists);
    • Greater availability and use of academic medical centers for both inpatient and outpatient hospital based-services, and use of outpatient hospital-based facilities for some services that could be provided in less costly settings;
    • Richer health insurance benefits compared to the nation; and
    • Use of payment methods that are not designed to incentivize efficiency and coordination of medical care.

Again: no surprise here — Massachusetts health care costs are higher than national averages, and are growing at an unsustainable rate.The challenge before Massachusetts policymakers is clear:  They need to put together these puzzle pieces of data, learn from the past, model potential solutions, and plan for the future.  Even the national mainstream media acknowledges that, in the face of health reform meltdown, doing nothing is not an option.  (Where were they six months ago?)

In the midst of this challenge, Governor Deval Patrick seems to be distracted by health reform’s implications for his political future. Instead of waiting for a reasoned outcome of the deliberative process set in motion two years ago (well, as reasoned as possible, given the heavy-duty political and economic interests at stake here), he has leapt into the fray with what looks like an ill-conceived bit of political grandstanding: a bill that would give the state insurance commissioner the authority to cap health care price increases.

The Boston Globe reports:

Rates hospitals and other health providers charge insurers would be “presumptively disapproved as excessive’’ if they increased faster than the level of medical inflation, and they could be rejected after a public hearing.

Similarly, for health insurance plans sold to employers with 50 or fewer workers, premium increases that exceed one and a half times the level of medical inflation would be considered excessive and could be turned down.

The legislation would also impose a two-year moratorium on lawmakers’ mandating any new health benefits that must be covered by insurance plans, a practice that employers have said drives up their health insurance premiums. Small businesses have been hit with double-digit rate increases in recent years.

This proposal brings us back to the future here in Massachusetts:

Twenty years ago, Patrick’s presumptive GOP challenger in the fall, Charlie Baker (who, thanks to some of his views being out of step with GOP orthodoxy, will likely draw many of the significant number of independent voters in Massachusetts, as well as some Democrats), was largely responsible for the dismantling of the Massachusetts health care rate setting system during his tenure in budget and health policy roles in the Weld administration.  (In fact, some of us who have been around long enough still refer to DHCFP as “the agency formerly known as Rate Setting.”)  (As a second aside: For those of you tuning in from afar, Baker’s most recent position was CEO of Harvard Pilgrim Health Care, one of the three dominant payors in the Commonwealth.)   Is Patrick trying to stake out a position in opposition to Baker’s legacy?  What constituency is going to buy into this vision of the future?  Other local observers have also questioned the wisdom of this approach, including fellow health policy bloggers Evan Falchuck and Paul Levy.  (Taking a cue from Paul’s musings on blogger disclosure in connection with this issue, I’ll just say that as a life-long registered Democrat, I have voted for a Republican maybe just once.)

Deregulation was successful twenty years ago because we were collectively convinced that payors could do a better job of holding providers’ feet to the fire.  We later framed this in terms of holding providers accountable, and have employed a variety of tools over time to try and make this private-sector arrangement work: capitation, discounted fee-for-service payments, quality incentives, global payments, etc., etc.  Patrick’s proposal is one version of the general acknowledgment that the market approach has essentially failed.

Instead of going back to the future, Governor Patrick ought to let the health reform process play out.  The legislature should hold the Governor’s bill pending the DHCFP hearings and the subsequent deliberations that will — we hope — yield a more data-driven and sustainable approach to the problem of health care costs and quality.

And who knows?  The national debate may continue to be informed by what comes out of Massachusetts.

David Harlow blogs at the HealthBlawg.

How Maryland “Broke the Curve”: A Solution For Massachusetts?

by MAGGIE MAHAR

Massachusetts has succeeded in providing health care insurance for all but 2.6% of its citizens.

Yet the Commonwealth still struggles to make that coverage affordable. Health care inflation is driving Massachusetts’ system toward a cliff.  Total outlays for medical services and products are climbing 8 percent faster than the state’s economy.  Unless something is done to rein in the cost of care, health care spending in Massachusetts is projected to nearly double over the next 10 years, hitting $123 billion in 2020. State officials know they must find a way to put a lid on spending so that it grows no faster than the state’s gross domestic product.

But how?

