Ten Cost Cutting Measures In Health Care Reform Bills

The newest attack on health care reform revolves around the supposed lack of cost cutting measures to curb runaway growth in health care spending despite the President's promise to make cost containment the highest priority in reform.

But the truth is, both the House and Senate bills include a variety of measures that will reduce the growth of health care costs while providing higher quality care. The Senate bill, particularly, includes a tax on high-value "Cadillac" plans which often allow costs to spiral completely out of control. Another proposal creates a commission that would make binding recommendations on wasteful Medicare spending, which has also been endorsed by the Business Roundtable.

Peter Orszag, OMB Director, says that in the discussion on health care reform and cost controls, "too often other important delivery system reforms are ignored" with the result being a failure to recognize that we are "on the verge of passing fiscally responsible health insurance reform". Mr. Orsag further stated that the current health care proposals offer "many promising ideas to improve the overall performance of the U.S. health care system" including ways to "slow long-term spending growth."

Cost containing steps, from the White House, include:

1.Penalties for high readmissions. Too often, patients are discharged from the hospital without the necessary follow-up care leading to re-hospitalization, risks to one's health, and higher costs. Under the proposals being considered, Medicare would collect data on readmission rates by hospital and would assess penalties on those hospitals with high, preventable readmission rates.

2.Bundled payments, which pay a fixed amount for an entire episode of care rather than piecemeal for each individual treatment or procedure, would help improve patient care by encouraging better and more coordinated care than under a fee-for-service system. Bills in both the Senate and the House would develop, test, and evaluate bundled payment methods through a national, voluntary pilot program. Once we see what works and what doesn't, bundled payments can be quickly scaled up across the country.

3. Quality incentives for physicians. Creating incentives in the payment system to reward quality of care rather than just the quantity of procedures. These proposals would expand quality incentives for physicians and provide more timely feedback on physician performance based on their submitted data.

4. Accountable Care Organizations (ACOs). Under the current system, quality and efficiency are not sufficiently rewarded, and there is little incentive for physicians to collaborate in the coordination of patient care. Legislation in both Houses would encourage and reward ACOs, which are groups of providers that are jointly responsible for the quality and cost of health care services for a population of beneficiaries with chronic conditions.

4. Investing in research into what works and what doesn't in health care.

5. Reducing hospital-acquired infections and other avoidable health-center acquired conditions through rigorous reporting and transparency.

6. Putting prevention first, rewarding care that focuses on wellness and treating the whole patient in an integrated and coordinated delivery system.

7. Tackling the insurance bureaucracy, streamlining the payment system to save time and money that is now spent processing claims and navigating through the byzantine insurance system.

8. Establishing a health insurance exchange with a public insurance option, where individuals and small businesses can buy lower-cost insurance that will spur competition and put downward pressure on costs.

In addition, these measures build on the health care reforms that were made in the American Reinvestment and Recovery Act such as beginning the transfer from paper to digital records; strengthening preventive care and patient-centered health research; and investing in the education of primary care providers.

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Tags: Health Care Bill, health care reform, health care reform costs, hr 3962 (all tags)



I am not impressed by this argument...

(a) If cost cutting was as strong as it should have been, then one would have heard claims about reduced health care costs, and not claims on reducing the rate of growth of health care costs.

(b) some of the specifics you mentioned ~ like "investing in research on what works and what does not" are good things, but one should not count on those for cost cutting.  That would be kinda like expecting heart disease to vanish because we are now investing in stem cell research.  Same goes for the bundled payment methods you mentioned ~ it is a fine idea, but I do not see how you can count on it saving any money if all you are doing is setting up pilot programmes.

(c) some of the other specifics may be viable, but are not self explanatory.  For instance, how does increased reporting and transparency reduce hospital aquired infections ?  Another example..how does one reward quality of care (as opposed to quantity of procedures) ?  By what metrics does one go about judging quality of care ??

I would welcome any answers, obviously.

by Ravi Verma 2009-11-13 07:18PM | 0 recs
Re: I am not impressed by this argument...

Reducing health care costs would primarily assume everyone would take a cut in income, from hospitals to health care workers to medical supply companies.  Obviously they aren't going to do that.  Slowing growth in costs is the best you're going to do.

The bundled payment plan will be implemented nationally if it works locally.  That's what investing in research to see what works and what doesn't means.  They're going to track health care, just like they're going to track education.

The more that health care workers feel free to report problems in a hospital, the more opportunity there is to take action and the less infections there will be.  You might look at the Hospital Report Card Act in Illinois for more info on that.  And you can check the Leap Frog Group for one hospital rewards program.  http://www.leapfroggroup.org/

Even if single payer were implemented, we would need to do more within health care to cut costs and enhance delivery of care.

by sandy 2009-11-14 06:35PM | 0 recs


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