Today is Thursday, May 17, 2012

Quality

13 ways to cut Medicare costs

Over the last 35 years, there have been a lot of attempts to slow the growth in Medicare expenditures, which have continued to soar unabated because of poor policy making by both parties. 

Although the Budget Control Act of 2011 (S. 365) says the Joint Budget Committee that will try to agree on the next round of budget cuts won't be allowed to change Medicare's benefits, I think it should.

Here are some ideas for changing Medicare that would give consumers and providers strong financial incentives to increase access to care and higher quality care at lower costs per patient and per enrollee.

1. Means testing should be introduced to Medicare. 
2. Premiums should be upped 50% to 100% for the wealthiest beneficiaries, provided that they are allowed to buy non Medicare insurance in place of the lousy Medicare plan. That would take 5 million to 15 million of about 47 million beneficiaries out of Medicare and save billions, if not trillions.
3. The WSJ Health Blog reported on a study that estimated that defensive medicine costs $46 billion a year, or $460 billion over 10 years and growing. Tort reform is imperative.
4. Strip the pork and new public sector jobs built into ObamaCare from the budget and save close to $1 trillion.
5. Revamp Medicaid so that it serves the truly poor, and not every special interest group that votes Democrat. Save billions for the states and federal government.
6. Strip useless preventive care from Medicaid and Medicare and save more billions. Provide only the four preventive care services that actually save lives. Note that I've blogged on a Krauthammer column that reported that preventive services increase health care costs 162%. http://tiny.cc/k4hck
7. Stop using Medicare to subsidize over-staffed inner city and teaching hospitals and save more billions.
8. Reduce Medicare/Medicaid reimbursements for providers' payments to GE and its competitors for equipment maintenance contracts and save more billions.
9. Give consumers on Medicare and Medicaid strong financial incentives to buy reasonably-priced Medicare and Medicaid insurance plans and save more billions.
10. Stop all subsidies to people who want and buy Medicare Advantage plans and to the insurers who offer those plans and save more billions.
11. Spend more on fraud and abuse enforcement for M/M and save more billions.
12. Give workers stronger financial incentives to save for their health care expenditures after they reach 65 and save more billions.
13. Reimburse hospitals for only 50% of the health insurance premiums that they pay for employees. Many hospitals pay 100% of their workers' insurance premiums, which are soaring like everyone else's.

Even libertarians should support more regulation of food suppliers; fraud widespread

If you order snapper at your favorite restaurant, there’s a 77% chance that what you’re served is something else. If you try to buy foods without corn syrup because you’re allergic to it or are trying to control your weight, “pure” maple syrup and honey may be adulterated with it despite what the label says. Lindsey Layton reports that large food processors and sellers of accurately labeled foodstuffs are trying to get the Food and Drug Administration to crack down on fraudulent food importers and sellers. But they are talking to the wrong people. Only Congress can give the FDA the funding needed to support a stronger FDA enforcement drive. But Congress is more interested in wasting money on health care deform, green energy and climate change than in protecting our food supplies. Even libertarians recognize that consumers need to be protected from food fraudsters.

What does defensive medicine cost? It depends on your agenda

Democrats who depend on malpractice lawyers for huge campaign contributions do everything they can to down play the cost of defensive medicine. Republicans who don’t get money from trial lawyers do everything they can to show that the threats of malpractice suits cause physicians to increase the cost of health care by 30% to 50% by practicing defensive medicine. When physicians practice defensive medicine, they order more tests and procedures and drugs than they should in an effort to reduce their risks of being sued. Trial lawyers win. Medical supply companies and medical device companies win. Physicians and hospitals win. Patients and taxpayers lose.

A new Gallup poll of physician finds that 25% of procedures ordered by physicians are unnecessary. Jackson Healthcare uses that number to estimate that $650 billion of the $2.5 trillion spent on health services is spent on unnecessary tests and treatments. Click on the hed of this story to see links to several relevant articles.

WSJ: Why medical malpractice reform increases health insurance premiums up to $200 billion a year

For those concerned about fixing medical malpractice, or tort reform, this Wall Street Journal op-ed is a good read.

Impact graphs:

 

Life expectancy: U.S. health care does very well compared with other countries

A blogger on Reuters writes that the U.S. health care system is really good compared with other countries.

He links to a University of Pennsylvania paper, Low Life Expectancy in the United
States: Is the Health Care System at
Fault?, by Samuel H. Preston and Jessica Y. Ho.

