Current Health Care Legislation Will Not Control Costs

Preface: Today, Columbus Day, The New York Times ran a piece warning current health bills had no effective way to control costs. Here are a few excerpts from the piece with my comment.

“With Democrats increasingly confident that they can pass major health care legislation this year, some of the nation’s foremost experts are warning that the emerging bills do not do enough quickly to tamp down soaring medical costs — the biggest problem facing the majority of Americans, who already have insurance.

As Congress prepares for heated floor debate (the Senate Finance Committee is expected to approve its bill on Tuesday), the experts, including policy analysts, hospital executives and current and former health officials, say lawmakers must make crucial changes.”

“They urge adjusting the legislation to reshape more aggressively the health system, from one that overly rewards quantity of care to one that promotes high-quality, cost-efficient treatment that will save lives and money.”

“A statement on Saturday by four former surgeons general calling the health care system “unsustainable” and urging bipartisan cooperation was the latest example that health experts overwhelmingly support swift action and generally support the main proposals in Congress. But many, like the surgeons general, stress that lawmakers must do more to lower costs."

"The health debate, in many ways, is premised on the idea that Americans and the government could save hundreds of billions of dollars by eliminating wasteful spending on things like duplicative scans or laboratory tests that might be avoided by electronic records, unnecessary hospital readmissions that could be averted by better follow-up care and patient infections that could be prevented by rigid safety protocols.”
“A number of strategies to transform the health care system, such as promoting research into the most effective treatments and encouraging doctors and hospitals to form “accountable care organizations,” are included in the legislation, but either in a limited way or as small demonstration projects. “

“A member of the group, Elizabeth A. McGlynn, associate director of RAND Health, said that her firm’s research showed that the legislation would do more to provide benefits for the uninsured than to change the overall upward trajectory in spending."

“We are not really seeing a lot of evidence that the trajectory would change very much,” Ms. McGlynn said.

My Comment

As author of Obama, Doctors, and Health Reform and a longtime commentator on the health system, I think we should get real for these ten reasons:

1. Americans have great expectations of our system and expect prompt access to the best technologies we have to offer.

2. If those expectations are not met or if results do not meet expectations, the threat of a lawsuit is always there.

3. Two-thirds of American physicians are specialists; many are $150,000 to $200,000 in debt when they enter practice, and they expect to recoup their debts.

4. The managed care gatekeeper system requiring patients to go through primary care physicians to gain access to specialists failed; Americans prefer to select their own specialists.

5. Experiences abroad indicate a broad primary care base is the most efficient delivery system, but it will require incentives to pay primary care doctors more and ten years to build that base.

6. Hospital CEOs are hired and exist to bring in more revenues; those revenues are best obtained through high tech procedures; consequently most hospitals are engaged in marketing wars featuring high technology expertise.

7. There are 1700 private health plans, most of them for-profit, which employ 400,000 people, are beholden to stockholders, have to maintain capital reserves; have average profit margins of 3.3%; and administer many of the existing Medicare and Medicaid programs.

8. American drug firms create 80% of the new drugs, rely on the profits to create new drugs, have stockholders, and therefore depend on profit margins.

9. 85% of Americans are covered by insurance, and 90% express satisfaction with their current health plans and fear they will lose these plans under sweeping government reform, including a public option.

10. Given these realities and the complexities of the system, it is unrealistic to expect the Obama administration in its first year in office, or even in its first term, to unwind and rewind the system and to turn it upside down.