Tuesday, February 03, 2009
More about President Obama and the Cost of Health Care
The feature article in last Sunday’s New York Times Magazine was about fixing the current economic crisis. One section of the article dealt with the cost problem in health care. It referred to health care as a “fabulously inefficient” sector of the economy and indicated that its cost had to be brought under control to avoid serious economic difficulties.
Much of the discussion referred to Peter Orszag, President Obama’s selection as budget director. Orszag had previously served a term as director of the Congressional Budget Office, during which he “devoted himself to studying health care, believing that it was far more important to the future of the budget than any other issue in front of Congress.”
When dealing with this topic in past speeches and statements, Orszag has focused on the variation is Medicare spending by region. It seems that expenditures in some areas, like Southern New Jersey and Texas, are much higher than in areas like Minnesota, New Mexico and Virginia. No explanation can be found other than the way doctors practice medicine. Patients in the high spending areas aren’t sicker, don’t do better, and, in fact, may do somewhat worse due to the risks involved in invasive care.
The first step Orszag proposes is the electronic medical record, for which money has been included in the administration’s stimulus bill. The idea is that standard electronic medical records would make it possible for Medicare to discourage unnecessary care by not paying for it.
In other words, Medicare would refuse to pay for tests and treatments that it considered to be unnecessary. As the article recognized, that would not be popular among doctors and patients who believed otherwise.
The reluctance of politicians to make their constituents unhappy would pose a serious, possibly fatal, barrier to carrying out Orszag’s idea. For that reason some other approach may need to be found.
But it all supports the notion that President Obama may be serious about the cost issue.
The feature article in last Sunday’s New York Times Magazine was about fixing the current economic crisis. One section of the article dealt with the cost problem in health care. It referred to health care as a “fabulously inefficient” sector of the economy and indicated that its cost had to be brought under control to avoid serious economic difficulties.
Much of the discussion referred to Peter Orszag, President Obama’s selection as budget director. Orszag had previously served a term as director of the Congressional Budget Office, during which he “devoted himself to studying health care, believing that it was far more important to the future of the budget than any other issue in front of Congress.”
When dealing with this topic in past speeches and statements, Orszag has focused on the variation is Medicare spending by region. It seems that expenditures in some areas, like Southern New Jersey and Texas, are much higher than in areas like Minnesota, New Mexico and Virginia. No explanation can be found other than the way doctors practice medicine. Patients in the high spending areas aren’t sicker, don’t do better, and, in fact, may do somewhat worse due to the risks involved in invasive care.
The first step Orszag proposes is the electronic medical record, for which money has been included in the administration’s stimulus bill. The idea is that standard electronic medical records would make it possible for Medicare to discourage unnecessary care by not paying for it.
In other words, Medicare would refuse to pay for tests and treatments that it considered to be unnecessary. As the article recognized, that would not be popular among doctors and patients who believed otherwise.
The reluctance of politicians to make their constituents unhappy would pose a serious, possibly fatal, barrier to carrying out Orszag’s idea. For that reason some other approach may need to be found.
But it all supports the notion that President Obama may be serious about the cost issue.