The abstract follows:

 

Bernanke’s health care term paper shows how little he knows about health care economics, uninsured

Federal Reserve Board Chairman Ben Bernanke’s freshman-level term paper on health care economics shows how little he knows about it.

Here’s the evidence:

He talks about the health care system in America as if there is one. There are thousands of health care systems in this country. They include the military and Veterans Administration health care systems, the investor-owned and not-for-profit health care systems and systems owned and run by states, counties and municipalities. Typical systems include hospitals, specialty hospitals, long-term care facilities and services and primary care, diagnostic, emergency care and surgical clinics. Every state and municipality that has a hospital, doctor’s office, nursing home or other health care provider is a health care and health insurance market. In addition, we have dozens of medical devices, medical supplies and pharmaceutical markets. While they are interdependent, they are not in a “system.”

He cites a Institute of Medicine report on medical errors, which has been discredited in the Journal of the American Medical Assn. and other peer-reviewed journals. I’ve also written about its flaws in Health Care Strategic Management. Here is one of the 32 posts I’ve written about medical errors, and it puts the number of deaths due to errors at 32,000, not the more than 100,000 projected and estimated by the IOM in its 1999 report.

Bernanke talks about the 47 million uninsured when there are, at most 10 million American citizens who cannot afford health insurance and are “uninsured.” I’ve explained the math here. On this blog, I’ve written about the uninsured more than 177 times over the last five years.

The Fed’s chairman repeats a couple of important points.

First, no single reform will fix the health care markets.

Second. We have excellent health care services and medical products producers in the U.S., and policy makers must be careful not to damage what we have, which is what they’re bound to do.

Lasik surgery on eyes requires stronger warnings, FDA says

The other day I asked a friend who is an internist what he thinks of Lasik surgery, and he replied, “I still wear glasses.” Me too. And I’m glad that I’ve never had the procedure done. Ultra light specs work for me. When it comes to my eyes, I’m risk averse.

Stock pickers ask: Who makes contacts, solutions for contacs, glasses and relevant components? Who sells glasses? Maybe it’s not the weakening economy that has cut Lasik eye surgeries by about 17%?

The Food and Drug Administration’s Ophthalmic Devices Panel last week heard horror stories from and about people who had Lasik surgery go wrong, and the Panel urged stronger warnings about the surgery, the Washington Post and about every paper in the country reported. Impact graphs:

Institute of Medicine sounds alarm about lack of staff trained in geriatric care; boomers beware

Baby boomers won’t have enough trained health care workers to take care of them, and an expansion of geriatric care training is need for physicians, nurses, allied health professionals, families, friends and even patients, according to a report by the Institute of Medicine. CQPolitics.com’s impact graphs:

Budget Deficit Reduction Act of 2005 hurting GE, PHG and other makers of imaging equipment

The Budget Deficit Reduction Act of 2005 (PL 109-171, or DRA) continues to be blamed for slowing sales of x-ray, CT and MRI equipment sales by GE, PHG, SI and other makers of that equipment. The exact language of that act related to imaging is shown below. Click on this story’s headline.

What the act does is reduce the profitability of owning imaging equipment for radiologists and owners of outpatient clinics, making investments in the equipment much less attractive. The Congressional Budget Office’s analysis of the bill is here. It’s section on Medicare is on page 26 of the report. The Centers for Medicare and Medicaid Services (CMM) announces the rules that will implement Section 5102 of PL 109-171 here. To better understand the reasons for the DRA, read this statement by Herb Kuhn, director of the Centers for Medicare and Medicaid Services (CMM) to a congressional committee.

Walgreens’ (WAG) move into worksite clinics looks smart

Walgreens (WAG) recently acquired two firms that operate work site clinics, and Brian Klepper
explains why work site clinics might make it big for WAG and other companies. His article is must reading for investors trying to understand WAG’s latest acquisitions.

Work site clinics can work for small businesses as well as large employers, and

 

67% of patients rate their hospitals highly; hospitals under staffed, under paid, mismanaged

Most patients feel they got good care while they were hospitalized, but a sizeable minority were discharged unhappy with their care, and comments posted in response to Robert Pear’s report on a government survey of patient satisfaction shows how years of cost containment errors by politicians and employers have undermined the quality of care in America’s hospitals.

The key findings were: