The Freshman Class and Health Reform Cost Containment

Thanks for keeping the heat on the Senate to recognize that the increase in health insurance cost is the out of control health care costs.
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If our esteemed Representatives on both sides of the aisle do not tackle this problem first, no amount of reform will make a difference.
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Cost containment must be put into place for health care reform. PERIOD. Otherwise any “reform” proposed does not matter at all.

Thanks, Kate. The 11 freshmen are Warner, Begich, Bennet, Burris, Hagan, Kaufman, Kirk, Merkley, Shaheen, and both Udalls (list wasn’t in your post or Klein’s, fixed that for you).
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So McCain thinks cost containment is “misguided”? What are his solutions (besides tax cuts)? Do the 11 pledges have full support by some of the senior classmates such as Schumer or Rockefeller? Do you think this group could stick as a bloc to force changes in the bill (no cost control, no final vote)? What else are they telling you, Kate? thanks

Hell has officially frozen over. I agree with Rusty….

rusty,

I agree with you 100% (hell must be frozen over, LOL). It is a shame that no one wants to tackle this issue, but the health care industry has a lot of friends in Congress and does a good job of PR.

I am really disappointed in the Republicans. Instead of pointing out the same problems with cost containment, they are trying to scare Grandma about benefits (They are not unique, the Demos did the same regarding Social Security reform, the one issue George Bush attempted that I supported).

What is wrong with Republicans? Why can’t they support the idea of delivering government services at less cost? Now if you want to argue, the government is efficient, that is one thing, but they argue you can’t cut costs and provide better services, that rationing will result. I always thought Republicans were about more efficient government using less money. Why else would I vote Republican? (I can’t stand their social agenda – out of my bedroom, please!)

It is indeed a cold day in Hell

Cost containment has always been the goal, they’ve just been approaching it in a second hand way. Instead of attempting to pass legislation which would directly reduce payments to doctors (which is essentially what most other countries have done), they’ve pursued legislation which would have forced the insurance companies to squeeze providers for lower costs.

That was the goal of the original public option. By forcing private insurers to compete with a government plan which could dictate reimbursement rates, you put pressure on the insurers to negotiate competitive rates with providers. It makes sense when you think how much more sympathy the public generally has for doctors than insurers; if Obama had originally stated a goal of reducing doctor’s salaries by 40% over ten years, he would’ve probably been impeached by now.

Universal coverage has mostly been a claim for a moral high ground, as well as a way to gain the support of liberals. Congress would never have taken up this issue if it wasn’t necessary for financial reasons, so don’t think that cost containment hasn’t always been the central issue.

indeed, hell is good place to be at this moment. now im sure rusty isn’t necessarily criticizing repubs, so guys cut the cheap shots. Rusty, i’d love to hear more about what you think on this subject. It’s great having a conversation.

Finally some truth acknowlegement from my dear friend’s on the left here in the swamp.
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However, I have along with stuart been saying this all along. You can’t acheive lower costs by simply putting in a government backed or government run insurance company, when the real problem is the overall cost of health care.
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Both Republicans and Democrats are delusional in my opinion. This specific bill, which the Democrats to date have refused to discuss with Republicans in the Senate or the House is not going to fix anything. And, I truly believe will make overall health care worse by attempting to squeeze out savings through the back door.
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Put into place as the first steps policies that regulate insurance. IE: Portability of Insurance, No denial of health care benefits (pre-existing conditions), and pass insurance reform that includes State to State sales just like we have with car, life and homeowner insurance, Tort Reform, and last but not least Medicare Fraud and Abuse.
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This costs nothing. Then allow panels to discuss Quality Health Care versus carte blanc / ala carte health care. We all know that every Doctor will order any and all possible tests, most are not even needed. Set up best practices that hospitals and doctors are required to follow, and begin denying payments for those who will not follow the guidelines.
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They talk about bundling of money for any disease. Meaning, “we’ll give you X dollars for this specific illness or disease”, but this in my opinion will not work either. Standards of care have long been established. But unnecessary tests continue regardless. This is an example of how Doctors will order it in order to cover their butts, period. This is the abuse, waste and fraud that needs to be addressed and stopped. Tort reform would go a long ways in making this happen.

