By David U. Himmelstein and Steffie Woolhandler
The Boston Globe, May 30, 2012
The House and Senate health care proposals would set imaginary limits for spending growth enforced by secret âimprovement plansâ and wrist slaps for hospitals that overcharge; establish tiered payment schemes to consign the poor and middle class to second-tier hospitals and doctors; push most residents of the Commonwealth into HMOs (oops, we forgot, now theyâre called âaccountable care organizations,â or ACOs); and wipe out small doctorâs offices by âbundlingâ their pay into ACO payments. Apparently the legislatorsâ theory is that forcing health care providers to consolidate cuts costs. Oligopoly saves money?
Here are six alternative steps the Legislature could take that would actually save money while still preserving care.
* Cut out the middlemen. Why exactly do we pay private insurers 10 cents of every premium dollar? The plan that covers all 13 million residents of the Canadian province of Ontario has overhead of only 1 percent. Adopting that single-payer approach in Massachusetts would save about $2 billion in insurance overhead in 2013 alone.
* Pay hospitals the way we pay fire departments: real global budgets that cover all operating costs, not the per-patient schemes that are masquerading as global payments. Billing, collections, and paperwork consume nearly one quarter of hospitalsâ revenues. Eliminate billing for individual patients and youâd cut that nearly in half. The savings: about $3 billion in 2013.
* End the medical arms race and enforce real health planning. Hospitals and clinics vie for affluent patients needing lucrative high-tech care. They reap surpluses, a.k.a. profit, which they use to buy fancy machines and superluxe buildings â usually situated where thereâs already a surplus of such facilities. Inevitably, the surplus facilities induce unnecessary, even harmful overcare. Meanwhile, underserved communities and under-provided services like mental health and substance abuse are starved of investment. Hospital payments should go for patient care, not new buildings. Money for new buildings and technology should flow to a separate fund, and be allocated according to need, not profitability, through a transparent public process. Investing in whatâs needed instead of whatâs profitable would save billions and improve care for both the poor and the affluent.
* Right-size the physician work force: more primary care, fewer specialists. Massachusetts hospitals take pride in training super-specialists who go on to provide profitable but often unneeded care (see above). Meanwhile, the primary care shortage persists. The public, through Medicare, already pays for residency training and should use the power of the purse to make hospitals train the doctors that the public needs. And physiciansâ fee schedules should be altered to assure that best students are attracted to the most needed, important, and difficult fields â primary care â and that doctors make as much for talking to patients as for putting them through a scanner.
* Negotiate drug prices statewide. Canadians pay 40 percent less for drugs than we do because they use single-payer buying power to drive down prices from pharmaceutical companies. Why canât we?
* Cap health executivesâ incomes. Why should a hospital CEO make more than the president of the United States?
David U. Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H. co-founded Physicians for a National Health Program. They are professors at the City University School of New York School Public Health and visiting professors at Harvard Medical School. They worked as primary care doctors in Massachusetts from 1982-2010.