Important links to Mayes and Berenson's "Medicare Prospective Payment"
By Don McCanne, MD
A recent Quote of the Day message discussed the new book, “Medicare Prospective Payment and the Shaping of U.S. Health Care,” by Rick Mayes, Ph.D. and Robert Berenson, M.D. The authors have demonstrated that Medicare has not only slowed the excess growth in health care costs, but has actually improved quality and efficiency and has an even greater potential to further expand on health care value.
That qotd message is available at:
http://www.pnhp.org/news/2007/january/mayes_and_berenson_o.php
The authors have made available to us the Introduction, which provides a brief summary of the book, and the Conclusion, “How Medicare Does and Should Shape U.S. Health Care.” They are available at the following links:
Table of Contents:
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Title_Page.pdf
Introduction:
http://www.richmond.edu/~bmayes/Introduction.pdf
Conclusion:
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Conclusion.pdf
These chapters are an important contribution to our current national dialogue on reform. Everyone agrees that reform must address the costs of health care, yet few proposed reforms really do. Expanding private insurance programs actually increases administrative costs while failing to control wasteful spending. The cost sharing of consumer directed approaches may slow spending increases but at the terrible cost of making access to beneficial health care services much less affordable. Information technology systems and liability reform are important topics, but they are often presented as measures to control costs when it is more likely that such reforms will actually increase costs.
Our uniquely high health care costs are due to many factors, but one of the more important is quite simply our health care prices. This was described in a classic Health Affairs article by Gerard Anderson and others, “It’s the Prices, Stupid.” Last month, McKinsey & Company released a report, “Accounting for the Cost of Health Care in the United States,” which also demonstrated that our high costs were due to input costs (prices, etc.), delivery processes (overcapacity, etc.) and intermediation (multi-payer system administration, etc.).
We have identified the wasteful excesses in health care spending. We now have many decades of experience that have proven that our fragmented system of private plans and public programs has been incapable of eliminating most of this waste. Mandates to purchase even more competing private plans can never succeed in bringing us the mechanisms we need to improve health care value.
On the other hand, Mayes and Berenson have shown us that Medicare has been somewhat effective even though it covers less than 15 percent of our population. Imagine the power of a social insurance program that adds in the other 85 percent of us. Through our own public insurance program we would be in a position to demand fair prices, demand improved allocation of our spending, and demand elimination of private bureaucratic administrative waste.
Anderson, et al, “It’s the Prices, Stupid,” Health Affairs, 22, no. 3 (2003): 89-105
http://www.healthaffairs.org/
McKinsey & Company, “Accounting for the Cost of Health Care in the United States”
http://www.mckinsey.com/mgi/rp/healthcare/accounting_cost_healthcare.asp
But if you have time to access only one of the links listed above, be sure that it is the “Conclusion” from Mayes and Berenson. We really can shape our health care system to make it work much better for all of us.
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Conclusion.pdf