I don’t know about hell, but it sure is cold here in L.A. today.
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Re: out of control health care costs –
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Perhaps these numbers will help explain part of the problem:
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Average cost of a doctor’s office visit – Germany – $22, France – $31, Spain – $15, Canada -$30, US – $59 to $151.
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Average cost of an CT Scan – Germany – $319, France – $212, Spain – $161, Canada – $530, US – $950 to $1,800.
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Average pay for an anesthesiologist with 3 or more years post-residency practice – $350,000 to $651,000.
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An estimated 50% of surgeries, tests, and procedures are not backed by scientific evidence. It is also estimated tha $500 BILLION is spent annually on unnecessary care.
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Certain forces are pushing this overtreatment. one of the most important is that most of our caregivers are paid through a system known as fee for service. They are reimbursed for each office visit, each day a patient spends in the hospital, and each test or surgery performed. This means that health care providers have every incentive to give patients more care, not better care.
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Will the health care bills now before the Senate fix this?

Sources :
http://voices.washingtonpost.com/ezra-klein/2009/11/an_insurance_industry_ceo_expl.html

http://www.valuemd.com/physiciansalary2.php

http://www.aarpmagazine.org/health/health_care_costs.html

My understanding of the bundling issue is that by setting a fixed price for medical conditions, you remove the incentive to perform additional tests, since the payment is based not on the treatment but on the illness. Tests and treatments cease to be a profit center and become a cost.
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The argument for selling insurance across state lines is a major blow to states’ rights, by the way. Republicans claim to support that cause, but like budgetary concerns, its really just a card they play when they oppose the policy. Right now, any company that wants to sell insurance in any state can do it as long as they’re willing to play by that state’s rules and laws as far as minimum coverages and such. The claim of increased competition may hold some merit, but at the certain cost of a drastic reduction in the ability of the state to regulate its own insurance market and deal with insurance companies in their own courts.

Excellent post mjshep.
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Now how do we convince the stooges in Washington, both Republicans and Democrats of it as well?

discostu:
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But, in reality, bundling is the same as Medicare has done with Home Health Care reimbursements, which I know very well. They give a big lump sum of money for a patient to be managed by a Home Health Company. The Home Health Company decides how many staff to employ on the case, how often, and for how long. Most Companies usually front end visits to the home, but overall cut out visits to maximize profits.
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With managed care patients, the insurance company gets the lump sum, and they decide how many visits they will reimburse. The insurance company profits the most, and the home health company and patient both lose.
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This big lump sum is a cash cow for most Home Health Companies, I know it because I know the profits made from it by owning my own company.
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I fear if you do not put on price controls for actual costs, then Doctors would simply forgo tests that would be needed in order to make more profits. Same as hospitals would do as well.
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Bundling doesn’t mean I will get better health care results, simply that my doctor or hospital will be paid a lump sum and only give me marginal care. Care needs could be withheld as most illnesses and diseases could be postponed until they get so bad that I end up dying from the lack of care I predict bundling would produce. To me this is even worse than potential rationing would bring us once a government plan is put into place.
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Example in point. Doctor A decides that radiation would suffice for my cancer, and chemo is not going to be used. Then my cancer spreads because the chemo was not used from the start. I die because radiation was the only treatment prescribed due to bundling of funds. Doctor is not held liable, because it is well known that cancer is unpredictable. Off I go to heaven kicking and screaming because had he used chemo in concert with radiation I had a higher chance of survival.
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So far as State to State, yes it does infringe on State rights. But so does the “Government Option”. Why not try out a non-costly measure first, rather than jumping fully into another big Government Entitlement program? It just makes sense to at least try.
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Each State has one big insurance company that enjoys a near monopoly in that specific State. They maximize profits through their specific state monopoly. Why would they compete with another mega insurance company, if they can maximize their efforts in just a few States? If all States are required to be equal, then the incentive to stay in a specific region or State is gone.

