Checking Up On Health


Benita M. Dodd, Vice President, Georgia Public Policy Foundation

Health Policy Briefs: September 18

Compiled by Benita M. Dodd

Why the cost? Becker’s Hospital CEO Report quizzed nine health care professionals, including physicians and former hospital executives, on how U.S. health care costs have gotten out of control in the past 10-plus years and what more needs to be done. Among the reasons they cite in the lengthy article: obesity, the expense and use of advanced U.S. technology and the costs of drugs and medical devices.

 “Supply-driven demand” is cited as another reason; for example, when a facility has six MRI machines but needs just one, it may be motivated to create a “need” to use the excess capacity. Also, as one expert points out, most health care processes are designed to do more rather than what is necessary: You have a backache that could be resolved with therapy, but the physician orders an MRI and more.

Patient demand is another factor, they believe. A patient visits a physician and will say, “I want this.” Typically, most physicians will give them what they want, within reason.

Defensive medicine also makes matters worse and has adverse outcomes that are not always expected. Many health care providers will treat patients at a higher level than necessary to protect themselves, the experts say.

***Friday’s Georgia Legislative Policy Forum at the W Midtown Atlanta features a panel discussion covering, “Health Policy after the High Court: Reforming Medicaid, Rethinking Medical Malpractice and Reaching the Uninsured.”

Medicare payment cuts projected: In July, the Congressional Budget Office (CBO) released an analysis of the Medicare payment reductions as a result of the Patient Protection and Affordable Care Act (PPACA). The cuts are estimated to be $716 billion between 2013 and 2022.

Researchers at the University of Minnesota’s Carlson School of Management broke the data down to the regional level and report that for Georgia, the projected reductions total almost $13.3 billion, with Fulton County the hardest hit at $1.04 billion. California tops the list with nearly $61 billion, followed by Florida ($44 billion), Texas ($43 billion), New York ($40 billion), and Pennsylvania ($28 billion). Ohio ($21 billion) also is in the big eight, which all have more than $20 billion in anticipated cuts to Medicare provider and plan payments.

The reductions nationwide include: decreases in annual updates to Medicare’s payment rates in the Medicare Fee-for-Service program by $415 billion; reduced payment in the Medicare Advantage program by $156 billion; reducing disproportionate share hospital payments by $31 billion and $25 billion from the Medicare program; and reduced Medicare spending through provisions such as the Independent Payment Advisory Board by $114 billion.

A simple fix? Whatever you think of the federal health care law also known as ObamaCare, there are two propositions that are hard to argue with, says John Goodman of the National Center for Policy Analysis: (1) seniors have been singled out and forced to bear a disproportionate share of the cost of a new entitlement for young people and (2) the states are administratively just not ready to implement the new program in time for its January 1, 2014, start date.

Goodman proposes a simple, revenue-neutral fix: Delay the scheduled cuts in Medicare spending by five years and pay for that expense by delaying the 2014 start date of ObamaCare by two years. Read more here:

One step forward, two steps back: A total of 97 new drugs are currently in development for patients with Alzheimer’s disease and other dementias, including 83 for Alzheimer’s, 12 for cognition disorders and two for dementias, according to a new industry report. However, between 1998 and 2011, 101 such treatments failed to reach patients, and only three medicines were approved to treat symptoms of the disease, representing a 34:1 ratio of setbacks, says the report, published by the Pharmaceutical Research and Manufacturers of America (PhRMA). The number of people with Alzheimer’s in the United States is projected to grow every year to reach a total of 13.5 million patients by 2050. On this trajectory, the direct cost of the disease in people aged over 65 could balloon to $1 trillion a year by 2050, in today’s dollars, with a total of $20 trillion in medical costs in the next 40 years, PhRMA adds.

“Fiscal cliff” could hurt drug reviews: The Prescription Drug and User Fee Act might fall apart after only three months of implementation as Congress debates whether to follow through on a government-wide budget reduction worth $1.2 trillion through 2021. Drug and device reviews might slow or stop in January because the Food and Drug Administration needs funding from Congress before it can spend the pharmaceutical industry’s money, FDA spokeswoman Karen Riley said. At risk are fees from major drugmakers, which are set to pay nearly $2 million for every new-drug application, a $98,000 product charge and a $527,000 establishment fee starting Oct. 1. Source: Bio SmartBriefs

Quote of Note: “If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one. …” – James Madison, letter to Edmund Pendleton, Jan. 21, 1792

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