The most recent version of the Annals of Internal Medicine contains a rather gloomy forecast for President Obama’s proposed cost-containment measures. The administration has promised that investments in health information technology, comparative effectiveness research, preventive care, and payment reform could lower health care costs, but authors of this piece — Theodore Marmor, Jonathan Oberlander, and Joseph White — aren’t buying the hype:

However, none of these measures is likely to substantially reduce health care spending in the short run, even if they are worthwhile long-term investments that improve quality of care and health outcomes. The Congressional Budget Office (CBO) has issued a report disputing claims of sizable savings from moving to electronic medical records; other CBO studies cast doubt on the capacity of disease management programs to reduce costs.

While correct on the merits, Marmor, Oberlander, and White may be too pessimistic. The above mentioned measures may not score well with the Congressional Budget Office, but independent efforts to lower health care spending have incorporated some of Obama’s proposals:

- Kaiser Permanente And Health IT: Today, all of its medical clinics and two-thirds of its hospitals operate in a paperless environment and the rest are scheduled to be completely digitized by next year. “Within the first 18 months of installing electronic medical records, the rate of patient visits to doctors’ offices and clinics and the emergency department falls by about 7%.” Unnecessary office visits were reduced or replaced with telephone visits.

- Geisinger Health Systems And Payment Reform: Geisinger has devised a 90-day warranty on elective heart surgery, promising to get it right the first time, for a flat fee. If complications arise or the patient returns to the hospital, Geisinger bears the additional cost. The venture has paid off. “Heart patients have fared measurably better, and the health system has cut its bypass surgery costs by 15 percent.”

- Transitional Care And Care Coordination: Mary Naylor, RN, PhD, has developed approaches to transitional care that can reduces the need for readmission to hospitals. This model has resulted in significant reductions in readmission rates and savings for patients.

These cost containment measures are in line with Obama’s proposals and could result in savings not captured by standard actuary measures. In fact, government investment in health IT, comparative effectiveness research, preventive care and care coordination should unleash even greater innovation in the private sector and better cost containment models.

As the authors point out, containing costs, will inevitably lower the profits of “doctors, nurses, and hospitals to pharmaceutical companies, insurers, lawyers, and sales and marketing staff.” But a health care system that spends one-third ($700 billion) of its dollars on treatments that don’t work and still leaves 16 percent of the population without health insurance, is simply unsustainable. Thus, the Obama administration will likely adopt a broad spectrum of cost containment measures, greatly regulate the insurance industry, and allow an efficient public health plan to compete alongside private insurers.

After all, government is not in the business of sustaining inefficient practices. Rather, it has a responsibility to funnel its resources towards efforts that incentivize quality and efficiency in the health care system. Recently, Medicare decided to stop reimbursing providers for “never events” -– serious and costly errors in the provision of health care services that should never happen like surgery on the wrong body part or mismatched blood transfusion — and is considering ending payments for Medicare coverage of virtual colonoscopies (because it hasn’t found enough evidence that these tests, which use X-ray images and computer software to create images of the colon, improve outcomes for Medicare beneficiaries).

To the extent that Medicare can shape the market towards quality and efficiency (private insurers have also sopped reimbursing for never-events), it can play an important role in lowering the nation’s health care costs.

Former Rep. Dick Gephardt (D-MO) is urging the White House to defer the goal of expanding access to health insurance “until it enacts cost-saving reforms in health care delivery“:

“I feel so much now like déjà vu all over again,” said Mr. Gephardt, who now lobbies for corporate America on issues including health care. Universal coverage “is absolutely imperative, and it needs to be dealt with. But the way to get to it is to show that we can deal with some of these problems first”…According to Mr. Gephardt, incremental additions of coverage for children or low-income workers may be the most Congress can muster to complement cost containment.

The administration and most progressives typically argue the contrary: one can’t control health care costs without extending health insurance coverage to the 47 million Americans without insurance. That is, to eliminate the $1,100 an average family is now paying for uncompensated care for those without health insurance, provide families with financial security, and to address the skyrocketing costs of chronic disease management, reform must ensure that all Americans have access to continuous health care.

In fact, during the 2004 presidential campaign, Gephardt spoke of the need to expand access to coverage in such dire and emotional terms, that one would expect the former majority leader to embrace Obama’s commitment comprehensive health reform. During the campaign, for instance, Gephardt promised that if he were elected president, he would “immediately” ensure that “everyone who works will have health coverage.”

Gephardt argued that “access to quality health care is the moral issue of our time” and portrayed himself — in a rather dramatic fight with Gov. Howard Dean (D-VT) — as the only candidate who could address the health care crisis:

- “Howard Dean and the other candidates may think leaving tens of millions of Americans uninsured is acceptable….I think they’re wrong.” [NYT, 01/03/2004]

- Gephardt promised that if he reached the Oval Office he would immediately seek to repeal recent tax cuts. The money would be used to give tax credits to businesses, which would be required to provide health insurance to employees. Pension systems also should be simplified, he said, because too many Americans reach retirement without their finances secure. “Everyone who works will have health care,” Gephardt said. [Chicago Tribune, 02/20/2003]

- “It is immoral to have people without health insurance,” he said, speaking to about 70 people on the lawn of a Manchester home. “This issue is in my heart. It’s in my head. It’s in my soul. I will not rest until I get the people health insurance.” [Chicago Tribune, 07/22/2003]

- “Today in this country there is a great divide, a Grand Canyon between those who have health coverage and those who do not. And for too many, trying to cross from one side to the other is a hopeless pursuit.” [Atlanta Journal-Constitution, 04/24/2003]

- “We have proven our mettle at liberating oppressed peoples. Let us prove our worth at liberating millions of Americans from economic oppression and a life without health care.” [NY Daily News, 04/24/2003]

The current economic crisis demands health reform. Approximately 14,000 Americans are losing health insurance coverage every day, and skyrocketing health care costs could threaten America’s economic growth and prosperity. Containing health care costs is impossible without expanding coverage, and today, the “great divide” “between those who have coverage and those who do not” couldn’t be wider.