I was watching television the other day and I saw an ad for electric scooters. The thrust of the ad was that if you were enrolled in Medicare and needed assisted mobility, this company would get Medicare to pay for your scooter — no cost to you! It would be nice if every senior had a power scooter to zip around house and town, but is an electric power scooter essential health care?
Medicare has been a big success with most people, even though it is a government-sponsored program. It would be tough to get most seniors to give up their Medicare benefits because it is big government intruding in their lives. In fact, Medicare is so popular that it will soon run out of money. Medicare spends more than it takes in. We need to realize that services and costs cannot be unlimited. Staying within budget is imperative. But accepting limits is not a characteristic of our society. Let me assure you that accepting limits need not detract from the quality of care. Our focus should be on optimizing the quality of care while staying within the limits of available funds. Maybe some services are unnecessary costs. Does everyone need an electric scooter? Are there cheaper alternatives?
We could take a tip from the British. The British National Health Service, or NHS, has an agency that focuses on health care cost and quality. It is called the National Institute for Health and Clinical Excellence, or NICE. NICE studies medical therapies and determines if they are worthwhile. NICE then suggests the most cost-effective care based on hard evidence. Some treatments actually make the patient worse. The NHS then decides if these recommendations should be included in their benefits. The idea is to find which devices, drugs, and therapies provide the best care for the lowest cost. If two drugs have similar benefits, the cheaper drug is offered. Exceptions can be made if unique evidence can be provided. The British public is happy with this system.
The United States has a similar government agency, the Agency for Health Care Research and Quality, or AHRQ. It already does a good job in making objective recommendations. Perhaps AHRQ should have more authority in deciding what services and products are best, and which should be abandoned. A little money invested in AHRQ may save a lot, and provide a higher level of care.
A second idea is to shift away from our fee-for-service provider payment system. Most health care economists have agreed that paying a doctor a fee for each and every service just encourages the doctor to provide more services. More, in this case, is not necessarily better. Monthly or annual payment to doctors and hospitals for all provided care proves to be more cost-effective. There are medical providers who accept comprehensive global payment for services because they have learned how to provide good care within budget. Kaiser and the Scripps Clinic come to mind, but there are many other doctor-hospital organizations that may be even better. Where these organizations exist, Medicare could directly contract with them for fixed monthly costs to cover all needed care. Quality care can be assured with regular audits by Medicare. Consumer groups can add their voice as watchdogs of government performance. If your region does not have such an experienced provider, perhaps one can be created. Doctors and hospitals will welcome Medicare’s business if they can make a decent profit.
These are just two ideas that can be employed to contain costs without sacrificing quality. There are others (such as competitive bidding for pharmaceuticals), but let me just summarize by saying that better management is possible and profitable. After we have pared away unnecessary costs we can then decide if we need to raise or lower our insurance premiums. We always have the opportunity to vote for richer benefits through higher taxes. I do not think that we have the right to spend more than we pay for.
Brad Burnett, M.D., MBA, is a retired health care executive who lives in Rancho Santa Fe.