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Articles by Donald E. L. Johnson

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Cutting physicians’ incomes wrong way to cut Medicare costs and expenditures

The Budget Control Act signed by President Obama today creates a Joint Committee of a dozen members of Congress. It's job is to cut the budget by Thanksgiving.

Everyone expects that the committee, which will be comprised of six members of the Senate and six members of the House with six from each party, will target Medicare, Medicaid and other health services for savings.

This is a slightly revised piece I'm posting on comments sections and on Facebook:

 

1. How would you like to have Obama cut your income by, say, raising your income taxes, forcing you to buy expensive health insurance mandated by ObamaCare, forcing you to buy expensive food and gasoline as a result of ethanol mandates and forcing you to pay for others’ preventive care even though they can afford to pay for it themselves?

Oh, you are having your disposable income cut. So you know how it feels.

But say you’re a hospital employee—a nurse, a receptionist, a technician, etc. And you’ve been taught guest relations skills so that you’ll help patients and be friendly. Your pay is cut. What happens to your attitude, your attention to details and how much you care about quality?

Cutting the pay of highly-trained, skilled health care workers will destroy much of the quality that we see in today’s health care institutions.

I’ve had to be in and out of hospitals a few times over my pretty long life, and I think that while care always was as good as the workers could make it, today’s care is exceptional. The people who have cared for me and mine have been friendly and attentive with minor exceptions.

2. I’ve covered the hospital industry since 1976 for Modern Healthcare, Health Care Strategic Managment and my blog. I’ve learned that hospital executives care about themselves first. They’re human.

Therefore, they care about their bottom lines second. Profits are important to both tax exempt and taxable companies. They care about physicians third, because the docs control them. Then they worry about their employees and patients in that order.

So hospital associations, which also care about themselves before they worry about their members, are most concerned about protecting their members’ bottom lines. They never suggest changes that cut government’s or private payers’ costs. This is why the AMA, AHA, CHA, etc. are looked at with such scorn and cynicism in Washington where everyone is looking out for number one—himself.

3. Medicare expenditures must be cut by reforming the system, not by cutting payments to doctors and health workers. While it’s impossible to motivate people, it’s very easy to demotivate them by threatening their incomes and their status.

4. Reform Medicare by adopting significant parts of Paul Ryan’s plan and modifying Medicare and Medicaid as much as politically feasible.

Give patients strong financial incentives to be smarter about using Medicare. And give physicians and institutions strong financial incentives to cut costs.

Let everyone make as much money as possible by increasing access and quality of care while cutting Medicare expenditures per enrollee and per patient.

Providers have no control over disease outbreaks nor demographics, which is why controlling the rate of growth in health care expenditures is so difficult.

If the Joint Committee focuses on problem solving instead of politics, it can take $1 trillion to $3T out of Medicare over 10 years.

I assume politics will cut the real savings to about zero.

Posted by Donald E. L. Johnson on 08/02/2011 at 08:14 PM

Congress 112thHealth insuranceHealth Insurance ReformMedicaidMedicare

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