The nice thing about Bloomberg News is that no one accuses it of being a left-wing rag.
So when Bloomberg spotlights a report from the Institute of Medicine (IOM) that counters “stingy” estimates from the Congressional Budget Office on how much health care reform could save, it’s worth paying attention. The analysis from the institute’s working group on health costs reveals that the type of reform that Congressional progressives support would save “five times the amount that CBO acknowledges” according to Bloomberg’s Tim Mullaney.
“The report will help bolster the argument that covering the nation’s 46 million uninsured won’t bust the budget . . .”
According to Bloomberg, the IOM working group plans to release a preliminary version of its report “by about September 20 . . . to ensure its findings contribute to the debate in Congress . . . , with a more comprehensive paper to follow.”
The report has some bi-partisan support. “I think the Institute of Medicine report will garner a lot of attention,” David Brailer, a peer reviewer on the study who was former President George W. Bush’s top adviser on health-care information technology told Bloomberg. “There will be big differences on the magnitude of real near-term savings.” As HealthBeat noted in an earlier post, when it comes to estimating the savings likely to come from health care legislation, the CBO has a dismal track record.
The panel that put the report together asked dozens of experts to prepare case studies about how leading hospitals and insurance companies have saved money and incorporated those cost-saving ideas, presented at three workshops in May, July and September. Proposed solutions include simplifying medical billing forms, letting Medicare buy equipment at auction and rewarding doctors based on the quality of care.
The working group is seeking ways to cut costs in the $2.5 trillion U.S. health-care industry by at least 10 percent by 2019, said Arnold Milstein, planning chairman of the institute’s working group on health costs.
Medicare saved 26 percent in a pilot test of buying equipment at auctions before Congress suspended the program, according to Mark Wynn, senior adviser at the Centers for Medicare and Medicaid. Medicare spends about $10 billion a year on such equipment, including hospital beds and wheelchairs, Wynn added. One can’t help but wonder why Congress closed down the program. Perhaps companies that make hospital equipment weren’t thrilled to see Medicare recycling their products?
Bloomberg reports that insurers could save as much as $109 billion over 10 years by accelerating the use of electronic payments and related technologies, quoting David Wichmann, executive vice president at Minnetonka, Minnesota-based UnitedHealth Group Inc., the largest private U.S. health insurer. “An additional $14 billion could be cut if insurers substituted monthly statements for ‘explanation of benefits’ forms on each claim,” Wichmann. This seems like a sensible and relatively easy fix.
Other recommendations echo the House bill for health care reform by focusing on paying doctors and hospitals based on the quality of care, instead of rewarding doctors for performing more tests and procedures.
Will the IOM report convince Congress? Gail Shearer, director of health-policy analysis at Consumers Union and a member of the institute’s planning committee says that the answer to that question “will come down to [a matter of ]political will.”
According to Bloomberg, “CBO spokeswoman Melissa Merson didn’t return calls seeking comment.”