Thursday, September 24, 2009

Health care reform shorts:
Why prevention doesn't pay

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Yesterday I caught on radio snatches of an interview with Phillip Longman, author of Best Care Anywhere: Why VA Health Care is Better Than Yours. Fortunately he said something very similar in a Washington Monthly article back in 2005, so I can share the thought that grabbed my attention here.

Suppose a private managed-care plan follows the VHA [Veterans Health Administration] example and invests in a computer program to identify diabetics and keep track of whether they are getting appropriate follow-up care. The costs are all upfront, but the benefits may take 20 years to materialize. And by then, unlike in the VHA system, the patient will likely have moved on to some new health-care plan. As the chief financial officer of one health plan told [an investigator]: "Why should I spend our money to save money for our competitors?"

Or suppose an HMO decides to invest in improving the quality of its diabetic care anyway. Then not only will it risk seeing the return on that investment go to a competitor, but it will also face another danger as well. What happens if word gets out that this HMO is the best place to go if you have diabetes? Then more and more costly diabetic patients will enroll there, requiring more premium increases, while its competitors enjoy a comparatively large supply of low-cost, healthier patients. ...

For health-care providers outside the VHA system, improving quality rarely makes financial sense.

Helping people live healthy lives -- as opposed to doing things for/to them -- doesn't add up to profits for doctors (who aren't paid for the time it takes), for hospitals (gotta keep beds full to pay for the new wing), or for insurers (who make their money out of extorting cash from healthy people and getting rid of sick ones). The odds are good that any money providers spend on preventive health care services today will only hurt their own immediate bottom line. Some other medical entity will have to bear the costs of the absence of prevention years in the future.

Given these realities, it is hard to see how any health care reform, except one where the government competes directly with insurers on cost through a large not-for-profit public option, can provide a vigorous incentive to medical entities to deliver quality preventive care.

On an elderblogger call with some of Senator Harry Reid's policy people recently, we were told repeatedly that one of the proposed changes in the reform package was to make preventive procedures free for Medicare recipients. They are apparently betting that more routine physicals and screening tests will make delivery of care cheaper in the long run. But we weren't told how they intend to pay unwilling providers for this. However Medicare is one big system like the VHA in the sense that its beneficiaries will be in it for the rest of their lives. So costs today in order to create savings tomorrow do make sense within Medicare. Let's hope these measures survive the sausage making on Capital Hill.

You can find the White House's description of Medicare reforms here.
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I guess I should explain again why I am calling my posts like this one "health care reform shorts." When this became THE issue of the day, I promised myself I wouldn't try to master the myriad ins and outs of health policy. I know that is the work of years. But I'm a political blogger -- I can't very well ignore the issues.

And health care reform turns out to be a topic much like getting good medical care itself: it will proceed better if the patients (the public) learn as much about our ills and options as we can.

So I am writing occasional "shorts" despite knowing how little I know in this very technical discussion.

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