Bloomberg News: CBO’s Elmendorf is Wrong; Healthcare Reform Would Save Billions

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.”

 

33 thoughts on “Bloomberg News: CBO’s Elmendorf is Wrong; Healthcare Reform Would Save Billions

  1. Rewarding quality instead of volume sounds like a no brainer which I wholeheartedly support. I thought the problem, however, is that there is little consensus among doctors and hospitals around how to define and measure quality. Has there been some breakthrough in quality definition and measurement that I missed? Patients vary greatly in complexity. Some have multiple co-morbidities. Some are poor and uneducated. Many are non-compliant. The state of the art in risk measurement and risk adjustment is not as advanced as it needs to be. Are there quality metrics that doctors and hospitals have signed onto? If so, that’s great news. If not, how do we get from here to there?

  2. Barry, bascially I think you’re right, no, we don’t know how to measure or define quality. The way I look at it is we’re building this one brick at a time. We’re never going to fix everything broken in health care in one fell swoop with one piece of legislation no matter how many thousands of pages. I think the comparative effectiveness research speaks to the quality issues, but who’s doing the research and who’s comparing, even I don’t know but I hope it’s a neutral third party who also maintains and enforces standards of care.

  3. Barry wrote:
    “Rewarding quality instead of volume sounds like a no brainer which I wholeheartedly support. I thought the problem, however, is that there is little consensus among doctors and hospitals around how to define and measure quality.”
    ——-
    Even if this has been the case in the past, allowing the person making the decisions to make more and more pooled system money for doing more and more processes that may not be defined (as you say) is a prescription for danger and bankruptcy and non-sustainability.
    If quality cannot be defined, then fee for service for this undefined pie-in-the-sky must not be the mode of payment! Providers, as the real generator of costs in the system (top down), must start to compete on results which mean something, and they must be incentivised to find those true results or quality. Therefore, paying capitation or salary or bundled payment should help dissect that quality out of the mess that we have now!

  4. “Quality” of care is still in an early state. Continuously identifying those characteristics that improve patient outcomes can help medical training programs identify more effective quality of care.
    According to researchers at Johns Hopkins Hospital, problem-solving skills don’t necessarily translate into identifying or fixing health care systems in a hospital even after taking special classes. Quality improvement programs are designed to teach the basics of spotting and addressing problems inherent in complex medical systems. But, those researchers have found several common characteristics in programs that have led to more positive patient outcomes.
    Is “patience” a virtue yet?

  5. Rick, Lisa, NG, Gregory
    Rick–Thank you.
    Lisa–First we do know how to measure quality in many areas.
    See the post “Low Hanging Fruit– we know who needs bypasses (a small group) and who doesn’t — a much larger group now getting bypasses.
    Unnecessary surgeries define poor quality care.
    The Dartmouth reserach offers reams of information and benchmarks for high quality.
    Finally, as I have written in the past, the IOM has already picked a comparative effectiveness panel and there is an oversight board in place.
    Most of the people on these boards are physicians and they’re excellent.
    NG– Yes we know that moving away from fee-for-service discourages unnecessary care–and lifts the quality of care.
    Gregory–
    See the post titled “Low Hanging Fruit”

  6. “Finally, as I have written in the past, the IOM has already picked a comparative effectiveness panel and there is an oversight board in place.”
    Really, who!?!?
    “Most of the people on these boards are physicians and they’re excellent.”
    Oh. Well that certainly seems fair, have mostly physicians decide what’s effective and have mostly physicians define quality. Sounds like a fair and impartial neutral third party overseeing health care. Because, after all, the doctor knows best, right?

  7. Maggie, this may be a bit off-topic, but I recently came across these two blog entries from a single-payer proponent who claims the public option envisioned in HR 3200 and the HELP bill are too weak to effectively compete with private insurers and that in many ways they contradict Jacob Hacker’s original principles when coming up with the idea of the public option: http://pnhp.org/blog/2009/07/28/does-the-congressional-progressive-caucus-care-about-its-public-option-principles/
    and http://pnhp.org/blog/2009/08/08/reply-to-critics-of-%E2%80%9Cbait-and-switch-how-the-%E2%80%98public-option%E2%80%99-was-sold%E2%80%9D/
    I know they are long, but I would appreciate your input.

