Obama’s Proposals For Medicare — Do They Go Far Enough? Will They Become Law?

Not long ago, I wrote about the Center for American Progress’ (CAP’s) “Senior Protection Plan” —a report that aims to rein in Medicare “by $385 billion over ten years without harming beneficiaries.” In that post, I suggested that CAP’s proposals might well give us a preview of the “modest adjustments” that President Obama had said he would be willing to make to Medicare.  At the time, I highlighted three of CAP’s recommendations:

– increase premiums for the wealthiest 10% of Medicare beneficiaries (raising $25 billion);

– insist that drug-makers extend Medicaid rebates to low-income Medicare beneficiaries (saving $137.4 billion);

– prohibit “pay for delay” agreements that let “brand-name drug manufacturers pay generic drug manufacturers to keep generics off the market” (saving $5 billion).

Last week, in his State of the Union address, President Obama embraced the first two:  “Already, the Affordable Care Act is helping to slow the growth of health care costs,” he noted. “The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors.”  (In time, I suspect that the administration also will call for a ban on those decidedly seamy “pay for delay” deals.)

“On Medicare,” he added, “I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission.” The commission called for reducing Medicare spending by roughly $350 billion over 10 years–  a sum that is not far from CAP’s $385 billion target.

Are These “Adjustments” Too Modest ?

These may seem like small numbers. But keep in mind that this is on top of the $950 billion that the Affordable Care Act (ACA) saves by squeezing waste out of health care spending, while simultaneously raising new revenues. Of that $950 billion, some $350 billion comes in the form of Medicare savings achieved by:

–  Pruning over-payments to private sector Medicare Advantage insurers– $132 billion  

–  Containing Medicare inflation by shaving annual “updates” in  payments to hospitals and other large facilities by 1% a year for ten years, beginning in 2014– $196 billion

– Cutting disproportionate share hospital payments to hospitals that care for a disproportionate share of poor and uninsured patients over 10 years beginning in 2014 – $22 billion.

Why has Medicare been overpaying Advantage insurers? Under the Medicare Modernization Act (MMA) of 2003 Congress agreed to pay Advantage Insurers 13% more than it would cost traditional Medicare to cover the same seniors.  Since then research has shown that seniors themselves didn’t believe that Advantage is worth the premium.  A 2009 study published in the International Journal of Health Care Finance and Economics reveals that, when Advantage beneficiaries were asked how much they would pay, out of their own pocket, for the benefits provided by their insurer, they estimated the value of those benefits at just 14 cents for every extra dollar that Medicare was paying. The Incidental Economist’s Austin Frakt, a coauthor of the report, concluded: “This relatively poor return of value on taxpayer dollars is why I support reductions in Advantage payments.”

Under the ACA only those Advantage insurers that receive four or more stars under Medicare’s five-star quality rating system will escape the cuts.  Thus the best plans will be rewarded, ensuring that they stay in business, while encouraging others to pay more attention to the quality of care their customers receive.

Reform legislation saves another $196 billion by trimming annual updates to hospitals, nursing homes and ambulatory surgical centers by 1% a year for 10 years.  If in a given year, inflation suggests that they should receive a 3% hike, they will instead see their Medicare payments rise by only 2%. Here, the goal is to encourage hospitals to find ways to become more productive. When reformers talk about increasing “productivity,” they are not talking about “downsizing” hospital staffs or asking hospital employees to work harder. The ACA focuses on creating systems that help them work as teams that can provide streamlined, safer care.

In its June 2010 report, the Medicare Payment Advisory Commission (MedPAC) revealed that when hospital revenues fall—either because the hospital has fewer patients, or because private insurers are paying less—many can and do become more productive. In fact, they become so efficient that they manage to turn a profit on their Medicare patients.  (The same MedPAC report reveals that one-third of U.S. hospitals already are able to make a profit on Medicare patients, refuting the conventional wisdom that Medicare always pays hospitals too little.)

That hospitals are able to cut waste when they concentrate should come as no surprise. Like most other organizations, hospitals tend to spend lavishly when feeling flush, investing in hotel-like amenities, new wings (which often are not needed), higher salaries for executives, and pricey if not fully tested cutting-edge equipment. On the other hand, when money is tight, the same institutions are more likely to concentrate on avoiding waste. And when hospitals make that effort, the quality of care also improves. Patients do not benefit from waste.

Finally, under the ACA many fewer patients will be uninsured. As a result, Medicare can lower the additional payments that it now makes to hospitals that care for a large number of uninsured patients.

Medicare Spending Is No Longer Growing at a Breakneck Pace

Because hospitals know those cuts are coming, many have become more cost-conscious. As the President noted in his State of the Union: “Already, the Affordable Care Act is helping to slow the growth of health care costs.”  Back in the summer of 2011, I reported that hospitals had begun to ask: “How can we cut our costs?”   Since then, government numbers have confirmed that Medicare’s spending has slowed, in part because hospitals have begun tightening their belts.

Two weeks ago, the Congressional Budget Office (CBO) released the latest figures: since 2010 (when Congress passed the Affordable Care Act) Medicare’s outlays have risen by an average of just 2.9% per year — far less than the 8.4% annual growth seen between 2002 and 2009.

As former Obama health care adviser Ezekiel Emanuel pointed out a few days ago in the New York Times: “over the last three years, Medicare costs per person have grown 1.3 percent slower than growth in the overall economy. In January, a Department of Health and Human Services  (HHS) report showed that Medicare spending per beneficiary grew just 0.4 percent in 2012.”

In response, CBO has lowered its long-term projections. Five years ago, CBO estimated that Medicare spending in 2018 would amount to 3.9 percent of GDP. Now CBO puts 2018 Medicare spending at 3.5 percent of GDP.

The difference between 3.5 percent and 3.9 percent might not sound like much, but as Peter Orszag, former director of the Office of Management and Budget (OMB), recently observed, we’re looking at substantial savings “That difference has about the same impact on the budget as did the upper-income tax cuts that expired as part of the fiscal deal reached on Jan. 1.”

Here, you might be wondering: “So if the growth of spending is decelerating, why are premiums increasing?”  Emanuel raises, and answers, precisely that question. One reason, he suggests,is that  “like everyone else in the health care industry, insurance companies are uncertain about the future, particularly about what will happen to their margins when the new exchanges open in October. The natural response to uncertainty is caution, and for insurance companies, the cautious approach is to increase revenue and profits as much as possible in the short term in case Obamacare lowers them in the long term.

“But once the exchanges begin to facilitate competition,” Emanuel adds, “this fear should dissipate and premiums should come down.”  (I agree. In the Exchanges, all plans will have to meet the same standards: covering all essential benefits, offering free preventive care, capping out of pocket costs …  As a result, they will be pretty much alike. The only way for a plan to differentiate itself will be to compete on price.)

