03.27.09
Health care reform
I’ve been reading blog posts by economist Uwe Reinhardt of Princeton in the NYT. He points out that lack of transparency is a big problem relative to health care providers (as we do too in white paper). Not to mention the many payers (Medicare, Medicaid, private insurers, and uninsured) with different pricing from hospitals. There are big regional disparities in health care pricing which cause a portion of the escalating costs (see blog post in Feb about HC). It is going to take an enormous amount of political will to pare down health care costs. There are many drivers that must be tackled, simultaneously or sequentially, on the supply and demand side.
This is going to take many, many years to work out. Medicare’s DRG payment system took many years to phase in. Reinhardt says Medicare’s DRG system would work well across the board to bring pricing into a more rational framework.
There’s still the cost-shifting phenomenon to deal with in Medicare. When one sector/area in health care gets squeezed, another area mushrooms, eg., after DRGs were implemented, the skilled nursing facility and home health care costs took off. I recently saw the WSJ light onto the “quicker and sicker” trend that began happening in the 80s, like it was something new. The insurance industry recognized this and LTC insurance came into being when limits on nursing home and home health care were then imposed by Medicare to control the new rising post-acute care costs. Of course, demographic factors are playing a role now. We are an aging population. We need to get wiser about health care…
