Wednesday, June 24, 2009

The $400 Billion Dollar Question

Max Baucus (D., Mont.), chairman of the Senate Finance Committee, said after meeting with top Republicans on the panel that "the mood and tone is positive" among those trying to forge a bipartisan deal. "Nobody said...I'm outta here," he said. "We're going to have a bipartisan bill."

In another sign of progress, Senate aides said the committee has managed to cut $400 billion from the estimated cost of the 10-year measure, bringing it to $1.2 trillion.
"Obama Open to Health Overhaul Without Public Plan", Wall Street Journal, 24 Jun 2009

In policy, it's the story behind the story that matters.

About a week or so ago, the Congressional Budget Office came out with their projections for the cost of health care reform, and tabbed the bill somewhere close to $1.6 trillion dollars. Congress gasped. The price tag was so steep that even more conservative Democrats took pause.

And so, the "Senate aides" went back to work and sharpened their pencils. Magically, in the space of about a week, $400 billion in "savings" were realized. The proposal is now "on track" again.

But what, exactly, was cut?

Was it the pharmaceutical profits? Probably not, since they've already "come to the table" with price concessions.

Was it fees to hospitals? Probably not, they're already struggling to stay afloat.

Was it concessions from the unions? Probably not, after all, cost-of-living increases need to continue.

Was it the health information technology budget? No, we need that to save money, and to collect co-pays.

Was it quality assurance budgets? Not sure. But wouldn't a cut there potentially harm patients?

Was it legal costs? No way. Who will write the legislation and draft the bills that go before the House and Senate and assure the rights of all Americans?

Was it the doctors' salaries? Probably not significantly. The policy pundits understand that someone has to deliver the care.

No doubt there are many others at the policy "table" that had their say.

But in the end, the one person not at the "table" are patients. Eventually, every dollar cut from the budget will be one less to trickle down to the people receiving the care.

This is no surprise to me, but we must realize that everyone of us are having compromises to care imposed upon us when the pencil sharpeners come out and $400 billion are magically shaved from the health care delivery budget.

Putting this in perspective, yesterday a well-done study came called MADIT-CRT demonstrated that the addition of biventricular pacing to a defibrillator significantly reduces the complication of heart failure to asymptomatic or event minimally symptomatic patients with heart failure. Such a device costs about $30,000. Admittedly, heart failure is an immensely expensive complication of weak heart muscles because of recurrent admissions to hospitals, need for frequent doctor evaluations, expensive implanted devices, ongoing testing, and the like. As a doctor, it's hard to argue that patients' lives will benefit from this technology.

Now to digress a moment, when I was in the US Navy many years ago, we had a $1.2 million-dollar a year budget for our cath lab. We struggled to stay within that budget as we treated our active duty servicemen and women, their dependents, and often retirees. As defibrillators came on the scene, it became abundantly apparent that they would completely disrupt our budget. But there was no denying the benefit that these devices provided to our personnel.

So what did we do when we overran our budget? Well, first we "borrowed" from other budgets. After all, our devices saved lives, plain and simple. But expenses quarter to quarter kept growing. Sometimes, we also found that we did not have the latest technologies for our active duty personnel and we always happy to farm them out to the local private heart center since those expenses didn't come out of our budget - it was Tricare's problem then. And so it went.

Now getting back to the present discussion, we have to ask ourselves what will be our fiscal pop-off valve as new technologies are invented and lives prolonged in our health care system going forward? In the case of heart failure, will the government limit the number of defibrillators available for us to implant, or will they not, in favor of "permitting" budget overruns in one area and take from some other less-apparent part of the health care system? Should America understand precisely what is being cut when we see $400 billion suddenly disappear from the health care reform budget?

I would argue we must know.

After all, it's we the patients who are not at the policy table, and you can bet that it's the patients who will untimately be paying the tab, be it directly through health care premiums, or indirectly by taxation or deficit spending.



EMG said...

You say "every one of us" will suffer loss of (or "compromises to") care. That's plainly untrue in the very obvious sense that not every one has care, of any quality, to begin with. The number of people for whom even the worst case scenario of failed health care reform would be "no change at all" is quite large.

Evidently, then, when you speak of "everyone" and "us" you don't include the uninsured. I see this all over the place, and - once I swallow my anger - I'm honestly quite mystified by it. Why does this unstable, poorly-defined shadow polity of winners-under-the-current-system hold your loyalty so strongly, in a way that you are not willing to extend to your country at large? (Especially befuddling from a veteran, if I may say so.) Is it that you think the rest of us are ne'er-do-wells who deserve our fate (all 50 million? children too?)? Is it that you think that the level of care you currently provide is so fabulous that just being able to beg the scraps from the table is enough for anyone (but then why the panicked fear of any change *at all* for yourselves)? Or....? I'm not just being polemical; I really want to know.

Anonymous said...

You missed a very large player that is not only not at the table but seems to be invisable to government!
That player is healtcare fraud that no government agency or party will even hazard a guess as to its' size, which the only government fraud expert testified before the Justice Committee on crime on May 20th is probably $200 to $300 billion each year.[$2 to $3 trillion in 10 years]
The entire government fraud recoveries remain constant at $2 billion each year which is a recovery rate of 1/4 of 1% a year in healthcare alone but includes other fraud recoveries as well.
It really doesn't matter how much liquidity one pours into a bucket if there are large holes in the bucket's bottom, and in this case the more money poured into the bucket makes the holes and not the bucket larger.
We need to concentrate on making the holes increasingly smaller which is the only thing that will provide any long term value; for if we don't healthcare value will continue to be devalued!