And this is just the beginning. As Medicare’s Trustees observed in their 2011 Annual Report, the ACA “contains roughly 165 provisions affecting the Medicare program by reducing costs, increasing revenues, improving certain benefits, combating fraud and abuse, and initiating a major program of research and development for alternative provider payment mechanisms, health care delivery systems, and other changes intended to improve the quality of health care and/or reduce its costs to Medicare.”

Few of Obamacare’s critics could name even a dozen of those 165 provisions. They haven’t read the legislation.

Most Americans don’t know how the ACA sets out to trim the fat in our health care system.  And for good reason: it’s impossible to list and explain 165 reforms in a news story or a blog post– let alone on television. But this is how historic legislation makes a difference. The good is in the details. We will recognize this as reform rolls out, and begins to affect each of us in different ways.

In the meantime, Obamacare’s opponents won’t acknowledge that the ACA is beginning to put a lid on healthcare inflation.  They claim that the recession explains why seniors are spending less on care.  But  the notion that the recession accounts for a slowdown in Medicare spending just doesn’t make sense. Unlike so many younger Americans, seniors haven’t lost their health insurance, and almost all have supplemental insurance that covers their out-of-pocket expenses. Their Social Security incomes have remained stable. They have little reason to cut back on care.

Finally, if you look at Medicare spending as a percent of GDP, you find that it has remained flat for three years. This is extraordinary– particularly at a time when GDP is growing so slowly.

The changes indicates that we are seeing a “structural” change, in Medicare spending, Orszag notes, not simply a short-term response to economic cycles. ”

As we  look ahead to 2014 , the question becomes: Will Medicare spending slow further ? 

Yes.  Long term savings are baked into the ACA cake.

As President Obama observed Tuesday night:  “We’ll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital – they should be based on the quality of care that our seniors receive.”

This I would argue is the third, and most important way that the PPACA will both “protect’ patients and make high quality medical care “affordable” for all

In part 2 of this post I will explain how we are beginning to change the way we pay for care, in part by  “bundling” payments to doctors and hospitals. In January, the Centers for Medicare and Medicaid (CMS) officially launched “Bundled Payments for Care Improvement,” (BPCI) a program that has enrolled more 500 hospitals, health systems and other providers. When reimbursements are bundled, doctors and hospitals receive a lump sum for an episode of care. If they manage to deliver “better care for less” they will share in the savings. If not, they may lose money.

Already, hospitals have begun to sign contracts both with Medicare and with private insurers that link financial reward to clinical performance. The more the hospital exceeds its cost-reduction and quality-improvement targets, the more money it can keep. If it misses the targets, it will lose tens of millions of dollars. This is a radical shift. It means that providers will have “skin in the game.”

Some of Obamacare’s critics claim that we really don’t know whether moving away from paying “fee for service” will reap substantial savings. This just isn’t true.

In Part 2, I’ll cite both research and on-the ground examples revealing how collaboration and risk-sharing can work.

Finally, I’ll take a look at Presdient Obama’s proposals to save another $350 billlion by:  raising Medicare premiums for the wealthiest 5% of all seniors, while insisting that drugmakers give deep discounts to Medicare beneficiaries who qualify for Medicaid.

Do these ideas stand a chance of being accepted by Congress? Without question,  Republicans will fight them tooth and nail. But in the end, both Democrats and Republicans agree that we have to save money somewhere. Ultimately, they will have to choose the most “politically palatable soltuions.” I will suggest that cutting overpayents to private sector insurers, and raising premiums for seniors at the very top of the income ladder meet that definition.

I am convinced that President Obama would veto any broad reforms that would ration care, or shift costs to middle-class seniors.

As for Republicans, they should be wary of alienating seniors. This is the one group of voters that they can depend on.

In their fury, extremists can be self-destructive. But I believe that most Republican legislators would like to be re-elected.  If they fail to accept the political reality that the public is not behind them on slashing Medicare and Social Security, the nation will face the automatic across-the-board cuts to the budget that are scheduled to go into effect in March—cuts New Jersey Mayor Cory Booker rightly describes as “blunt, brutal and blind.”

If that happens,  the Republican Party will “inherit the wind.”

38 thoughts on “Obama’s Proposals For Medicare — Do They Go Far Enough? Will They Become Law?

  1. Keep up the flow of information……….this is valuable in the health care debate.

    Of all the items noted above, I am least impressed by the
    ‘reduction in annual updates.’ First there is my sarcastic but unscholarly observation that medical salaries and revenues have grown so much since 1965 that we need to claw money back, not reduce the increases. Also, I am not sure that these reductions save a nickel if there is no control on utilization.

    I look forward to an explanation of quality standards. From my own experience with the elderly as a counselor, not a doctor, I would not know how to measure quality —when there is a bowel blockage, a stroke, or a hip fracture,
    you repair what you can and give therapy. The patient may never spring out of bed and play tennis again. My own preference if we want to cut expenses would be to just send out smaller checks to all providers. But I could be very wrong.

    • HI Bob–

      Shaving updates by 1% a year for 10 years is huge. Think of 1% a year compounded for Ten years.

      Also, there have to be some updates. The cost of living increases every year. Thus hospital workers (and here I’m thinking of the millions of hospital workers who are not doctors) have to have raises. The cost of equipment increaes (though we should put a lid on those increases. Still, you’re going to see inflation of at least 2%., just as you do in the rest of hte economy.) Meanwhile, buildings deteriorate and have to be maintained.
      (We shouldn’t have built so many of them in the first place., and hopefully we’ll convert some of them to community clinics,
      long-term care facilities, etc. But we have to maintain them.

      Many doctors are paid more than would seem reasonable. But many are underpaid. Here, I’m not just thinking of
      primary care physicians on the lower half of their income ladder, but gerontologists, pediatricians, palliative care experts, gerontologists, doctors who take Medicaid patients, doctors who work in very poor rural areas. And even if a particuarly group is overpaid, you can’t just whack their income by 10% or 20%. They have homes, children, obligations, all based on their income expectations.

      These things have to be done gradually–over time. Otherwise, you create great dislocations.

      The ACA already has many provisions that will reduce utiliation by making over-treatment far less profitable. I’ll talk about that in Part 2.

  2. I’m still trying to understand all these proposed changes. It’s such a complex (but important) piece of legislation! I know we have to cut spending somewhere, but I’m always concerned when costs on health care getting cut because I’m afraid providers will cut corners to save money, but I’m glad to see you noted that there will be “financial reward [related] to clinical performance” with this legislation. I hope that providers will take this seriously.

    • Jackie-

      Your concern that providers might cut corners to save money is understandable.

      But as you note, under the Affordable Care ACt, they will be rewarded only if they manage to achieve better outcomes for less.

      There is plenty of room to improve quality, particularly in our hospitals Preventable errors– ranging from bedsores (actually the most expensive preventable errors) -to surgical infections and medication mix-ups cost billions–and, more importantly, an immeasurable amount of needless suffering.

      Will providers take this seriously? Yes. Most physicians and nurses very much want to provide better care. Streamlined systems could help them do this.

      Granted, some will resist change, thinking that the way our doing things now is fine. But financial incentives will definitely help.