With that question in mind, The Massachusetts Division of Health Care and Policy (DHCFP) contracted with the RAND Corporation to develop a menu of cost containment strategies and options.  In  September RAND came back with a report that recommended 12 strategies for reducing health care bills.Continue reading…

Massachusetts’ Problem and Maryland’s Solution

While health care reformers argue about what it would take to “break the curve” of health care inflation, the state of Maryland has done it, at least when it comes to hospital spending.

In 1977, Maryland decided that, rather than leaving prices to the vagaries of a marketplace where insurers and hospitals negotiate behind closed doors, it would delegate the task of setting reimbursement rates for acute-care hospitals to an independent agency, the Maryland Health Services Cost Review Commission.

When setting rates, the Commission takes into account differences in labor markets and how much a hospital pays in wages; the amount of charity care the hospital does; and whether it treats a large number of severely ill patients. For example, the Commission sets the price of an overnight stay at St. Joseph Medical Center in suburban Towson  at $984,  while letting  Johns Hopkins, in Baltimore Maryland, charge  $1,555. For a basic chest X-ray, St. Joseph’s asks  $81 and Hopkins’ is allowd to  charge  $155. The differences reflect Hopkins’s higher costs as a teaching hospital and the fact that it cares for generally sicker patients.Continue reading…

Government to Account For More Than Half of Healthcare Spending

Goozner

Amid all the gloomy numbers in the latest government projections for health care spending, one statistic stands out: Public sector involvement in health care this year will surpass private sector spending for the first time in U.S. history.

The actual projections show it will only reach 49.3% of $2.57 trillion, but that assumes Congress won’t throw more money at physicians at the end of this month when previously legislated cutbacks in Medicare pay are slated to go into effect. Congress can’t pass health care reform, but spending more on physicians (mean salary for cardiologists and radiologists in 2009 was over $400,000) has unusual bipartisan support.

What’s driving the growing public role is no mystery. With unemployment at 10 percent and underemployment widespread, millions of Americans have lost employer-based coverage and now must rely on public sector programs. Even where people remain employed, their firms can no longer afford skyrocketing premiums and thus are abandoning or cutting back on coverage.

And there’s no end in sight to those trends, even with an improving economy. Health care spending, which surged to 17.3% of gross domestic product in 2009 from 16.2 percent in 2008,  the largest single jump in the history of government recordkeeping, is slated to rise to 19.3% in 2019, a year when the public sector will account for 51.9% of the $4.49 trillion health care economy. And that’s without paying physicians more.

Here’s another way to look at it: In 2019, U.S. government agencies at the state and federal level ALONE will spend 10% of GDP on health. That’s a greater share of economic activity than many other highly industrialized nations that insure everyone, yet the U.S. will still have one in six or seven people without any coverage at all at some point during the year.

Regional Variation Revisited: Price Differences Not A Significant Factor

Merrill

Dartmouth scholars have revisited their analysis of regional variation in health  care spending and found contrary to the assertions of some critics that cost-of-living differentials do not account for much of the difference. However, they confirmed that some big cities with high poverty concentrations that also serve as training grounds for future physicians may have been unfairly lumped in with areas that overuse health care services.

The new study in Health Affairs showed after adjusting for price differences that Miami, Florida and McAllen, Texas still led the pack in terms of how much Medicare spent on each beneficiary. Both areas still spent nearly three times more than the lowest spending regions of the country, which remained Honolulu, Hawaii and LaCrosse, Wisconsin.

There were a few areas of the country where the adjustments made a big difference, and they were mostly big cities. The Bronx and Manhattan in New York City fell 39 and 33 percent, respectively, from the adjustments. But price was only a minor factor, according to the researchers, who were led by Daniel Gottlieb of the Dartmouth Institute for Health Policy and Clinical Practice.

Much of the reason why the New York metropolitan area is so costly is not because of the wage index per se (what we usually think of as “cost-of-living” adjustments), but because the CMS pays hospitals in the New York area so much to reimburse them for graduate medical education and caring for disproportionate shares of low-income patients.

Other high-spending areas frequently targeted by critics did not do so well under the adjustments. Los Angeles, for instance, dropped just 14 percent after adjusting for cost-of-living, graduate education and disproportionate share payments for low-income residents.

The Medicare Payment Advisory Commission issued a report late last year that suggested regional variation in use patterns were less than the Dartmouth Atlas of Health scholars had previously estimated. This latest study says regional variation still matter — a lot. The debate clearly isn’t over.

Here’s the list of the ten highest and ten lowest spending areas in the country both before and after adjustments for price, graduate medical education and disproportionate share payments:

10 high-spending hospital regions:

BEFORE        AFTER    % CHG.