  8. Maggie,
    I’d like to delve into this statement a bit deeper:
    “Most of the people on these boards are physicians and they’re excellent.”
    As an RN, I have a great deal of respect for MD’s and all healthcare professionals. I actually believe that quality suffers most from poor management, and that front-line workers are often the scapegoats for executives & Boards who focus too much on profit and not enough on quality outcomes.
    But my question is why would we want boards made up of a strong majority of people who’ve only worked in an industry that has never had to worry about outcome data, never has been transparent with costs or quality, and has a history of being completely provider-driven?
    The whole system needs to be shaken up and I guarantee it won’t be if we build a majority of these boards with only MD’s.
    Engineers, pilots, medical ethics professionals, consumers (those who’ve been harmed or lost family members), RN’s, quality control people from other disciplines, creative/innovative thinkers, finance people, and statisticians are some of the professionals that should be sitting on these boards.
    Yes, we need the expertise of docs to have input on the medical piece but that’s it….
    We need to open up the gates and welcome those who’ve already worked within a system that has focused on quality, safety, customer service, transparency, costs, & ethics and mastered it.
    Otherwise, it will be more of the same.

  9. Lisa–
    C’mon Lisa.
    I could’t sift through the reserach and figure out which medication o rtreatment works best for patients who fit a particular medical profile.
    I’ve spent years studying health care and reform–but I’m not a medical reseracher and never went to med school.
    I wouldn’t want me on the comparative effectiveness panel.
    This is a job for physicians and medical reserachers—who have no financial interest in the outcomes.

  10. Lori,
    I should have been more specific.
    There is, in fact, a RN
    on the panel (which, as I recall is a 10 or 12 person panel) plus at least one patient advocate And a couple of the MDs on the panel also have degrees in public health
    The physicians on this panel are not doctors in private practice working fee-for-service, but rather doctors who are very famliar with the Dartmouth research and believe in evidence-based
    medicne–like DR. Christine Cassel, head of the American Board of Internal Medicine.
    These are people who have studied delivery of health services–and what can be learned form the airlines etc.
    Matt– When I have time I will look at the PNHP arguments you linked to–but . . . I have read their material for six years.
    The public sector plan in the House bill could easily take on Aetna, et al.
    First, it is a national plan.
    Secondly, in its first year it would include not only people who are uninsured now but people who are self-employed and people who work for small employers.
    This is a large group–which would give it great clout.
    And by 2013, when the public plan would be rolled out,
    the number of people who don’t have employer-sponored insurnace, and will be eligible for the public plan, will be much larger than it is now.
    If health care costs continue to rise at the rate that they have been rising for the last ten years, then in three yers, premiums will be more than 25% higher than they are now.
    A great many employers will be getting out of the health benefits business

  11. Thanks for the reply Maggie, but some of the stuff presented in those entries does concern me (especially the 10 million figure which seems lower than any other public option enrollment figure I’ve seen) and I would definitely appreciate it if you take a look and get back back to me as you say you will.
    Thanks again,
    Matt Parker

  12. I also believe that real people need to be any oversight board too. Look at the UNOS membership, its a combination of MDs, patients, nurses, administrators, etc.
    UNOS and the whole organ transplantation area is a model for governance and outcome reporting.