      This is particuarly true when hospital CEOs are making decisions. Many are businessmen, and in their world, “money talks.”

      That said, I should stress that this will take time. But I truly believe that within 10 years, the ACA will have a huge impact on health care in this country. As a result, we will be able to provide high quality care for all Americans.

  3. I have an issue with plans to save money for Medicare by forcing higher income people to pay a larger out of pocket expense for benefits. I have the same issue with any changes to Social Security based on similar ideas.

    I have the concern that if these programs are made “means tested” programs that the change will threaten the national solidarity over these benefits. As higher income people benefit less and less from the programs, the entitlement programs will come to be perceived as welfare programs, not entitlements, and the political consensus that now protects the programs from reactionary attempts to reduce or eliminate the programs will erode.

    I would prefer to see the need for more money from higher income people addressed by increasing the tax support for the programs. In the case of Social Security this could be achieved by increasing the taxable income level to bring it closer to historical levels, widening the types of income taxed, and tweaking the tax rate itself, and in the case of Medicare, slightly increasing the tax rate while extending the tax to more types of income, as has already been started by the ACA.

  4. Pat S.

    I agree with your take on this issue.

    About 2% of Medicare beneficiaries are already paying an Income Related Monthly Adjustment Amount (IRMAA) surcharge, including yours truly and my wife, for our Part B and Part D benefits. There are four IRMAA tiers with the highest applying to income above $428,000 for couples requiring those affected to pay 80% of the actuarial value of their benefit including the sum of the standard Part B premium plus the surcharge amount. The ACA froze the income threshold through 2019 so the number of people affected will gradually increase over the next six years.

    On social security, the payroll tax used to apply to about 90% of all wages back in the 1980’s but has since drifted down to 85%. To get back to the 90% level, we would have to apply the FICA tax to the first $170,000-$175,000 of wages vs. $113,600 under current law for 2013. Of course, as more wages are subject to tax and if more types of income are subject to the tax as well, that incremental income to which the tax applies would also have to go into the calculation that ultimately determines benefits that each individual is entitled to.

    The calculation of social security benefits has three bend points as the SSA calls them. The first (lowest) tier has a 90% wage replacement ratio associated with it. The second tier has a 28% replacement ratio and the third tier has only a 15% replacement ratio. This is what gives the benefit calculation its progressive structure though the FICA tax itself is a flat rate. On the flipside, lower income people tend to have a lower life expectancy so they don’t collect benefits for as many years.

    I’m getting tired of the attitude among too many liberals in Congress and elsewhere that high income people (top 2% or so) are always ripe for further soaking no matter how much they are already paying. Just taxing the rich more won’t come close to solving our fiscal problems. The middle class and upper middle class will ultimately have to pay more or accept less in benefits as well.

  5. Maggie, I am not so sure that millions of hospital workers have to have raises.

    I have only anecdotal evidence, which is the worst kind, but I do read about nurses who clear well over $80,000 a year. The average patient load of a nurse has gone down in many institutions.There is a boat load of paperwork, but computers surely relieve some of the drudgery.

    The educational requirements for nurses seem to be exaggerated also. Nurses have to take out their own enormous student loans to get through their program.
    Then we overpay them the rest of their working lives.

    I am not calling for a minimum wage. I am just backing up my skepticism that hospitals need annual updates.

    • Bob,
      As a nurse, I take everything you say as a personal blow to my profession. I work a minimum of 44 hours a week (three 12 hours shifts and one 8 hour shift) and made less than $60,000 last year. I am an ER nurse and we can take between 4-8 patients a piece, some are extremely critical, and some are not. You say our patient load has decreased, and it has, but obviously mistakes are still being made. You can not honestly think these mistakes are made on purpose, but they are made due to having too many patients, being tired and overworked, hungry or even needing to use the restroom. Also, if you think nursing school is a breeze, please go try it because it is not. I worked extremely hard to get into one of the best nursing schools in my state and graduated with a bachelor’s degree in 3 years. It cost me approx. $75,000. and I make less than $60,000 a year with mandatory overtime, mandatory weekends, and mandatory holidays. There is an extreme responsibility that is placed on nurses that others do not see. We are responsible for catching physician mistakes. We are expected to be waitresses. We are expected to complete all of the “dirty” tasks associated with nursing. We get yelled at by family, patients, physicians, etc. And we are expected to keep a smile while doing so. If you treat your hospital workers badly and do not pay them for what they are worth, you wont have any hospital workers. If you don’t have workers, you wont have a hospital. I am not saying that I am paid badly because I am just grateful for having a job that allows me to pay my bills with stability. However, you can not honestly say that we are overpaid for the rest of our working lives!

      • Jordan–

        I was going to reply to Bob, just suggesting that he spend 12 hours walking in the shoes of a nurse.

        But I’m glad you did it instead.

        (I like Bob– he’s an honest, intelligent HealthBeat reader who often raises very useful questions. But in this case, I have to say, he just doesn’t know a great deal about what it’s like to be a nurse. I’m sure he would be quick to admit this.)

        I also don’t think $80,000 is excessive pay for a nurse— particularly if she goes on to earn a master’s. As you say, nurses come out of nursing school with loans. And they should be paid professional salaries.

        Moreover, the work is both physically and mentally extremely challenging. And as you point out, the responsibility is huge. My husband’s niece, who was a nurse in NYC for a number of years, ultimately moved out of the City because given the under-staffing and multi-tasking in our hospitals, she was afraid that she might wind up harming a patient.

        I am always very happy to hear from nurses. I hope you will tell others about the blog, so that they too can comment.

        Ideally, I would love to have an audience composed of doctors, nurses, patients, patient advocates, health policy wonks and people in the health care industry who care about patients.

        If we are going to improve the system, all of us need to get together–and talk to each other.

        • Interestly enough Bob I have had many patients and their families tell me that my nurses and medical assistances need more raises. At my hospital the raises are based on performance. The more the nurse puts into her job the better the raise. I have noticed that raises have actually decreased overall. Budgets have decreased and so have raises.
          But as far as hospitals being wasteful. It is true. There are many ways and on many levels that costs could be controlled. Sure we could not run duplicate test or shorten the length of stay. But you cannot go to a patient’s family and say that a test will not be run because of the cost or the effect. If there is a chance that a test may shine some light onto the situation then money and time are unlimited. If you are talking about a production line of tires it might be easier but with human lives it is more complicated.
          The ACA is helping with cost control and changing the way hospitals operate but it will take more.

          • L. Davis–
            Exactly. There is obivous waste in our system, but since health care “is all about human lives” reducing costs is very complicated.
            You say “The ACA is helping with cost control, but is will take more.”
            Yes–and I would add that the “more” is a cultural change in how both providers and patients think about health care.
            “More” is not necessarily better.
            And not everything can be cured.

    • Hi Bob–

      Please see my reply to Jordan (who is a nurse)
      2013/02/25 at 10:36 pm
      I hope you won’t take offense, but I do think that, in this case, you are mistaken.

