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If Congress’ super-committee wanted to save the day

Since fiscal austerity is currently “in,” Congress created the super-committee of six senators and six representatives to lower the deficit by $1.5 trillion or trigger broad-based cuts of $1.2 trillion.

A major driver of our deficits is growing health costs. These costs have more than tripled since 1990, and grown eight times over since 1980. If nothing is done and current trends continue, health costs which currently eat up 16 percent of U.S. GDP would consume almost half our spending by 2050. Even more cautious estimates suggest we’ll spend 37 percent of every dollar on health care come mid-century.

Could this be the atmosphere finally needed to rein in America’s out-of-control health costs?

Here’s hoping the super-committee is up to the task, because the trigger certainly isn’t the solution. Rather than wisely realigning incentives, Suzy Khimm reports, “the CBO estimates that some of the automatic cuts would actually increase net costs because of how some programs are structured.”

When you need a scalpel but use an ax, the ax often does more harm than good.

GOP interest in changing Medicare
Early signs, unfortunately, suggest the conversation isn’t headed in the right direction. House conservatives prefer to sacrifice Medicare’s bargaining power by transforming the program into subsidies used to purchase private insurance. Even worse, their plan controls costs by limiting the size of the subsidies even as health-insurance costs continue growing.

Other recently proposed changes, some of which show up in President Obama’s deficit reduction plan, include charging higher co-pays for home health care and other Medicare benefits, raising Medicare deductibles for outpatient services, and retooling the Medicaid state payment formula. Also, since the summer-long debt ceiling battle, the specter of raising the Medicare eligibility age from 65 to 67 has loomed in the background.

The problem with nearly all of these proposals is while they reduce the federal government’s share of our nation’s health bill, they do nothing to reduce the size of that bill itself, instead shifting costs to states or citizens.

Raising Medicare’s eligibility age is a prime example. According to the Center on Budget and Policy Priorities, doing so would save the federal government $5.7 billion in the first year of full implementation while increasing national health costs by $11.4 billion. With health costs growing so rapidly, it’s worse than useless to focus on federal savings if they only serve to accelerate our growth problem.

The greatest service the super-committee can perform for the federal government and for our nation is to find ways of bending health spending’s cost curve. While there are no silver bullets here, there are ideas that must be on the table if the United States hopes to slow its health cost growth.

Cut out useless care
First and foremost, Americans need to stop spending money on methods of care with no feasible benefit for quality or longevity of life. Right now, our fragmented system often doesn’t tell us which methods to avoid, but that should change in coming years.

The Affordable Care Act created the Patient-Centered Outcomes Research Institute (PCORI), which will fund research to answer these kinds of questions. While PCORI has no authority to decide what procedures are or aren’t covered by public and private insurers, bending the cost curve might mean using PCORI’s findings to make those decisions.

For instance, Medicare could charge higher co-pays of seniors seeking procedures shown to have no benefit, or reimburse doctors at a lower rate for such procedures. A more drastic move would have Medicare drop coverage of such procedures, and seniors wanting them could either pay out-of-pocket or buy private supplemental insurance for them.

The most rampant examples of these ineffective procedures usually grow out of overtesting. For instance, Professor Michael LeFevre of the U.S. Preventive Services Task Force reports, “Colon polyps take 10 to 20 years to become cancerous, while the risks from colonoscopy, including intestinal perforation and heart attack, substantially increase after age 80.”

‘It’s easier to simply order a test’
Yet surveys show as many as half of Medicare recipients receive colonoscopies more frequently than is shown to be beneficial. Why? As Kaiser Health News explains, “Many doctors say it’s easier to simply order a test than to discuss its risks and benefits with patients.”

Dr. Lisa M. Schwartz goes into further depth, saying, “Unfortunately that’s how we’ve measured quality: Did they get tests? And doctors are being judged and paid accordingly. So all these crazy things get done that don’t help people.”

Realigning Medicare’s payment structure to discourage useless or even harmful care strategies would incentivize having these difficult but necessary conversations and begin to transform our medical system.

Whenever discussions of limiting benefits come up, someone always tries to shout them down by labeling them “rationing.” But making decisions on what to cover in full based on PCORI’s findings doesn’t ration benefits at all, because the methods being “rationed” aren’t beneficial.

