Obama strategies, Medicare, Electronic Medical Records -The Big Fix in Health Care

If you’re like me, you’re wondering what the Big Fix for the economy and health care is going to be. David Leonard, an economics columnist and staff writer for the New York Times, thinks he knows. It’s going to be government investment in medicine, education, and alternative medicine.

In the case of health care, the big fix will focus on Medicare and,

One, initially investing heavily in EMRs for doctors and hospitals.

Two, within five years, restricting Medicare payments only to those doctors and hospitals who have EMRs,

Three, using Medicare-acquired data, to pay doctors and hospitals, at the prevailing rates in the least expensive part of the U.S., e.g. the same in urban New Jersey as in rural Minnesota.

Four, stopping or reducing Medicare payments for expensive treatments that don’t work, as determined by a federal comparative outcome institute using EMR-generated Medicare data.

The Medicare EMR Data-Driven Solution

There you have it, a Medicare EMR data-driven solution. I may be overstating this, but I don’t think so. Here I quote Leonard’ in his February 1 New York Times Magazine article “The Big Fix: What can Obama do to transform an economy that can no longer count on Wall Stree t or Silicon Valley.”

The subheadings that follow are mine, the words are Leonard’s. To put his words in context, I recommend you read his 7800 word piece in its entirety.

The Doctor Problem“Doctors, drug makers and other medical companies persuaded the federal government to pay for expensive treatments that have scant evidence of being effective. Those treatments are the primary reason this country spends so much more than any other on medicine. In these cases, and in others, interest groups successfully lobbied for actions that benefited them and hurt the larger economy. “

Government’s Successful Investments

“But government investment seems to have one of the best track records of lifting growth. In the 1950s and ’60s, the G.I. Bill created a generation of college graduates, while the Interstate System of highways made the entire economy more productive. Later, the Defense Department developed the Internet, which spawned AOL, Google and the rest. The late ’90s Internet boom was the only sustained period in the last 35 years when the economy grew at 4 percent a year.”

Curing Health Care Inefficiencies

“On health care, the challenge is keeping one of tomorrow’s industries from growing too large.”

“For almost two decades, spending on health care grew rapidly, no matter what the rest of the economy was doing. Some of this is only natural. As a society gets richer and the basic comforts of life become commonplace, people will choose to spend more of their money on health and longevity instead of a third car or a fourth television.”

“Much of the increases in health care spending, however, are a result of government rules that have made the sector a fabulously — some say uniquely — inefficient sector. These inefficiencies have left the United States spending far more than other countries on medicine and, by many measures, getting worse results. The costs of health care are now so large that it has become one problem that cannot be solved by growth alone. It’s qualitatively different from the other budget problems facing the government, like the Wall Street bailout, the stimulus, the war in Iraq or Social Security. “

Unsustainable Government Medicare Promises

“The unfinanced parts of Medicare, the spending that the government has promised over and above the taxes it will collect in the coming decades requires another decimal place. They are equal to more than 200 percent of current G.D.P.
During the campaign, Obama talked about the need to control medical costs and mentioned a few ideas for doing so, but he rarely lingered on the topic. He spent more time talking about expanding health-insurance coverage, which would raise the government’s bill.”

The Wennberg (Dartmouth Institute) Solution

“After the election, however, when time came to name a budget director, Obama sent a different message. He appointed Peter Orszag, who over the last two years has become one of the country’s leading experts on the looming budget mess that is health care. “

“Orszag explains that the problem is not one of demographics but one of medicine. ‘It’s not primarily that we’re going to have more 85-year-olds,’ he said during a September speech in California. ‘It’s primarily that each 85-year-old in the future will cost us a lot more than they cost us today.’ The medical system will keep coming up with expensive new treatments, and Medicare will keep reimbursing them, even if they bring little benefit.”

“In his talks, Orszag puts a map of the United States on the screen behind him, showing Medicare spending by region. The higher-spending regions were shaded darker than the lower-spending regions. Orszag would then explain that the variation cannot be explained by the health of the local population or the quality of care it receives.” (This comes directly out of the Dartmouth Institute playbook, which says that most cost and practice variation by region is “unwarranted.”Never mind socio-economic differences.)

“Darker areas didn’t necessarily have sicker residents than lighter areas, nor did those residents necessarily receive better care. So, Orszag suggested, the goal of reform doesn’t need to be remaking the American health care system in the image of, say, the Dutch system. The goal seems more attainable than that. It is remaking the system of a high-spending place, like southern New Jersey or Texas, in the image of a low-spending place, like Minnesota, New Mexico or Virginia. “

Mandatory EMRs to Bring Medicare Costs Into Line

“The government would have to create a national version of his database and, to do so, would need doctors and hospitals to have electronic medical records. The Obama administration plans to use the stimulus bill to help pay for the installation of such systems. It is then likely to mandate that, within five years, any doctor or hospital receiving Medicare payment must be using electronic records.” (bold italics mine)

Stopping or Reducing Medicare Payment for Expensive Treatments That Don’t Work

“The next steps will be harder. Based on what the data show, Medicare will have to stop reimbursing some expensive treatments that don’t do much good. Private insurers would likely follow Medicare’s lead, as they have on other issues in the past. Doctors, many of whom make good money from extra treatments, are sure to object.. They will claim that, whatever the data show, the treatments are benefiting their patients. In a few cases — though, by definition, not most — they may be right. Even when they are not, their patient, desperate for hope, may fight for treatment.”

The government will argue, tough luck, it has the data – and it knows best. The trouble is, of course, you can make data say what you want it to say. It depends on your premise.