Healthcare providers have little to worry about when it comes to the pledges offered by six major industry players last week to try to help the White House curb healthcare costs: The pledges offer little thats new and target existing quality and cost-cutting programs. But Congress is ramping up the pressure to deliver even more savings.
Promises and threats
Leading industry groups are vowing to help the White House cut healthcare costs, but reform-hungry Congress already has its eye on even bigger savings
The proposals, spelled out in a June 1 letter to President Barack Obama as part of the industrys health reform negotiations with the White House, seek to slow healthcare inflation in the coming decade with a few suggestions to change public policy or new regulation. But hospital and physician trade groups largely rely on efforts already under development or under way to improve quality, prevent medical errors, curb unneeded care and pare down the cost of doing business.
Initiatives would shave an estimated $350 billion to $850 billion in healthcare costs through better care to the chronically ill and another $150 billion to $180 billion by cutting out wasteful treatments and improving quality. More efficient administration could generate $500 billion to $700 billion in savings, the groups said.
Clearly, were building on momentum thats there, said Richard Umbdenstock, president and CEO of the American Hospital Association, of his trade groups pledge to launch a campaign to better promote highly effective ways to combat eight preventable infections or complications. Two of the trade groups targetsbed sores and urinary tract infections linked to cathetershave been high priorities for any hospital since Medicare said it would no longer pay for treatment when patients acquire either condition during a stay as of October 2008. The proposed campaign also lists other harmful and costly complications that have long been the focus on national patient-safety efforts, including blood stream infections from central lines and pneumonia in ventilator patients.
Congressional leaders are already starting to pressure hospital leaders to deliver more than already pledged.
The Senate Finance Committee on June 3 asked representatives from the hospital lobby to find Medicare and Medicaid cuts that over the next decade could be used to offset the cost of health reform legislation now being drafted on Capitol Hill.
Senior staffers on the Finance Committee met with representatives from the AHA, Federation of American Hospitals and Catholic Health Association in a closed-door meeting to discuss where those cuts could come from, according to several sources with knowledge of the meeting.
According to one source, the hospitals were directed to find cuts that could be scoreable, or in other words tangible enough to get a price tag from the Congressional Budget Office.
While a dollar amount wasnt discussed during the meeting, there was widespread speculation among Washington healthcare lobbyists that it could reach up to $220 billion over the next 10 years.
Any amount that high would almost certainly mean Medicare and Medicaid reimbursement cuts, something hospitals have been leery of since serious health reform negotiations started.
How the AHA will orchestrate its campaign has not yet been decided, Umbdenstock said. Discussions with hospital executives in coming weeks will shape the initiative, though the trade group will enter talks seeking hospitals public endorsement for the effort.
Nonetheless, by more readily sharing strategies known to work best to improve quality, Umbdenstock said the hospital trade groups campaign could accelerate savings to help squeeze an estimated $1 trillion to $1.7 trillion from healthcare spending in the next 10 years.
Thats the projected combined savings for initiatives contained in the 28-page letter from the six groups, which, in addition to the AHA, includes Americas Health Insurance Plans, the Advanced Medical Technology Association, the American Medical Association, the Pharmaceutical Research and Manufacturers Association and the Service Employees International Union.
Industry officials released the letter as congressional efforts to draft sweeping health reform legislation intensified. The coalition of conflicting interest groups pledged to deliver cost-control proposals in early May after the White House and the industry publicly announced a voluntary effort to contain costs (May 18, p. 6). Obama told players he would hold you to your pledge to get this done, though news of the agreement sparked anxiety among hospitals and public back-and-forth between the administration and industry over the scope of the commitment and targeted savings.
As restructuring takes hold and the populations health improves over the coming decade, we will do our part to achieve your administrations goal of decreasing by 1.5 percentage points the annual healthcare spending growth rate, the healthcare groups wrote in a May 11 letter to the president. The reduction would curb the projected growth rate by one-fifth and save an estimated $2 trillion, the letter said.
