Cost Controls

[physasst]

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Okay, since many of you seem to be very apprehensive at best as pertains to Pay for Performance, how do you suggest we control costs?

The number that everyone in health policy should know, and then one that providers should be well aware of, isn't in the trillions, it's not the 2.4 trillion which will be spent this year on healthcare. It doesn't involve the 47 million uninsured...the scary number...

6.2 percent. This is the rate of annual average growth in spending in healthcare for the projected term of 2008-2018.

considering a then prediction of GDP growth of 4.1% and you can see the problem. BTW, 4.1% is so far past optimistic for this year, that it really seems almost silly at this point. Yet, healthcare spending, while slowed, continues for the most part unabated.

OH, and BTW, when the actuaries made these calculations, the stimulus package hadn't happened yet, and none of the current economic factors were included, which likely makes this even worse than above.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.2.w346

Curious to hear your thoughts.

 

[MOHS_01]

P4P, as a concept, has merit; the tools to effectively implement it are what is lacking.

Medicare has been underfunded for decades; in fact, only one year after its inception Congress had to convene emergently in order to supplement its funding. Politicians are predictably consistent in at least one way -- they make promises that they cannot deliver. Said simpler, their mouths write checks that their a**es can't cash.

There are but two ways to control healthcare spending:

1. have a healthier populace who requires less services
2. impose rationing of services

That's it... that's all we have. Decreasing reimbursement per unit service is a very self limiting method, as it can only go to a certain point. Along the way to reaching that point they will have successfully demoralized the medical profession.... and who in their right mind (and who is smart enough to have options) would willingly choose this as a career given the time and financial costs incurred?

Making for a healthier populace is a long term solution that we must work toward, but this will require societal changes and have a lag period measured in generations most likely. I can see no way of doing this without directly tying personal choice and decisions to financial risk (which means repercussions for poor choices) along with rewarding responsible behavior. Given the current regime's slant and ideology, I have little hope for this as well.

Which leaves us with rationing. Taking into consideration the prevailing political winds of the day, one can only assume that sh***y care will be acceptable -- just as long as everyone is afforded the same sh***y care. I mean, that is only fair and just....

The public health insurance system is largely at fault for this debacle that we are now in. A mechanism for price controls was, and would have been in place if we did not have a federal agency that is in the business of price fixing.... If you really want to lay blame, a strong argument can be made that the Progressive movement in America was the architect of this mess -- from FDR's wage control regulation that was responsible for the proliferation of health insurance as an wage increase alternative in order to attract workers, his creation of SS, to LBJ's Medicare... to the current continuation of the agenda (only worsened by W's prescription drug benefit). But I digress.....

Services will have to be restricted in one form or another. Dollar-life-years seem to be a logical place to start. I can see it now "sure, Jimmy, treatment A is measurably better that treatment B, but we are over our quota of A for the month. Either take B now, or get in line for next month when hopefully we will get to you before we reach our quota again. Take a number and watch the screen. Next."

 

[Miami_med]

You could control costs by making it so that the public health insurance plan is no longer the tail that wags the dog. There are a couple of different ways that we could control costs, and I tend to be a bigger proponent of the first:

1. Seperate the public and private systems. As you know, I am a fan of local control, but this doesn't necessarily have to happen in order to split the system. Government hospitals can hire physicians like the VA hospital and then put whatever incentives in place that they wish. Like the VA now, competition for providers will still be in direct competition with the private market, and so whatever system of reimbursement they come up with, it can't get too far out of whack without people leaving the system for the greener pastures of private healthcare. The public system would then HAVE to ration care in order to stay within a predetermined budget. This system should pay based on the money available, rather than the "entitlements" of its recipients. However, a flourishing private market on the side would prevent rationing=pay everyone less. Certain services would be on the chopping block, but for offered services, the prices would have to resemble those of the market in order to retain staff.

2. I tend to prefer this idea less, but allow the government to simply offer a fixed amount for services and then stop making providers take exactly that amount. In other words, let's say that Medicare decides that an initial consult on a complicated patient in a generalist's office is now worth $120 in my state. The government can pay $120, but the office can charge whatever it wants (thought the number MUST be stated up front). So if the office charges $160, they can receive $120 from Medicare and then bill the patient $40. This stops making a Medicare price cut a physician wage cut by default and gives all the players more skin in the game. Some physicians will probably take the Medicare money to attract new patients, but that would be a choice. Quality physicians may also be able to charge more under this system, which would create quality incentives. I don't have an issue with a private firm creating quality metrics, posting the results, and letting patients decide if they want to pay the difference. That's just freedom of speach and association at work. It will never happen, because seniors will never go for it.