  13. At a recent group meeting one of our members explained to us the current status of “P4P” – pay for performance.
    Several examples:
    1) Instead of including the phrase: “patient was prepped and draped in the standard manner”, we need to dictate the phrase: “patient was prepped using ‘maximum sterile technique’ “. Prepping and draping will not change since we already prep and drape according to the definition of “maximum sterile technique”.
    2) In reading bone scans we need to include the phrase “scan was compared to prior films”. We already ccompare to priors since doing so is the standard of care. Now we just need to put the proper “catch phrase” in the report. (what to do with patients that have not had prior films is not dealt with by the P4P rules.)
    3) We need to eliminate BIRADS category 3 – a step we have already taken.
    Complying with these “standards” earns us “points” toward a small bonus because we have met “P4P” goals.
    The good news, as explained by the member that has been researching the issue, is that we don’t need to do anything differently, we just need to include the proper phrases in our reports.
    The “P4P” process reminds me of the movie “The Wizard of Oz” after Dorothy finds out the wizard is a fraud. He tells them: “I can’t give you courage, but I can give you a medal”, “I can’t give you brains, but I can give you a diploma”. What the government told us (in effect) is: “We have no idea of what constitutes quality, nor any idea of how to measure it. Instead, we will require you to “regurgitate” certain phrases in a report that can be recognized by the person with a high school education who will be monitoring you.”
    Presumably the people who came up with “P4P” are the same people who will be charged with enforcing the new quality standards – not a very inspiring thought.
    For these new quality standards to be of any value (as opposed to the usual BS) the groups that make these policies will have to be a quantum leap better than what they have been. Any bets on how that will turn out?

  14. Matt, Lisa, Legacy
    Matt–No one knows how many people would choose the public option.
    It would require reading the future thoughts of millions of uninsured and self-insured people as well as the minds of small employers and their employees.
    (These are the people who will be eligible for the public option in 2013.
    A few years later, employees who work for large companies and have employer-based insurance can, if they choose, give up that insurance and sign up for the public option instead.
    PNHP obviously has a vested interest in low-balling how many people will sign up for the public option because they want to argue that will be too weak to compete with private insurers, and thus is useless.
    The ONLY solution, they say , is single-payer. (PNHP, like many single-payer advocates has a “my way or the highway” attitude.)
    At the other end of the political spectrum, conservatives argue that we shouldn’t have a public optoin because if we do EVERYONE will sign up for the public option.
    The truth is no one knows.
    First we don’t know how many more people will become uninsured between now and 2013.
    How many will lose their jobs? How many employers will decide to get out of the benefit business between now and 2013?
    How much will the public plan cost?
    Over the next three years, Medicare will be trying to make reforms that bring down the cost of Medicare by paying doctors for the quality of the work they do instead of paying for volume, paying bonsues for chronic disease management that succeedds in keeping patients out of hospitals;
    paying less for very lucrative treatments that we know are done too often;
    negotiating with drugmaker for discounts (if the House Bill HR3200 lets them do that) and refusing ot reward hospitals for inefficiency (preventable readmissions, etc.). . .
    The public plan will incorporate whatever reforms Medicare achieves over the next three years.
    If Medicare is successful, the public plan will be cheaper.
    We also don’t know how successful conservatives and the for-profit insurance industry will be over the next three years in “fear-mongering”–making people afraid of the public plan.
    Especailly if Medicare and the public plan begin to avoid ineffective and unnecessary care, the conservatives will say that it is “rationing” care.
    On the other hand, if the public plan is more affordable, and provides all effective needed care, many people may choose it–if not immediately, in a year or so–once they see how other people like it.
    Lisa– patient advocates belong on certain panels–medical ethics committees, for instance.
    But you would have no idea what people were talking about on a panel looking at comparative effectiveness reserach.
    This require in-depth expertise, an understanding of variables that could affect controlled trials, an understanding of bio-chemistry, an understanding of pharmacology . . I could go on and on.
    Also, you’re not a “consumer”–you’re a patient advocate.
    Consumers consume commodities that they can understand fairly easily–cars, clothing, etc.
    Healthcare is not a commodity and
    Patients are not in a position to understand medical care in depth.
    They haven’t gone to med school, and they haven’t practiced medicine for years.
    That’s why they need to rely on doctors who are professionals and will put the patient’s interests first. The doctor/patient relationship must be based on trust. If you can’t trust your doctor, you need a new doctor.)
    Legacy–
    I’m afraid you (or your hospital) are behind the times.
    “P4P” went out of fashion a number of years ago because people realized that you’re merely givign people a list of things to do–and if they concentrate on that list, they may forget other, important things–like listening to the patient, looking at the patient etc.
    These days, when people talk about paying for quality they are talking about paying for better outcomes and efficiency i.e. better outcomes at a lower price.
    That’s how Medicare is setting the hospital benchmarks.

