Reforming Medicare and Health Care Costs

A friend wrote about the enormous cost of a recent hospital stay, and an anecdote about another friend whose elderly parent incurred over $1 million, billed to Medicare, in the last month of his life.

Here's my comment:

This is why our share of GDP for medical care in the USA is 18%, the highest in the developed world. A lot of it has to to do with the "boutique" nature of American medicine. Specialists choose their own treatments, follow their own preferred regimens, there are no economies of scale, no standardized competitive selection of products and proven effective, and cost-effective, medication. What I would propose to counter Ryan Romney Right Wing Extremist Slash it and Burn It, were I involved in policy for the Obamians would be something like this:

Medicare will transition to supporting major treatment only in not for profit institutions which agree to adhere to medical best practices, to be devised by regional conference boards made up of elected top specialists and medical technology experts, chosen by the doctors and nurses themselves. These conference boards will approve standard regimes for all the most commonly prescribed procedures and medicines, and set cost controls based on competitive bidding. (No more knee replacements that range from x to 5x in price when the technology was standardized a quarter century ago). Also, there needs to be a set up of continual consultation and oversight to make sure that every ICU patient (since this is where a lot of the money goes) is monitored for best outcome, adherence to patient health care directives, and efficient use of resources. (No more specialists coming in and ordering a raft of tests that have already been done).

There are times when medicine is terribly expensive because of undiagnosed problems, difficulty and unavoidable cost of rare treatments, etc., but MOST of the excess cost comes from inefficiencies and excessive use of costly services, devices, and medications when the need is dubious or non-existent.

With these reforms, which would effectively spread into the general population and private health insurance, and with Medicare's historically low administrative costs, it should be possible to get a real handle on escalating health care costs. Medical technology is expensive, and no one wants to return to the days when if you got really sick you died; in other words, we all WANT to spend a certain chunk of GDP for necessary medicine; what's needed is to control inefficiency and excess, of which almost all informed observers seem to agree there is a great deal. Especially excess cost, and in that respect the presence of a profit motive is an inherent conflict of interest and needs to simply be excised from publicly supported medical care.

It would be politically difficult because FOR PROFIT Big Med has a lot of pull in Washington, but many big hospital groups have reorganized as not for profit, and it can be done. With regional video monitoring and automatic best practices consultations, costs can be brought down, and here's the thing... when this has been done (notably in Boston), the outcomes improve.

I believe in "Health Care is a Right, not a Privilege," but I also believe that the public has a right to make sure its money is wisely and reasonably spent. 

The issue of unnecessary CYA testing and procedures, often cited by Rightists, can be addressed as well. I would impose some reasonable caps on damages, the way we've done it in California since the late 1970s, and also change the standard of care, from negligence equals anything that falls below what amounts to the ideal standard, which is the way it is now, to negligence can only be found when it can be shown that the care provided was below what a reasonably well trained health care provider would reasonably have been expected to have done in like circumstances. This would reduce malpractice awards and medical practices mainly designed to avoid liability as an engine of high health care costs.

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*See "Big Med" in the current issue of the New Yorker.