Monday, May 11, 2009

I thought it was still spanning the East River

The Boston Globe reports:

Healthcare industry to offer cuts of $2 trillion: Pledge boost goal of system overhaul

WASHINGTON - Volunteering to "do our part" to tackle runaway health costs, leading groups in the healthcare industry have offered to squeeze $2 trillion in savings from projected increases over the next decade, White House officials said yesterday. . . . Representatives from half a dozen health industry trade groups are scheduled to make a formal offer today in a White House meeting with President Obama. . . . The trade groups making the pledge represent a broad spectrum of healthcare interests, including the American Medical Association, the Pharmaceutical Research and Manufacturers of America, America's Health Insurance Plans, and the Service Employees International Union. . . . The groups will have to streamline administrative costs, better coordinate care and bundle payments to achieve the projected savings.

What, the Brooklyn Bridge isn't available for sale anymore?

Gotta love the last line in particular. See discussion below on these very points. We can continue to try to portray health care reform as lowering costs, providing greater access, and maintaining consumer choice, but there is no evidence that all three are possible.


Anonymous said...

Haha, you saw through that one too, huh? They have no shame. Coupled with Scott(Columbia/HCA) the money grubber leading the opposition, this is shaping up to be the major brawl everyone expected.


Anonymous said...

It is sad that many people will read this and not realize how divorced it is from reality.

Reality is that labor costs are the bulk of healthcare costs - both directly and for suppliers - so for any major cost savings you must be able to say: "We will save X dollars by eliminating 90% of the jobs in _____." For example, the travel industry saved a lot of money by eliminating 90% of travel agents. The valuable work was not eliminated, but it changed who did the work. When automation reached the point that it was equally easy for a traveler to tell a computer or a travel agent what was wanted, the travel agents became expendable.

If this group had added "by eliminating 90% of all insurance employment" I would give them enough credit to ask "How?". But this is just smoke.

Anonymous said...

Medical costs will be controlled by involving the consumers in the "lean process" that BIDMC is working on within the hospital. I could follow a standardized plan for controlling my blood pressure and cholesterol, including getting scheduled blood tests, without having to schedule 6-month visits to my PCP who sends me off to get the same blood tests and sends the bill the cost to Medicare. The lab clerk types in all of my infomation every time instead of having a computer system remember it all from the last time and ask me if there are any changes.

I monitor my blood pressure and would know if it is going out of control. I could get the labs done on a standing order. The lab reports would go to my PCP (and to me via email) and I would get an email or a phone call if results indicated need for followup. Standing prescriptions could be mailed to me or ordered from a local pharmacy if needed immediately.

When I had a tick bite last summer I could have gone to the drug store and bought a 50 cent doxycycline pill (the recommended prophylactic for Lyme disease), but it cost more than $200 for a visit to my PCP, analysis of the tick (with inconclusive result) and a recommended blood test. The Dr gave me a long speech about the side effects of doxycycline, after which I asked him what he would do. He said he would take the doxycycline but wouldn't prescribe it without seeing me.

Most nominally healty people can follow a management plan with much less involvement than current regulations and processes require.

Costs control will come from creating a "lean but effective" relationship between health care users and the medical community.

Another factor related to cost control and privacy risks assocated with the broad medical data bases that would exist is that there must be seriously punitive consequences (prison time and lifetime debarment) for fraud and for intentional misuse or criminal negligence in managing personal data.

Mark Graban said...

One problem I have is how do you prove a savings from projected increase? That's not a real savings, is it?

Its like saying "I lost 40 pounds because I gained less weight than projected."

You're still 40 pounds heavier than before.

nana said...

great comments on Paul's witty observation... I especially liked anon. 12:25 think of the cost and time savings!!!

Anonymous said...

Check today's NYTImes column by David Leonhardt, in which it becomes even more clear that the cost-saving "commitments" made are not real.

Mark Graban said...

The "cost savings" often touted (as in the NY Times piece) seem to either come from:

1) Reduce the care or services provided ("proved" "ineffective" by some study or organization) - the "DO LESS" strategy.

2) Let's pay MDs or hospitals less - the "PAY LESS" strategy. This is what the "Big 3" always tried in squeezing their suppliers and it's at best a short-term fix (until suppliers go bankrupt.

What's missing from the debate is the Lean strategy -- providing care in a way that truly costs less through employee-driven operational improvements. Not doing less, not paying less, but reducing the wasted time, motion, cost, and errors from the process.

Paul, I'm so glad you've talked about SPIRIT and Lean here on this blog, I hope you continue to use your soapbox.

Anonymous said...

Exactly right, Mark. A point made by Steve Spear, among others.

Anonymous said...


** 2.6 Million New Jobs,
** $317 Billion in Business Revenue,
** $100 Billion in Wages, and
** $44 Billion New Tax Revenues

The press release is here:

Here’s the study:

It’s clear that single-payer is the solution, not only in terms of providing quality care for all, but also economically!