  15. For these new quality standards to be of any value (as opposed to the usual BS) the groups that make these policies will have to be a quantum leap better than what they have been. Any bets on how that will turn out?
    Posted by: Legacy Flyer
    ——————
    When I go to the medical system, I want to come away better than I went. I do not want to be a piece of meat for some provider to make money at my expense and society’s expense because that provider thinks he/she is God or likes lots of money. Therefore don’t pay these folks to do more and more that they cannot show makes me better than I went in as. If that is impossible, then change the pay incentives to not overdo, and/or post for all the world to see what the patient improvement rate for each provider is in terms that are quite simple such as hospital aver. stay, complications suffered, death rate, patient and family satisfaction surveys, others many others that can be measured and are easily understood as meaningful.

  16. Maggie,
    You said: “I’m afraid you (or your hospital) are behind the times. “P4P” went out of fashion a number of years ago.”
    We cover 5 hospitals and more than 20 offices. P4P is currently an ACTIVE program. If you go to the CMS website, they say that the rules for (’10) will be published on the website by Dec 31st of 2009. Presumably this means it will also be active in 2010.
    Perhaps I am less aware of what is “fashionable” than you, but perhaps I know more about how CMS ACTUALLY works than you think.

  17. Legay-
    I’m famliliar with the pilot PCP projects that CMS has been doing–
    just saying that they are ending. This is not in the future of CMS — if you read the most recent MedPac testimony or the House bill.

  18. My main point was not whether P4P will be active in the future. I know that there are many fads in medicine and I have lived through more than a few of them. Everyone seems to think they have come up with the latest and greatest, then 5 years later – poof! That probably includes whatever they are coming up with now to replace P4P.
    My main point was that the DEMONSTRATED ability of CMS to do anything meaningful about quality is poor. And we are not talking about any particularly difficult issues like who should get bypass, who should get angioplasty and stenting and who should get medical treatment.
    Here are some real issues in my field that it would be helpful to have good guidance on:
    1) When should women start having mammograms and how frequently should they have them? (like you I believe mammo is overdone)
    2) What should be the criteria for getting Head CT and CT Angio of the Chest? (I know CT is overdone)
    There is the potential to save a ton of money in just these areas. But bare recommendations without any kind of “carrot” to follow them won’t do it.
    Watching the national circus that has been the Health Care debate also doesn’t give me a great deal of confidence about the rationality with which the above issues will be decided. I can just see the 30 second interviews done by “Investigative Reporters” with people whose “Lives were saved by these wonderful technologies”

  19. Matt & Legacy–
    Matt– you’re more than welcome.
    Legacy-
    The health care reform we are talking about is not based on a “fad.”
    It is based on nearly three decades of Dartmouth reserach that, by teh mid-1990s, was finally accepted by physicians, like yourself, who understand how much overtreatment there is in the system.
    (Recently some conservatives have come forward to claim the Dartmouth reserach is wrong. No real basis for the claims. The body of the research still stands up. I’ll be doing another post on this)
    Once the Dartmouth resreach was sidely accepted at some point in the 1990s, why wasn’t it implemented?
    If you recall, by the mid-1990s the conservatives controelled Congress and were not able to do anything that would reduce revenues for Pharma, private insurers, etc. They were working hard to pass legislation that woudl deliver windfalls to insuers and pharma–and when Bush came into the White House , they succeeded.
    Under the Bush administratoin, nothing was going to happen. He made it clear that his only goal was to do away with Medicare by turning it into a private plan run by the for-profit insurers.
    IN addition, there was no way that Bush, Cheney or any of his advisers were going to wrap their minds around the Dartmouth reserach.
    It was only when Obama was elected that reform had a chance. His budget adviser–Orszag–and Orszag’s health care adviser–Zeke Emanuel, fully understand the Dartmouth reserach and the implications for reform.
    Some in the Senate (like Kennedy, Jay Rockefeller, etc. understand what needs to be done.
    Unfortuantely, there are not enough strong statesmen in Congres these days to guarantee passage of intelligent reform.
    It’s going to be very very tough–but it is possible.
    What we don’t need, Legacy, is people like you going the reform movement a fad.
    Please, try to get over your cynicism long enough to appreciate the possibilities in front of us.

