Monday, May 11, 2009

To boldly go where no one has gone before?

Maybe it's because I saw the new Star Trek prequel this week (great movie, by the way, at least in the view of this lifelong Trek fan), but today's announcement that major stakeholders have agreed to reduce health care expenses by two trillion dollars reminds me of the alternative universe scenarios popularized by the series. Just alter the time-space continuum, and you can change the past, present and future to meet a screenwriter's preferred ending, even if it conflicts with everything that had gone before. In this alternative timeline, many of the groups that opposed past efforts to rein in health care costs have joined together to promise major cost reductions.

The co-signers of the agreement, conveyed in a letter to and a meeting with President Obama, are the American Medical Association, America's Health Insurance Plans, Service Employees International Union, Pharmaceutical Research and Manufacturing Association, Advanced Medical Technology Association, and the American Hospital Association. The groups pledged "to do our part to achieve your Administration's goal of decreasing by 1.5 percentage points the annual health care spending growth rate - saving $2 trillion or more. This represents more than a 20% reduction in the projected rate of growth." The letter is short on details ("we are developing consensus proposals") but focuses on four areas: administrative simplification, standardization and transparency; reducing over-use and under-use of health care by aligning quality and efficiency incentives among providers and across the continuum of care; encouraging coordination of care, adherence to evidence-based best practices, and proven clinical prevention strategies; and improvements in care delivery models, health information technology, workforce deployment and development, and regulatory reforms.

President Obama, called the agreement "remarkable" noting that, "some of these groups were among the strongest critics of past plans for comprehensive reform. But what's brought us all together today is a recognition that we can't continue down the same dangerous road we've been traveling for so many years; that costs are out of control; and that reform is not a luxury that can be postponed, but a necessity that cannot wait."

It truly will be remarkable if this agreement leads to concrete steps to lower health care costs and l certainly hope that it does. To do so, though, will require that each of the stakeholders do things that go well beyond anything that they've done so far. For instance:

Will the medical profession go beyond pilot-testing of new payment models to embrace reforms to hold physicians accountable for achieving better outcomes and lower costs, improve payments for primary care, and correct the mis-valuation of services, even if this comes at the expense of some physicians who are doing pretty darn well under the status quo?

Will the drug and medical device manufacturers be willing to negotiate with the government on the prices of their products? Will they be willing to allow comparative effectiveness research to be used to make coverage decisions or accept other limits on coverage of new drugs and devices?

Will the health insurance industry agree to reductions in overpayments to Medicare Advantage plans, to transparency in their own industry practices, and to reductions in the administrative tasks they impose on physicians?

Will unions agree to reforming the medical liability system to lower the costs of defensive medicine or subjecting their own rich health insurance benefit packages to income taxes in order to pay for coverage for others with no insurance?

Will the hospitals agree to reforms to penalize those with high readmission rates, to regulatory controls on excess capacity, or to delivery system reforms to keep people out of the hospital?

I ask these questions not because I am a cynic, but because I know that controlling costs will involve sacrifice from all of us. Emphasizing things like prevention is nice, but even if we all live longer and prosper as a result, health care is still going to be extraordinarily expensive. True and effective cost controls will involve all of us - physicians, hospitals, drug and device manufacturers, health insurers, and yes, John Q. Public, giving up something we like for the greater good.

Like all Star Trek fans, I believe in the power of rewriting the past to create a better future, but it remains to be seen if the co-signatories to today's agreement are really ready to take their members where none have gone before.

Today's question: Do you believe that this agreement will lead to concrete and shared sacrifices to control costs?


Robert J. Sobel, M.D. said...

The work of all of us appears to be the modern challenge of remaining on the precipice of skepticism without falling into the abyss of cynicism. If the president wants to exert his authority, Congress wants to act intelligently, and the clearly dys-regulated phenomena eliminated and bought out ASAP, I won't stand in the way.

The catch words are filled with meaning. Primary care is already pretty transparent. The pharmacopoiea needs the simpli- fication of a regulated, brand-only (Regulated Royalties) environment. Standardization is dangerous if it is not flexible. Efficiency is lost in bureaucratic tangles.

Hopefullly my prediction of the last decade will have been wrong: that the managed care fallacy would screw up the industry so severely that national health care would be forced upon us. The fear of this should bring some of these entities to the table. Physicians must fight to re-balance the playing field.

Steve Lucas said...

The short answer is no. This is all political theater designed to allow these companies, and organizations, to continue their business and political practices unabated.

The means to achieve substantial cost savings exist now, and if these organizations were truly interested in lowering cost, these steps would be in place.

Steve Lucas

Jay Larson MD said...

The operative word is sacrifice. I suspect that major stakeholders expect other stakeholders to sacrifice more than they do. I agree with Steve. The means to achieve lower healthcare costs are already available but have not been put in place.

henochmd said...

This is clearly a strategic attempt on the part of the insurance industry and pharma to modify and limit the passage of meaningful health reform (especially the proposed public health plan). We at the ACP should beware of these new found proponents of reform.