Last post I discussed some reflections Dr. Steven Schoeder from the Department of Medicine at UCSF shared in a special article in the April 25th edition of the Archives of Internal Medicine. He makes some other points that are equally deserving of wider dissemination. He references the introduction of CT imaging and upper GI endoscopy in the 1970s and remarks that estimated charges were 3-6 time higher than their cost to provide. When reviewing the efficacy of technology in the late ‘70s to early ‘80s, he noted that new technologies were rarely not accepted and coverage was dissociated from price setting, and tended to be additive in nature. Interestingly, the prices never came down, even as the procedures became routine.

In the 1980s prospective payment plans were instituted to attempt to change hospital utilization incentives and increase efficiency. They had the effect of decreasing hospital lengths of stay, but didn’t slow the rising costs, shifting much of the surgery to the outpatient setting.

Dr. Schroeder became aware of the discretionary nature of hospital use when he served as director of the GWU HMO. Upon tracking all hospitalizations, he found that all psychiatric inpatient lengths of stay were 30 days. Not surprisingly, this was the benefit limit for individual hospital stays for the Washington, D.C. Blue Cross plan at the time. Although the psychiatry chairman warned of an uptick in suicide attempts if stays were shortened, a program to institute reduced stays with aggressive post-discharge follow ups was instituted. There were no suicide attempts.

The doctor concludes (pessimistically or pragmatically, depending on your viewpoint) that implementing such strategies as widespread electronic medical records use, curbing fraud and abuse, paying for performance, and comparative effectiveness research, while all reasonable endeavors, will in themselves be unlikely to be more successful than prior efforts at cost control. In his opinion, what is required is a stiff political backbone able to resist the industries benefitting from the 17% of the economy spent on health care and the consumers who expect unlimited access to what they perceive they need. He favors a comprehensive strategy of reform, otherwise “politicians and health policy experts will continue to embrace tepid and ultimately ineffective solutions that may sound good in theory but will fall short in practice.”

Another voice giving weight to the concept that if a tree falls in a forest and there’s no one there to hear it, the tree still falls. Thank you, Dr. Schroeder.


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