Healthcare Business News

Arbitrary and capricious, and other letters

By Modern Healthcare
Posted: January 12, 2013 - 12:01 am ET

Your cover story on how Medicare rewards and outcomes are not always linked (“Quality paradox,”) suggests that the CMS has developed standards for reimbursement for quality that exceed their rulemaking authority under the Federal Administrative Law Act. The rule is in essence “arbitrary and capricious” and not based on any evidence to support the conclusion it will indeed lower costs and improve outcomes. One wonders when the American Hospital Association will file an action to have an injunction placed against the rule.

Dr. Jay Meythaler
Professor and chairman,
department of physical medicine
and rehabilitation-Oakwood
Wayne State University
School of Medicine
Dearborn, Mich.

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Dimmer future

Regarding the “brighter future” mentioned in the introduction to your Dec. 24/31 cover story (“Healthcare's tumultuous year: Looking back on events that shook the industry,”), the only path this nation is on is a fast-track to socialism, which includes socialized medicine. I don't know which “readers” you are referring to, but as a healthcare administrator, everyone I know in this industry is seriously concerned about the viability of healthcare and how we will continue to provide quality services to patients. The industry faces severe physician shortages. Diagnostic laboratories face closure as high-volume commercial “mega-labs” threaten our industry with below-market value pricing and poor-quality lab services. That doesn't seem like a very bright future to me. Hospitals continue to struggle to survive as CMS cutbacks have us all operating on a bare-bones budget. And things are only going to get worse. Shame on you for perpetuating the ideology that this administration has done an ounce of good for anyone, or that Obamacare will be beneficial to this nation or the healthcare industry in any way. You could not be more wrong.

Nancy Woodard-Bourke
Laboratory outreach supervisor
Somerset Medical Center
Somerville, N.J.

Need a much deeper debate

Regarding the editorial “At a turning point,” I think you need to look at the situation we are facing a little more deeply than is evident in your editorial. Yes, we are aging; yes, we are a more sedentary society and a richer, less-disciplined one. But I would question “the healthcare system's best efforts to create a healthier society.” We have some quality issues; we have some service issues. In the direction we are heading, correcting those issues will be part of what separates the survivors from the also-rans. But the cost issue is most compelling. There is an upper limit on the percentage of gross domestic product that healthcare can absorb. If healthcare is effectively free (low deductibles and copayments) and no other restrictions are put on access, consumers will, by and large, consume all that is offered. Changing provider payment incentives to some type of per-capita basis rather than a fee-for-service basis will probably reduce the amount of healthcare offered, which is one form of rationing. Upping the deductibles and copayments will also act as a form of rationing in that the public will not consume certain services if the perceived out-of-pocket price is too high. Reducing the cost of healthcare (percentage of GDP used) will not be significantly changed by incremental efficiency improvements among providers. While a healthier population will require less healthcare, this is only true up to the end-of-life stage, where we spend an awful lot of money. If we don't do something about end-of-life costs, all a healthier population will do is delay the end-of-life expenditure somewhat. It would be a one-time savings. Given the above assumptions, there are two routes to containing healthcare costs. The first is attacking the lifestyle issues that contribute to the current level of general health. Smoking, drinking, poor eating habits, lack of exercise are the low-hanging fruit. That should reduce healthcare demand in the general population up to end of life. The second route is rationing of healthcare. This can be done in a lot of ways. But whatever name you put on it, it is rationing. There are three players here, and any or all of them can be the rationers: government payers, nongovernment payers (employers or insurers) and patients. All have a large stake in the outcome. None of these options is very pleasant, but one of the underlying issues that needs to be explored is how does society at large want to go about this. After we work through that thorny question, then we can start to work on how we will actually create the incentives and legal structures to make it so.

John D. Starr
Board chairman
Littleton (N.H.) Regional Healthcare

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