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Posted by on Apr 9, 2012 in At TMV | 8 comments

To Cut Health Care Costs, Unnecessary Care Must Be Targeted

Until the Supreme Court makes a decision about the legality of the Affordable Care Act (ACA) and its provisions, health care is in limbo regarding legislation that might be enacted to control health care costs and provide care to the uninsured. However, the health of the economy and federal government demand that these costs be controlled.

Recent recommendations by physician panels that doctors reduce the frequency of commonly used tests and procedures because they are often unnecessary reinforces the importance of attacking unnecessary care as a way to constrain costs. This advisory was issued by the American Board of Internal Medicine Foundation. The president of the organization, Dr. Christine K. Cassel asserted that the uninsured would be able to get coverage without any increase in government spending and that rationing of care would not be required if only appropriate care was provided.

An article in the Archives of Internal Medicine last September reported that many physicians believed their own patients were receiving too much care. The Congressional Budget Office and a number of analysts have placed the amount of unnecessary care at about 30% of health care expenditures, or $900 billion out of a total of $2.7 trillion; a considerable saving waiting to be harvested.

While politicians have spoken about broad cuts to Medicare and Medicaid to shrink the nation’s budget deficits, they have not mentioned targeting unnecessary care as a way to lower overall health care costs. They do not want to antagonize the powerful stakeholders in the health care system who would suffer financially by legislation having this objective. These stakeholders include organized medicine, insurance companies, trial lawyers, pharmaceutical companies and hospitals.

To reduce unnecessary care, physicians’ incentives to order or perform tests and procedures must be eliminated, and the rationale for defensive medicine must be ended. The paths to achieve both of these goals are clear, but the obstacles in the way require heavy lifting on the part of Congress if they are to be removed.

In order to curb defensive medicine, the ordering of unnecessary tests and procedures by physicians to protect themselves against malpractice suits, malpractice reform is needed. Trial lawyers, who are major contributors to the Democratic Party, are strongly opposed to any major changes in the malpractice process. The current system, which does not work effectively for either patients or physicians, greatly benefits these trial lawyers. Peer panels to review cases before suits can go forward should be required, with their analysis allowed to be introduced at any trials. Caps on the amounts given to injured patients for pain and suffering should also be legislated.

Even more significant in reducing unnecessary care would be ending the incentives physicians have to perform excessive tests and procedures which help determine their incomes. This means finding an alternative paradigm in order to end the fee-for-service payments that drive unnecessary care. Other methods that could be employed include bundling of payments for particular services, capitation, or having physicians on salary. Over 30% are doctors are already on salary and as I’ve mentioned previously, I favor this course as being the simplest one to implement. There are many ways this could be done. It works for the Kaiser system, Cleveland and Mayo Clinics, and there’s no reason why it can’t be successful when applied broadly. Physician salaries could also be augmented related to their productivity, patient satisfaction and quality of care.

Overall health care costs are skyrocketing. Federal budget deficits are partially due to increased spending on Medicare and Medicaid. Curtailing unnecessary care is an obvious way to bring costs under control and reduce the budget deficits and national debt while putting more money into the more productive parts of the economy. Getting it done in the current Washington environment is another story.

Resurrecting Democracy

A VietNam vet and a Columbia history major who became a medical doctor, Bob Levine has watched the evolution of American politics over the past 40 years with increasing alarm. He knows he’s not alone. Partisan grid-lock, massive cash contributions and even more massive expenditures on lobbyists have undermined real democracy, and there is more than just a whiff of corruption emanating from Washington. If the nation is to overcome lockstep partisanship, restore growth to the economy and bring its debt under control, Levine argues that it will require a strong centrist third party to bring about the necessary reforms. Levine’s previous book, Shock Therapy For the American Health Care System took a realist approach to health care from a physician’s informed point of view; Resurrecting Democracy takes a similar pragmatic approach, putting aside ideology and taking a hard look at facts on the ground. In his latest book, Levine shines a light that cuts through the miasma of party propaganda and reactionary thinking, and reveals a new path for American politics. This post is cross posted from his blog.

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