Debate over debt is needed, but let’s see how reforms play out
Dead on arrival. Dead shortly after arrival. Those descriptions certainly apply to a couple of thought-provoking—and alarming—reports concerning the U.S. healthcare system released in the past few weeks. Based on early reaction to the initial draft of recommendations from the bipartisan panel charged with attacking the ballooning national debt, that thumping noise you heard was from the letters D.O.A. being rubberstamped on the document by pundits and observers, including members of Congress. It looks as if there’s something in the draft to be despised from all angles, no matter what sector of the economy and what your political persuasion. Tax increases, Social Security changes, defense cuts, benefit eliminations. What some find popular others will deem anathema.
The document released Nov. 10 was only the first round of proposals from the National Commission on Fiscal Responsibility and Reform. This one was penned by the panel’s co-chairmen, and healthcare certainly didn’t escape the ax. Of course, since the industry accounts for 16% of gross domestic product, it will always be subjected to intense scrutiny.
Given the fact that the nation’s total debt stands at just under $14 trillion and climbing, it’s certainly time to start having a national discussion about how to stop the bleeding.
But when it comes to healthcare, this country just had that pleasant discussion—in the ramp-up to passage of the Patient Protection and Affordable Care Act in March. Remember that the law will provide insurance coverage for 32 million uninsured Americans but still slow the growth rates in federal healthcare programs over time.
While the law is imperfect and clearly doesn’t do enough to bend the cost curve, it has promising reimbursement reform ideas that deserve to be tested broadly before new sweeping changes are considered. Those concepts include bundled payments, accountable care organizations and medical-home models, among others.
Provisions boosting comparative-effectiveness research can’t be overemphasized because that’s the type of data that could help to ultimately slash healthcare spending. Critics scream bloody murder—that it will lead to rationing. Of course it will, if done correctly. And that’s just what this country needs and actually is what the bipartisan commission recommends. But we’re not talking denial of patient care whatsoever. What really needs to be rationed is the ineffective, inappropriate and unnecessary healthcare that has been driving the cost spiral for decades.
That was apparent once again in a report released last week by HHS’ inspector general’s office looking at the incidence and cost of “adverse events” at hospitals. Because of such events, not long after arrival at a hospital, patients are suffering serious harm and, in too many cases, they pay with their lives—often as a result of a condition not present at admission.
The study looked at 2008 data involving Medicare beneficiaries, determining that 13.5% of those patients experienced adverse events during their hospital stays. Not all of the events were considered preventable, but nearly half of them (44%) were. The extra cost to Medicare was estimated at $324 million in one month alone, which extrapolates to $4.4 billion in extra spending on an annual basis. Think of the cumulative savings to the national treasury if such unnecessary care could be eliminated across the entire healthcare spectrum.
The Affordable Care Act includes a provision that penalize hospitals even more if they rise above certain thresholds for hospital-acquired conditions. We’re not talking big money here, but it’s another way to reinforce that taxpayers aren’t going to keep paying for poor-quality care.
That provision doesn’t kick in until fiscal 2015. Maybe it’s time to speed up the timetable on such penalties. Add hospital-acquired conditions to the list where more rationing can’t arrive soon enough.