FL-Miami               $15,909     $14,966      6%
TX-McAllen              13,633       13,881      -2
NY-Bronx                12,004         8,653      39
NY-Manhattan          11,744         8,861      33
TX-Harlingen            11,489       11,324      1
CA-Los Angeles        10,674         9,325      14
NY-Long Island        10,608         8,740      21
MI-Dearborn            10,460         9,791        7
LA-Monroe               10,226       11,385     -10
MI-Detroit                 9,954         9,541       4

10 low-spending hospital regions:
ND-Minot                   6,033         6,711     -10
VA-Lynchburg             6,022         6,524      -8
CO-Grand Junction      5,983         6,075      -2
OR-Eugene                5,968         5,798       3
IA-Iowa City               5,902         6,254      -6
SD-Rapid City             5,854         6,176      -5
OR-Salem                  5,810         5,642       3
IA-Dubuque               5,799         6,219      -7
WI-La Crosse             5,715         5,757      -1
HI-Honolulu               5,293         5,212       2

5 hospital regions with biggest drop due to price and other factors:

NY-Bronx                   12,004         8,653     39
NY-Manhattan            11,744         8,861     33
CA-Alameda County     9,251         7,094     30
CA-San Francisco         8,140          6,278    30
CA-San Mateo County  7,878          6,104     29

A Special Edition of Health Wonk Review

American Health Care Reform:
Observations From Health Care Analysts
Edited by Brian Klepper

Here we are, with the first edition of Health Wonk Review (HWR) in a new decade. It is a pregnant moment, as reconciliation begins between the House and Senate health care reform bills, when the best health wonks are weighing in on how we arrived here and what it will probably mean to have a few key successes and some very significant failures at a time when most everyone in the country who doesn’t have power yearns for real solutions. Joe Paduda summed it up very nicely on Managed Care Matters, “…after all this, we’re going to end up with a bill that won’t work – it will not appreciably reduce health care costs today, tomorrow, ever.” Alas, the result is much more a reflection of what America has become than what health care is about.

And so, I have exercised my editor’s prerogative, and veered away from HWR’s standard format to focus this edition on the best, recent health writing I’m aware of, rather than just summarize the writings of submitters. Please indulge me as I have passed over some strong pieces in favor of a smaller, more selective number of consistently very thoughtful, insightful and meaty writers.

I’m hoping this selection will satisfy readers interested in deeply provocative discussions of the most pressing issues at hand, particularly around reform. There’s a lot to chew on here, and I’d urge each of you to curl up on a cold afternoon and read through every one of these columns.

A Face Full of All That Other Mud

Let’s begin with J. D. Kleinke’s thoughtful meditation on yesterday’s Health Care Blog, Is It 2013 (or 2014) Yet?, on the horrific compromises made in the name, not of problem solving, but of ideology. Referring to the watered down Senate bill, he notes that it

“has been so stripped of government management options and control that it is best characterized as the exact opposite of a government takeover. Rather, the bill now on trajectory to become The Plan is – paradoxically – a privatization of the public health problem of the uninsured, a corporatization rather than nationalization of health care’s rotting safety net.”

And this: “…people…have been using the health care reform stage to act out their bigger grievances, philosophical angst, and political frustrations…Something as literally critical to all of our lives as our health care system – regardless of which way an eventual bill goes (including the remote but real possibility of it just going away) – deserves better than a face full of all that other mud.”

Reform Based On The Principles of Competition

On The Health Affairs Blog (12/22/09), Alain Enthoven rebuts Atul Gawande’s New Yorker article that compares the health care bills’ pilot programs to those of the Agricultural Extension service that “sparked the agricultural revolution that so benefited the US economy in the first half of the 20th century. “

Both Enthoven and Gawande are icons, and justifiably so for their insights into how health care does and should work. Gawande’s June, 2009 piece, The Cost Conundrum, on health care profiteering in McAllen, Tx, was a sensation in DC, and became required reading for White House staffers looking forward to reforms that could impact the kinds of circumstances Gawande recounted so eloquently.

But in this piece, many of us thought his thesis was a stretch, and Dr. Enthoven lays out the case. One of his conclusions: that we need a commitment to structural reforms, rather than just more experimentation.

“If America wants 1,000 pilot projects to blossom and grow into significant improvements in health care delivery, it must reform its system based on the principles of competition and wide, responsible, informed, individual consumer choice of health plans. Experience shows that people will join if they get to keep the savings.”

