I’m skeptical. Floyd Norris, who usually is smart enough not to join the ‘Pain Caucus’, claims it is in The NY Times:
The federal government is now starting to build the institutions that will try to reduce the soaring growth of health care costs. There will be a group to compare the effectiveness of different treatments, a so-called Medicare innovation center and a Medicare oversight board that can set payment rates.
But all these groups will face the same basic problem. Deep down, Americans tend to believe that more care is better care. We recoil from efforts to restrict care.
Managed care became loathed in the 1990s. The recent recommendation to reduce breast cancer screening set off a firestorm. On a personal level, anyone who has made a decision about his or her own care knows the nagging worry that comes from not choosing the most aggressive treatment…
From an economic perspective, health reform will fail if we can’t sometimes push back against the try-anything instinct. The new agencies will be hounded by accusations of rationing, and Medicare’s long-term budget deficit will grow.
I don’t buy this, especially when you consider the high cost inflation that’s occurred in Massachusetts, the home of
First, unnecessary procedures do not appear to be driving cost differences. What is driving cost differences? Price gouging. That is, certain hospital systems and medical practices have de facto monopolies, either through consumer loyality or market share. For instance, in 2000, Tufts Health Insurance (this is not associated with the university), in response to Partners HealthCare’ (which includes the Harvard hospitals) demands for much higher reimbursement rates, announced they would no longer include these hospitals. After a day, Tufts backed down. This wasn’t about unnecessary care: Partners simply wanted to charge more for the same care. This type of thing is still happening: now Tufts Hospitals is butting heads with Blue Cross.
The second problem, as I’ve discussed before, is that the claims of unnecessary procedures, to a considerable extent, are overhyped, at least in terms of costs*. That assumption is based on an analysis that conflated high-income low-need patients with low-income high-need patients. In other words, the supposed evidence that regional disparities in costs reflect unnecessary procedures didn’t take into account the role of poverty.
Sure, we should not provide unnecessary care. But much of the problem seems to revolve around anti-trust and poverty. We need to fix those things.
*Poor antibiotic use, for example, is a real problem. But, in most cases, in an immediate sense, this is a relatively cheap ‘procedure’ and one heavily borne by the consumer.