Editorial: Health reform's hidden game-changers

  • Updated: March 13, 2010 - 5:08 PM

Overlooked measures would help rein in health costs.

Even tough critics of the health care reform bills acknowledge that the legislation would accomplish a worthy goal: extending coverage to 30 million Americans without insurance. At the same time, health reform's staunchest advocates admit that its Achilles' heel is cost containment, a big problem when the nation's annual health care tab is $2.4 trillion and climbing.

As reform heads toward final passage in Congress through reconciliation -- the U.S. House is expected to vote on the Senate bill this week -- expect cost to be the prevailing line of attack from Republicans and the chief concern raised by Democrats still on the fence. While both the House and Senate bills are disappointingly short of specifics on cost containment, deep within both of them are some smartly crafted but often overlooked provisions that could be real game-changers for reining in health care costs without compromising quality. Even if comprehensive health reform fails this year, Congress should consider quickly resurrecting these measures and passing them separately. They're that important.

The changes called for in both bills deal with payment reform, something that experts in Minnesota and across the nation agree is a critical component. Today the nation relies on what's known as a fee-for-service system. Providers typically are paid for how much care they provide. So the incentive is to do more procedures and more tests, even if the benefit to patients is questionable. In turn, efforts such as Park Nicollet's pioneering congestive heart failure program, which keeps patients healthier and out of hospitals, are often money-losers because there are fewer hospital days and procedures to bill for.

The measures in both bills are important steps toward changing the reimbursement system into one that rewards value, not volume. The legislation would direct the agency that oversees Medicare and Medicaid to launch voluntary pilot programs that bundle payments for care and reward organizations that control spending while meeting quality care benchmarks. The legislation also smartly calls for a new Center for Medicare and Medicaid Innovation.

At face value, these changes don't sound very exciting. But whoever crafted the language did so with an eye toward getting around the main roadblock to true reform -- Congress and its susceptibility to special interests who profit from the costly system now in place. The simple act of designating new programs as "pilots" vs. "demonstrations" means congressional approval isn't needed to expand new programs promoting efficiency. Lack of congressional approval, for example, delayed by eight years expansion of a demonstration project that tested competitive bidding for medical equipment, and cut Medicare expenditures on these purchases by 19 percent. Adequately funding the new Center for Innovation, as the legislation does, would also help the agency expand new programs and reward providers doing care coordination, technology upgrades and other quality improvement projects that typically aren't paid for by Medicare.

Because of its size, it makes sense for Medicare to pioneer reimbursement changes. Private insurers would follow its lead, creating better quality and more efficiency across the nation's entire system. The payment reforms called for in the legislation were advocated for recently in the New England Journal of Medicine by Robert Mechanic and Stuart Altman of the Heller School for Social Policy and Management at Brandeis University. While these changes wouldn't bring down costs in the short term, the authors wrote, "the long-term effect on the U.S. health care system could be priceless.''

  • PAYMENT REFORMS

    A full-text version of the March 4 New England Journal of Medicine article mentioned in this editorial is available free online at tinyurl.com/ycxymxf.

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