How to slow the growth of health care costs.

Thanks to Susan Voss for her thoughtful essay about the complexities of our health care system, and how difficult it is to reduce costs. (See link to Register essay below.)   I don’t claim to have “the answer”, but I do suggest that the following cost saving ideas be given serious consideration.

  • Medicare, Medicaid and private insurance should not be required to cover every new drug, product, or procedure that is approved by the FDA. Some are very high cost but provide only marginal improvement over alternatives that cost much less.  Also, at least some covered products and procedures would likely be considered not medically necessary by most people.
  • Consider shortening the amount of time that government grants a monopoly for patents.  Patents are not natural property: humans have copied one another since the beginning of time.  Our U.S. Constitution allows patents to be granted to encourage inventiveness, but there is no objective reason why a patent must be granted for 20 years. Why won’t five or ten years work?  Maybe the length of the patent should be based on the cost to develop the patented item and whether or not government funds were used to help develop the item.
  • Don’t require limits on out-of-pocket payments such as co-payments, especially for very high cost items.  A person should have “skin-in-the-game” if they expect their insurance to cover very high cost items.  Today, we see the opposite: drug companies offer to help pay people’s out-of-pocket costs so there won’t be so much political pressure on them to lower their prices.
  • Allow both pharmacies and individuals to purchase drugs from sellers in other countries that are “deemed” to have sufficient safety procedures in place.  If drug companies are free to charge lower prices in other countries, then pharmacies and individuals should be free to purchase the drugs from those other countries.
  • Allow Medicare and Medicaid to negotiate with drug companies on prices they pay for the drugs that are covered by the programs.  Right along with that, Medicare and Medicaid should be allowed to develop formularies (lists of drugs that are preferred over other therapeutically similar drugs), that give beneficiaries a financial incentive to use the preferred drugs and a penalty for using higher cost drugs.

Our health care wants are unlimited.  Our ability to pay is not.  We, as citizens, should not expect private insurance or our government health care programs to cover everything, regardless of cost.  We should expect our government to NOT do things that increase costs, or reduce our choices.

Link to Register essay:  https://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2018/09/19/dont-fooled-when-someone-claims-have-answer-soaring-health-care-costs/1355890002/

 

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Medicare fraud and over-utilization

The Register recently criticized our fee-for-service health care payment system for causing over-utilization and for driving up health care costs.  (2/12/2015 – “Florida, home of medical scans — and scams” – see link below)  They gave examples of doctors ordering unnecessary test because they get paid more for every additional service that they provide.  They advocated paying physicians a salary like Mayo Clinic does, so that doctors, “…have no personal, financial incentive to provide unneeded care.”  They urged the Obama administration to, “…continue to work toward reimbursing providers based on quality instead of quantity while fairly reimbursing them.”  I agree with the Register that, “Ultimately, reducing the overuse and misuse of health care falls to patients.”  They urge patients to not rush to the doctor for every ache, ask questions when doctors order tests, resist clinic staff who want to schedule tests and procedures.

One thing the Register failed to mention is the importance of patients being required to pay out-of-pocket for some portion of their health care costs.   To the extent that patients are not required to pay for some portion of their costs, they will not question the recommendations of doctors and other providers and they will tend to over-utilize health care.  Requiring patients to make some out-of-pocket payment will also help reduce fraud, since patients won’t want to pay part of any fraudulent charges that billed to their insurance.  Many insurance policies under Obamacare do seem to have significant deductibles and co-payments.  That will go a long way to help keep down health care costs.

Link to Register article: http://www.desmoinesregister.com/story/opinion/2015/02/12/florida-home-medical-scans-scams/23278965/