What Have We Lost and What Have We Gained with Healthcare Reform?


Even with the passage of healthcare reform, we still have an expensive, inefficient, uncoordinated, more complex healthcare delivery system.

In my previous post, titled “Healthcare Model Redesign: How Do We Measure Up against Other Developed Countries and What Options Do We Have for Improvement?,” part of the ongoing series “What's the Patient Protection and Affordable Care Act (PPACA) or ObamaCare Going to Do for Us?”, I discussed the fact that “when the US is measured against other developed countries, we're at the bottom when it comes to healthcare costs and outcomes.”

This week’s installment will discuss long-term growth in healthcare costs and what can be done to reduce them.

In their article "Health Care Reform and Cost Control," published June 16, 2010, on the NEJM Health Care Reform Center website, Peter R. Orszag, PhD, and Ezekiel J. Emanuel, MD, PhD discuss the reality that savings from the PPACA "will be illusory if we do not reform health care delivery to bring down the long-term growth in costs." Some of the cost-control elements of the PPACA they discuss include, but are not limited to:

  • Eliminating unnecessary expenditures such as "unjustified subsidies to Medicare Advantage plans" and "fraud and abuse in the Medicare and Medicaid programs."
  • Administrative simplification that "will reduce unnecessary paperwork and create uniform electronic standards and operating rules to be used by all private insurers, Medicare, and Medicaid
  • "Generic biologic agents"
  • Requiring that "complex imaging studies... operate not just 50%, but 75%, of the time.”
  • Please note we are talking about reducing the level, not the growth rate of healthcare costs. "If that were all the legislation did, it would technically pay for health care reform but would miss an opportunity to put downward pressure on the growth of health care costs — an essential step in reducing our long-term fiscal imbalances."
  • The legislation also encourages greater integration of healthcare as we are seeing in the "medical home" concept and the new appellation for managed care, the accountable health care organization.
  • In a win-win proposal, "the law includes a new hospital readmission policy to address the fact that nearly 20% of Medicare patients are readmitted within 30 days after a hospital discharge and that lack of coordination in “handoffs” such as hospital discharges has been identified as a particular problem in the health care system overall. More than half of these readmitted patients have not seen their physician between discharge and readmission, and a recent study suggests that better coordination of care can reduce readmission rates for major chronic illness."

What does this all add up to for healthcare reform and cost control? Here’s what a nationally recognized physician executive (who shall remain anonymous) had to say via e-mail:

Before this legislation we had problems with the healthcare system (the "system"), including excessive costs with little accountability for outcomes, high-cost inflation, excess capacity, poor care coordination, and weakening of primary care.After PPACA, we have problems with the system including excessive costs with little accountability for outcomes, high-cost inflation, excess capacity, poor care coordination, and weakening of primary care, plus increased costs to pay for new insurance regulations.What have we gained? Potential coverage of large numbers of uninsured? Not really. This will only happen if we drive healthier people into the system. The penalty for not having insurance is too small to do this, and even this can't be collected since there are no criminal sanctions or asset seizures to enforce this. So this won't work unless it's fixed with serious penalties and sanctions.What have we lost? We have cut $125 billion a year from Medicare. This frankly can't be done, so it will be rescinded and the money will need to come from somewhere else (more taxes?).We are spending $40 billion on EMR based on the premise that if we drop them into offices, miracles will happen. They won't. There is something to be gained from EMR but no evidence they reduce costs.We will tax, and thereby increase the cost of health insurance. The problem is that it costs too much now. How does this help?Our big problem is that we have added $1 trillion in cost, gained little, are still in need of reform, and everyone seems to think it has already happened.

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