Core Health Care Issues: Controlling Costs (Part 1)

TW: This is the big Kahuna. The following are two of the key possibilities to control future health care costs:

1) Ration care by excluding un- and under- insureds. This is only partly successful as many of these folks obtain emergency care regardless (i.e. when they get in a serious accident hospitals generally do not turn them away). But they generally will not have access to preventive care or much chronic care (i.e. diabetes, high blood pressure, cancer treatments, schizophrenia etc.) unless they get pushed into Medicaid. This is essentially the status quo. The challenge is the status quo is not working well at all in controlling costs. In other words, I lied this is not a means by which to control costs, it is a means by which to run our country into the fiscal ditch.

2) Remove treatment decision-making from Congress. This is not well understood but much medical payment and treatment parameters are already government controlled through things like Medicare/Medicaid/Vet health programming etc. Congress sets payment and treatment regulations many of which are used as benchmarks by private insurers. Anytime Congress has control of setting parameters, those parameters become a source of power for individual Congressmen and subject to manipulation by lobbyists. Removing some or all of Congress' control of these parameters would be a huge step towards cost containment. Naturally Congress (either party) is not enamored with this idea. It is a perfect example of how good policy is de-railed by political structures.

From Ezra Klein at WaPo:
"As told to the Wall Street Journal's Laura Meckler:
The battle heated up in June, when Mr. Orszag visited Capitol Hill to discuss health care with a small group of House Democrats. The meeting started well, with one lawmaker after another echoing his message that spending controls were critical to any health-care overhaul, according to two administration officials.

Then one member said her top priority was winning higher payments for oxygen suppliers, the officials say. Mr. Orszag was taken aback. Officials had been trying for years to cut payments to suppliers of oxygen and other medical equipment, which critics say are inflated. Yet when a new competitive bidding process was set to take effect last year, industry supporters in Congress were able to delay the plan. They are still fighting to block changes.'

"One of the reasons we currently have such disjointed and skewed incentives is that we have an excessively political process," Mr. Orszag said in an interview.

Orszag's big idea right now is to depoliticize the process a bit by taking decisions about payment for oxygen out of the hands of individual members of Congress and putting them into the hands of an independent panel of experts modeled off of MedPAC. But note something important about it: It's not an idea meant to solve a particular policy problem. It's meant to solve a particular political problem.

The problem with Congress is that it's not well-suited to, well, anything, but it's particularly ill-suited to small, technical decisions. If Congressperson X has an oxygen manufacturer in his or her district and decides that helping that oxygen manufacturer is his or her top priority, no one else really has an incentive to push back. After all, other congresspeople will have their own pet projects and constituencies. And it's not like oxygen reimbursements are, on their own, a particularly big deal. But put 435 congresspeople all doing things like raising oxygen payments together, and it's a big deal indeed. "