Repairing Medicare

Last week the President outlined his proposal for salvaging Medicare.  He suggested cutting $248 billion in expenditures over the next ten years.  Significantly, that is only 4% of the $6.3 trillion estimated to be spent on the program in that decade.  The money is to come from two places: The majority (90%) is from decreased reimbursement to providers and drug companies.  The rest ($24 billion) is to come from charging beneficiaries more.  What struck me was the deafening silence about spending smarter.
The Kaisers and the Mayo Clinics of this world have repeatedly demonstrated that good care is cheaper than bad care.  It is worth thinking for a minute about the economics of good and not so good medicine.  The plans are being urged—well, forced—to consider quality, but mostly from the point of view of HEDIS indicators that are heavily weighted toward preventive care and maintenance care in chronic illness.  There is no question that those measures can improve quality of life, but the evidence that they will save money in an aging population is less compelling.  There is, however, some evidence that good case management can save money, especially measures that decrease repeat and unnecessary hospitalizations and that cut down on complications of medical care.
One area that gets less attention, but one that I think would have the greatest financial impact, is to quit paying for care that has not been shown to be of benefit.  Examples include very expensive chemotherapeutic agents that have not been proven to prolong life significantly, stents for completed MI’s and strokes, or complex back surgeries for elderly patients with degenerative disease of the spine.  The list is much longer than that, but I would venture to guess that just those three would produce more savings than the President’s plan.