You got me there, Rusty.
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It will be difficult because they ARE stooges. Doctors and hospital corps will resist reimbursement restrictions, demagogues (think Sarah Palin) will scream that instituting reasonable standards and practices to improve efficiency equals “death panels” or rationing.

Don’t forget that one person’s unnecessary care is another person’s new yacht.

You got me there, Rusty

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No, I don’t have you there. I was hoping that you might say, “write, email and call them”. Inundate them with so many phone calls, faxes, emails and the best is hand written letters.
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If….IF enough people did it we can make a difference before it is too late.

Rusty,

You have mentioned “tort reform” and I am curious by how that would lower how much is spent of health care?

Some states have tried caps on non-economic damages for mal-practice cases. However, that has not reduced the costs of medical care, e.g. Texas installed a cap on non-economic damages and while mal-practice cases have gone to nearly zero in McAllen, Texas, it still charges the highest rate per patient for Medicare (more than twice the rate of the Mayo Clinic and twice as much as El Paso, Texas, a town with the same demographics.) The costs continue to rise.

I know one suggestion of a cap of $50,000 maximum for non-economic damages. Just imagine, if a doctor messes of a prostate exam and they have to cut off your penis. If $50,000 enough?

There has been one program which has been very successful at reducing medical mal-practice claims. It has been instituted at the University of Michigan. Instead of when a potential mal-practice claim comes in, where the doctor denies any wrongdoing and the hospital and its attorney tell the doctor to no longer deal with the patient — the doctor admits to the mistake and promises to investigate what went wrong and to talk to the patient. Often times, the patient just wants to be listened to. While there is no guarantee the patient won’t sue, the money the University of Michigan reserves each year for potential mal-practice cases has dropped from $2 billion per year to $700 million per year. They interviewed several potential mal-practice litigants (former patients or their parents) on NPR ( the one person not satisfied was a doctor himself) about the new program,and they were very happy with the process. This did not require any passage of law or limit on award caps, just a change in the behavior of doctors and hospitals to be candid and not instantly adversarial. Your thoughts?

Our current system is one where there’s a profit incentive to give more treatment than is needed, to order more tests and procedures than necessary or wise.
Doctors didn’t create that structure, but they’ve gone along with it.
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I think it’s a big, big stretch to suggest that doing away with that structure would result in a world where doctors chronically under-treat patients in order to minimize costs. There’s still the Hippocratic oath, and, I hope, enough ethical people in the medical field that this sort of behaviour would never take root.
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To put it in the terms of your example, I would suggest that any doctor who would choose to forego chemotherapy for reasons that have more to do with their practice’s finances than their patient’s health doesn’t belong in the medical field, and in a properly incentivized system, would likely choose investment banking or organized crime instead.

“You have mentioned “tort reform” and I am curious by how that would lower how much is spent of health care?”

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It simply makes sense that if Tort reform is passed country-wide, this would lessen the “risk” which all insurance companies base their cost of insurance. Less risk in my mind equals less cost or exposure to cost of being sued. It will not drive down cost immediately, but if Doctors who are honest, and do the right thing that group in my mind would be less likely to order unnecessary tests. Let alone the fact that a case was presented on down in this thread that they order tests and procedures to get more money for themselves and the hospitals.
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Tort may or may not drive down actual costs. But, I do know in my own State of Pennsylvanis, many doctors have left the state simply because of the high litigation. That of course decreased competition among doctors, and gave fewer choices of PCPs to the patients. Again, competition is twarted by regulations.
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It would be a great idea for hospitals to require doctors to actually talk to patients. Of course it is all voluntary, and being voluntary it will not affect anything. I like the idea, but I do not see that it will actually affect any great changes that are needed.