  20. Maggie,
    My cynicism (and that of other MDs)
    has been “earned” by seeing all the dumb things that have come down the pike over the last 20+ years. Make no mistake, I think there is very significant overuse of medical treatments and tests and I think the Dartmouth data is very important (although I think the interpretation of this data is more complex than you do) But being SKEPTICAL about the PROPOSED REMEDIES for the problem is NOT the same thing as DENYING that the problem exists. I have never called the “reform movement” a fad, but have called some of the proposed remedies (like P4P – which you admit has “gone out of fashion”) a fad.
    My first exposure to the problem of overuse of medical resources occurred in 1977, probably a good 20+ years before it “crossed your radar”. At U of MD, (a brilliant but VERY quirky) Professor of Radiology, John Diaconis (who died recently) gave a lecture (In fact, it would be interesting to see his lecture notes – if they still exist) to all the medical students about the costs of medical care, which at that time were an “astonishingly high 8%”. He went on to deliver to us young and impressionable medical students a message which included several points that you have “discovered” 20+ years later:
    • The majority of improvements in human life span are attributable to improvements in sanitation, vaccines, nutrition and other basic public health measures.
    • An increased number of physicians in a region doesn’t necessarily lead to better health outcomes, but does lead to an increased number of procedures and higher costs.
    I went on to become a Resident in the same department and was further taught by him (and others):
    • “Suttons Law – go where the money is” (named after the bank robber Willie Sutton, who when asked why he robbed banks said: “Because that’s where the money is”. In context this meant to order the test that had the highest probability of making the diagnosis in the quickest, most efficient manner)
    • “When you hear hoof beats on Greene St., don’t go looking for Zebras” (don’t spend time and money looking for rare diseases, when common ones produce the same findings and are more likely).
    Although I enjoy your blog and think it contains a lot of useful information, good points and worthwhile proposals, no one person (or blog) has a monopoly on the truth. As for your admonishment about “What we don’t need”, I am inclined to respond like Tonto to the Lone Ranger – “What you mean ‘we’ white (wo)man”. What we need is good basic health care at an affordable price. The road to that result, if we ever get there, will likely have a lot more twists and turns than you seem to think.

  21. Legacy-
    What is suprising is how much we have in common.
    I first heard about Wennberg and the Dartmouth research in grad school in the mid 1970s.
    My closest friend (who dropped out of English Grad school to become a child pscyhologist ) knew about Dartmouth and Wennberg. Her father was a doctor who had read the reserach when it first began.
    Later, both of my parents died, and I saw over-treatment first-hand. I was pretty young then– late 20s–and found that I had no power over what was happening to them. (No siblings, so I was on my own.)
    When people ask me why, when I left Yale and teaching English literature, I decided to become a financial journalist, I explain that I believed that if you want to understand what is going on in politics or history, you have to “follow the money”– I knew that I was quoting Willie Sutton.
    The difference is that I am an idealist, and you are, to some degree, a cynic.
    But as somoeone once said, an idealist is just the flip side of a cynic.
    I’m cynical about many things: the business world (I know too much about it)
    racism in this country, etc.
    But I hold out hope for health care.
    There are, in fact, a great many very good doctors, nurses and other health care professionals in this country.
    They are stuck in what Dr.
    Don Berwick (IHI) calls a “stupid system” but if given some help, they would do their best to change that system.
    Maybe I’m mistake –. But I don’t see the upsid to assuming that I’m wrong and giving up on the idea of reform. Do you?
    If I’m right, I might do some small amount of good.
    If Im wrong, I doubt I will have done any signficant harm.
    (And I, my husband and my cocker spaniel are all in a better mood because I am laboring under the delusion that I might be doing some good.)
    Best Maggie

  22. “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.”
    Should we feel hopeful now?
    I don’t think so. Health care reform has become the battlefield for yet another bloody feud in the “Culture Wars.”
    It is at the point that a non-negligible number of opponents feel entitled to their facts. With the training they were provided almost since birth in denying everything that do not fit into their mental universe, there is no room for honest debate about anything sensible.
    The political will must include a decision to systematically ignore those who oppose any reform “because!”, include those who have reserves or concerns about crucial elements of the reform, and put forward proposals that are clearly directed at solving problems, not inserting poison pills disguised as cute political talking points.

