Healthcare Business News
By Modern Healthcare Consider Ryan's plan

Regarding "Ryan: Plan is bipartisan," Congressman Paul Ryan's call for transforming Medicare from the broken status-quo model to a defined contribution model is worthy of serious discussion. Especially in states such as Wisconsin with advanced levels of delivery integration, provider organizations could be especially well-positioned to market themselves directly to future Medicare beneficiaries. The key will be to successfully manage risk by taking a more population health-oriented delivery approach and better coordinating care. Contrast this to the alternative vision of a 15-member Independent Payment Advisory Board empowered to arbitrarily reduce provider payments (and only provider payments) in order to reduce Medicare spending. But as with most complex matters, the devil will be in the details ... The next 80 days or so will see some, but probably not enough, serious discussion about Medicare's future. But, unfortunately, we will hear way too much over-the-top rhetoric intended to scare seniors ahead of the Nov. 6 election. But consider this: 1) Medicare is already broken and unsustainable. The sustainable-growth rate is a case in point. 2) Major new Medicare cuts are inevitable ... and an annual global spending cap likely. 3) The choices as to how 1 and 2 will be addressed make for a very short list. The November choice comes down to: The fee-for-service status quo run by IPAB, or Medicare largely paid for and delivered via a defined contribution. The latter, if consistent with the bipartisan Ryan/Wyden proposal, would include a "traditional" Medicare option. The weakest part of the Romney/Ryan plan may prove to be the 10-year transition to a defined contribution option. We don't have that kind of time.

Steve Brenton


Wisconsin Hospital Association


Market-based approach

Regarding Andis Robeznieks' interview with Paul Ryan ("Ryan: Plan is bipartisan"), we have applauded Paul Ryan in his efforts to sensibly reform healthcare in the U.S. in the past, and we agree that a market-based formula will be the best way to go forward. In a political climate of flying rhetoric and accusations, it's noteworthy when calm and reason prevail. When self-interest is rampant, often cloaked in holier-than-thou proclamations, simplicity and compelling logic offer a welcome respite. The Wyden-Ryan plan, "Guaranteed Choices to Strengthen Medicare and Health Security for All," was remarkable in a number of ways. Its executive summary was three pages in length. The proposal was nine pages. The document was clear, to the point, compelling, logical and insightful. It was readable and devoid of jargon and policy-speak, accessible to "every man" and challenged partisan attacks and assumptions. It's a sad commentary on the national debate surrounding the topic of healthcare (no, a debate is far more reasoned, fact-based and thoughtful on the issues) that these positive characterizations are so special, in part, because what's represented by the document is so rare. Last year's proposal represented a serious effort at presenting a framework for reasoned discourse to solve a very old problem. The Wyden-Ryan plan has more potential impact in its 12 pages than Obamacare had in its 2,700, precisely because it did not attempt to prescribe, but instead enabled market forces to reshape the current system. By taking a market-based approach to reforming healthcare, we can begin to address the fundamental issues facing the sector today and embed the kind of accountability that's needed to drive better healthcare at lower costs.

Rita Numerof

Numerof & Associates

St. Louis

Put focus on suppliers

I read your article "Supply-side economics" with great interest. In Owensboro, Ky., we have been on the mission to reduce our costs since I arrived here three years ago. Last year was a great year as we found more than $7 million and the two previous years netted more than $5 million each. Owensboro Medical Health System is a 371-bed stand-alone hospital. Certainly there are a great deal of savings to be had with supplies, but I've also found tremendous savings in maintenance agreements, service contracts, capital equipment buys and so on. OMHS has been using two GPOs and, of course, negotiating ourselves. If the country wanted to save Medicare billions of dollars a year, simply make every supplier put a price on every product and charge every hospital the exact same amount. That would eliminate the giant hassle of getting a fair price. During the benchmarking process, I found knee implants that ranged from as high as $10,000 at one location to as low as $3,700 at another. Same exact product. That just isn't right. Hospitals spend billions on consultants, GPOs, benchmarking companies, data cleaners, etc. All that would go away if we were being treated fairly. It's pretty simple ... Obamacare is going after the wrong part of our industry. They need to get the suppliers right.

John Walker

Executive director of materials management

Owensboro (Ky.) Medical Health System





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