For now, the super-committee ought to look at existing studies on non-beneficial care; in the future, Congress should look to PCORI’s findings.

Aaron Sinner is a Hindsight Community Fellow at Minnesota 2020, a think tank based in St. Paul.  This is part one of a two-part series that originally appeared on the organization’s website. Part two explores preventive measures to help control costs without hurting quality outcomes.

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Comments (4)

  1. Submitted by Richard Schulze on 10/03/2011 - 06:57 am.

    The only way out of this trap is to simultaneously offer Medicare for all. You can’t reform Medicare because to do so is an attach on seniors, which they will fight. You can’t means test Medicare because middle class seniors (the ones who vote the most) know that they will be paying more. But if you offer Medicare to all, reform is absolutely essential, and it will be harder for the seniors to argue about means testing when the young are paying 80% of the premiums and the old are taking 80% of the services.

    So if you are a conservative, you start by offering Medicare to all. You make the annual dues for young people astronomical for the full plan, so you offer them cheaper versions of Medicare which are not fee-for-service, or high deductible and co-pay, and/or run through private insurers. Then you tell the seniors that they have to move to the cheaper versions of Medicare if they want to avoid fees, fees which are means tested. This will take a decade or more, but if we don’t pursue a path like this, the politics become impossible.

    The takeaway lesson is that you can’t privatize or otherwise reform Medicare unless you make it universal, first.

  2. Submitted by myles spicer on 10/03/2011 - 10:05 am.

    I wish to second Richard Schulze’s comment. Making Medicare available to all (public option) is such a simple, obvious, and semaless way to enhance medical care in our country. The paln is in place. The logistics are done. The administrative costs are small compared to private insurance (and of course there is no drive for “profits”. And adding younger insured into the current mix would improve program from an actuary standpoint…for all.

    There is only one thing holding this back: irrational ideological opposition. Hopefully, there can be changes in congress to eliminate this ridiculous obstacle.

  3. Submitted by Greg Kapphahn on 10/03/2011 - 04:27 pm.

    Actually, that “irrational ideological opposition” is just a smokescreen by which some of our friends seek to cover up the fact that they’re making MASSIVE profits and incomes off the system just the way it is.

    Those folks love to come up with scare tactics designed to terrify those who depend on Medicare for their healthcare,

    But the bottom line is that our nation’s biggest problem is currently the massive “entitlement” of the fabulously wealthy.

    Once someone has become entrenched in the system as it currently exists and is guaranteed to be continuously enriched by that system at the expense of taxpayers, consumers, etc.,…

    those folks simply find it unconscionable that the system from which they receive their massive incomes (no matter how useless or even destructive their role in the lives of their fellow citizens and the planet has become) should EVER be changed in ways that might PROPERLY reward them for the actual benefits society is receiving from their work (which in far too many cases would mean no continuing income at all).

    It is, indeed, not the fact that some among the poor, the middle class and retired folks feel “entitled” to being taken care of by our government and our economic system, but rather,…

    that so many of the rich feel entitled to the wealth they receive from government contracts and from our economic system, even when they provide ZERO benefit to society in return for that wealth; even when that wealth is extracted from their fellow citizens in ways that amount to nothing but theft

    (as is the case with Wall Street’s theft from the proceeds of the retirement investments of that vast majority of Americans, a theft which was massively enabled by Wall Street’s successful demand that corporations wipe out or strip away the funding of their defined benefit pension programs and force everyone into 401Ks that folks would have no choice but to invest with Wall Street firms).

  4. Submitted by Bernice Vetsch on 10/04/2011 - 10:58 am.

    I wish to second, third and fourth the above comments.

    Harvard Medical School researchers found several years ago that we would save $400 billion per year in health care costs were we to enact a Medicare-for-All health care program.

    And we would do this by providing preventive and curative care to absolutely every person. The words “pre-existing condition” would disappear.

    Ideology is what led to the Affordable Care Act not having a public option. While a great improvement, the AFA is not a plan that will save money because the drug and insurance industries will continue to be enriched. And enriched. And enriched, along with their Congressional buddies.

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