  23. Maggie,
    I think you are right, cynicism is the flip side of idealism.
    You, because of your long experience with the business world are cynical about it. I, because of my long experience with the medical world am cynical about ASPECTS of it – although I do agree that there are many people trapped in a bad system who would like to change it for the better.
    Your last remark is a lot like Pascal’s wager – but remember that wager was about facts that couldn’t be proven. I hope you are right and we do see INTELLIGENT Health Care Reform which results in good care at an affordable price.

  24. Maggie:
    Great point about idealism and cynicism.
    Where you don’t want to be, for any length of time,is right in the middle, apathetic, which leads to depression, the absence of feeling.
    We must err on the side of idealism, for what is idealism, but clinging to hope.
    My grandfather had a terrific saying.
    One can go 5 days without food, 3 days without water, but one cannot go 5 minutes without hope.
    Your blog helps provide some hope.
    While we may have different ideas for a solution, the end is the same: the necessity of health care must not be priced as a luxury.
    Don Levit

  25. Fragmented care delivery breeds poor performance and dysfuntion. Dismantling inertia requires courage, reslience, stakehoder’s buy-in and efficient framework for delivering high value care. New infrastructure should promote well defined accountability, for improving quality of care and controlling costs. It must also motivate and encourage healthcare professionals, clinical and non-clinical, to align themsleves into multidisciplinary, effectively coordinated, care delivery teams creating value for consumers and the healthcare organization.
    Do join in our discussions at http://www.daviron.com/blog

  26. I am so sick of payors / providers / device / pharma gaming the system and attempting to create a new system that they can game better with more new money.
    Reform has become the opposite of reform.
    What a shame!!
    I wonder how many supporters of reform are in the % counted as being not in favor of reform because reform is now corporate greed.
    OK well we have a majority against greed!!

  27. There was a recent article in Business Week that is emblematic of the problems the Government has in cutting costs:
    (http://www.businessweek.com/bwdaily/dnflash/content/sep2009/db20090918_316075.htm)
    Medicare has been trying to save $850 Billion on motorized wheelchairs because: “Medicare allowed an average of $4,018 for standard power wheelchairs that cost suppliers an average of $1,048 in the first half of 2007.” And: “From 1999 to 2003, Medicare payments for motorized wheelchairs increased approximately 350%, from $259 million to $1.2 billion, while overall Medicare program expenditures climbed just 28%.”
    Of course the article goes on to explain the “push back” Medicare has been getting from various sources including “the Power Mobility Coalition, a nationwide association of manufacturers and providers of ‘power mobility devices’”. What happens will probably be determined by the effectiveness of various lobbyists and campaign contributions.
    If the Government cannot control expenditures on motorized wheelchairs, how much hope do we have in controlling costs in other areas?

