Checkup: Reducing Costs By Paying More

You've all been there. Sitting in a sterile waiting room while you fidget. Finally hearing your name called, allowing you a few precious moments with the man in the white coat. While you are waiting, time seems to drag, but once ushered into the presence of a physician it suddenly seems to kick into overdrive. You can hardly believe that you were in and out so quickly.

It begs the question: can adequate care really be given in the rushed format in which most doctors see their patients?

One answer offered also claims to be a route towards decreasing medical spending. In short, the idea of paying doctors more to take time with their patients (a permutation of the Medical Home concept) to prevent massive costs down the line. It is a grand experiment on the part of a group of state and federal government agencies in conjunction with a number of insurers.

Milt Feudenheim at The New York Times gives us two pages of analysis and commentary on the idea. Here is an illustration of the difference taken from that article:

For want of a careful examination by a primary-care doctor, Mr. Williamson became one of countless Americans each year whose unidentified or under-treated illnesses escalate into medical conditions with catastrophic personal and economic costs. Besides incurring $30,000 in hospital bills paid by his employer’s insurer, Mr. Williamson had to stop working as a customer service representative at Philadelphia Gas Works and go on Social Security disability, at a current cost to taxpayers of $1,900 a month.

With Mr. Williamson’s new doctor, such an outcome would be much less likely.

“I give him my heart and diabetes readings by e-mail and phone, without getting up out of my chair,” Mr. Williamson said. “I can get better directions, at the very moment I need them. It’s life-saving.”

His current internist, Richard Baron, is one of more than 100 physicians in metropolitan Philadelphia taking part in the experiment, which is being conducted jointly by some of the region’s largest insurers. Dr. Baron still gets a fee of only about $64 for each office visit. But his five-doctor group will also receive $200,000 to $300,000 this year beyond their regular fees to keep better track of their 8,400 patients.

“We are trying to do more e-mail care and telephone care, which we haven’t been paid for in the past,” Dr. Baron said.

Insurers are conducting similar pilot projects in at least a half-dozen states, in experiments involving thousands of doctors and nearly 2 million patients. Many more are in the planning stages, at the urging of health policy experts and employers that provide medical benefits.

The big government health care programs, Medicaid and Medicare, are also studying the concept. A Medicaid experiment already under way in North Carolina saved the government program in that state about $162 million in 2006. That was 11 percent less than the state would have spent under the old system of reimbursement, according to an audit by Mercer, a consulting firm.

This looks like an idea that might have legs. It is axiomatic that more careful and comprehensive care should drastically reduce the longterm costs of health care. Whether this approach will yield a solution or not is something only time will tell, but the logic is sound.

Certainly a set of initiatives to watch!

SOURCE: "Trying to Save by Increasing Doctors' Fees" 07/21/08
photo courtesy of Papalar, used under its Creative Commons license

Maggie Mahar Looks at an Alternate Approach: Value Added Tax

'Tis the season. Election season, that is. With health care hot on the topic list for politicians, 47 million uninsured, and voters in general, it seems only appropos to look at some of the ideas floating up from the Blogosphere.

Maggie Mahar examines a plan proposed by Dr. Ezekiel Emanuel in her most recent post on Taking Note (which is, if you are unaware, a Century Foundation website). In the spirit of George C. Halvorson's exhortation to examine foreign systems in order to inspire the development of a uniquely American one, Dr. Emanuel proposes a Value Added Tax (VAT) to consolidate health care payment. While this may or may not be the correct path to take, the arguments as framed are rather compelling:

Here is how the plan works: Every American would receive a voucher for individual or family coverage. The vouchers would be of equal value and all insurers would be required to offer the same comprehensive benefits package to anyone who applied—young or old, sick or healthy.

Insures would report to 12 Regional Health Boards. Each Board would have a Center for Patient Safety and Dispute Resolution staffed by patients, physicians and lawyers that would receive and adjudicate patient complaints, compensate patients, discipline and disqualify physicians responsible for repeatedly injuring patients, and fund and develop patient safety programs. (Patients not satisfied with the Board’s resolution of their complaint still could sue for malpractice).

The Guaranteed HealthCare Access Plan pledges to cover the 257 million Americans who are not now on Medicare at a cost of nearly $1 trillion. This number includes what we now spend on employer-based insurance, Medicaid and SCHIP –plus what it would cost if the uninsured had employer-based coverage.

