Look­ing for value in re­form doc­u­ments? Weigh the new IOM re­port

One doc­u­ment gives health­care bet­ter bang for the buck

Modern Healthcare - - FRONT PAGE -

Last Wed­nes­day, I asked Maureen McKin­ney, one of our re­porters, for a copy of the In­sti­tute of Medicine’s new re­port, Best Care at Lower Cost. McKin­ney got an ad­vance copy of the re­port, which was for­mally re­leased Sept. 6, to be­gin work on this is­sue’s cover story. Af­ter I asked, she looked up from her cu­bi­cle and said, “Are you sure? It’s a real door stop­per.” At first, I thought she said “show­stop­per” be­cause the re­port promised a de­tailed blue­print on how the health­care sys­tem in the U.S. could trans­form it­self into one that pro­vides the best pos­si­ble care for the low­est pos­si­ble price. “No,” she said. “I meant door stop­per.”

At 382 pages, the re­port was in­deed ca­pa­ble of prop­ping open one of the big out­side doors at HHS head­quar­ters in Wash­ing­ton. Af­ter read­ing it, though, the re­port was truly a show­stop­per. In short, the health­care sys­tem can spend at least $750 bil­lion less each year and elim­i­nate 75,000 avoid­able pa­tient deaths just by bet­ter us­ing what the sys­tem has al­ready.

But isn’t that what the Pa­tient Pro­tec­tion and Af­ford­able Care Act is sup­posed to do? Con­trol costs, ex­pand ac­cess and im­prove care? With value top of mind for all health­care ex­ec­u­tives and the jour­nal­ists who cover them, I started to do some fig­ur­ing. I com­pared the rel­a­tive value of three of the most im­por­tant health­care doc­u­ments of the past two years. In chrono­log­i­cal or­der, they are the ACA (March 2010); the U.S. Supreme Court’s de­ci­sion on the ACA (June 2012); and the IOM’s new re­port (Septem­ber 2012).

I loaded two, 500-sheet reams of 8.5 x 11-inch pa­per into our Kon­ica Mi­nolta 4525 Se­ries PS copier and printed out the ACA. It spit out 975 pages of health­care re­form. I took the stack to our mail­room to weigh it: 9 pounds, 10.7 ounces. At a to­tal cost of $940 bil­lion over the first 10 years of the law, that comes out to a lit­tle more than $6 bil­lion per ounce and about $964 mil­lion per page.

Af­ter putting in more pa­per, I printed out the Supreme Court de­ci­sion, which up­held most of the key pro­vi­sions of the re­form law but struck down sev­eral oth­ers. It was 193 pages long and weighed 1 pound, 14.6 ounces. I don’t know if the nine jus­tices of the Supreme Court got a raise this year, but in 2011, the chief jus­tice was paid $233,500, and the other eight jus­tices were paid $213,900 each. That’s a to­tal of $1,944,700. That comes out to be $63,552 per ounce and a lit­tle more than $10,000 per page.

And fi­nally, I printed out the IOM re­port. The tome weighed in at 3 pounds, 13.1 ounces. The re­port didn’t have a price on the cover, nor did it say inside how much it cost to pro­duce. Three foun­da­tions pro­vided the sup­port for the project: the Blue Shield of Cal­i­for­nia Foun­da­tion, Charina En­dow­ment Fund and Robert Wood John­son Foun­da­tion. All are sup­ported by char­i­ta­ble do­na­tions, so the grants they give out are ef­fec­tively free to tax­pay­ers. So that’s $0.00 per ounce and $0.00 per page.

So which of the three pro­vided the best value? No doubt it was the IOM re­port. If its rec­om­men­da­tions are fol­lowed, the na­tion could spend al­most 30% less on health­care each year and pro­duce bet­ter re­sults. For nearly a tril­lion dol­lars, what do you get with the ACA? Ac­cord­ing to the lat­est es­ti­mates from the CMS’ Of­fice of the Ac­tu­ary, the rate of in­crease in an­nual na­tional ex­pen­di­tures on health­care ser­vices would av­er­age only slightly less through 2021. In other words, you’re spend­ing a lot to bend the cost curve a lit­tle. Un­der the IOM’s plan, you’re spend­ing lit­tle to bend the cost curve a lot.

The real value of the IOM re­port is this: It shows that the health­care in­dus­try al­ready has the tools it needs to fix its prob­lems. The real ques­tion is whether it needs the strong arm of gov­ern­ment to make it hap­pen.



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