Friday, June 19, 2009

I told you so

I don't claim to know much about medicine, still being relatively new to the field, but I do understand public policy and politics pretty well. A short while ago, I wrote here, with regard to Washington's consideration of health reform:

Meanwhile, hospitals, do you see the hand-writing on the wall? Academic medical centers have the most to lose here: There is no natural constituency in Congress to provide high levels of support for graduate medical education to these high-cost hospitals. While there is a community hospital in every Congressional district, academic medical centers are much fewer in number and concentrated in just a few districts. Count the votes.

Today's New York Times graphic confirms this, listing ideas under consideration by the Senate Finance Committee:

Establish an “automated mechanism” to rein in Medicare costs like the one used to close military bases.

Reduce geographic variations in Medicare spending by cutting or capping payments in “areas where per-beneficiary spending is above a certain threshold, compared with the national average.”

Cut special Medicare payments to teaching hospitals.

The first item would likely exclude those innovative, but often high-cost, diagnoses and therapies that get their start in academic medical centers.

The second item would reduce reimbursement rates where AMCs are often located, in urban areas that require higher wages and salaries for hospital workers.

And here's the code for the third item. Those "special" payments are what fund graduate medical education -- the residency programs that train the next generation of doctors.

6 comments:

Nancy L. said...

That NY Times graphic is great. As a fellow hospital administrator I understand where you're coming from--in fact I recently posted about the same thing on our blog http://srmcblog.com/2009/06/19/please-allow-me-to-step-onto-my-healthcare-reform-soapbox/

We're just building Spotyslyvania Regional Medical Center now (near Fredericksburg, VA) and it will be interesting to see how everything plays out by the time we open our doors next year.

I also have to say, your blog is great. It was a major inspiration for our team to get out there and blog about as you put it so eloquently in your title...Running a hospital.

Anonymous said...

We don't need residency programs. Just a bunch kids with too much free time on their hands. They spend most of their residency falling-in-and-out-of-lust. Haven't you seen Grey's Anatomy? That's some insightful tee vee. Some of us get our ideas from tee vee instead of looking at peer-reviewed literature and the latest white-papers.

Anonymous said...

Academic centers aside, "they" don't get it yet. Simply trying to cut Medicare payments in selected areas, like they've tried with physicians for years (only to restore them every time) just isn't going to make it for a bill of this magnitude. Nothing less than wholesale payment reform will make this a viable bill. I am disappointed that all the smart people working on this seem unwilling or unable to deal with this incontrovertible fact.
Until someone comes up with something imaginative, like bundling hospital/dr. payments or something, nothing, and I mean NOTHING, will change.

nonlocal

Barry Carol said...

While everyone seems to agree that the cost growth of the current healthcare system isn’t sustainable, I haven’t noticed any of the major stakeholder groups, especially doctors and hospitals, put forth any meaningful CBO scorable ideas that would contribute to a solution. In the case of hospitals, for example, where are they and the doctors who practice in them, on bundled pricing for expensive surgical procedures, shared decision making, palliative care in end of life situations and more widespread use of living wills and advance directives? Of course, lower utilization means less revenue and the need for fewer workers which, in turn, means painful and unpleasant adjustments would be necessary. It probably also means lower income for surgeons, oncologists and other highly compensated specialists. Then again, if it were easy, we would have fixed the system a long time ago.

Paul Levy said...

Right, Barry. As I have noted before, one person's costs is another person's income.

76 Degrees in San Diego said...

It should come down to "pay or play".
Hospitals that provide graduate medical education really do not receive adequate benefit from the resources that they allocate to GME because the graduates do not all practice in their community. Hospitals that do not provide GME gain benefit from newly trained physicians moving into their area.
So, hospitals, and maybe managed care entities, are the beneficiaries of GME. My proposal would be to "tax" non-GME providing hospitals in a Medicare AHEC region proportionate to their hospital beds(and managed care organization "lives"?) to fund regional GME programs(maybe just primary care??). This could also better distribute residency graduates to areas of greatest need. BI and others could receive annual regional hospital "taxes" to support its GME programs.
..."pay or play" needs "traction"...