Costs Must Be Controlled in Health Care

The Florida Times Union, December 20, 2012 | Go to article overview

Costs Must Be Controlled in Health Care


There are three major issues with health care in America.

- Access: Not everyone is covered.

- Costs: America spends more on health care than other industrialized nations, but outcomes are usually no better.

- Quality can be improved.

Obamacare deals mostly with the first issue - access. It doesn't provide health care for everyone, but it does expand access to about 30 million previously uninsured.

This access is provided in two ways that Florida leaders have been resisting: creating health care exchanges and expanding Medicaid.

Florida's Medicaid program costs more than $21 billion a year, covers nearly 3 million people (half are children) and consumes about 30 percent of the state budget, The Associated Press reported.

State leaders have been seeking to privatize Medicaid in search of lower costs, concentrating on a five-county pilot that includes several counties in Northeast Florida. So far the federal government has not approved a waiver for the pilot program for the rest of the state.

Obamacare would expand Medicaid coverage for another 2 million Floridians.

The federal government would pick up 100 percent of the cost for the first three years and 90 percent afterward.

Gov. Rick Scott seems to be softening on expansion, admitting that Obamacare now is the law of the law.

COST IS ELEPHANT IN ROOM

Obamacare never did enough to address rising costs.

As Gail Wilensky wrote in the New England Journal of Medicine, the cost and quality aspects of Obamacare are based on "aspirations and promises."

"... Adding more people to the insurance rolls is politically and technically easier than finding a way to ensure that care is effective, high-quality and affordable for both the recipients and taxpayers," she wrote.

Obamacare still relies mainly on fee-for-service payments that provide incentives for expensive treatments.

In addition, physicians are paid through a series of payment codes, the RUC (Resource-Based Relative Value Scale), which don't do enough to reward high-value, low-cost service.

Simply cutting Medicare reimbursements to physicians and hospitals eventually will result in fewer doctors and institutions accepting Medicare patients.

Pilot projects included in Obamacare have not been scaled up, and there appears little sense of urgency to do so, Wilensky writes.

"What is needed are reforms that create clear financial incentives that promote value over volume with active engagement by consumers with the health care sector," she writes.

The Medicare drug benefit, Part D, is one example of putting market competition to good use.

Many of Obamacare's provisions take effect in 2014.

If Florida's elected leaders have better solutions, let's push for them. …

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