Jul ‘11
28
Options If Health Cost Controls Fail
I thought you might be interested in a piece by Stuart Butler on the implications of a failure of PPACA to control federal health care costs. He looks at the strategic options that would be available if spending controls fail, from tightening price controls to creating a true health budget, and ponders the policy changes needed to make the options effective and their implications.
Stuart Butler Ph.D. is the Distinguished Fellow and Director for Center for Policy Innovation at The Heritage Foundation
My reacation:
First, For the most part, the spending/cost/quality goals of PPACA could never be implemented in Washington/Baltimore. If our goal is a uniquely American health system, built on our strengths rather than our weaknesses, these goals must be implemented where health care is practiced in 70-90 distinct practice regions of the country. The way to do that is to regionalize Medciare so its measuring and paying functions can go on where medicine is practiced and health improvement is linked. In communities. Berwick knows this, Mike Leavitt knows this, but the CMS bureaucracy cannot understand it and the political genius in the White House presumes provider politics won’t let it happen.
Second, To your substance. Health care spending. Define it first. What do you mean? To keep it simple, we are approaching 50% of all spending from government tax/debt revenues, and 95% of the other 50% is driven by the public programs. To get you to react, I suggest two categories of public spending – Investment and Access.
Investment: These are the largely national government investments in healthcare research and development, in education, and in safety and efficacy. These reflect our values – what we expect from the system. They have roots in our past practice, not our future, and in large part are the cost-drivers in the system. Disease research, medical technology development, scope of practice acts and professional society control over education, credentialling and supply are all ,part of the “more is better” pay us what we demand for our services system.
Little is left over for effectiveness or evaluative sciences and each of these investments is fought tooth and nail by the professions thru national associations of the lowest common denominator. Solution: We need consensus driven redefinition of our national investment policy. And a brand new NIH (if you want to know what it should be doing, check the current agenda of the IOM which is the closest we have to an effort to straighten out the problems we keep creating with NIH med tech lobbying etc.
Access: and Outcomes. To keep this simple, all we need to do to start to improve our chances to make access affordable is to change Part B of Medicare and align payments with the outcomes dictated by all the data already available. To facilitate the switch from the RBRVS/SGR to outcomes based payment formula, we would be best served by regionalizing Medicare. In two ways: Either hire carrier/intermediaries to run medicare’s redefined payment formula in 70/90 regions, or do the premium support approach to private medicare plans once adequate insurance reform rules are in effect to make markets work.
Our relationship began with new federalism in the early eighties. Its time has come again - everywhere but in the political debate. Heritage should be playing a role in sorting out responsibilities and capacity issues. They are too important to be left to Michele Bachmann or Rush Limbaugh.
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