Zeke Emanuel Hammers Obamacare Again
Obamacare’s best frenemy, Dr. Ezekiel Emanuel, and his colleagues at the Center for American Progress, gave up on Obamacare last year. In yesterday’s Wall Street Journal, he and Topher Spiro emphasizes that Accountable Care Organizations, which Obamacare established to co-ordinate care and lower costs in Medicare, are failing to achieve either goal:
The Obama administration recently announced a laudable goal: 50% of Medicare payments will be made under new payment models by 2018. But to reach this goal, the administration must change tactics and use the authority given to it under the law to rapidly expand payment reforms.
While many reforms are being tested, the administration’s main focus has been on creating “accountable care organizations.” ACOs are groups of medical providers that are rewarded for achieving savings on their total spending while improving quality.
A cost-control strategy that relies on expanding the number of ACOs won’t be successful. Before it is too late, the Obama administration must focus on a reform that can be scaled. Medicare should lump together physician services, hospital costs, tests, medical devices, drugs and rehabilitation services related to common ailments—such as broken hips, heart stents and cancer treatments—into a bundle. It could then pay a medical provider a discounted amount for the whole array of services.
(Ezekiel Emanuel and Topher Spiro, “The Coming Shock in Health-Care Cost increases,” Wall Street Journal, July 8, 2015)
I am not quite sure what they are getting at, because Medicare did establish bundled payments in 2013. It is not clear what Dr. Emanuel and Dr. Spiro believe the current model lacks. Here’s my summary of the difference between government-dictated “accountable care” and “bundled payments”: The former is for healthy patients and the latter is for sick patients.
Anyway, this invites the question: If current bundling and accountability, as determined by the federal administration is failing, then why would we expect the same administration to do a better job? Why would we expect a future administration to do a better job?
In which other line of business would we expect an insurer, a third-party, to determine what should be bundled and what should be sold independently? Do auto insurers decide whether radios should be standard in cars? Do homeowners’ insurers decide whether homes should be built with kitchen appliances included?
The only way to ensure that bundled care is bundled right is to let patients control the dollars and let providers experiment with collaborating on different bundles of care. That would mean turning Medicare into “some kind of voucher,” as President Obama has put it.
In his WSJ article today, Doctor Perfesser Ezekiel Emanuel presents a breathless, “time is running out” advocacy for not giving up on ACO’s. He acknowledges that no evidence exists to show ACO’s have reduced costs substantially. He goes on to assert that if only ACO’s will implement something he calls “bundles for hospitals”, $50 billion would be saved over 10 years.
Hey, $5 billion a year is not chump change, but is that what Dr. Zeke means by “substantial”? Will it bend down the cost curve? Or will it actually prevent the recession-driven slowdown in medical spending, from bending back up?
CDC says the level of US healthcare spending has reached roughly $2.9 trillion annually.
http://www.cdc.gov/nchs/fastats/health-expenditures.htm
That means Dr. Zeke’s $5 billion annual ACO hospital-bundling savings would be worth 0.001724 of our present spending. In words, that’s seventeen one-hundredths of ONE percent. In other words, if your family medical insurance premium is $2,500 per month, Dr. Zeke’s solution would save you $4.31. Which won’t buy you a latte grande.
Maybe the perfesser lost track of a couple decimal places along the way? Maybe I lost track of them? Or, if not, why is Dr. Zeke so worked up that time will run out; that we will miss a historic opportunity; and that the medical cost curve will again bend upward – – if we fail to do this ACA bundling thingy that will save all of seventeen one-hundredths of one percent?
Well spotted. The advocates of centralized decision-making spend a lot of energy on reforms that they themselves do not expect to have significant effect.
I do not see where to respond to your article in the Daily Policy Digest for July 15, 2015 regarding lower cost over the counter contraceptives. Please see that physicians recommended AGAINST this option.
A study conducted by the Department of Obstetrics and Gynecology at the University of Missouri-Kansas City assessed physician attitudes on making oral contraceptives more readily available. The survey addressed a transition from prescription only status for oral contraception to an over-the-counter status. The survey was sent to residents in obstetrics-gynecology as well as family practice training programs. The overwhelming majority, 638 respondents (71%) were against a switch from prescription only status to over-the-counter status. Their primary concern (92.3%) was safety. (Source: Howard, D.L, et al. Maternal Child Health Journal, 2012, Nov. 8. “Physician Attitudes Toward Over the Counter Availability for Oral Contraceptives.”