One of the centerpieces of the
Obama health scheme is what he calls cost cutting. They even plan to cut some of what they now
pay into Medicare Advantage. But they
seem set on just arbitrarily paying less for the same services, not finding
more efficient ways to, for example, extract an appendix.
We already hear about many doctors
who already won’t accept Medicare patients because of the low payments. This number will have to grow. You won’t get any benefits by setting prices
so low that providers can’t operate.
We already have a lot of cost
shifting instead of cost saving now in a world where Medicare and insurers are
negotiating prices with providers. If
Medicare makes lowball payments, some of the cost of these procedures will be
transferred to insurers or individual payers.
Just saying you will pay less does not make a provider more
efficient. It means they have to get
their money by overcharging somebody else.
We need is to have CPA’s go over
charges and accounting practices to see what the costs actually are. I expect they will find a lot of overhead in
every charge. This is because there is a
lot of infrastructure and administration in hospitals. And all of the cost shifting will have to be
accounted for and that will be ugly.
There are also some reports that in
the case of Medicare, in some locations patients are given far more treatments
and procedures than in others while the overall results aren’t much
different. This needs to be looked at in
great detail.
Another thing that should happen is
an analysis of every procedure to see if it could be done more
efficiently. Is there an alternative
treatment?
If the only cost containment technique you use is that you just decide to pay less, you will most certainly receive less, one way or another. We need to work on actually providing services more efficiently. This involves analysis by both those with a technical knowledge of how services are provided and those who understand all the intricacies of how costs are accounted for. This isn’t the same as a plan concocted by horse trading lawyers and politicians who have only a barely superficial knowledge of either.
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