Such projections met with skepticism from Ray Gibbons, a Mayo Clinic cardiologist who also works with the the Rochester, Minn.-based systems Health Policy Center. I would view this package of ideas as good ideas from well-intentioned people, Gibbons said. However, I would express concern as to whether they are bold enough and provide enough detail to derail the nations steady and strong healthcare inflation. Gibbons said he applauded the groups focus on quality improvement and curbing wasteful medical care. But noted the AHA and AMA failed to detail how the proposals will accomplish savings. He cited the hospital trade groups list of six long-term quality-improvement goals, which include critical initiatives, such as greater coordination of care, with few specifics.
The AHA said it would expand its campaign to better coordinate care; implement health information technology; promote palliative and hospice care; prevent patient falls; promote high-quality perinatal care; and curb supply costs through more transparent and standard purchasing as the evidence, tools and nationally endorsed measures for these opportunities develop.
Gibbons also said the proposals are missing some crucial elements. They dont address some of the fundamental problems in our system, he said, such as incentives that reward volume rather than efficient, high-quality care.
Real reform wont come fast, one executive said. Certainly consensus is building on what a comprehensive healthcare reform program should look like, but the proof of how we will get there as a society will be in the details with all key groups, including patients and consumers, participating, said Michael Tarwater, CEO of Carolinas HealthCare System, based in Charlotte, N.C., in a written statement. It wont be simple and we should take the time to do it right.
Oliver Henkel, chief government relations officer for the 11-hospital Cleveland Clinic system, praised the AHA and AMA proposals as constructive, but also noted they failed to address significant issues in the reform debate, such as the role of a public health plan in expanding coverage or payment incentives for the quality of care, rather than its quantity.
James Rohack, a cardiologist with Scott & White, a two-hospital system based in Temple, Texas, and the AMA president-elect, said the groups proposals to the president largely stem from a 6-year-old effort to wipe out wasteful medical care.
Among the initiatives already under development and expected to deliver savings are measures to eliminate overuse of surgical treatment of back pain; percutaneous coronary intervention procedures; induced labor and Caesarean sections; antibiotics for respirator and sinus infections; and diagnostic imaging. Also among the groups fixes are newly developed measures under review by the National Quality Forum to target waste and error that lead to hospital readmissions and redundant medical tests. Another potential source of savings, an estimated $3 billion annually, is a prototype electronic card to help patients and doctors monitor multiple prescriptions and avoid harmful complications. The AMA did not break out all savings for its initiatives.
The six organizations noted in their letter to the president that the success of some efforts would hinge on good public policy, and Rohack cited technology standards and the AMAs call for more extensive protection for doctors against medical liability as examples.
Some groups proposals do seek new policies or programs. AHIP called for federal health officials to require universal insurance standards to confirm coverage and pay medical bills; previously the group supported voluntary efforts, said AHIP spokesman Robert Zirkelbach.
The proposal also spells out necessary changes to the 1996 Health Insurance Portability and Accountabilty Act to achieve universal standards. The initiative would help curb overhead costs and paperwork, the insurance group said. The trade group also said insurers would test state or regional Web sites in the Ohio and New Jersey, areas that allow area doctors to deal with any insurer.
The PhRMA proposal, which also did not break out any specific savings, endorsed expanded use of medication therapy management, public reporting of performance measures and said it supports well-designed comparative research on clinical effectiveness.
David Nexon, senior executive vice president for AdvaMed, said medical-device makers support research that compares clinical effectiveness, but oppose studies that evaluate whether more expensive treatments deliver enough benefit to justify the added expense.
In testimony before the House Ways and Means Committee, the trade group said such research should be structured to promote better patient health rather than deny or delay patients access to beneficial care. Billy Tauzin, president and CEO of the Pharmaceutical Research and Manufacturers Association, was unavailable for comment, a spokeswoman said.
The Service Employees International Union proposed that Medicare deploy teams of nurses, social workers and others to work with physicians to manage patients care at home and in transition to hospitals or nursing homes, which could curb costs between 4% and 8%, the union estimated. The SEIU also proposed temporary federal matching payments for home- and community-based services to divert patients from nursing homes.
Andy Stern, SEIU president, said its initiatives targeted wellness and prevention and drew on the healthcare unions long-term-care experience. Its our belief that institutional care is the most expensive, home care is the most desirable, Stern said.
with Matthew DoBias
Send us a letter