Health for life

According to the Kaiser Foundation, health care costs are continuing to go up. Assuming Uncle Sam is doing everything he can to "increase efficiency" and "reduce waste," what are the options that can quickly control costs?

Its simple: leverage the insurance companies or the providers or both.

1. Tell the insurance companies what they can charge: While the ability of the Feds to regulate insurance remains murky, the Affordable Care Act enables CMS to require that insurance companies "justify" a premium increase of 10% and keep their administrative costs below 15%.

What is less appreciated is that the Medicare premium support plan being championed by Republican Paul Ryan is a variation of this same strategy. Thanks to a voucher that is indexed to the rate of inflation, insurance companies would be essentially told what they can charge for the bulk of their insurance. If the health insurers need to charge more, theyll have to wrestle that out of the beneficiary.

2. Tell the providers what they can charge: For an excellent example of this at the state level, check out this article in JAMA that describes Massachusettss just-passed law that aims to control the Bay States $9278 per capita health spending. Large providers (with more than 15,000 patients or $25 million in revenue) are now subject to cost controls that are tied to the states inflation rate.  Enforcement mechanisms will include "performance plan" reviews for violators, public reporting and the threat of civil penalties.

Of course, Medicares fee schedule functionally dictates what providers can charge for their services at the federal level, but up until now, Congress has been unwilling to leverage that. While a softer and gentler approach of "upside risk arrangements" and "global fees" are being developed, the paranoid DMCB suspects that theyll be ultimately calculated to cover a predetermined charge that is supplemented with a small profit margin.

While Democrats and Republicans have been supportive of a limited number of options ultimately lecting their ideology, the DMCB predicts that, over time and with a worsening fisc, both parties will converge on using all of the options described above.  Thats because theyll have no choice.

Heluva way to achieve bipartisanship, but there you go.

In previous posts, the Disease Management Care Blog has repeatedly questioned the wisdom of a one-size-fits-all, top-down, blunt force and Ver 1.0 approach to measuring health care quality.  Thats why its glad to see that the New England Journal of Medicine agrees with the DMCB in this Perspective by Nancy Morden and colleagues on the topic of Accountable Prescribing.

The authors point out that while blood pressure should be less than 140/90, LDL cholesterol less than 100 in persons with a history of heart attack and A1c should be less than 7% in persons with diabetes, its clear that the cure can be more costly than the disease.

For many individuals with mild elevations in blood pressure, diet and exercise can be enough and, if that doesnt work, cheap water pills often work great.  Among persons with elevated cholesterol levels, inexpensive statin prescriptions can save lives. Metformin for diabetes has been around for decades and it a first line agent no matter what the A1c is.

As a result, they call for measuring and rewarding quality based on accountable prescribing that not only measures the numbers (blood pressure, blood cholesterol or diabetes control), but the percent of individuals receiving conservative or first line treatments.  While this approach would require an even more detailed databases/registries, its within reach of most commercial insurers and advanced electronic record systems.  We owe it to our patients to provide a tailored, bottom-up, nuanced and Ver. 2. approach to measuring health care quality.

Its also a concept that the population health and care management service providers could, with the right kind of clinical partners, lead.  This calls for a pilot program and, in the DMCBs humble opinion, the sooner, the better.

For a better idea of how this might work, check out this table.

Image from Wikipedia