The Nearly Trillion-Dollar Lake Mead of Money

In There Be Dragons, The Fiscal Risk of Premium Subsidies in Health Reform (12/14/09), Jeff Goldsmith, with unfailing attention to detail, takes us through a variety of health care principles to explain why 1) the Congressional Budget Office’s (CBO) attempts to model the impacts of subsidies on the private health coverage market are, at best, shots in the dark, and 2) its probably not wise to bet on our political system’s ability to say “no.”

He concludes, “All in all, the fiscal risks from an open-ended new entitlement to premium subsidies are likely to be significantly larger than CBO estimates. Instead of neat economic models with ten variables, we need something closer to chaos theory to explain how the nearly trillion-dollar Lake Mead of money will behave when we completely re-engineer its flow pattern…Behavioral economists would add that anxious health insurance and provider executives would behave differently, perhaps, than entirely rational actors, and act aggressively to preserve their franchises and operating margins. I wouldn’t bet the farm on moderation of present cost and rate trends. All the big risks are on the upside.”

The Medical Cost Tidal Wave

In a simple but straightforward column (12/22/09) on the health plan’s blog, Bruce Bullen, the Interim CEO at Harvard Pilgrim, explains how the structural provisions of the Senate’s final health reform bill will worsen current health care cost trends, which have been more than 4 times general inflation over the last decade.

“… expansion of eligibility and other reforms are largely delayed to 2014, but changes having the effect of increasing health insurance premiums will take effect prior to 2014. Before seeing any material benefits of reform, some will see their Medicare payroll tax rate increase, many fully insured subscribers will, beginning in 2011, see the effects of the health insurance premium tax, and everyone in the commercial market will see the cost-shifting effects of Medicare payment reductions and the tax on drug and medical device manufacturers. Medicare Advantage plan enrollees will also see sharp increases in premiums. Since there is no significant cost containment in the bill, these increases will occur on top of normal medical trend. And because the universal requirement to purchase coverage is weak, adverse selection will further increase costs starting in 2014.”

He concludes, “We can focus on insurance reform all we want, but the medical cost tidal wave continues.”

The Unintended Consequences of Hopelessly Complex and Poorly Thought-Out Laws and Regulations

At the Disease Management Care Blog (12/27/09), Jaan Siderov explicates the seemingly straightforward provision of the Senate bill that would require commercial insurers to “rebate” any excess profitability, if they have a medical loss ratio lower than 80%-85%. The rub lies in the definitions of medical costs and administrative costs, and what is contained in each. Under the Senate’s Management Amendment, the National Association of Insurance Commissioners (NAIC) would be charged with defining each term. But so far,

“the NAIC has not done well [clarifying] if the costs of wellness, prevention, care management, or patient-centered medical home support programs are costs that are assigned to the medical costs that make up the medical loss ratio or if they are administrative costs.”

It remains to be seen whether a compromise plan will correct this kind of confusion.

The Evidence In a typically pithy and to-the-point read (12/31/09), Roy Poses crystallizes what many of us have thought about the national squashing of the US Preventive Services Task Force guidelines for breast cancer screening. Here’s a quote:

“…after 30 years and 8 trials, we still have no convincing evidence that mammographic screening for 40-49 year old women saves lives (which is different from reducing deaths due to breast cancer), or reduces morbidity, improves function, or improves quality of life in the screened population.  In the absence of such evidence, how can anyone fault the USPSTF for recommending (not that women not be screened), but that decisions to screen individual people should be based on considered discussion between them and their physicians?”

Dr. Poses calls for better clinical and comparative effectiveness research, another area given short shrift in the current reform proposals.

Who’s Kidding Who

In a policy environment in which half-truths and whoppers are the coin of the realm, nobody pours on the cold water of reality better than Bob Laszewski at Health Policy and Marketplace Review A former Liberty Mutual health insurance executive, Bob’s deep health finance experience has been refined by his long standing in the DC community as a health policy advisor. Throughout the reform process, Bob has written often, and his insights are always to the point. Take, for example, this simple observation from a 12/19/09 post, Coal in Your Christmas Stocking?

“…the Democrats [will] face four health insurance renewal cycles and two elections between 2010 and 2014 when the benefits of the health care bill would finally become effective. That’s four years of new taxes and continuing big health insurance rate increases before voters see any big benefits from what looks like will be a very unpopular bill.”