“There’s still the Hippocratic oath, and, I hope, enough ethical people in the medical field that this sort of …”

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Unfortunately you can go to your own State website that handles the licenses of Physicians. There are many cases where Physicians have had their licenses revolked due to “medication” over prescription of drugs. Mainly narcotics, for the purpose of getting quick money for patient visits. What do you think is the percentage that actually gets caught? I’m guessing less than 10%. I think it is happening more than you know, and the public would be shocked to find out. Most of the ones who loose their prescription priviledges simply move out of State. My own personal Physician lost his DEA license for narcotics abuse with prescriptions. He is a very good doctor, but the money got the best of him. He can still practice, but cannot prescribe any narcotics.
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Look at the Michael Jackson death as an example of a Physician forgoing his “ethics” for money. And, in my humble opinion a needless death occurred. It is more prevalent than you realize.
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The “Oath” went out a long time ago. Basic greed in health care has taken it’s place. That is a fact of life, unfortunately.

Rusty,

Thanks for your response regarding tort reform.

I think you give the insurance companies too much credit. While mal-practice cases have dropped 4% from 1999 to 2006, tort cases have dropped 21% in the same time. Has anyone noticed the difference in their insurance rates?

You have doctors, OBGyns, who have practiced and never been sued in 30 years have their insurance rates triple in the last 10 years. In states that have instituted mal-practice caps, the mal-practice rates continue to climb.

The reason for the rate climb has nothing to do with doctors and everything to do with the insurance industry. Insurance companies invested and lost a bundle when the stock market bubbles burst. They simply passed the costs to the doctors. What could doctors do? Every doctor has to have mal practice insurance. The insurance companies has the doctors by the cajones.

I am not sure what type of “tort reform” you are talking about. Award caps don’t work. Lawyers will simply work around them.

While some tort cases can be frivolous, I don’t know how you can fake a medical injury. Granted it may be questionable whether the injury is caused by the doctor’s care, but the patient would have to be truly insured.

Ironically, the current system of tort law is the freest in the world. As a lawyer, I only get paid if I win or my case settles. Therefore, if someone comes with something frivolous, (and I have had those), I don’t make money, in fact I lose money working on such cases, so I refuse them. Sometimes, a person may attempt to pull a fast one, but if they are caught, they have to pay the other side’s lawyers.

Most tort reform looks like an effort to regulate the legal profession, but as a liberal, you know I love government regulation! LOL

I understand there’s a lot of fraud that comes from overtreatment or prescribing narcotics, that sort of thing. My point was, from there, its a big leap, on a human level, for a doctor to decide to profit by shortchanging patients, as opposed to doing too much. It might not be that difficult for a doctor to rationalize making an extra buck by ordering a few tests that he knows are wasteful and unwise. Conversely, it would be very difficult for the vast majority of doctors to rationalize making an extra buck by denying chemotherapy or any number of other treatments to patients who they know are in need.

Just HCR in general or specifically about the repubs lack of real involvement?
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I will go ahead and assume you mean that repubs have not put forth any earth shattering proposals that would benefit us all with health care reform? Yes?
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Republicans have IMHO, squandered a chance to put forth real proposals for change. Putting Tort and State to State sales of insurance aside, they have not painted a clear picture either how they would propose securing affordable health care for everyone. In specific, how to drive down the costs of health care.
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I am sure most conservatives would back away from any kind of cost control measures, but they would be smart to put up on the table measures that would simply go for cost control of health care through incentives for competition. Forget about all the rest and show what conservative proposals they would offer up that demonstrates cost control or at minimum, containment. They would gain so much of their lost credibility back in the eyes of the average voter.
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One easy option in my opinion would be to attack Obama’s deal with big Pharma. Repub’s credibility would go through the roof if they proposed sales of drugs across all borders, most particularly Canada. That does two things, shows how Obama cut a deal to buy his way into HCR, and that they are working for the little people.
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Other smaller things would be to offer up incentives for Quality Standards of Practice, using the groups already identified to show how putting into place certain standards would curb the un-necessary treatments and procedures which are ordered by Physicians.
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Basic steps, but very do-able.