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Healthcare players offer plan to cut costs by $2 trillion

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This week the country's power players in the health plan, hospital, physician and union world--among others--have come together to propose what could turn out to be an astonishing change. The groups have announced that they'll voluntarily take steps that they estimate should lower overall healthcare costs by an extraordinary $2 trillion over the next decade.

The groups, which include the American Hospital Association, the American Medical Association, America's Health Insurance Plans and the Service Employee International Union, are offering the deal as part of their healthcare reform plans, which apparently closely resemble those under discussion within the Obama administration.

The first step in this process would come in the form of providers accepting bundled payments for services, which typically means accepting one fee for the entire course of care before, during and after a procedure or treatment. Private health plans would begin the process, but the administration is likely to do the same with Medicare before long.

The group says steps like these could cut health costs for a family of four by $2,400 within five years, and that within 10 years, overall national health spending could be cut by 3 percent.

To learn more about this proposition:
- read this Modern Physician piece (reg. req.)

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Comments

How would this plan work for psychotherapists?

This is about the dumbest idea I, as a health care provider, have heard. I wasn't asked.

This is simple blackmail by Obama. It implies we have been overcharging for services. Any money saved from this will go to fund an increasingly hostile and arrogant government bureacracy which will make Medicare today seem like our best friends.

Note that ama membership has been dropping for years. It will absolutely plummet now.

Obviously this issue is all the fault of greedy individuals and their lawyers. These people should not be allowed to sue the people who are trying to help them. The solution is simple. Let experts in the industry come up with the best system to solve the problems. Increase the salaries of the executives that run the large pharmaceuticals and insurance companies, and hospitals, say double their salaries, to pay them for their service on a national corporation, like the FDIC, that will discuss and create policy that will reduce health care costs while keeping their businesses viable, even increasing their profits, so that they can continue to serve us.

Please go back and re-read the actual statements, since you have mischaracterized the "offer". All it said was that they propose to reduce the INCREASE IN COSTS (as they have been "projected" by economists) by 1.5% per year over 10 years. So the outlandish inflation in insurance premiums and medical costs will be slightly less--after 10 years--than the current projections. A reduction of 3% of the current $2.3 billion we spend TODAY is still $6.9 billion--even with NO inflaction--after 10 years (and if you believe that, I have a bridge I can sell you). A "cut in healthcare costs for a family of four" in 5 years is $480 per year for the family, or $120 per person; does this mean that insurance premiums will decrease in 5 years while costs for copays, deductibles, co-insurance payments, drugs, and devices continue to increase each year? None of these "offers" will make Americans any healthier or less likely to die from lack of access to medical care than they are now. This is more of the smoke and mirrors that the insurance, pharma, devices, and provider industries have been using to lie to the American public up to now. See Commondreams.org, M.S.Bellows, Jr, Is Obama naive about the for-profit health industry's commitment to real reform? (5.11.09)
In addition, global payments (or "bundled payments for services") will not work in the current dysfunctional delivery system because of the turf wars and the lack of coordination among providers; it would only work in a single payer system, as Marcia Angell and Arnold Relman explain in The Boston Globe, editorial opinion, Take Next Harder Step: A Single-payer plan (5.10.09). (I wasn't allowed to post the links).

This idea is not new. It is the model manifested in the PHO fraud, in which hospitals were able to skirt the corporate practice of medicine regulations and now control outpatient care delivery at no decrease in cost but visible deterioration in quality. It also has the features of the capitation model HMO, where only high cost procedures, and hospitals make a profit. It was only when after a sery short time, doctors realized they were on the high risk, low reimbursement side of the equation that they opted out. Hospitals and insurance carriers will never sacrifice profits when they can count on government to beat up on doctors. It is really not surprising that the AMA would go along. And of course the highly honest and ethical SEIU is a party to this charade!

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