As I understand it, Bob’s blog is the most widely-read source for DC health wonk types. There’s a good reason for that.

Later

In Health Reform – When Will The Next Shoe Drop (12/22/09) at Managed Care Matters, Joe Paduda lays out an enticing scenario for straightforward, important changes that can’t happen when 60 votes are required, but are eminently doable if the goal is 51. He writes:

“I’d look for a requirement that the Feds negotiate drug prices for Medicare and lower payments for Medicare Advantage plans to start…And it won’t stop there. There is a large and growing concern about the cost of entitlement programs and Part D is particularly problematic. By attacking drug costs and thereby reducing Medicare’s future liability, liberal Democrats will make it very tough for their opponents to use the ‘big spender’ attack angle in November.”

Two On What To Expect

Jane Sarasohn-Kahn, one of our most gifted, industrious and grounded health care prognosticators, has a broad-reaching summary of the certain trends – employee cost-sharing, employer ‘nudging’ of employees toward wellness, health information technology becoming more mainstream among physicians, participatory medicine/online health tools – that will remain in play in “What to Expect When You’re Expecting…Health Reform on Health Populi. She says,

“With the US still in recession, the issue of managing costs will be Job #1 in health care for institutional and business stakeholders, from health plans and employers to pharma and medical device companies.”

Matthew Holt, a Founder of Health Wonk Review as well as The Health Care Blog, and one of the most incisive, if irreverent, health care commentators writing today, suggests five major trends. He wonders how the changes brought about in policy will take shape in the market, and how changes in the political winds will affect the ability to continue reforms. He thinks that HHS’ Office of the National Coordinator for Health IT’s transformation initiatives will have a profound impact on everyone in health care – “’It’s clear that we are not going to simply see mass adoption of the mainstream EMR vendors’ products.” – and that patients are beginning to expect more access to information, especially their own. And that quality of care, especially at the end of life, is finally becoming a concrete, mainstream issue.

The Verdict

Each of these voices describes different facets of a complex process. These are some of the most experienced and prominent health care authorities working today, and they don’t hesitate to conceal their disappointment at what is passing for reform.

It is not enough to dismiss this Congressional health care reform process as just another example of sausage-making. As David Kibbe, Alain Enthoven, Bob Laszewski and I discussed here, America’s health care industry has placed the national economic security in deep peril. An important goal, a commitment to structural changes that can significantly reduce the one-third or more of health care cost that is waste, now appears to have been squandered by a system that welcomes influence over policy in exchange for special interest financial contributions.

It is unlikely that meaningful health care change will be forthcoming after this process. The forces of special interest influences are vigilant.

Nor will the problems that were on the table now disappear just because they’ve been ignored. They’ll fester and worsen until business rises up in revolt to force the issue, or necessity overwhelms the capacity of lobbying to drive public policy. Unfortunately, the process of getting to that inevitable terrible moment won’t be pretty or pleasant.

Brian Klepper is a health care analyst and commentator based in Atlantic Beach, FL.

Why is this the one thing?

By JOE FLOWER

When the terrorist attacks of 9/11 hit the United States, and then suddenly we were plunged into war, first in Afghanistan and then in Iraq, I don’t remember anyone demanding that the wars be “deficit neutral.” No one talked about whether we could afford them. They were things we just had to do.

When George W. Bush proposed giving vast sums to rich people in the form of tax cuts, no one argued that it would be “deficit neutral.” Rather, it was argued that cutting taxes wouldn’t bring in less tax revenue at all, it would bring us more tax revenue, because the economy would grow so much faster. And besides, it was somehow terribly urgent, something we just had to do.

When the banks tottered and needed to be shored up with taxpayer money to the tune of nearly $1 trillion, there was no way to argue this would be “deficit neutral.” We might get the money back, we might not. Whether we could afford it was not the question, we just had to do it to save the banking system. Similarly, the “Stimulus Bill” was terribly urgent, and something we just had to do, whether we could afford it or not.Continue reading…

How to Rein in Medical Costs, RIGHT NOW

George Lundberg

I believe that there are still many ethical and professional American physicians and many intelligent American patients who are capable of, in an alliance of patients and physicians, doing “the right things”. Their combined clout is being underestimated in the current healthcare reform debate.

Efforts to control American medical costs date from at least 1932. With few exceptions, they have failed. Health care reform, 2009 politics-style, is again in trouble over cost control. It would be such a shame if we once again fail to cover the uninsured because of hang-ups over costs.

