Tuesday, September 11, 2007

Health-Care Costs
The Wall Street Journal reports on skyrocketing health care costs:
Health-care premiums of employers and their workers have climbed more than twice as fast as inflation in 2007 -- to about double their cost in 2000 -- and look to rise at a similar or slightly faster clip next year, a pair of nationwide surveys show.

The average family premium rose 6.1% in 2007...
Small businesses and their employees are bearing the brunt. Though 99% of businesses with more than 200 employees continue to offer workers some sort of health-care coverage, only 59% of smaller firms have a company health plan, compared with 60% last year and 68% in 2000. Among businesses with fewer than 10 workers, only 45% do, down from 48% just a year ago.
Meanwhile, guest-posting at Washington Monthly, author Shannon Brownlee says that even if we bring costs under control, doctors and specialists have a good way of making that money back: they perform more medical procedures.
That means that we don't end up saving any money by tightening reimbursements. But we do end up pissing off doctors, who don't really want to have to run around doing more procedures and seeing more patients just to maintain the same income. It also means we patients can expect to be given a lot more unnecessary procedures, because when doctors do more, they don't necessarily do more of what we really need. In the 1990s, managed care trimmed physician reimbursements and an avalanche of unnecessary procedures and blood tests and CT scans was the result.

All of which is just one more reason why fee-for-service has got to go. It's a broken payment system, and it simply encourages bad quality care. Doctors need to be put on salaries.

Alan Sager, at Boston University, suggests that we take the portion of our national health care bill that already goes toward physician reimbursement — about $500 billion — and say to doctors, in effect, you can keep the money, but you have to take it in the form of a salary. Surgeons would no longer be paid separately for each surgery, and primary care physicians would no longer get a separate fee for each office visit.
Sounds like a good idea to me. And so long as the salary is plenty high, why wouldn't doctors go for it? I doubt they enjoy looking for ways to require unnecessary procedures.

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