NOT THE WAY TO CONTROL COSTS

In my post of 12/21/2018 (Why Is American Healthcare Se Expensive -- Part Two), I cited my heroes Woolhandler and Himmelstein, who said, "Medicare's (and other payers') Pay for Performance initiatives impose substantial costs on providers, with no evidence that they've improved patients' outcomes in any setting." [Emphasis added.]

This would seem to conflict with the assertions of those touting what they claim is the success of Medicare’s Hospital Readmissions Reduction Program (HRRP) in lowering risk-adjusted readmission rates for targeted conditions at general acute care hospitals.

But now (in January, 2019) comes a Paper in Health Affairs titled Decreases In Readmissions Credited To Medicare’s Program To Reduce Hospital Readmissions Have Been Overstated. The  Paper's abstract presents a statistical analysis far beyond my sphere of competence. But Don McCanne of the PNHP (Physicians for a National Health Program) comments:  "This study shows that, at a minimum, the benefits of penalizing hospitals for readmitting patients have been tremendously overstated."  Moreover, he points out the additional concern that

patients are often held on observation status rather than being readmitted, sometimes to avoid the readmission penalties. This can significantly increase out-of-pocket costs for the patient since they are billed as outpatients (Part B), with greater cost-sharing, rather than as inpatients (Part A). More importantly, there is also the risk that the patient may receive less care as an outpatient when the patient's condition warrants full inpatient services. Thus the readmission reduction program may be causing significant patient harm, both physically and fiscally.

In conclusion, he states :

The government bureaucrats and the policy community are fixated on these various programs that they just thought up out of the blue that supposedly would control spending, even though their track record overall is dismal. Yet they keep avoiding a proven solution that would reduce our uniquely outrageous administrative waste that costs hundreds of billions of dollars. That solution is a single payer national health program, an improved Medicare that would cover everyone. We should at least enact that and then we could examine other innovations as long as they are designed to truly benefit patients.

Of course he is right:  Single-Payer would save administrative costs more reliably than any of  our government's fiscal schemes, which have proved so far to be, in  McCanne's words, "a dismal failure."  But whether Single-Payer in New York State (NYHA) would control non- administrative costs -- such as hospitals gaming the system in order to make profits, and whether payments to hospitals would reflect current market realities (e.g. regional differences in payscales, etc.) and different standards of excellence (e.g. Memorial Sloan Kettering vs a provincial outfit like Poughkeepsie's Vassar Hospital) has not yet, to my knowledge, been figured out.

The last time I checked, the House of Representatives proposal for Single-Payer adopted Woolhandler and Himmelstein's suggestion that medical facilities such as hospitals should NOT be privately owned and should be compensated NOT by procedure, but should be publicly owned and compensated globally for operating expenses, with capital expenses (MRI machines, etc) awarded by government grants, not by any profits or surpluses, which they would not be supposed to make.  Sanders' Senate Bill keeps the current setup, where hospitals are expected to make profits and are tacitly encouraged to game the system in order to do so. But the House proposal, as I understand it, is currently being rewritten, with results yet to be announced. And how the NYHA would treat these matters is yet to be determined.

With all these uncertainties, why go to single-payer, or for that matter any new system?  The answer is simple: Our current system is fiscally unsustainable and morally bankrupt. Single-Payer seems the best avenue forward. Inaction is not an option. Hence this blog.

Dio

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