Wednesday, October 13, 2010

The high cost of cutting costs...

I had an opportunity to attend a Boston Chamber of Commerce breakfast meeting this morning, featuring the four candidates for Massachusetts Governor.  In attendance: Charlie Baker, my old boss at Harvard Pilgrim, Deval Patrick, current governor, Tim Cahill, the recently controversial independent conspiracy theorist candidate, and... ah... the other one.

The other one is Doctor Jill Stein who is running as the Green-Rainbow Party candidate and who has absolutely no chance of winning.  As such, it's very easy to dismiss the perspective she brings to the race.  But this internist, community adovcate and respected author actually adds an important voice and I for one was interested to hear what she had to say this morning.  And although she received no applause (as did the current Governor when he dropped a very stirring "this is a profound distraction" remark related to the allegations that former Cahill operatives were working with his own campaign to undermine Baker's efforts) and her turn at the mic often felt more akin to a polite obligation than an opportunity for the audience, she did make one very interesting point. 

Dr. Stein's platform includes a proposal that the current Medicare system for seniors be converted into a national system for all populations.  Citing the fact that "this system just works" and cuts administrative hassles, she compared the 250 "workers" at Massachusetts General Hospital to merely 3 at a similarly sized hospital in Toronto.  The 250 at MGH sort through the multitude of requirements and paperwork associated with generating clean bills and pursuing payment for services rendered.  In Canada, that work takes just three individuals, leading to, per this candidate, a greater ability to apportion the funds toward medical care or savings.

It's an interesting point.

Managed care was designed to, among other things, control the growth of medical spending.  In our own agency, the number of individuals who oversee our managed care operations outnumber the resources devoted to other much, much larger payers. 

The new, emerging health care system contains provisions for the creation of new accountable care entities, pilot payment reform programs, and quality-based reimbursements.  The goals are to improve care while expanding access.  Oh yes... to cut costs too.  To Dr. Stein's point, if administering these programs becomes overly complex and the documentation demands expand (as we've recently seen in home health care with the adoption of tighter and more complicated OASIS requirements), then savings can rapidly evaporate or even reverse as the MGH-Toronto hospital example highlights.

Cutting costs is good.  Adding administrative burden... not so good.

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