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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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Copyright 2012 The Moderate Voice
  • Marsman

    Our current medical system is one of the drivers of the malpractice tort lottery that goes on. Imagine that you have a surgery and after the surgery the outcome is not as good as you hoped resulting in you being unable to work. In countries with a more generous social safety network, you might find yourself with a pension, guaranteed housing, guaranteed healthcare, etc. In the US, these things are simply not as available. Who would not go looking for a day in court with a possible million dollar payoff. Imagine that your child is born with cerebral palsy. Where will will you get the kind of care that will let the child develop his/her maximum potential and at a minimum provide caretaker time so that you can move forward with your career? Yes, you can fight the state and the state schools for the scraps that they provide, or you can get into court, and maybe get the multimillion dollar verdict. Those are the alternatives.
    What will happen if we restrict the court options at the same time that we are squeezing back on the benefits that the welfare state provides? Undesired outcomes are not that rare. Won’t we be creating another class of angry people who feel disenfranchised and alienated?
    Malpractice litigation is high in the US because the welfare state is so weak.
    I am a rich guy with close to 1% net worth. My fear is that if we shove people to the wall by cutting down on social benefits and reducing the access to courts, at some point they start shoving back.

  • Rcoutme

    Marsman: I agree with you. Having said that, I believe that people are already beginning to push back (Occupy Wall Street, and others).

    A better solution than simply reducing malpractice awards would be for the government to take responsibility for malpractice. I realize that this sounds a bit over the top, but bear with me.

    I have a nephew who was incorrectly diagnosed and went into a coma due to hypertensive encephalitis. He survived. Of course, he had brain damage. For quite a few years his parents ran donation events to help pay for his needed equipment and care. Eventually, he received a settlement from the hospital. Some of that money had to go to the government who had assisted in his medical bills. If the hospital had not paid, society would have had to help my nephew through gov’t programs and what charity his parents could muster up.

    Why go through the middleman? Quite a few of these cases are going to be decided either 1) against the plaintiff leaving that person a ward of the state or 2) against the doctor/hospital/whatever…leaving the person a ward of…the insurance industry? That seems like a rather inefficient way to do things. Why not just have the gov’t insure the hospitals and health care workers? At least that way, those who are hurt by doctors would at least be sure to get the medical and social assistance they need.

    The major drawback to this plan would be the “pain and suffering” part. Then again, we could have the gov’t insure the care but make the health care workers take out insurance “only” for p/s lawsuits…

  • I know that models that move away from “fee for service” have good success with controlling costs while maintaining a good level of care, but the profit margins are lower. Doctors and facilities must be willing to accept the flat-fee system and benefits/drawbacks that come with them. I do medical billing for my brother-in-law’s family practice, and I can tell you single practicing doctors are getting bulldozed by multi-function conglomerates that have everything in-house and bill for everything separately.

  • dduck

    Trial lawyers, who are major contributors to the Democratic Party, are strongly opposed to any major changes in the malpractice process.

    Says a lot, thanks, RAL.

  • RP

    have universal healthcare wiht one payor, the government. make all doctors, nurses and other healthcare workers government employees. All malpractive suits are then file against the government as the malpractive coverage is paid for as part of the physician salary and benefits and they are co-defendants in the suit. As part of the legislation creating the universal system, fees for injury will be spelled out in advance of any malpractice injury. That will allow physicians to order only those tests necessary to provide adequate service to the 99% that will be treated correctly. The 1% that something is missed will be covered in the malpractice payments.

  • DaGoat

    Part of the ACA is getting a “best practices” committee together to recommend consensus on the best way to treat given conditions. There was some suggestion to make physicians that followed the “best practice” guidelines exempt from litigation, ie following the recommendations of the government committees would automatically mean there was no malpractice committed.

    The Democrats would have none of that though.

  • zephyr

    Get rid of the unnecessary care and the prolonged end of life care and half the problem is licked. Of course that will never happen because it makes too damned much sense!

  • dduck

    Z, how about mandatory end-of-life directives at age 18.

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