Another possibility that will never happen (but would really help) would be reformation of the legal system. At any given time in my own ER 20-60% of the patients are drug seekers, homeless hungry people, or people who are simply not sick enough to require an ER. If we stopped having to treat these people for fear of an occasional legal zebra, our ER costs would PLUMMET. Another controversial possibility would be to impose a lifetime maximum payout. Another possibility would be to create some sort of quality of life score below which we limit payouts (that would also get controversial). The idea would be to say limit payouts to people in nursing homes or with advanced dementia.

I could keep going, but there are a lot of ways to cut costs to the government without P4P.

 

[MOHS_01]

Miami,

Regarding #1 -- that is the way that the system should have been set up years ago -- a public system and a private system. The independent contractor model worked prior to the application of budget neutrality and arbitrary spending limits tied to factors unrelated to disease prevalence, etc (i.e. GDP). As costs went up, the feds should have made one of two choices -- curtail services or increase funding. Due to Congress' self serving, votes are the only thing that matter mentality, anything that would cost political capital is kicked down the road. Limiting coverage or increasing the funding, those are their choices. What is ultimately untenable, however, is to continue covering unlimited services for everyone with a statutorily fixed dollar amount.

#2 brings up the issue of balance billing. There has been heated debate over this issue for years; the reason that it ultimately does not come to pass, and probably never will, is the failure of #1 to exist. In many areas of the country the public would not have access to all fields of care outside of a limited few providers. The argument has been that this would create local micro-monopolies, and would be contrary to public welfare.

 

[MOHS_01]

Upon further thought, and tell me where I go astray....

It would seem to me that option #1 would eventually (d)evolve into the same problem that we have today, whereby the federally subsidized system would ultimately set the standard for reimbursement, services offered, etc. The general populace's desire to avoid out of pocket costs, coupled with the unlevel playing field that invariably exists when government competes with private enterprise, would tilt the balance in favor of the public system. As they grew in size, so would they grow in influence (look at MC today). The remainder of the argument holds, though...

 

[docB]

We could quickly reduce costs dramatically just by ending med mal and the defensive medicine it causes. Alternatives to the current med mal system are a seperate discussion.

Take the way we deal with chest pain in the ED. We admit everything. We practice to avoid missing anything because missed MI is the highest paying lawsuit in EM. It might be much more cost effective to work more toward missing 1 in 10000 or 1 in 1000 and redirecting those resources expended on all the "chest pain rule out" admissions. It is also likely that the patients as a whole would be happier as so many hate staying in house for their rule outs.

 

[physasst]

We could quickly reduce costs dramatically just by ending med mal and the defensive medicine it causes. Alternatives to the current med mal system are a seperate discussion.

Take the way we deal with chest pain in the ED. We admit everything. We practice to avoid missing anything because missed MI is the highest paying lawsuit in EM. It might be much more cost effective to work more toward missing 1 in 10000 or 1 in 1000 and redirecting those resources expended on all the "chest pain rule out" admissions. It is also likely that the patients as a whole would be happier as so many hate staying in house for their rule outs.

Considering that malpractice costs, including premiums, torts, and payments only account for less than 2% of all healthcare expenditures...

http://www.cbo.gov/doc.cfm?index=4968&type=0

and, in 2005, the HHS estimated defensive medicine costs at 60-108 billion. Not small change for sure, and could, and would definitely help.

http://www.managedcaremag.com/archives/0503/0503.regulation.html

However, in a 2.4 trillion dollar system, even at 108 billion, this only represents less than 5% of all healthcare expenditures. Would it help certainly. But considering the price tag of Obama's reform, which, according to the CBO is 1.5 trillion over the next ten years. 108 billion doesn't go very far.

It certainly would help though. Just won't create the kind of massive cost savings that many physicians think. One of my better friends is a Phd Medical Sociologist, and we've discussed this on any number of occasions. His summation is that, eliminating all malpractice costs would stabilize, or neutralize the increases in medical costs for ONE year. Then we would be right back to where we are now.

 

[MOHS_01]

However, in a 2.4 trillion dollar system, even at 108 billion, this only represents less than 5% of all healthcare expenditures. Would it help certainly. But considering the price tag of Obama's reform, which, according to the CBO is 1.5 trillion over the next ten years. 108 billion doesn't go very far.

It certainly would help though. Just won't create the kind of massive cost savings that many physicians think. One of my better friends is a Phd Medical Sociologist, and we've discussed this on any number of occasions. His summation is that, eliminating all malpractice costs would stabilize, or neutralize the increases in medical costs for ONE year. Then we would be right back to where we are now.

