Policymakers Search For Ways To Anchor Ballooning Health Costs

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In 1993, when President Clinton attempted to overhaul the health care system, America's total health spending amounted to $912 billion and left 40 million uninsured, Bloomberg reports. President Obama faces a worsening situation: national health spending has more than doubled to $2.5 trillion, and the number of uninsured people has increased to around 50 million. Critics say the reforms Obama and congressional Democrats are pushing - which carry a $1 trillion price tag - would make the system cost even more. But, "[t]he experience of the 15 years since Bill Clinton failed to win passage of legislation suggests that the price of inaction may be even higher than the cost of Obama's plan" (Benjamin and Faler, 7/28).

News reports carried three ideas for slimming down the costs of care: cutting down on repeat hospital admissions, research that promotes higher value medical treatments and losing weight.

Cutting hospital readmissions: "When older patients get discharged from a hospital, 1 out of 5 of them will come right back within a month. Medicare pays $17 billion a year on these hospital readmissions. And in many cases, coming back should have been avoidable," National Public Radio reports. One way to cut back on the avoidable episodes is to deploy nurse practitioners to provide "transitional care," including visits to patients' homes to make sure problems with medications and new medical instructions are resolved (Shapiro, 7/28).

The Wall Street Journal reports such efforts are easier said than done. One hospital executive said few programs reimburse the types of care that reduce readmissions, so "[y]ou do it because it's the right thing to do. But doing the right thing is getting expensive." Another hospital succeeded in cutting its readmission rate by 4.4 percent between 2006 and 2008, but estimates that the improvement resulted in $225,000 in lost revenue (from admissions) and the new program that made it possible cost $500,000 in operating costs. The hospital expects a 17 percent readmission rate this year (Winslow and Goldstein, 7/28).

High value medicine: Separately, in a column, the Wall Street Journal's Melinda Beck says: "It's widely estimated that 30% of U.S. health-care spending - some $700 billion a year - is spent on tests, treatments and procedures that provide no value. But one man's waste may be another's life-saving treatment." To help resolve such "quandaries," policy makers are pushing for comparative-effectiveness research. "But who would determine what makes us healthier? What if the evidence isn't clear, or your doctor disagrees? What about a screening test with only a small chance of finding cancer? Or an expensive, last-ditch treatment that may add only a few months to your life? Setting up rigid rules could risk overlooking the idiosyncracies of each patient" (Beck, 7/28).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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