  6. Barry & Pat

    Pat – I share your concern about undermining solid support for SS & Medicare by means-testing the programs.

    But as Barry points out, currently only the wealthiest 2% are being asked to pay more.

    If they resent this (and no doubt many do) their disaffection is not going to make much of a dent in national support for these programs.

    I also believe that many wealthier seniors don’t resent paying a little more. They realize that since median income among seniors is roughly $20,000 a year (with half earning less), rather than griping, they might better say “There, but for fortune.”

    At the same time, Pat, I agree with yout. I too, would “prefer to see the need for more money from higher income people addressed by increasing the tax support for the programs. In the case of Social Security this could be achieved by increasing the taxable income level to bring it closer to historical levels, widening the types of income taxed, and tweaking the tax rate itself, and in the case of Medicare, slightly increasing the tax rate while extending the tax to more types of income, as has already been started by the ACA.”

    Yes, yes, and yes.

    The problem is that it is very, very hard to get Congress to raise taxes.

    For reasons I don’t fully understand, many Americans would prefer to see Medicare recipients have “more skin in the game.”

    Many would like to see even middle-class seniors have more skin in the game. Thankfully, Obama won’t let that happen.

    The problem is that too many people believe that if seniors had higher co-pays the “greedy geezers” wouldn’t use as much healthcare.

    They don’t realize that many seniors would postpone care they truly need, and in the end, we all would wind up paying more.

    Meanwhile, a great many Americans think that people in say, the top 5% already pay too much in taxes (even if they themselves are not in the top 5%.) For this reason, politicans who hope to be re-elected just won’t raise taxes.

    As for wealthier Americans (who have more power, thanks to campaign contributions) Barry represents many when he says that he is “tired of liberals suggesting that those in the top 2% are ripe for soaking.”

    I’m also tired –weary of hearing those earning more than 98% of their fellow Americans complaining about taxes-.

    Some even insist that someone earning $200,00 is really “middle-class”

    The fact is that they are rich. (By definition if you earn more than 98% of your fellow citizens, you are wealthy.)

    In truth, our tax system has become regressive. Even if you just look at effective taxes (what people actually pay) rather than marginal rates. the truth is that for incomes in the top 1 percent, the effective tax rate went from 37 percent in 1979 to 29.5 percent today, with a big drop and subsequent rise during the 1980s. http://www.slate.com/slideshows/news_and_politics/the-great-divergence-in-pictures-a-visual-guide-to-income-inequality.html#slide_8

    Imagine saving 7.5 % of your income (37% mminus 29.5 percent) year after year, for 34 years. Imagine that money compounding.

    Meanwhile, over that time, middle-class Americans have become working class, working-class Americans have become poor and the poor have become homeless.

    Granted, growing inequality in this country is not mainly a matter of an increasingly regressive tax system. At the top both incomes and the value of investments in stocks and real estate rose sharply. That was the primary force widening the gap.

    But a tax system that ,increasingly, favored the rich made an enormous difference.

    See this NYT editorial on why we must raise taxes on those earning more than $200,000 ($250,000 for a family ) http://www.nytimes.com/2013/02/22/opinion/why-taxes-have-to-go-up.html?ref=opinion&_r=0

    See Jared Bernstein’s excellent piece on the same subject here:
    http://jaredbernsteinblog.com/taxes-all-the-day-long/
    (Bernstein is one of the best economists around–it’s worth following him.)
    And Ezra Klein in the Washington Post here. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/21/how-obama-moved-the-tax-debate-to-the-right/?hpid=z1

    These pieces all appeared in the last couple of days.

    A consensus is building. To meet our obligations and do the things we need to do (repair infrastructure, improve education,provide mental health care for Vets, address global warming etc. etc.) we’re going to have to raise revenues

    Barry suggests that Americans who are not in the top 2% shoudl help.

    But people earning under, say $90,000 to 120,000 just don’t have the money to pay higher taxes. They’re having a hard time sending their children to college, and they’re not able to save enough for retirement.

    If you squeeze them, fewer of their children get the educations they need, and we fall further behind in global competition. At the same time,if they are not earning enough to save for retirement, taxpayers will wind up spending more to help them as they grow older.

    There is a reason that the consenus is growing. I would bet that we’ll see a tax increase for those earning $200,000-$250,000 ($250,000- $300,000 for families) sometime before Obama leaves office.
    We need the revenues. It’s that simple.

    Btw– many people think our biggest problem is that we spend too much on health care. There is, of course, great waste in our health care system,and we need to squeeze it out. (Though I would argue that we’ll need to use some of that money to provide care for everyone, expand Medicaid, raise payments to doctors and hospitals that care for Medicaid patients, and improve public health.

    If we do a good job of making health care more efficient, I hope that we’ll be able to do all of that AND lower the percent of GDP that we spend on healthcare. Or, at the very least, keep a lid on it, so that it isn’t growing as fast as GDP.

    But we need to be mindful that today, millions of Americans get very little care, or poor quality care.

    Providing them with the care that you and I want for our families will be costly. We can do it, but it means shifting money around– less wasteful spending, more effective spending.

    • If you increase the % going to SS from wealthy people, then you need to increase the cap. It will be a welfare program otherwise.

  7. When you say that people making $90k – $120K have trouble sending their children to college, this is mathematically true.

    It is also completely idiotic, and I am not blaming you in the slightest

    If college education was funded by taxes, then a family making $90000 a year would probably pay about 3-4% extra in income taxes each year. Families with no children would pay the same 3-4%.

    Outside of status conscious New Yorkers, no familly in America has to save up money for elementary school.
    They pay taxes instead. Seniors with grown children pay taxes too.

    College should be part of the social wage. Maybe not the humanities, but certainly vocational training should be free to the student.

    American families either save up or go into debt for things that they could be getting free in exchange for taxes.

    • Bob–

      I totally agree that we should subsidize college education through taxes– as many other
      developed countires do.

      I woudl add that we should subidize education in the humanities for all students who it seems might benefit from it–merit based scholarhips–perhaps for everyone who graduates form high school with a solid “B” average. (There should also be a way for kids who don’t graduate with a B average to go back to school (probably at night) take more courses, learn more, and prepare themselves so that they can take advantage of college.

      Many teen-agers are immature. But once they go out into the workforce, they begin to realize that perhaps they should have paid more attention to courses in high schoo. They should have a chance to make up for those mistakes

      Why? Becuase unless young Americans, study the humaniries and know more about history, they will be doomed to repeat it and repeat it and repeat it. (If more Americans had understood more about the war in Vietnam, they would have realized what a mistake we were making when we invaded Iraq.

      It was another case where the majority of citizens in the country we were trying to “save” did not want us there–certainly not when we began bombing, ruining their economy and their country.

      Vietnam also should have taught us that our military technology will not ensure victory in what is essentially a guerilla war, whether fought in the jungle (vietnam) or door to door (Iraq.

      Finally, by studying literature, foreign languages and literature, economic history, philosophy and so many other subjects, young Americans can learn how to think, grapple with ideas, analyze them, and synthesize them.