...and the "estimate" keeps going up every few weeks. The number tossed about until just this past week was 1.2 trillion. Given their exemplary track record, we can expect this to as much as double as well. One thing that malpractice reform would do, however, is allow practitioners some peace of mind, afford them more sleep at night, and make for an overall more pleasant work environment.

 

[dilated]

Considering that malpractice costs, including premiums, torts, and payments only account for less than 2% of all healthcare expenditures...

http://www.cbo.gov/doc.cfm?index=4968&type=0

and, in 2005, the HHS estimated defensive medicine costs at 60-108 billion. Not small change for sure, and could, and would definitely help.

http://www.managedcaremag.com/archives/0503/0503.regulation.html

These estimates are wrong because they are not looking at the right thing. I wish someone would develop a better way to analyze it, perhaps looking at practice variations by country. "Defensive medicine" isn't just excess caution above the standard of care, it's an unnecessarily high standard of care due to legal fears. They don't CT everyone who moves in other countries in the ED. That's the "standard of care" in the US, but it's still defensive medicine. I guarantee the difference between what "r/o MI" means in the US versus the UK probably amounts to hundreds of million dollars a year.

The entire culture of medicine in the US and much of the reason it costs more than other countries is the lawsuit mentality and zero risk mentality.

 

[physasst]

...and the "estimate" keeps going up every few weeks. The number tossed about until just this past week was 1.2 trillion. Given their exemplary track record, we can expect this to as much as double as well. One thing that malpractice reform would do, however, is allow practitioners some peace of mind, afford them more sleep at night, and make for an overall more pleasant work environment.

No, both are correct. The TOTAL price tag for Obama's plan is 1.5 trillion over 10 years. They estimate that he has 300 billion in additional revenue from letting the Bush tax cuts expire. Leaving him 1.2 trillion short.

 

[physasst]

These estimates are wrong because they are not looking at the right thing. I wish someone would develop a better way to analyze it, perhaps looking at practice variations by country. "Defensive medicine" isn't just excess caution above the standard of care, it's an unnecessarily high standard of care due to legal fears. They don't CT everyone who moves in other countries in the ED. That's the "standard of care" in the US, but it's still defensive medicine. I guarantee the difference between what "r/o MI" means in the US versus the UK probably amounts to hundreds of million dollars a year.

The entire culture of medicine in the US and much of the reason it costs more than other countries is the lawsuit mentality and zero risk mentality.

yes and no. The CBO's accounting for the total relative cost of malpractice, including, awards, tort filings, premiums, etc. is quite accurate. The estimates by the HHS as pertains to defensive medicine is more difficult to figure. It is a much more elusive figure, but here is something more to ponder.

The Mass. Medical Society release a report in November of 2008 that suggests defensive medicine costs of 1.4 billion. Criticisms include the fact that figures counted are only from 8 specialties, and only represent 46% of practicing physicians in Mass.

http://massmed.typepad.com/each_pat...-medicine-costs-mass-at-least-14-billion.html

But, even if you DOUBLE that to 2.8 billion in costs, and then multiply by fifty states (crude, I know, but even figuring some states like California and Florida will have higher figures, they will be offset by smaller, lower populated states, like wyoming, montana, and the dakotas), you STILL only get 140 billion. Or approximately 5.8% of total healthcare expenditures.

If you have data to suggest otherwise, please present it, I would actually like to see it.

 

[MOHS_01]

No, both are correct. The TOTAL price tag for Obama's plan is 1.5 trillion over 10 years. They estimate that he has 300 billion in additional revenue from letting the Bush tax cuts expire. Leaving him 1.2 trillion short.

OH.... just 1.2T. I feel better already...

Wait just a da** minute -- you mean to tell me that those evil rich bastards who pay the lion's share of taxes already, carry by a large margin the highest tax burden relative to income, who have not been carrying their due societal weight, will, when those evil tax cuts expire, only generate 20% of the needed "new" money for this new social welfare program? That's not change I can believe in........😱😉

 

[physasst]

OH.... just 1.2T. I feel better already...

Wait just a da** minute -- you mean to tell me that those evil rich bastards who pay the lion's share of taxes already, carry by a large margin the highest tax burden relative to income, who have not been carrying their due societal weight, will, when those evil tax cuts expire, only generate 20% of the needed "new" money for this new social welfare program? That's not change I can believe in........😱😉

you gotta trillion on you? Hell, they'd even name the plan after you. The comprehensive MOHS healthcare system.