  28. Matt,Legacy, NG, Dr. Frankie, Legacy, Don, John C. David, Joe Says
    Matt– I checked in with Tim Mullaney the Bloomberg reporter. He said he was checking on when it woudl be released–should be soon.
    Legacy– the fact you are seeing these stories in Biz Week is telling.
    Ten years ago, Biz Week didn’t publish stories like this. Few publications did. It was all good news about healthcare– progress, miracle cures, new technology, etc.
    Govt will do something about this because it has to . Medicare is on its way to running out of money. Congress knows it can’t raise FICA taxes adn Medicare deductibles and co-pays are already too high for many seniors.
    Legislators caught between a rock (lobbyists) and a hard place (seniors).
    No one wants to have to say that Medicare began running out of money on his watch.
    Stay tuned– we’re going to see Medicare getting tough about spendning in the next three years.
    NG–
    We can change the financial incentives that encourage providers to do more.
    WE can also lower fees for services that we know are of marginal benefit–if that– i.e. PSA tests.
    What we can’t do is
    judge how good individual providers are based on how many of their patients improve.
    There are too many variables. It’s not just a matter of the doctor’s skill, it’s patient complicance, how sick the patient is, how many different diseases the patient has; is patient elderly? is patient poor?
    In the relatively small pool of patients that any single doctor treats, a few very poor, very sick and non-compliant patients will skew his results.
    Posting results would only make doctors avoid poor very sick patients–not our goal.
    But if the pool of patients is large enough–all of the patients seen by a large group of doctors who use a particular hospital, and all the patients admitted to the hospital, then the outliers even out and results do mean something.
    That is why the House bill encourages medicare to begin “bundling” payments to a hospital and all of the doctors involved in a particular episode of care from 6 months before the patient entered the hospital until 6 months later. The bundled payment would be given to the hospital to divvy up.
    The payment would include a bonus if outcomes are good.
    This motivates doctors and hospital to work together since no one gets the bonus unless they all do a good job.
    But there is no fair way to measure the quality of an individual doctor’s work.
    Legacy — we already have good guidelines on
    mammograms. (Breast Cancer Coalitiion is saying that they are of dubious value–there is only a narrow band of “at risk” women of a certain age who should be getting them.)
    We have guidelines for PSA testing (shouldn’t be routine for average-risk men. Should discuss risks as well as benefits.
    The problem is doctors in this country Refuse to Follow Guidelines– compliance by physicians is much, much lower here than in other countires, and unless they work for Mayo, Kaiser, the VA, Geisinger etc. no one forces them to follow guidelines.
    Their paitents don’t know that there are guidelines that are being ignored, and even if they did would probably be proud that “my doctor is independent. He doesn’t let anyone tell him what to do.”
    We need legislation that protects doctors who follow tuidelines from lawsuits. We need legislation tha tprotects doctors who use the full shared decision-making protocol from lawsuits.
    Medicare needs to begin paying doctors more if they generally follow guidelines, paying them less if they don’t.
    The media needs to be writing more stories warning patients: in general, angioplasty makes sense for you only if you meet this profile.
    Same for bypass. We have lots of info. We are as
    NOrtin Handler points out, drowning in comparative effectiveness studies.
    Now we have to insist that doctors use them.
    The anesthesiologists got their act together. Other specialties can do. And if the professional societies and the academic medical centers won’t do it, then Medicare will have to.
    It’s outrageous that practice at different brand-name medical centers varies so widely.
    Finally, Dartmouth is very good at measuring “value” — based on outcomes and use of resources –at large medical centers where the pool of patients is large enough to give you meaningful results.
    Dr. Frankie–
    You write: “It is at the point that a non-negligible number of opponents feel entitled to their facts. With the training they were provided almost since birth in denying everything that do not fit into their mental universe, there is no room for honest debate about anything sensible.”
    This is absolutely true.
    Truly “authoritarian” personalities cannot and will not see beyond their frame of fixed beliefs.
    I sometimes refuse to appear on radio or TV programs with people representing certain extreme ideologies. There is no point in arguing with them. They just say the same thing over and over again.
    One reader told me that he has a very conservative relative who believes that “facts are just something you use to support your point of view.”
    I agree, we just have to ignore those people and go forward with reform.
    Don–
    Yes, I agree being hopeful is the only constructive position to take.
    John C. David-
    Yes, structural changes are definitely needed to realign financial incentives and change the way care is delivered.
    This will happen–more slowly in some parts of the country–but it will happen. Will look at the website.
    Joe Says–
    Not all reform is designed to support industry profits.
    HR 3200 (known as “the House bill”) is actually quite good in calling for
    less greed and more patient-centered medicine.