      These disciplines also teach us much about ourselves, and help us become more
      self-consicious–more aware of our own failings in ways that help us. both as individuals, and as a nation, mature.

    • Why should seniors pay for children going to school? Why should single people pay for children? Exactly why i don’t own a house—i don’t want to support the school system.

      • Peter–

        Peter–
        If someone hadn’t supported the school system when you were a child, you
        wouldn’t have an education.

  8. “For reasons I don’t fully understand, many Americans would prefer to see Medicare recipients have “more skin in the game.”

    Many would like to see even middle-class seniors have more skin in the game. Thankfully, Obama won’t let that happen.”

    Maggie,

    If you haven’t seen it, you might want to check out the excellent, though long, Time Magazine cover story by Steven Brill titled “Why Medical Bills are Killing Us.”

    Much of the article is about the outrageous billing practices by hospitals when dealing with the uninsured and underinsured while the trend toward consolidation among hospitals only enhances their market power. There is also a discussion of high prices for drugs and devices which hospitals then mark up significantly. In the section about Medicare beneficiaries, he talks about overuse of medical services among many of the elderly, in part, because they are almost totally insulated from the cost of care thanks to the supplemental policies 90% of the elderly buy to cover the coinsurance that Medicare would otherwise require.

    As if we needed it, the thrust of the article is a reconfirmation of the 2003 Health Affairs paper, “It’s The Prices, Stupid.” There is also a discussion of the need for safe harbor protection from lawsuits for doctors who follow evidence based guidelines but Democrats resist because they are so beholden to trial lawyers. All in all, it’s a very worthwhile read in my opinion.

  9. Barry–
    I know Steve Brill. He is not a physician. He is not a health care researcher.
    Health Care reserachers know that when people have “skin the game” they postpone needed care.
    They become sicker. This costs everyone more.

    • Brill does not even come close to advocating “skin in the game” as a solution. He lists a detailed set of solutions, all of which involve more aggressive regulation but none of which involve increasing out of pocket costs or decreasing value of insurance, and none of which advocate privatization of Medicare or Medicaid. In passing, he does suggest greater cost sharing for high income retirees, a step advocated by Obama and discussed by Maggie and me above. My position on that is clear above.

      The Slate critique of the Brill article by Matthew Yglesias rests on the point that Brill’s solutions involve many complex steps, and that adopting a single payer government system would allow orderly implementation of payment patterns and regulations that would provide an to end the abuses Brill documents. This is obviously true, but probably irrelevant. It would also be true that if we were to adopt a true socialized system, like Britain, costs likely would be even lower and waste better controlled yet. Both things are unlikely to come to pass. Personally, I would welcome single payer, and think a true socialized system would be fine but nearly impossible in the US due to the existing huge and hugely expensive existing health care infrastructure, and the trillions in bonding that finances it.

      • Barry & Pat–

        Pat– Yes, Yglesias piece is “largely irrelevant”. He is very smart on many topics, but knows nothing about health care.
        At least Brill understands that single-payer isn’t going to happen in this country (totally impractical to erase the slate and try to re-design a system that accounts for so much of our economy– not to mention the fact that the vast majortiy of American don’t want govt-controlled heatlh care,
        Also, as Brill realizes, having just one health care option– the govt–gives whoever happens to be running Washington way, way too much power. Think Margaret Thatcher.
        Moreover, single-payer doesn’t save nearly as much as single-payer advocates claim
        Canada’s single-payer system just isn’t that much less expensive– per person– than the best systems in Western Europe that are not single-payer. And many of them provide better care.

        That said, I should admit that I had just looked at Brill’s piece when I first replied,
        (I know him, and it seemed typical Brill bombast..)
        But today, I actually sat down and read the whole thing..
        I could have saved him a great deal of time by sending him a copy of my book, Money-Driven Medicine, when it was published 7 years ago.
        There is nothing in his article that wasn’t in the book:
        Yes, U.S. health care is over-priced at almost all levels. Yes, it is profit-driven. (Did he really just figure this out??)
        Yes, consumers have no power to bring down prices. Health care is a necessity.
        and when you are sick you will pay whatever you are told you must pay–even if that means getting your mother to write a huge check. Folks in our health care industry are the price-makers, patierns are the price-takers. (We spend 75% of our health care dollars when we are ill, suffering from chronic diseases.)

        But because Brill is neither a doctor not a health care reseracher he doesn’t realize that this is only half of the problem.
        Yes, we over-pay for everyting.
        But we also over-treat Americans who are well-insured or on Medicare.
        And all of those unnecessary tests, procedures and surgeries aren’t just a waste of money–they expose patients to risks without benefit
        And when patients are hospitalized unnecessarily, they are exposed to the danger of being killed or harmed by “preventable medical errors.”

        This is why health care reform legislation is not just titled the “Affordable Care Act” it’s the “PATIENT PROTECTION” and Affordable Care Act.
        People have become so focued on cutting the cost of care that they have forgotten that the quality of our health care system is a major problem:

        It’s not “patient-centered.” It’s not focused on “patient safety.” It doesn’t give patients a chance to share in decsion-making.

  10. Matthew Yglesias has a good critique of Steven Brilll in Slate on line.

    Brill misses the obvious point that we could regulate the fees for emegency care. Maryland did this years ago and has suffered no ill effects. California has a law called AB 774, which limits undisclosable emergency charges to the Medicare fee schedule for anyone making less than about 65K a year. Of course this should be extended to all citizens.

    Congress and Obama have had little or no interest in regulating hospital fees. I suppose that the victims of overcharging are not a voting bloc and they certainly are not campaign contributors. What a shame.

    Meanwhile, let me address the ‘skin in the game’ critique.

    Seniors who are basically healthy account for about 30% of Medicare spending with their office visits, PSA tests, occasional biopsies and heart scans.

    If each and every one of them faced a $5000 deductible and reduced the number of tests that were ordered by 20%, Medicare spending would go down very slightly. Some of them would get horribly sick after forgoing a mathematically inconsequential test, and this would eat into the savings

    So overall Medicare might save 4% with skin in the game.

    I could save 10% just by not paying for Stage 4 cancers and heart surgery after age 80.

    My method seems cruel but it does save money.

    The focus on skin in the game aims at the wrong persons.

    • Once again, Brill does not advocate skin in the game. What he advocates is a set of proposals to impose price control by both forehand (direct rules) and backhand (taxing to confiscate excess profits) approaches.

      The best commentary on this I have seen so far, and everyone is writing about it, comes — no surprise — from Sarah Kliff in the Ezra Klein machine. She has an article about it on Wonkblog, and also a nice 13 minute conversation with Klein on video about it. Here is the link:
      http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/25/wonktalk-ezra-and-sarah-are-shocked-by-the-american-health-care-system/

      In his discussion of the Brill piece, Austin Frakt notes that not only are there a lot of services that are overpriced, as Brill notes, but there are a lot that are really worth nothing — or less than nothing, if they have a net harmful effect (the emission computed tomography heart study that one of the patients Brill follows being and example: in her setting — three negative lab tests — the only likely contribution of the very expensive ECT is to create confusion that could lead to further expansive and potentially risky invasive tests.)

