Thursday, November 3, 2011

Buckle your seatbelts, it's going to be a bumpy ride

Oh, boy...hang on to your hats!
It looks like it is going to be a bumpy ride for healthcare providers as the federal government wrestles with the deficit. President Obama recently released his recommendations for reductions over the next ten years and compared to MedPAC (the advisory board to Congress on Medicare issues) and the Congressional Budget Office, the President's proposal is the most moderate. But that said, he is still recommending a cut of $320 billion on top of the $155 billion that was already part of the Affordable Care Act. Ouch! This would mean massive reductions in staff and services in the nation's hospitals as a result.
There is no question that if you are going to make a meaningful reduction in the federal deficit you are probably going to have to look at Medicare and Medicaid since they make up such a big part of the deficit. At the same time, when the economy continues to be on the rocks, these cuts will most certainly mean big reductions in jobs in the healthcare sector. This is going to be a tough decision for lawmakers and given the unbelievable partisanship going on in Washington right now, I really don't think an agreement is likely.
Are there any other answers to reducing the costs in Medicare and Medicaid in this country? Sure. There were several huge disappointments in the Affordable Care Act including a total lack of personal responsibility for people to take care of themselves. There is a lot of money in the law for improving health, but little incentive for individuals to be accountable for their own health. Think about it - the law really starts shifting the financial responsibility for improved health to the providers. One of the centerpieces of the law is the Value Based Purchasing (VBP) which incents providers to improve care and reduce costs for Medicare beneficiaries by holding back some of the payment at the front end and letting hospitals compete on improved quality and patient satisfaction scores. The quality measures are moving toward looking at outcomes for Medicare patients and will reward those providers with the best outcomes.
I fully support the government buying healthcare based on value. We actually expect that Iowa providers will do very well with this provision of the law given our high quality scores and lower expenses compared to other parts of the country. However, why not also incent the beneficiaries to be partners in their health? The physician can provide all the right advice to his or her diabetic or hypertensive patients, but if they won't improve their diet or take their medication, the provider gets punished by the system and ultimately there will be no cost savings.
I just got back from Mississippi where the obesity rate is the highest in the country. No offense, but folks there appear to really like their fried food. While I was there, I heard a local doctor on a panel of presenters. He did some of his training in Colorado where they have the lowest obesity rates. He said many Colorado residents like to hike in the mountains and eat granola. It is a concern if Mississippi doctors are going to be evaluated then punished for how well their patients control their diabetes compared to his medical counterparts in Colorado. Shouldn't the patient take some responsibility to be compliant and accountable for their health and the recommendations their doctor makes?
I realize it is going to be extremely difficult for a politician to stand up in front of voters and say, "I am going to work on legislation that will likely have an impact on the lifestyle choices people are making."
The largest and fastest growing part of the federal budget is related to Medicare and Medicaid. I believe it is time for us all to realize that if through taxes we are going to pay for the care of seniors and the poor, we will never afford it if beneficiaries are not required to take some responsibility for living a healthy lifestyle.
In the meantime, if the federal budget is going to be balanced by slashing reimbursements to hospitals and physicians for providing Medicare and Medicaid to a growing population and one that seems to be less healthy, I do believe we are indeed headed for a very bumpy ride.


Jane Sherwin said...

Todd, do you suppose the ACO concept is leaving patient motivation to insurance plans (other than Medicare) and employers? Certainly there is a lot more of this coming into play--Value Based Insurance, for example, and rewards for quitting smoking in the form of lower premiums.


Todd C. Linden said...

Absolutely, Jane. Thanks for sharing your thoughts.