Some hope to cut US med spending, and raise med quality, by paying more for higher quality outcomes. But this doesn’t work so well if the people you pay are also in charge of telling you the outcomes. Or if you must prove that their care caused bad outcomes, instead of being due to especially weak/sick patients. I have
The basic problem is economic. Health care is, with some justification treated as a right. It is largely financed by third parties. Thus it freed from the effect of real price incentives on the consumers. Until consumers can shop for medical care, for instance getting their appendix removed more cheaply at hospital A than hospital B, costs will never be controlled.
None of the providers really want this. Most medical supplies and services, save generic drugs and primary medical care are vastly overpriced.
Administrative means of cost control, finding ways of complying with them, avoiding them, not to mention dealing with fraud, make up a spectacular portion of medical costs.
These are increasing and actually driving the small cost effective providers out of business. Small pharmacies and solo practitioners are being phased out. Now providers must install expensive computer system with vastly more complex and added burden of generating data for bureaucrats.
As your article mentions these encourage gaming and fraud. Then to ferret out fraud additional detailed data needs to be collected. Inspectors auditors and enforcers need to be hired. This adds to expense on both sides of the equation both , payor and provider. Top down administrative means work about as well as one of that Soviet era five year plans.
Mandating “quality” is a whole other subject. It is artificially linked because the illusion that quality medical care would be cheap. Even if it reduced some costs by preventing complications it also increases costs by addition of complicated complex monitoring, and its enforcement by outside auditors. Mind you, since safety is increased it is a good thing, but not a big cost saver. Efficient data handling such by EMS might be the solution. Most hospitals already have EMS driving their ambulances. (Sorry couldn’t resist.)
The basic problem is economic. Health care is, with some justification treated as a right. It is largely financed by third parties. Thus it freed from the effect of real price incentives on the consumers. Until consumers can shop for medical care, for instance getting their appendix removed more cheaply at hospital A than hospital B, costs will never be controlled.
None of the providers really want this. Most medical supplies and services, save generic drugs and primary medical care are vastly overpriced.
Administrative means of cost control, finding ways of complying with them, avoiding them, not to mention dealing with fraud, make up a spectacular portion of medical costs.
These are increasing and actually driving the small cost effective providers out of business. Small pharmacies and solo practitioners are being phased out. Now providers must install expensive computer system with vastly more complex and added burden of generating data for bureaucrats.
As your article mentions these encourage gaming and fraud. Then to ferret out fraud additional detailed data needs to be collected. Inspectors auditors and enforcers need to be hired. This adds to expense on both sides of the equation both , payor and provider. Top down administrative means work about as well as one of that Soviet era five year plans.
Mandating “quality” is a whole other subject. It is artificially linked because the illusion that quality medical care would be cheap. Even if it reduced some costs by preventing complications it also increases costs by addition of complicated complex monitoring, and its enforcement by outside auditors. Mind you, since safety is increased it is a good thing, but not a big cost saver. Efficient data handling such by EMS might be the solution. Most hospitals already have EMS driving their ambulances. (Sorry couldn’t resist.)