Sunday, April 24, 2011

Making healthcare cheaper

Making healthcare cheaper is not, actually, a particularly difficult problem. It requires political will, not theoretical innovation. It can be arrived at via many routes, provided they observe a simple principle:

We must pay for health, not for sickness. For outcomes, not for methods. For the totality of a life, and not a particular crisis.

There are many ways in which this could be accomplished. A national health service, responsible for the health of the entire population, is one. A more market-driven approach would be to have a number of necessarily large healthcare organizations who would "bid" for patients, likely in lots, the contract for life-long health services going to the lowest bidder.

If we prefer to nibble around the edges of the problem first, there are a number of small, commonsense reforms we could implement. We could cut reimbursement for diagnostic studies and all procedures by 20%. We could require all Medicare and Medicaid recipients to fill out an advanced directive (we aren't going to tell them what to put in their advanced directive, only require that they have one).

Medicare could announce that it will automatically deny any claims by a physician who exceeds the census-adjusted rate of billing for a given code by more than 200%, excepting things like health maintenance or counseling. So if you, as an EM physician, order five times as many cervical spine CTs as your peers, Medicare will deny them all and require you to justify them one by one.

Medicare and Medicaid could carefully chose a subset of the best-validated, evidence-supported practice guidelines, and automatically deny any claims not in accordance with those guidelines.

Another money-saving and quality-improving device would be to rigorously limit the amount of documentation by health care professionals to the absolute minimum that can be shown to substantially improve safety and continuity of care. Fines for overcoding and fraud should be increased by orders of magnitude, forcing organizations to police themselves.

It is almost too obvious to say Medicare should only cover treatments which are effective. That this is a matter of some controversy cannot help but raise the question of whether Americans are, as a nation, too stupid to survive. A NICE-style board, calculating cost per DAYL, is the best way to calculate effectiveness. I would go a step further, and have too sets of calculations; one for people over the age of 60 with two or more chronic health problems; one for everyone else. Because we need to stop pissing away hundreds of thousands of dollars a case to no purpose but to torture some poor benighted soul for three or four weeks in the ICU. If you want that (and no one but no one who has seen it at the bedside and knows what it is wants it) you can pay for it yourself.

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