Managed care needs a better watchdog

Counterpoint

So UnitedHealth Group has figured out a way to cut Medicare's costs "without cutting services"? That is how the Star Tribune characterized the organization's self-serving claims in a recent story ("UnitedHealth says Medicare can save big without big cuts," Jan. 20).

The Star Tribune has long had a policy of clearly distinguishing advertisements from news reporting. That policy was violated by the story on United, which characterized the firm's claims as a fresh perspective in the debate about how to cut Medicare's costs. In fact, United and every other large health insurance company has been peddling similar hype for decades.

The reader had to wade through 15 paragraphs to find a dissenting view, expressed by the Congressional Budget Office. The Star Tribune relegated the CBO's views to this single sentence: "The Congressional Budget Office ... tends to downplay or even ignore numbers like the ones UnitedHealth now offers, experts said." It would have been helpful if the article had gone on to explain why.

The reason is that CBO requires supporting evidence before it will report back to Congress that a health care reform proposal will save money. The evidence the CBO looks for is not news releases and "studies" from health insurance companies but papers based on the principles of science and published in peer-reviewed journals. To date, the scientific literature does not support the cost-containment claims made by United and the rest of the managed-care insurance industry.

Neither the CBO nor professional journals are infallible. But they have no financial stake in the debate.

United thinks "private success stories need to drive public reforms." In other words, that self-serving anecdotes from the health insurance industry should mean more to lawmakers than the scientific literature does. How does the state's largest newspaper let such nonsense go unexamined?

Here are two questions to investigate:

First, how can United claim to have discovered methods that will lower Medicare costs when the health insurance industry, including United, has a long track record of raising, not lowering, Medicare's costs? A steady stream of research has shown that it costs more to insure seniors through health insurance companies than it does through the traditional fee-for-service (FFS) Medicare program.

The current name for the private-sector branch of Medicare is Medicare Advantage (MA). The Medicare Payment Advisory Commission, which is very sympathetic to managed care, had this to say in a recent report to Congress: "Currently, Medicare spends more under the MA program for similar beneficiaries than it does under FFS."

The second question to investigate is United's claim that "health improvement programs such as diabetes prevention and weight control could save $53 billion" for Medicare and Medicaid. The peer-reviewed literature on this claim currently supports the opposite conclusion -- that the cost of administering "disease management" programs in general, and diabetes and obesity prevention programs in particular, exceeds the savings in medical costs achieved by these programs.

There are a few exceptions to this rule, but diabetes and obesity are not among them. It remains possible that such programs targeted at a very small number of diabetics and overweight people (for example, those who are highly motivated to get well) will someday prove to save more than they cost the health care system, but in that event the total savings will be small compared with total health care spending.

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