More on Slowing Health Costs

May 23rd, 2012 at 2:51 pm

Yet another piece on whether some recent signs of slower growth in health care spending are for real or not (I’ve been blogging on this question). 

Interestingly, a number of the delivery system reforms that are central to the Affordable Care Act’s cost saving strategies are showing up already.  These include things like accountable care organizations (where providers form groups to lower costs through coordinating care, reducing duplication, avoiding errors), bundling payments (one payment for a full medical “episode” as opposed to separate ones for each provider), “medical homes” (assigning a primary doctor to coordinate a patient’s services), and financial incentives to reduce hospital recidivism. 

Note that much of what we’re seeing here is the private sector trying out these measures even before the law has fully taken hold (and before the Supreme Court has announced its verdict on the ACA).  So it’s a unique and positive interaction between pubilc policy and private practices in an area where we very much need these types of innovations.  As I see it, the way forward for America involves fewer synthetic credit default swaps and more accountable care organizations!

Anyway, I hope such experimentation is why spending has slowed, but other evidence points to cost shifting onto to folks who can’t afford the services they need.  That’s another way to bend the cost curve—a truly lousy way.

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5 comments in reply to "More on Slowing Health Costs"

  1. save_the_rustbelt says:

    I just spent some time with health care executives from all 50 states.

    Brief summary:

    Many hospitals are all hot about ACOs and other integration formats, physicians are extremely leery.

    Hospitals and physicians are talking more about cooperative efforts (within limits of Stark laws) but this is moving very slowly and cautiously.

    There is much fear about bundling, especially among physicians and ancillary providers.

    Providers feel under siege from all sides, and think too much leverage has been given to the private insurers. Many see Medicare and Medicaid as fast moving disasters.

    Physicians over 55 (a large chunk of docs in many states) are spending a lot of time reviewing their retirement accounts.

    So let’s not be too optimistic too quickly.

  2. save_the_rustbelt says:

    Jared, could you explain to someone in the White House that writing 600, 700 or 800 page regulations are counter-productive? (besides making me blind)

    The “meaningful use EHR” regs and the ACO regs come immediately to mind.


  3. Art As Social Inquiry says:

    If this healthcare ship we’re all on weren’t running aground, healthcare reform would never have happened. We proceed cautiously, but the peril we face by not moving forward will sink us. The health outcomes for $ spent; the high administrative costs compared to other first-world nations; the out-of-control cost shifting to consumers; the incentives to hire part time workers and on and on….we just can’t continue with the status quo.

  4. Healthcare Salaries says:

    The problem with healthcare is that it does not exist in a true free market economy. There is too much government regulation and bureaucracy for the sake of bureaucracy being layered on top. All this leads to high administrative costs. Another problem is the shortage of doctors, which leads to skyrocketing salaries for healthcare workers. And yet another problem is that technology comes up with new and ever more expensive treatments with marginal benefits. If a brand new treatment is invented costing $200k a year which can extend the life of a patient for another 3 years, should the government pay for this treatment when the patient can’t afford it? Should private insurance cover it? In our day and age, someone with unlimited money can gain access to all sorts of miracle treatments. The public healthcare system on the other hand does not have unlimited money so some hard choices need to be made… Ultimately all aspects of the healthcare system need to be reviewed with healthcare costs in mind. For example, increasing the number of doctors will help drive the salaries down and therefore reduce the overall cost of the system. Maybe the government should start by getting more doctors trained and ready for the aging population?