The lesson from Massachusetts is that genuine cost control is avoided because it’s so politically difficult. It means curbing the incomes of doctors, hospitals and other providers. They object. To encourage “accountable care organizations” would limit consumer choice of doctors and hospitals. That’s unpopular. Spending restrictions, whether imposed by regulation or “global payments,” raise the specter of essential care denied. Also unpopular.
In other words, health care spending may be swallowing up the budget, but so long as doctors and hospitals oppose moving towards an outcome-based reimbursement system, policy makers will twiddle their thumbs or pass legislation to shield the medical community from the tough cuts.
Samuelson is wrong on several fronts. First, as Cohn points out, unlike the Massachusetts bill, the national law includes important cost containment provisions like “an independent board to calibrate and ratchet down Medicare spending. It imposes a tax on high-end benefits, to push down private insurance rates. And then it introduces a host of smaller delivery reforms–everything from penalizing hospitals with high infection rates to encouraging the formation of more efficient group medical practices–that should make it possible to lower spending without lowering quality.” “The Congressional Budget Office, which takes a skeptical view of these changes, still estimates that health reform will reduce the rate of growth in health care spending–which, as Samuelson knows, is the key to controlling costs long-term.”
Second, many hospitals and doctors may lobby against these changes, but in an era of ever growing health costs and deficits it’s not certain that they’ll succeed. For instance, the AMA has been trying to pass a permanent fix to the SGR for years, but has found itself rebuffed by lawmakers who have yet to find a way to pay for the overhaul. This same economic reality has contributed to the diminished clout of the AMA and has encouraged other providers to adopt the kind of outcome based reimbursement systems that Samuelson believes are so politically unfeasible.
Geisinger Health System, a physician driven system that has led the nation in delivery and payment reform, estimates that its advanced medical home model for the care of chronically ill Medicare patient has “bent the cost curve and lowered projected spending by up to 7 percent” and it has successfully adopted many of the new law’s delivery reforms without sacrificing profit. “We don’t know if the Geisinger experience is scalable or generalizable through U.S. health care, but we do think that the way our country pays for and delivers health care nationally will need to move to something that looks a little bit more like Geisinger in a relatively short period of time,” Geisinger’s CEO told Health Affairs. Indeed, other systems across the country are now adopting similar measures.
So Samuelson is undoubtedly right about the political challenges to controlling health care spending but he’s underestimating the extent to which economic necessity shapes reality for politicians and providers.