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Ellen R. Shaffer

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Mr. President: Campaign on Health Care!

Posted: 07/01/2012 4:46 pm

Dear Mr. President:

You won on health care. Campaign on it.

You won historic legislation in 2010. Your advisers told you to change the subject and campaign on the economy. You lost the mid-term elections, big time.

You won a victory in the Supreme Court this week. The same advisers who counseled you then are at it again. I'm not sure what economic accomplishments they think you should run on. I know a few things about what you've done in health care.

The Affordable Care Act instituted system reforms in how we pay doctors, and how they practice medicine, that are reducing the actual cost of health care. This is tremendous news. It is not showing up yet in reduced insurance premiums. But your law makes it possible to do so.

Health care spending growth has slowed from double digits to 4 percent or lower. Further, hospital admissions are down, even among insured people.
Writing in Health Affairs in April Kenneth Kaufman states that "independent of the recession, other fundamental and structural changes are likely contributing to the flattening of the cost curve, and further, these changes have the potential to significantly alter the curve's path into the future."

Kaufman quotes Jeff Goldsmith, Ph.D., President of Health Futures, Inc., who "suggests that the makeup and organization of the nation's physicians is one source of the slowing cost growth." Physicians of the past 30 years typically practiced in solo or small group practices. Under the fee-for-service system, they were incentivized to work long hours, see as many patients as they possibly could, and buy into labs, ambulatory clinics, and specialty hospitals. As a result, they tended to be high users of inpatient and outpatient services. These more entrepreneurial physicians are now reaching retirement age and many tens of thousands are opting to exit the workforce. Replacing them are physicians of a new generation, which has different work and lifestyle expectations. For many younger physicians, owning a practice is not as important as having time to spend with the family and a steady, predictable income:

One effect is that physicians have sought employment by hospitals...and in larger group practices, many of which now employ hundreds of doctors. They are practicing medicine in ways that remove utilization and cost from the system. Protocols to reduce variation in care delivery, chronic disease management, case management, and other approaches are increasingly being adopted by physicians nationwide. Larger practices owned by hospitals and other entities will have the capital and human resources required to successfully reduce care costs through such approaches, slowing health-spending growth going forward.

Other efforts include "move from an activity-based business model that incentivizes utilization of services to a value-based model that incentivizes population health management across the continuum of care."

Why aren't we seeing lower insurance premiums, then?

First, the insurance industry isn't yet sufficiently regulated. The Exchanges will make regulation more likely. States can use the ACA now to regulate on their own. A progressive new Congress could create a competing public option, and allow states to create entirely public financing systems like Medicare. Secondly, the system reforms are not yet universal. In fact, some physicians are turning to "boutique" practices where they can take only wealthy patients who will continue to pay whatever high fees the docs require to maintain their incomes.

The good news politically is that the opposition program is terrible for the American people. It will clearly hurl us right back into the days of double-digit health care cost inflation, while cutting seniors and others out of access to care.

The Ryan/Romney proposals would turn Medicare and Medicaid into voucher systems. Every person would get a coupon worth a certain dollar amount, and go out and look for the best deal from doctors, hospitals, and drug companies. his means bringing the kind negotiations from the car dealership to the hospital every time we and our families get sick. For most rational Americans, not an appealing prospect. It is certainly the end of Medicare.

The opposition hounded Dr. Don Berwick out of his position as administrator of the Medicare program, precisely because of his expertise in the kind of system reforms that are now working.

Mr. President, you need to stand with the many patients already benefiting from the improved coverage and consumer protections provided by the ACA, and fight for a second term that will propel us forward towards universal, affordable health care.

 

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