Friday, May 15, 2009

Controlling Health Care Costs: On Over-testing

Unnecessary tests are being conducted for Americans, especially those with health care insurance. There isn't any current incentive in place to make doctors more efficient. In fact, physicians are rewarded for greater productivity (more testing) by insurance companies. Also, it helps shield them from possible lawsuits with charges of neglect. Tests are driving up health care costs, since many are unnecessarily excessive.

Unnecessary lawsuits, medical duplication of expertise and equipment, deciding which procedures, hospitals and doctors work best, providing financial incentives for efficiencies, promoting wellness are all possible areas of improvement that could be addressed by the new administration.

Those without insurance who must pay out of pocket will inevitably opt for the most efficient and cheapest alternatives, especially the latter. A complication is that doctors who know the most about the results of expensive routines and tests aren't accustomed to having to choose which is most effective, despite being best able to do so. They like being able to request lots of tests, and work with affluent patients on unlimited budgets, in general. It's what they are educated to do. It's more fun and more interesting because they find more results to interest them. Financial incentives for less testing would be a novel idea.

Patient choice of health insurance after major illness has begun being treated would prove to be popular. Major illnesses test insurance company payouts. Insurance companies determine treatment options and doctor choice and wield huge power. They, along with big pharmaceutical companies, are major drivers of health care. In America, they are the number one cause of personal bankruptcies. Patients and their families must pay for medical care for many years, having had little choice of doctor, hospital or knowledge of best procedural practices. With 50 million uninsured, America clearly does not have the best medical care for all.

Much work has been done to provide care for children, but many more steps must be taken to keep America competitive in the workplace. Legacy costs of health care and long-term care can only increase. Cost control is in everyone's best interest. Patients, especially affluent ones, would like to be able to travel around the U.S. to make use of the best doctors, but insurance companies usually prohibit payments for out-of-area treatments.

We know that according to David Brooks in The New York Times, President Obama's aides are talking about "game-changers":

"health information technology, expanding wellness programs, expanding preventive medicine, changing reimbursement policies so hospitals are penalized for poor outcomes and instituting comparative effectiveness measures."

It stands to reason that there is duplication of medical expertise and medical machinery around the country. It also makes sense that some physicians are more expert than others. Some doctors are at the same time more corrupt than others; they might over-test patients to pay for expensive medical machinery. Testing "comparative effectiveness" is optimistic and at the same time ambitious.

One would hope these new initiatives are sufficiently flexible to patient preference. New businesses in health information, wellness and preventive medicine might even be created and expanded.

There is further hope of change announced in "Health Costs are the Real Deficit Threat" by Peter Orszag, Director of the Office of Management and Budget in today's Wall Street Journal that

"this week a stunning thing happened: Representatives from some of the most important parts of the health-care sector -- doctors, pharmaceutical companies, hospitals, insurers and medical-device manufacturers -- confirmed that major efficiency improvements in health-care are possible. They met with the president and pledged to take aggressive steps to cut the currently projected growth rate of national health-care spending by an average of 1.5 percentage points in each of the next 10 years."

The financial incentives are compelling. Bearing good news, he says that

"It would reduce national health expenditures by more than $2 trillion over the next decade -- and could help to put roughly $2,500 in the pockets of the average American family every year."

With Medicare becoming every more expensive, and medical expenses being the nation's major cause of personal bankruptcy, how can the nation and lawmakers continue to ignore the challenge of medicine?

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