People who are now enrolled in Medicaid, SCHIP or Medicare would not be forced to switch to the new Guaranteed HealthCare Access Plan, but if they chose to, they could. For the time being, probably most seniors on Medicare would stay put. But over 15 years, these three plans would be phased out.

It is nice to run across a fresh perspective. Ms. Mahar's post goes in depth examining various permutations of this plan such as

• Why not just raise income taxes instead?
• How is the VAT an incentive to reduce waste?
• How will the Guaranteed Health Access Plan reduce administrative costs?
• How to protect the Health care system from lobbyists.
  
• The creation of an impartial Institute for Technology and Outcomes Assessment to provide impartial testing and review of new drugs and technologies
  

The article is rather long, but chock full of information and links back to relevant source material. Another course on the banquet of "food for thought" that is laid before the American voting public. Please feel encouraged to join the conversation in the comments both here and on Taking Note.

SOURCE: "A Fresh Look at Health Care Reform: Part II" 06/05/08
photo courtesy of Phillip, used under its Creative Commons license

Health Care Costs, Bad Diagnosis for Providers As Well As Patients

I have often written about the rising cost of care and how it affects modern Americans. I have tried to steer my audience towards articles that help illustrate the conundrums faced by people who must put off needed health care in favor of paying rent or having groceries.

Not this time. Today, I'm going to share a commentary column from New Jersey, one which looks at another vital aspect of the cost of care: how it affects hospitals and care providers. In this case it is the cost of charity care, as Dr. Micheal Bleiman points up in his recent article for the Ashbury Park Press in New Jersey:

By law, New Jersey hospitals are required to treat all patients, whether they can pay for the services provided or not. In a majority of cases, patients without insurance are not able to pay and then qualify for charity care. Therefore, the cost of the emergency department visit, the possible admission, medications, chemotherapy, radiology services, surgery, nursing, meals, doctor consultations, etc., are provided without reimbursement to the hospital.

State law requires, based on a set formula established by Gov. Corzine's administration, that hospitals be partially reimbursed for a small fraction of the charity they provide. Under Corzine's proposed 2009 budget, the state will no longer reimburse some hospitals for charity care. He decided to break one of his own laws. It must be nice to be governor.

This is a big deal.

Southern Ocean County Hospital in Stafford provides more than $3 million in charity care a year. The state reimbursed the hospital $450,000 last year. Next year — nothing.

This is yet another symptom of our national health care crisis. No matter what your perspective is on profits in the health care industry, the fact that is as cold and hard as an operating table is that even if you have the money and have insurance, it will do you no good if the hospital you need cannot afford to stay open.

Imagine New Jersey legislating no more food stamps. Instead, supermarkets must provide qualifying families with free food. Imagine no Kids Care, the state insurance program for needy children. Instead, physicians must treat any family that qualifies and pharmacies must provide all medications free of charge. Imagine your vehicle is due for inspection, but the state closes the inspection stations. Instead, service stations and car dealers are required to inspect vehicles for free to those families that qualify.

I think the good doctor's analogies are good ones. This is part of the equation not frequently seen by those who are not in the medical (and related) fields. But wait, you say, what about non-profit hospitals and providers? Well, Dr. Bleiman wastes no time addressing that angle of the issue:

Most hospitals in New Jersey are not for profit. This means they are not responsible to investors for a return on their investment. However, they do have to pay their employees, buy pharmaceuticals and buy equipment. And they must reinvest to keep their facilities and equipment safe and up to date. They are responsible for providing the best care possible to their neighbors. Our patients demand excellent health care.

How is a private institution supposed to provide a service but not be allowed to charge for it or get reimbursed for it? Logic says sooner or later, the quality and available services have to suffer.

Thankfully, the majority of New Jersey residents don't have to worry about health care until they need it — especially in an emergency. For example, when you're driving 90 mph on the Garden State Parkway without a seat belt and your SUV rolls over, you need a well-staffed hospital that is not cutting corners just to keep its doors open.

More food for thought. Makes you really wonder doesn't it? Hospitals across the U.S. expend far more resources than they are reimbursed for in treating Medicare/Medicaid cases. Somewhere, the bottom has to drop out. Cost shifting efforts like the ones being addressed in the above excerpts simply delay the final collapse while they attempt to shift the blame for said collapse to someone else's purview.

SOURCE: "Don't burden hospitals with full brunt of charity care costs" 05/14/08
photo courtesy of Robyn Gallagher, used under this Creative Commons license