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Could Congress Actually Do Something Right on Health Care?


Yesterday we reported on the strange, perverse way a little-known AMA committee has been artificially inflating the payment doctors receive for common procedures. Today the Washington Post has some good news: a bipartisan group is working to fix the problem, and yesterday House subcommittee approved a draft of a bill that aims to do it. More:

The legislation, which is partly based on proposals from Congress’ Medicare watchdog, would require Medicare officials to collect data such as how much time doctors spend doing procedures. It would reduce the doctor payment for overvalued services.

It’s too early to tell if this bill will become law—or if Medicare would do a better job than the AMA at setting prices. But this is exactly the kind of piecemeal, yet potentially significant, health care experimentation we would like to see more of. There’s an obvious problem with doctor pay, and an obvious cause for the problem. As yesterday’s Post piece put it: “‘The concept of having the AMA run the process of fixing prices for Medicare was crazy from the beginning,’ [former Medicare chief Tom] Scully said. ‘It was a fundamental mistake.'” This is some very ripe low-hanging fruit that could save the health care system a lot of money if reformed wisely. It’s something both sides can agree on and profit from. In short, it’s an ideal example of an reform opportunity.

But it’s not the only such example. As we’ve noted before, there are many mundane but vital places we could start shaving costs off the system almost immediately. Some of these opportunities have been overlooked because they won’t make headline news, but they would still make life a little bit better for all of us. We hope we see many more bills like this one make their way through Congress.

[Glove image courtesy of Shutterstock]

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  • Anthony

    Well and good as Via Meadia has lamented for few years now. Stiil, interests are interests: “Many health care providers have set up in America. From a pure business perspective, those businesses are almost all economic successes – winners not economic losers – Expecting our current massive, very well-financed, high revenue, high-margin, high-growth, high-cost health care infrastructure to voluntarily and spontaneously improve either care outcomes or care quality is unfortunately naive…. Health care in America is a robust and growing nonsystem of immense size, scope, and scale. It is very well fed.”

  • wigwag

    Professor Mead outlines a great idea. Sometimes the best ideas are small and unheralded but can have enormous impact.

    Here are some other ideas:

    1) Let foreign physicians emigrate to the United States and make it far easier for them to be licensed. Does it make any sense that a graduate of the University of Puerto Rico School of Medicine can freely practice anywhere in the United States while a graduate of the University of Toronto has to jump through so many hoops to get licensed that it just isn’t worth it?

    2) Require that all accredited United States medical schools that receive funding from the federal government (which is 100 percent of U.S. medical schools) increase the number of students that they matriculate by ten percent each year for each of the next ten years while at the same time freezing tuition for a decade. Trust me, with all the bureaucratic blight and unreasonably high salaries at medical schools, this would be easy to accomplish.

    3) Reform graduate medical education. When new doctors graduate from medical school they know less about medicine than your average volunteer ambulance driver. Where these new doctors really learn their trade is during their residency periods which are conducted at academic medical centers around the country; the period of residency depends on the doctor’s chosen field of specialization.

    The Department of Health and Human Services, primarily through Medicare, funds the vast majority of residency training in the US. This tax-based financing covers resident salaries and benefits through payments called Direct Medical Education or DME payments. Medicare also uses taxes for Indirect Medical Education or IME payments, a subsidy paid to teaching hospitals that is tied to admissions of Medicare patients in exchange for training resident physicians.

    Here’s a better idea; given that residents provide cheap labor to teaching hospitals, let the academic medical centers cover the cost of resident’s salaries. Even better, let the new doctors pay for their own residency training. Yes, few new doctors could afford to pay for an additional year or two of residency training after deeply indebting themselves due to medical school tuition, but that’s only because medical student tuition is higher by a factor of ten than it should be. Reduce medical school tuition tremendously and then let new physicians pay for their own residency training.

    4) Find ways to reduce the cost of clinical research. Clinical research at academic medical centers is the backbone of discovery for wonderful new medicines and other health advances. Clinical research is funded by the Government through NIH but most pharmaceutical company research also takes place in academic venues. The costs of conducting clinical research have skyrocketed and as a result the cost of bringing new advances to patients has skyrocketed. While some of these costs are unavoidable, many of them are little more than bureaucratic gobbledygook. There’s no reason that it should take five times more administrators to facilitate clinical research than it took a quarter century ago. Many academic medical centers where this research takes place employ as many lawyers as they employ doctors. The U.S. Government doesn’t actually encourage all this waste but it facilitates it by its willingness to underwrite much of the overhead. Congressional Democrats in particular are in bed with University Presidents and Medical School Deans making reform difficult. Republicans are not blameless either.
    5) Do what Professor Mead says and empower nurse practitioners. It’s not a panacea, but neither is anything else. Empowering nurse practitioners could only help.

    • f1b0nacc1

      Outstanding…I have a few ideas of my own (and might quibble with one or two of yours), but I am impressed with the balanced, comprehensive nature of your proposals.
      Of course you realize that none of this will every happen (sigh)…

      • wigwag

        Unfortunately for any of it to happen we will have to wait for Hades to freeze over.

        • f1b0nacc1

          Yes, and then my ice skating rink options will become valuable too!

  • MarkE

    The Marxian pricing formula for physician fees has wandered away from any market based reality of pricing for a decade or more. Removing the AMA input and replacing it with a pure apparatchik determination of price could have some unpleasant unintended consequences.
    It would be far better and safer to allow market based price determination through negotiation between patients and doctors for the segment of population that can afford it. This price or some fraction of it could then be applied to the discount and managed care sectors in proportions allocated by the market prices.

  • circleglider

    It’s too early to tell if this bill will become law—or if Medicare would do a better job than the AMA at setting prices.

    Yeah… god forbid that something or someone other than a government agency or a private cartel in cahoots with the government “set prices.”The academy will never learn that central planning never works.

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