Saturday, August 15, 2009

How is Health Care Reform Going to Control Costs ?

Obama has made controlling long-term costs, not universal health care, the central focus in promoting his rather murky reform proposal.(3)

Yet in order to control costs, either benefits, or profits and salaries must be cut.

Despite a pledge of two trillion dollars in savings from the health care industry, the New York Times commented:
"If history is a guide, their commitments may not produce the promised savings. Their proposals are vague — promising, for example, to reduce both 'overuse and underuse of health care'. None of the proposals are enforceable, and none of the savings are guaranteed".(5)

Even if health care industry commitments are fully kept, it means only 1.5 % in health care costs savings per year. (6)

And the 'public option', which would over time undermine private profit and the excessive salaries in the private health care system, is now 'off the table'. (8)

To remain revenue neutral as Obama has promised, it therefore means that either revenues must be increased (taxes), or that benefits must be cut (expenses). And a significant share of health care expense comes during the last month of a person's life.(2,7)

There have been many studies of ways to reduce this cost, and they talk about death in a lobotomized way that is disturbing.

For example:
"Cost-effectiveness analysis considers both the effectiveness of a health care intervention-its ability to do more good than harm when used in the usual circumstances-and the resources required to deliver the intervention. Cost-effectiveness usually is described in terms of the cost of an intervention per unit outcome, such as a year of life gained. A quality-adjusted life year (QALY) is the weighted average of the health-related quality of life during a year of increased survival where optimal health has a value of 1 and death has a value of 0. Measures such as a QALY mean little by themselves and are most useful when the cost-effectiveness of one intervention is compared with that of another. Of course, neither or both interventions may be worth the cost, depending on one's point of view."(7)

The 'end of life' discussions so much in the news are not a small part of the health reform bill, but a key element, because they have been shown to reduce costs.
The study in the March 9 issue of Archives of Internal Medicine suggests a tangible benefit to advance care planning discussions with physicians -- lower costs and reduced utilization of aggressive care, including admission to the Intensive Care Unit.(2)

As John Curran, of Time magazine, writes:
For real cost containment to occur there will likely need to be difficult choices made in areas such as end-of-life care, which currently consumes an outsize share of Medicare's budget. It's not politically palatable, but as companies are discovering, healthcare-cost containment is not a job that wins friends.(4)

Unless profit is taken out of health care, the principle way to control costs for business and government will be by reducing care, and increasing the financial burden on workers - for instance, mandating insurance from for-profit companies.


1The Health Insurers Have Already Won
2Discussions About End-of-Life Care Reduce Healthcare Costs in Last Week of Life
3Bend It Like Obama
4Obama Meets Business Leaders on Healthcare Costs
5Obama Push to Cut Health Costs Faces Tough Odds
6Insurers Offer 2 Trillion in Savings
7Can Health Care Costs Be Reduced by Limiting Intensive Care at the End of Life?
8What Happened to a Public Health Plan?

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