Wednesday, October 11, 2017 1:00 am
A gamble on health care costs
Bloomberg View editorial
Lost in the debate over how best to insure Americans against the high cost of health care has been the question of how to bring that cost down.
That's a shame, because keeping the cost of medical treatment from rising so fast is just as important as providing access to it.
Promising efforts to get a grip on medical costs have lately run into resistance from the Trump administration. The federal agency in charge of Medicare is moving to curtail new requirements that hospitals “bundle” medical charges for hip and knee replacements, rather than assess separate fees for each appointment. Efforts to arrange similar lump-sum payments for other procedures are to be stopped altogether.
These changes are misguided on two counts: So-called bundled payments increase the quality of medical care even as they save money. In one San Antonio hospital network, bundling saved Medicare more than $5,500 per joint replacement – a 21 percent decline – while fewer patients required prolonged hospital stays.
Administration officials say these Obama-era bundled payment programs unfairly limit choices for patients and doctors. But the only choices taken off the table are unnecessary ones. And since the government is paying, it has a responsibility to see that its money is spent wisely.
Administration officials also argue that bundling should not be mandatory. But if it's voluntary, what's to prevent health-care providers from using the more lucrative fee-for-service model? Even Seema Verma, head of the Centers for Medicare and Medicaid Services, has condemned that model, calling instead for “a system that holds providers accountable for outcomes.”
Verma says doctors and hospitals should be able to shape this system as they see fit. Perhaps some local hospitals or networks could be allowed to experiment -- much as Vermont and other states have instituted other kinds of pay-for-performance measures. But CMS will still need to monitor progress and make sure medical costs come down.
U.S. spending on health care in 2015 reached $3.2 trillion, or almost $10,000 per person – the highest in the world. And that extravagant spending, as Americans are often reminded, doesn't buy better health or longer lives. It does, however, make it increasingly hard for Americans of all ages to afford their health care bills.
One of the best ways to both improve Americans' care and reduce its cost is to change the way it is paid for. It will be a long and painstaking process, and there are different ways to make it work. What the Trump administration needs to do is make sure the progress continues.