      The gist of this argument is do we need to have direct government control of prices and practices, as every other developed country has. My answer is a resounding yes, which will come as no surprise to any readers. However, as everyone including Klein and Maggie notes, that is a tall, tall order in the US political system.

      Again, I will argue that despite the fact that government programs to control prices and control usage are unlikely to be adopted soon, it is very important that people who are interested in reform, and especially people who want to offer reforms other than reactionary proposals like skin in the game and high levels of out of pocket cost, take every opportunity to argue that price controls and usage controls (through the payment process) are an important issue, and that we should adopt them, and that they offer the opportunity to solve the problems that reactionaries like to bring up, not only without harming patients but by actually making their care better.

      I understand the argument that these things are unlikely to be adopted right now, but if we fail to talk about them they will never by adopted, and we will yield large parts of the field to the reactionaries.

      Cast your mind back to 2005, and try to remember what people said back then about the likelihood that the US would ever have a program that expanded access to health care dramatically or even offered the chance for universal access. The argument at that time was that health care was a third rail for progressives, that attempts to expand access had failed entirely since 1965, and that an attempt to expand access now would sweep progressives out of power, as it was perceived as doing in 1994. But in 2010 we passed one, not because we said no, that can’t be done, but because a lot of people kept making noise about it until it happened. The reform of the payment system is equally important, since it is the other leg that is needed to hold access erect, and we should not allow ourselves to be talked out of informing the public about it and pushing hard for it.

  11. Your post is very informative, as there is so much information in the ACA that is not yet understood in the nursing workforce. I find it interesting that you talk of waste in the hospital setting. You nailed it when you said in good times wings are built, expensive equipment is purchased, and executive salaries increase. As a result of the ACA, our hospital is actively seeking ways to reduce cost and to become more efficient, primarily by exceeding our patients’ expectations through a perfect patient experience.

    We have had extensive Quint Studer training on AIDET, a pre-defined outline of how to talk to patients for increased satisfaction, and for getting the right people working for us. We have an outside company who mails random surveys to discharged patients so that we receive constant feedback and scores on how we are doing.

    These changes that I am seeing in my hospital are reflective of the changes in healthcare from the ACA. I am a generation Xer, and have always thought that we were wasteful in healthcare. I am pleased for these changes. I welcome the change, and see the positive impact it has on creating teamwork in the hospital setting and increasing productivity.

    I am in an Executive Master of Nursing program at The University of Memphis. This blog is very helpful in the Health Policy class that I am currently taking. I have enjoyed learning from you!

    • Anna–

      Thank you very much.I always appreciate hearing from nurses. They know so much about what goes on in our hospitals, and nurse practitioners will be an extremely important part of reform.

      I would be extremely interested in hearing more about
      what’s going on in your program.

      Could you email me at maggiemahar2@gmail.com?

  12. As a patient advocate, I can see how this future healthcare system and reform could be beneficial in trimming down waste and providing quality care. On the other hand, from a nurses perspective, I see many flaws in this system. I am 100% for everyone having access to quality healthcare. However, there is no adequate way of measuring quality of care. It is subjective and there will always being a conflict of interest despite the determiner. How will we completely base payment and compensation on this abstract concept and expect to be able to maintain a healthcare system in which people want to be a part of? If the hospital is not making as much money, they will make cuts and lose workers. It they continue to lose workers, quality will continue to go down. This cycle will go on and on until the system falls. For example, if a frequent flyer continues to come to the Emergency Room for pain medicine, who pays for that? Medicare shouldn’t be forced to pay for someone abusing the system, but the hospital shouldn’t either. This is just one example of many “abusing the system” scenarios. Also, how is it fair to the hospital to get reimbursed the same amount of money for a patient that stays overnight for observation as a patient that stays for a week and has multiple tests and blood work ordered each day? Currently, we have an unfair system, as we would probably all agree. A CT scan does not cost the same for me as it does for my grandmother or my neighbor who doesn’t have insurance at all. If we eliminate that form of inequality, we are all on the same playing field. A CT scan should cost X amount of dollars for everyone, and everyone have the same access to quality healthcare. There are other ways to improve quality than threatening hospitals billions of dollars. We have been working on improving quality for years. It is an ever evolving aspect to healthcare that will never be 100% perfect.

    • “However, there is no adequate way of measuring quality of care. It is subjective…”

      I agree with that. That is why it is disturbing to see us get bogged down in ”quality” indicators, many of which relate only loosely to outcomes. There is actually a new health care industry springing up in which private businesses are created to measure “quality” of institutions in ways that show the institutions in a good light, of course charging for the process of evaluating and listing the institution. It is possible to custom order a high rating that can be promoted in advertising and media.

      That is why it is so important to focus on objective scientific data measuring outcomes and effectiveness. These can be measured objectively.

      A system that overuses procedures that are ineffective may have very good “quality” indicators in some measures, but is not delivering effective care and is certainly wasting large amounts of money.

      • Pat,

        I 100% agree that the overuse of procedures is a major issue in healthcare! I work in an Emergency Room, where a lot of the testing is unnecessary a majority of the time. However, the reason we do most of the testing we do, is due to the idea of “charting to cover yourself.” Providers order tests to cover themselves and we also must chart this same way. Our system has become so focused on potential legal actions that we have lost the ability to adequately assess and treat our patients based off the objective data we find. I cannot physically look at someone and necessarily tell if they have a brain bleed (some of them are minor), but if you come in with a headache, we are getting a CT scan of your head. Is that completely necessary all the time? NO! I think the first step the healthcare system should take is teach these nurses and physicians how to adequately assess their patients because it is honestly a forgotten art. People use testing instead of assessment (and I see this first hand). Then, take some of the emphasis off the legal system. Let us do our jobs without being threatened to be sued!

        • And I do not mean that healthcare providers should never be sued. That security is still needed for patients, but we honestly get threatened weekly. If that was taken away, we would be more apt to treat with our first instinct instead of saying “well, if I miss something they could sue me.”

  13. Dr Robert Evans of Canada said all of this more articulately in his writings, but let me paraphrase……..

    A lot of our dilemma about hospital costs arises because of the way we pay them.

    If hospitals received a set monthly budget like a fire station, we would not know or care how many blood tests were needed. Pain medicine would be on the shelves, at least most common varieties.

    America has been in the grip of per patient reimbursement for a long time. Medicare fell into this also.

    A person with a literary bent might call it “a nightmare from which we have not awoken.”

    We cannot snap our fingers and put all hospitals on global budgets. Every hospital would want what they billed last year and a growth factor.

    But we can make some steps to pay hospitals a flat amount, and do away with the monstrosity of itemized bills.

