Health Care Reform and Medical Costs--What's in the House and Senate Bills
10-6-11NYTimes--Where are the death panels when we need them? Gina Kolata
- Lancet Report Cites Rate of Late-in-Life Surgery - NYTimes.com
Nearly one in three Medicare recipients had an operation in their last year, and nearly one in 10 in their last week.
Health Care Cost Reduction Proposals
Nearly everyone agrees that something must be done about skyrocketing health care costs which have been rising must faster than wages. Summarized below are some of the cost reduction measures proposed by the health care reform bill passed by the House of Representatives and reported out by the Senate Finance Committee.
1. Forced productivity gains--The House and the Senate bills would reduce Medicare payments to hospitals, nursing homes and other providers by an amount comparable to routine productivity gains in industry as a result of implementing new technologies and better ways of organizing work. This could bring about a long-overdue application of W. Edwards Deming's priciples quality control to hospitals and other health care providers. It could save as much as $100 billion over ten years.
2. Tax "Cadillac" Coverage--The Senate bill would impose an exise tax on health insurance plans that cost $8,000 per year for an individual policy or $21,000 for family coverage.
3. Simplified forms--Both the House and Senate bills propose to incorporate into law the health caer insurance industry's pledge to provide a standardized form for computer processing. Doctors and patients agree that this step could save hundreds of billons of dollars over ten years.
4. Electronic Medical Records--The stimulus package provided funds to convert inefficient paper records easily viewed and transmitted information. Once this is implemented, electronic records will help eliminate duplicate tests, preventing adverse drug interactions, and improving doctors' diagnoses and treatments.
5. Reform the Delivery System--Health care experts are nearly unanimous that the fee-for-service payment system which rewards doctors for the quantity rather than the quality of care they provide is one of the major contributors to skyrocketing health care costs. Most agree that doctors should be pushed to accept a standard fee for treating a specific illness or accepting pay for meeting a patient's yearly health care need. The bills in both houses would both implement pilot Medicare projects relying on incentive payments to get doctors to try them.
6. Independent Commission--The Senate bill would create an independent commission to monitor the pilot programs and recommend changes to Medicare's payment policies to prod providers to adopt workable, cost-saving reforms. The changes would have to be adopted by Congress, as a package, making it hard for narrow lobbies to decimate the proposed changes.
7. Managed Competition--Both bills provide for the creation of health insurance exchanges which would allow individuals and small businesses to choose from among several private plans, and possibly a public option. All the plans would be required to offer standard, easily compared options. Gaining access to millions of customers would provide an incentive for insurers to lower their prices.
8. Public Plan--There is support for providing a public plan in the final legislation which has been opposed doggedly and watered down in the House bill by insurance industry lobbying. The bill would provide for negotiating rates with providers rather than using Medicare reimbursement rates as reform advocates proposed.
9. Comparing Treatments--Obama's stimulus package provides money for research to compare the efficacy of various treatment modalities. For example, in which kinds of cases is surgery, radiation or monitoring best for treating prostate cancer? Are the most costly cholesterol lowering drugs more effective than less expensive generic substitutes? The Senate and House bills would accelerate this effort. The critics' charge that this proposal would ration care would only be true if you believe that paitents should have unlimited rights to ineffective treatments paid for by taxpayers.
10. Negotiating Drug Prices--The House bill would provide the authority for negotiating prices paid for drugs by Medicare and Medicare, a provision that should have been included in the Medicare drug bill passed by the Bush administration. Negotiation can work here as it does in other countries.
11. Malpractice Reform--Thanks to the trial lawyers support for Democrats, neither bill contains measures to reduce medical malpractice costs which are widely believed to be in the public interest. This issue, could provide an opportunity for a moderate compromise or trade offs malpractice measure to gain support for the final product of the House-Senate conference committee.
I am indebted to the NY Times Editorial of 11-14-09 for much of the above summary. I take responsibility for additions and omissions from the Times' editorial.