Physician decisions drive the majority of expenditures in the US health care system. American health care costs will never be controlled until most physicians are no longer paid fees for specific services. The lure of economic incentives to provide unnecessary or unproven care, or even that known to be ineffective, drives many physicians to make the lucrative choice. Hospitals and especially academic medical centers are also motivated to profit from many expensive procedures. Alternative payment forms used in integrated multispecialty delivery systems such as those at Geisinger, Mayo, and Kaiser Permanente are far more efficient and effective.

Fee-for-service incentives are a key reason why at least 30% of the $2.5 trillion expended annually for American health care is unnecessary. Eliminating that waste could save $750 billion annually with no harm to patient outcomes.

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Currently several House and Senate bills include various proposals to lower costs. But they are tepid at best, in danger of being bought out by special interests at worst.

So, what can we in the USA do RIGHT NOW to begin to cut health care costs?

An alliance of informed patients and physicians can widely apply recently learned comparative effectiveness science to big ticket items, saving vast sums while improving quality of care.

  1. Intensive medical therapy should be substituted for coronary artery bypass grafting (currently around 500,000 procedures annually) for many patients with established coronary artery disease, saving many billions of dollars annually.
  2. The same for invasive angioplasty and stenting (currently around 1,000,000 procedures per year) saving tens of billions of dollars annually.
  3. Most non-indicated PSA screening for prostate cancer should be stopped. Radical surgery as the usual treatment for most prostate cancers should cease since it causes more harm than good. Billions saved here.
  4. Screening mammography in women under 50 who have no clinical indication should be stopped and for those over 50 sharply curtailed, since it now seems to lead to at least as much harm as good. More billions saved.
  5. CAT scans and MRIs are impressive art forms and can be useful clinically. However, their use is unnecessary much of the time to guide correct therapeutic decisions. Such expensive diagnostic tests should not be paid for on a case by case basis but grouped along with other diagnostic tests, by some capitated or packaged method that is use-neutral. More billions saved.
  6. We must stop paying huge sums to clinical oncologists and their institutions for administering chemotherapeutic false hope, along with real suffering from adverse effects, to patients with widespread metastatic cancer. More billions saved.
  7. Death, which comes to us all, should be as dignified and free from pain and suffering as possible. We should stop paying physicians and institutions to prolong dying with false hope, bravado, and intensive therapy which only adds to their profit margin. Such behavior is almost unthinkable and yet is commonplace. More billions saved.

Why might many physicians, their patients and their institutions suddenly now change these established behaviors? Patriotism, recognition of new science, stewardship, and the economic survival of the America we love. No legislation is necessary to effect these huge savings. Physicians, patients, and their institutions need only take a good hard look in the mirror and then follow the medical science that most benefits patients and the public health at lowest cost. Academic medical centers should take the lead, rather than continuing to teach new doctors to “take the money and run”.

Physicians can re-affirm their professionalism and patients their rights, with sound ethical behavior without undue concern for meeting revenue needs. The interests of the patients and the public must again supersede the self interest of the learned professional.

George D. Lundberg MD, is former Editor in Chief of Medscape, eMedicine, and the Journal of the American Medical Association. He’s now President and Chair of the Board of The Lundberg Institute

Kamen: Healthcare Debate “Backward Looking”

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Segway inventor Dean Kamen thinks the wonkish debate over healthcare reform in Washington is largely missing the point. In an interview with Popular Mechanics editor-in-chief James Meigs and deputy editor Jerry Beilinson, Kamen tells the magazine:

“We now live in a world where technology has triumphed, in many ways, over death. The problem with that is that it’s enormously expensive. And big pharmaceutical giants and big medical products companies have stopped working on stuff that could be extraordinary because they know they won’t be reimbursed, according to the common standards. We’re not only rationing today; we’re rationing our future. ““If you project forward these horrific costs of treating everybody and you want to assume we are not going to respond to that by making the therapies better, simpler and cheaper and in some cases completely wiping out the [diseases], well you know what? We might actually get to that situation—if we stop investing in technology, if we stop believing that the future ought to be better than the past. ““If somebody in this country wants to explain to me that we ought to be spending about twice as much supporting sports as on all of our pharmaceuticals, then stop spending.”  “I think this debate shows a fundamental lack of vision, a lack of confidence, a lack of understanding of what’s possible.”

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