  14. Ms Kliff’s piece shows that the two single payer countries, Canada and UK, experienced faster real per capita growth in healthcare costs than the U.S. did between 2000 and 2009 though their growth rates were from a much lower total healthcare spending base as a percentage of GDP. Meanwhile, Switzerland which provides health insurance through private insurance companies and Germany, which uses what they call sickness funds which are effectively insurers, had per capita cost growth of only 2% annually vs. 3.0% in the U.S. which was, as Ms. Kliff notes, below the OECD average growth rate.

    We don’t need government rate setting to control outrageous hospital prices. Tougher anti-trust enforcement against ongoing hospital consolidation and perhaps requiring the breakup of some of the larger systems would be helpful. Insurers could be given an anti-trust exemption so they could negotiate as a group in each state or region to determine rates to be paid to hospitals, doctors and other providers. This is how the Swiss do it.

    We could reduce drug prices by using more restrictive formularies and maybe reference pricing. Restrictive formularies mean that some ultra expensive drugs that are no better or only marginally better than existing therapies but much more expensive would not be covered.

    We could also outlaw confidentiality agreements between insurers and providers and between device manufacturers and hospitals. It would be helpful if hospitals could compare notes on how much each pays for various devices or, better yet, subject them to competitive bidding. If surgeons still prefer to use a more expensive device, at least require them to make their case to hospital management.

    As I’ve noted numerous times before, there needs to be special rules that govern how much hospitals can charge for care delivered under emergency conditions on an out-of-network basis. For doctor fees, New York State defines reasonable charges for out of network care at 140% of Medicare though doctors can still balance bill patients which is another issue that needs to be reconsidered, in my opinion. I think any expectation of payment by a hospital in excess of 140%-150% of Medicare is unreasonable on its face regardless of how high the absurd chargemaster rates are.

    Finally, if we want to encourage doctors to follow evidence based guidelines, reduce unnecessary care and provide more cost-effective care, we need to protect them from malpractice lawsuits by giving them safe harbor protection if they adhere to those evidence based guidelines and protocols.

    I don’t think we need the heavy hand of government or a single payer system to mitigate prices and costs in our healthcare system. There are numerous market friendly strategies that we can employ if we have the will to overcome the lobbying power of providers and trial lawyers who benefit from the status quo.

    By the way, to replicate Maryland’s all payer hospital rate setting approach today would require Medicare and Medicaid to pay more than they do now so private insurers can pay less. That won’t happen in the current fiscal climate at both the federal and state level.

    • “Ms Kliff’s piece shows that the two single payer countries, Canada and UK, experienced faster real per capita growth in healthcare costs than the U.S. did between 2000 and 2009 though their growth rates were from a much lower total healthcare spending base as a percentage of GDP”

      Be careful of that particular chart. If you read the fine print, it says that the numbers represent EITHER ten year growth OR “the most recent year data is available for.” The US number is for one year growth in one of the recent years in which health care has grown much more slowly and shows just over 3%. The decade growth in the US is much higher — more like 6%. I am a bit annoyed at the chart since it does not compare apples and apples.

      However, it is not at all unusual for other countries to experience spurts of growth in health care costs that exceed ours on a percentage basis or even as a percent of GDP. That is because they are starting with much lower numbers, so that even though their growth is smaller in absolute numbers, they grow at a faster rate.

      Also, in highly regulated systems like everyone else, there can be a lag between introduction of new management techniques and implementation of regulation, leading to short periods of discordant growth.

      Conservatives love to cite data showing faster growth rates in countries with national systems, but fail to point out that growth is actually much slower than ours because they are starting with much smaller numbers.

  15. While I would defer to the medical experts on this, I suspect that defensive medicine is most prevalent in a hospital setting, especially in the emergency department but throughout the hospital as well. The main reasons are (1) the doctors treating the patients most likely don’t know them well if at all, (2) the patients are sick and (3) they won’t be sued for doing too much or ordering too many tests. Safe harbor protection from lawsuits when evidence based guidelines and protocols are followed would be most valuable in the hospital setting though all doctors would benefit as well.

    By contrast, when PCP’s refer patients to specialists more than they should or order too many tests, it’s probably because they don’t have adequate time to spend with the patient to figure out what’s wrong and, too often, the patient wants and expects the testing, especially if it’s not painful or invasive. So, even if a PCP felt protected from lawsuits if safe harbor rules were in place, he might fear losing the patient if he isn’t perceived as sufficiently “thorough” and get bad word of mouth advertising in the community as well. That’s a whole different issue that probably requires a different strategy to mitigate. I wonder how common this attitude is in other developed countries. I suspect it’s much less of an issue than it is in the U.S.

  16. Jordan & Pat S.
    Measuring the quality of care is an infant science, but we are getting better at it.
    See Dr. Uwe Reinharst’s excellent column on this here.http://economix.blogs.nytimes.com/2013/02/01/measuring-the-quality-of-health-care/

    Jordan–

    Good to hear from you again.
    Yes, in our ERs, too many tests are done automatically– while few doctors take an old-fashioned
    “history”–and really listen to the patient.
    This is in part, no doubt, about physicians’ fears of being sued. But a number of ER docs have told me that the hospital’s administration urges them to find reasons to admit patients–in order to fill empty beds.
    You’re also right that the patient’s right to sue should be preserved.
    But, “Safe Harbor” laws that protect doctors who actually follow “best practice guidelines”–based on medical evidence-would
    protect many, and should reduce the practice of “defensive medicine.”
    In addition, I believe that more hospitals (and doctors) need to follow the “Sorry works” protocol which says that, instead of stone-walling patients (or surviving reltaives), heatlh care providers should freely disclose exactly what went wrong (with appropriate legal protection ) and if they were responsible for what went wrong, ,offer a settlement (if necessary they could go to arbitrators.)
    When providers refuse to talk, we spend a fortune on the the legal process called “disclosure”–which can take years, adding to everyon’e suffering..
    If doctors and nurses are allowed to talk about what happened, then hospitals are in a position to avoid
    preventable errors in the future.

    • Pat,
      I never thought of completing a test due to patient request. I can definitely see how a PCP would feel obligated to complete the test to keep the patient. I think patient education would be the best way for a physician to keep from running an unnecessary test. However, sometimes, patients do bring different perspectives to the table. Patients know their bodies and sometimes suggesting a test is justified and can potentially diagnosis the underlying problem.

      Maggie,

      This may seem ignorant (I am new to the health policy aspect of my career :)) but I was not familiar with the “Safe Harbor” laws or the “Sorry Works” protocol. Do you have any articles or reading material that would help me strengthen my knowledge base?

      Also, in regards to admitting through the ED to fill hospital bed, are those more rural hospitals? We have certain physicians that seem to admit more patients than others. WAY more. However, we seem to have the opposite problem. I work in the biggest hospital in my city, and our CEO is very much focused on “lowering our length of stay.” We are usually full to the point that we are holding admitted patients in our ED. I have only been a nurse for 1.5 years, so this is my first nursing job and the only hospital that I am familiar with. I can see how a rural hospital with low census would beg for patients to be admitted.

