Hope for reining in health care costs

December 11, 2009

On Tuesday, a spillover crowd stood in the hallway outside a small room in the U.S. Capitol to listen as Sen. Jeanne Shaheen introduced a series of measures that will almost certainly be part of any health care reform effort enacted by Congress. That Shaheen was chosen by 10 other new senators to introduce the Freshman Innovation and Value package is a tribute to her political skills.

The measures, which will appear as a package of amendments to the Senate health care bill, fill a gaping hole in the reform effort: its lack of measures to control costs. If that isn't done, whether access to health care is expanded or not, the system will collapse relatively soon under the weight of double-digit increases.

The package contains measures to prevent the cost-shifting that plagues the system. It calls for the creation of an independent advisory board that would make system-wide recommendations to Congress about how to reduce Medicare spending. The package will result in the broader and more rapid sharing of information about costs and help to combat Medicare fraud. It seeks to reduce or eliminate the red tape and other barriers that stand in the way of innovations that might improve care and lower costs.

Two of the measures get to the heart of much that is wrong with health care in America. They are based, Shaheen said, on research pioneered at Dartmouth Medical School by Drs. Jack Wennberg and Elliot Fisher. The first is outcomes research - though none of the senators used the term, since it spawned no end of Republican nonsense about "death panels." Information must be collected and shared about what works medically and what doesn't. So must information about costs. The package calls for creating a way to measure the efficiency, quality of care and cost of private health plans so consumers and employers can compare the relative value of health plans before choosing one.

The second measure is called "value-based purchasing," also known as global payments. In the bad old days of HMOs and managed care, the same thing was called capitation. Providers were paid so much per patient per year, factored for age and health status, to care for that person. The theory was that the healthier providers made and kept their patients the more money they would make.

In a few places, a visionary medical leader created a culture that allowed managed care to work. In most of them, doctors were salaried. They made no extra money by doing needless or debatable procedures or tests But in most cases, insurers managed money not care. They profited when the system was underused, often at the expense of patient health.

Value-based purchasing recognizes that higher medical costs don't mean better patient health. The amendment recognizes that by requiring that the Medicare system start paying health care providers based on their performance, not on the number of procedures and treatments they perform.

An unlikely collection of bedfellows were in the room or watching when Shaheen and her colleagues made their announcement. They included the AARP, the Business Round Table, the nonpartisan New America Foundation, Dartmouth Hitchcock Health System and the U.S. Public Interest Research Groups founded by Ralph Nader. That's because they all know that until the health care system moves away from fee-for-service medicine toward a system based on keeping people from getting sick in the first place, costs will never be controlled.


Source: Concord Monitor