 

[MOHS_01]

you gotta trillion on you? Hell, they'd even name the plan after you. The comprehensive MOHS healthcare system.

Nope, but if I did, you can bet your a** that it would not go toward that... First I would fund the building of a Great Wall of Texas... and with whatever money was left over Gov. Perry and I would sit back with Jerry Jones & Co at the new stadium and watch the cheerleaders practice all day long... while sipping on some sweet lemonade....

 

[Miami_med]

Nope, but if I did, you can bet your a** that it would not go toward that... First I would fund the building of a Great Wall of Texas... and with whatever money was left over Gov. Perry and I would sit back with Jerry Jones & Co at the new stadium and watch the cheerleaders practice all day long... while sipping on some sweet lemonade....

You don't want to spend too much time at texas sporting venues, they don't have a good track record for stability 😉

 

[Miami_med]

Upon further thought, and tell me where I go astray....

It would seem to me that option #1 would eventually (d)evolve into the same problem that we have today, whereby the federally subsidized system would ultimately set the standard for reimbursement, services offered, etc. The general populace's desire to avoid out of pocket costs, coupled with the unlevel playing field that invariably exists when government competes with private enterprise, would tilt the balance in favor of the public system. As they grew in size, so would they grow in influence (look at MC today). The remainder of the argument holds, though...

Sure, there's a risk of that. The difference would be that practicioners who practice in a setting that is independent of the government would in fact deal with a real number paid by choice without the hybrid distortions that impact most practices. I fully expect that the government plan would slow and ration and eventually fall behind the private sector in quality. It would atleast establish an independent market. Now, there are some fields in which it is possible that said market would not flourish, and it is possible that there are in fact some fields that are currently overpaid. I don't know which ones, no one does. The government has so distorted the market that we have no idea what services are actually worth. The problem is that the government is not really qualified to determine that number any more than you or I. If anything, it gives some of us who are so inclined a window to break away and see if the market will handle our services and at what rate.

 

[Miami_med]

#2 brings up the issue of balance billing. There has been heated debate over this issue for years; the reason that it ultimately does not come to pass, and probably never will, is the failure of #1 to exist. In many areas of the country the public would not have access to all fields of care outside of a limited few providers. The argument has been that this would create local micro-monopolies, and would be contrary to public welfare.

Yeah, I know. It's funny how the largest monopoly in the country (the federal government) is so concerned with the "monopoly" created by people having to travel in order to see another specialist. Of course, those same "micro-monopolies" could right now all stop accepting Medicare if there really weren't other options. Practically, people can only charge what the market will bear, and if these specialists charged rates that people couldn't pay (Medicare money or not), then they wouldn't have patients and would make no money. If the pay became too profoundly high, the area would probably be able to attract more specialists.

 

[docB]

Considering that malpractice costs, including premiums, torts, and payments only account for less than 2% of all healthcare expenditures...

http://www.cbo.gov/doc.cfm?index=4968&type=0

and, in 2005, the HHS estimated defensive medicine costs at 60-108 billion. Not small change for sure, and could, and would definitely help.

http://www.managedcaremag.com/archives/0503/0503.regulation.html

However, in a 2.4 trillion dollar system, even at 108 billion, this only represents less than 5% of all healthcare expenditures. Would it help certainly. But considering the price tag of Obama's reform, which, according to the CBO is 1.5 trillion over the next ten years. 108 billion doesn't go very far.

It certainly would help though. Just won't create the kind of massive cost savings that many physicians think. One of my better friends is a Phd Medical Sociologist, and we've discussed this on any number of occasions. His summation is that, eliminating all malpractice costs would stabilize, or neutralize the increases in medical costs for ONE year. Then we would be right back to where we are now.

These estimates are wrong because they are not looking at the right thing. I wish someone would develop a better way to analyze it, perhaps looking at practice variations by country. "Defensive medicine" isn't just excess caution above the standard of care, it's an unnecessarily high standard of care due to legal fears. They don't CT everyone who moves in other countries in the ED. That's the "standard of care" in the US, but it's still defensive medicine. I guarantee the difference between what "r/o MI" means in the US versus the UK probably amounts to hundreds of million dollars a year.

The entire culture of medicine in the US and much of the reason it costs more than other countries is the lawsuit mentality and zero risk mentality.

yes and no. The CBO's accounting for the total relative cost of malpractice, including, awards, tort filings, premiums, etc. is quite accurate. The estimates by the HHS as pertains to defensive medicine is more difficult to figure. It is a much more elusive figure, but here is something more to ponder.