  17. Jordan
    On “Sorry works” See http://thinkprogress.org/health/2010/08/17/171600/sorry-works-works/
    In this column, you’ll also find links to other sources on “Sorry Works”
    This is , I think, far and away the best answer to malpractice because it opens the door to full disclosure of what happened, so that the hospital and doctors can try to make sure it doesn’t happen again.
    “Safe Harbor laws” are designed to protect doctors and hosptails from lawsuits. If doctors can show that they followed “best practice evidence-based guidelines” they are protected against lawsutis. But Safe Harbor Laws have less to do with protecting patients from becoming the victims of preventable errors .
    A report from the Urban Institute points out the problems with “Safe Harbor”:
    First: ““By their nature, guidelines provide guidance on what typically constitutes the best care for an entire population. It is therefore hard to use a guideline to deny care to a particular patient, who can always argue that their case is an exception to the general rule,” the report notes. “Accordingly, liability safe harbors are unlikely to contribute much in the near term to bending the curve of increasing medical spending.”
    In addition, because “guidelines” alway apply to “the average patient” doctors can–and should– deviate from them some of the time. For instance, in the UK , those who measure quality of care are happy with 85% to 90% compliance. (Compliance with evidence-based guidelines is much, much lower in the U.S. We should try to get up to 85% to 90%. Using — evidence-based guidelines is crucial to improving the quality of care. But because medicine is so complicated, they can only be guidelines, which is why using them to protect doctors probably is not appropriate.
    I can think of horrendous cases of malpractice where what doctors and the hospital did would normally be okay, but in this particular case, they totally ignored signs that this was not a normal situation.

    In one case, a young boy had a severe reaction to a medication given following surgery and began bleeding internallly. There was a warning on the medication about the possibility of a reaction, but no one paid attention to it. (The surgeon, who was aware of the warning–had left town following the Friday surgery– it was a holiday week-end. .)
    Most importantly, nurses and residents didn’t pay attention to the boy’s complaints –or his mother’s complaints– that he was in sever pain. They said the pain was “just gas.”
    Over the course of three days, the boy bled to death–in a hospital bed in an academic medical center.
    The mother chose not to sue, and instead formed an excellent patient safety organization.
    But this is a good example of how both the hosptial and doctors could hide behind a “we did everything that we would normallly be expected to do”" safe harbor excuse.
    I wish I could say this case was extremely rare. But it wasn’t. You’ve read the reports comparing patient deaths in hospitals to daily airline crashes. . .
    You know, as a nurse, that is filled with ambiguities and uncertainties. Every human body is different. There are many surprises.
    To keep patients safe, we need “patient-centered medicine.” That means Listening to the Patient. Doctors and nurses need to recognize that the doctor may be wrong; they may have made a mistake.
    The Urban institute points to other problems with safe harbor as a solution to lowering the cost of malpractice :;
    –”the inability to keep guidelines up to date with rapidly changing medical innovations”;
    – “doctor resistance to following guidelines, and
    the difficulty of indicating which care should and should not be given.”
    The report concludes: “Safe harbors may be better used as supplemental programs to general reforms that target overuse and are based on consumer education or incentives, provider risk-sharing, health plan controls, or government directives.”http://medicaleconomics.modernmedicine.com/news/can-safe-harbor-laws-stop-defensive-medicine

    I agree. The onlly real solution to malpractice is: Less Malpractice, fewer preventable errors and deaths. This means investing more $$ in patient safety reserach (the Affordable Care Act does this) emphaszing “team medicine”—and encouraging everyone on the team (including nurses) to speak up, without fear, when they see something wrong, and full disclosure, after the fact when patients are hurt so that hospitals can investigate exactly what went wrong and avoid repeating the mistake.
    As the report notes, doctors and hosptials also need to have “skin in the game.” Medicare and others payers need to use financial
    penalties to encourage everyone to improve patient safety.
    I’m hoping that some of the patient safety pilots funded by
    the ACA will lead to implementation of “sorry works” at hospitals across the nation.
    On “urging docs to admit through the ED “– This is not primarily a rural problem
    The major cases I know of (based oni nterviews with the doctors involved were in Chicago and another large city (I have forgotten which one.) In both cases, these are large hospitals.
    Also, see these reports from Houston: “Thousands of Hospital Beds Empty Even as Area Grows” http://www.chron.com/business/article/Thousands-of-hospital-beds-empty-even-as-area-1611571.php

    Portland Maine: Empty Beds May Signal Too Many Hospitals http://www.pressherald.com/news/empty-beds-may-signal-too-many-hospitals_2012-12-17.html

    This isnt’s just a result of the recession. There are stories going back to the 1980s And this one from 1994
    New York (city) Hospitals Face a Sharp Increase in Empty Beds http://www.nytimes.com/1994/05/31/us/new-york-hospitals-are-facing-a-sharp-increase-in-empty-beds.html?pagewanted=al

    2007, Naples Florida: Billions Per Year lost in Empty Beds
    http://www.teletracking.com/news/index.cfm?mode=detail_news&news=D258572B-1372-5B6F-0B30B4E37BF70F00

    The apologists claim that empty beds save lives. Hosptials need “surge capacity,” the New York Daily News says– 40% empty beds. (hospitals are abig advertiser for the Daily News The paper (like the New York Times) hate to see hospitals close. .)

    I recall one ER doc who was being harrassed by his hospital administration because he wasn’t admitting enough patients. I asked him why they had so many empty beds, and he said “We”re just waiting for the day when a commerical airplane hits a bus full of tourists right in front of the hospital. We’ll be ready!”

    We have too many hospital beds in this country. Everyone likes the idea of expanding hospitals to create jobs. (Of course that’s not the point of health care, but no matter.)
    Hospitals like to expand and become bigger than other hosptials. Hospital boards like the idea of being on the board of the biggest hospital.
    Years of Dartmouth reserach reveal that the supply of hospitals beds creates demand for hospitalization (Build the beds and they will come)
    Thiis is one reason why so many Americans are needlessly hospitalized.
    Under reform, I suspect some hospitals will close. As their profit margins are squeezed, those that can’t or won’t become more efficient will begin losing money. I can think of at least one hospital in Manhattan that should be closed– and quite a few in metropolitican NYC as well as NYC suburbs.
    In other parts of the country, the distance between hospitals can be a problem. But here, we have too many hospitals and some just aren’t very good. .

  18. I think the main value of safe harbor protection from lawsuits when evidence based guidelines and protocols are followed relates to the failure to diagnose cases like the rare headache that turns out to be due to brain cancer or the seemingly healthy man who didn’t get a PSA test and is later diagnosed with prostate cancer.

    Defensive medicine is not nearly as big a problem or issue in other developed countries as it is in the U.S. I think a big part of the U.S. problem is a difference in cultures. Americans seems to be more litigious generally and quicker to sue or at least want to sue and not just in medicine. I think we need to find ways to help the average person make a clearer connection between this culture and the high cost of healthcare and health insurance. By the way, the same goes for the all too common perception that more care is better care and more expensive care is better care when more often that not, it isn’t.

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