  29. Matt,Legacy, NG, Dr. Frankie, Legacy, Don, John C. David, Joe Says
    Matt– I checked in with Tim Mullaney the Bloomberg reporter. He said he was checking on when it woudl be released–should be soon.
    Legacy– the fact you are seeing these stories in Biz Week is telling.
    Ten years ago, Biz Week didn’t publish stories like this. Few publications did. It was all good news about healthcare– progress, miracle cures, new technology, etc.
    Govt will do something about this because it has to . Medicare is on its way to running out of money. Congress knows it can’t raise FICA taxes adn Medicare deductibles and co-pays are already too high for many seniors.
    Legislators caught between a rock (lobbyists) and a hard place (seniors).
    No one wants to have to say that Medicare began running out of money on his watch.
    Stay tuned– we’re going to see Medicare getting tough about spendning in the next three years.
    NG–
    We can change the financial incentives that encourage providers to do more.
    WE can also lower fees for services that we know are of marginal benefit–if that– i.e. PSA tests.
    What we can’t do is
    judge how good individual providers are based on how many of their patients improve.
    There are too many variables. It’s not just a matter of the doctor’s skill, it’s patient complicance, how sick the patient is, how many different diseases the patient has; is patient elderly? is patient poor?
    In the relatively small pool of patients that any single doctor treats, a few very poor, very sick and non-compliant patients will skew his results.
    Posting results would only make doctors avoid poor very sick patients–not our goal.
    But if the pool of patients is large enough–all of the patients seen by a large group of doctors who use a particular hospital, and all the patients admitted to the hospital, then the outliers even out and results do mean something.
    That is why the House bill encourages medicare to begin “bundling” payments to a hospital and all of the doctors involved in a particular episode of care from 6 months before the patient entered the hospital until 6 months later. The bundled payment would be given to the hospital to divvy up.
    The payment would include a bonus if outcomes are good.
    This motivates doctors and hospital to work together since no one gets the bonus unless they all do a good job.
    But there is no fair way to measure the quality of an individual doctor’s work.
    Legacy — we already have good guidelines on
    mammograms. (Breast Cancer Coalitiion is saying that they are of dubious value–there is only a narrow band of “at risk” women of a certain age who should be getting them.)
    We have guidelines for PSA testing (shouldn’t be routine for average-risk men. Should discuss risks as well as benefits.
    The problem is doctors in this country Refuse to Follow Guidelines– compliance by physicians is much, much lower here than in other countires, and unless they work for Mayo, Kaiser, the VA, Geisinger etc. no one forces them to follow guidelines.
    Their paitents don’t know that there are guidelines that are being ignored, and even if they did would probably be proud that “my doctor is independent. He doesn’t let anyone tell him what to do.”
    We need legislation that protects doctors who follow tuidelines from lawsuits. We need legislation tha tprotects doctors who use the full shared decision-making protocol from lawsuits.
    Medicare needs to begin paying doctors more if they generally follow guidelines, paying them less if they don’t.
    The media needs to be writing more stories warning patients: in general, angioplasty makes sense for you only if you meet this profile.
    Same for bypass. We have lots of info. We are as
    NOrtin Handler points out, drowning in comparative effectiveness studies.
    Now we have to insist that doctors use them.
    The anesthesiologists got their act together. Other specialties can do. And if the professional societies and the academic medical centers won’t do it, then Medicare will have to.
    It’s outrageous that practice at different brand-name medical centers varies so widely.
    Finally, Dartmouth is very good at measuring “value” — based on outcomes and use of resources –at large medical centers where the pool of patients is large enough to give you meaningful results.
    Dr. Frankie–
    You write: “It is at the point that a non-negligible number of opponents feel entitled to their facts. With the training they were provided almost since birth in denying everything that do not fit into their mental universe, there is no room for honest debate about anything sensible.”
    This is absolutely true.
    Truly “authoritarian” personalities cannot and will not see beyond their frame of fixed beliefs.
    I sometimes refuse to appear on radio or TV programs with people representing certain extreme ideologies. There is no point in arguing with them. They just say the same thing over and over again.
    One reader told me that he has a very conservative relative who believes that “facts are just something you use to support your point of view.”
    I agree, we just have to ignore those people and go forward with reform.
    Don–
    Yes, I agree being hopeful is the only constructive position to take.
    John C. David-
    Yes, structural changes are definitely needed to realign financial incentives and change the way care is delivered.
    This will happen–more slowly in some parts of the country–but it will happen. Will look at the website.
    Joe Says–
    Not all reform is designed to support industry profits.
    HR 3200 (known as “the House bill”) is actually quite good in calling for
    less greed and more patient-centered medicine.

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