The Mass. Medical Society release a report in November of 2008 that suggests defensive medicine costs of 1.4 billion. Criticisms include the fact that figures counted are only from 8 specialties, and only represent 46% of practicing physicians in Mass.

http://massmed.typepad.com/each_pat...-medicine-costs-mass-at-least-14-billion.html

But, even if you DOUBLE that to 2.8 billion in costs, and then multiply by fifty states (crude, I know, but even figuring some states like California and Florida will have higher figures, they will be offset by smaller, lower populated states, like wyoming, montana, and the dakotas), you STILL only get 140 billion. Or approximately 5.8% of total healthcare expenditures.

If you have data to suggest otherwise, please present it, I would actually like to see it.

I agree with dilated. The numbers attributed to actual costs, med mal premiums, awards and fees is the tip of the iceberg. Those who say that defensive medicine only costs a small amount are looking at testing that falls outside the “standard of care.” They are missing the fact that the “standard of care” has evolved under the constant threat of litigation and is extremely conservative. It is much more conservative than is prudent in a system trying to use resources appropriately for a whole population.

Examples include ruling out every chest pain no matter how non-cardiac it seems because missed MI is top dollar loser for EM, CT scans of clearly benign or clearly surgical abdomens, the endless TIA and syncope work ups, “emergent” DVT evaluations and so on. Do any of these practices fall outside the standard of care? No. But they are very expensive, low yield, and are done out of fear rather than genuine concern.

For a good illustration of this go ask a primary doctor or an ER doctor when was the last time they really tried to evaluate whether chest pain was cardiac or not. Most will tell you they haven’t done it in a very long time. That chest pain gets sent to the ED and from the ED it gets admitted.

 

[deleted6669]

agree with above. the "standard of care" now in the us includes all the following not done routinely elsewhere:
1. every cp is r/o mi
2. every pain in pregnancy is r/o ectopic
3. every leg/arm pain is r/o dvt
4. every h/a is r/o sah/tumor/etc
5. every joint pain is r/o fx(ottawa criteria? know anyone who actually uses it?)
6. every fever in a child is r/o meningitis/sepsis
7.every abd pain is r/o appy/diverticulitis
8. every surgeon refuses to operate on obvious pathology without "ct confirmation"
9. every smoker with a cough is r/o lung ca
10. every rich guy with joint pain needs an mri
11. every 2 mph mva needs a costly trauma eval(nexxus criteria???)
12. every minor fx needs an ortho f/u
13. every pt with back pain needs p.t., interventional pain referals, etc

and woe be the provider who uses common sense and doesn't order the million dollar workup up of a 5 dollar problem because they get pt complaints which are weighted much more strongly than competence....

add all this up and we are talking about a lot of $$$. working in the e.d. I probably see 5 pts/day out of 30 who actually need to be there. the rest is all evals of the worried well or stuff that should be seen in 2 weeks by their pcp. any idea how many folks I saw to r/o "swine flu" this week with no travel or other risk factors....?

the fact of the matter is that we all(especially in the e.d.) do things we know will be negative for the 1/10,000 times they won't be. typical sign outs at the end of a shift include" when this guys workup is all neg send him home..."
it gets worse every yr.
I'm seriously considering moving to a rural dept without as many technology issues(if you don't have an mri machine then guess what? your non-emergent study can be ordered by your pcp from clinic the way it should be) or even out of the country...I have some job offers overseas that look better every day.....

 

[LADoc00]

It seems they are on the verge of "solving" the great healthcare cost debate.
The Dems have realized that they can really control costs as the number of patients and providers goes to zero. Like a math equation.

Unfortunately that means Congress intends all of us to die. Sucks, but universal healthcare is the priority, Socialists demand it!!

 

[chessknt]

It has already been said, but the single easiest (yet most impossible) target is medmal. The sheer volume of bull**** that arises from this in the form of useless desk monkeys that push otherwise useless paper, completely unnecessary tests, and hours of wasted time filing and checking paperwork dwarfs everything else. If by some miracle congress made it illegal to sue drs for any reason for just a year to see what happened to cost they would probably all die of shock.

This problem is very much linked to obesity in the sense that most Americans feel no sense of personal responsibility or moral qualms about abusing themselves/systems in order to get easy money/blame someone else who isnt at fault. Greedy lawyers enable them, congress permits it, and people are just too damned lazy to admit something is their own fault.

While we obviously cant fix the attitudes of people, drastically reshaping medmal so that it becomes very difficult to sue a doctor would do wonders to healthcare. Lawyers have plenty of other fields to pray on and it would enable physicians to stop prescribing copious amounts of useleless tests/spend more time with patients, resulting in lowered healthcare costs for all.