Medicare/Medicaid spending a national 'threat,' says CBO

Pouring more money to spin a broken system as salvageable is like replacing transmission in a 25 year old car.
The entire wrath of the administration was directed against Physicians. The major cost drivers are 1) Defensive Medicine ( cost 50+Billion annually, not 3+ billion as initially reported by CBO( CBO almost seemed complicit by not saying this loud and clear before the bad healthcare bill's Dec 24th Voting.
2) Outmoded purchasing mandates through the GSA contract system( government consistently pays more for everything including most medications and devices!) by not allowing dynamic real time market prices to determine prices. The concept of internet enabled pervasive purchasing seems alien to the administration.
3) If only Medicare patients were directed to negotiate the best fee based on published maximum Medicare will refund , let patients determine how much they want to pay out of pocket to see the better physicians, pay a major portion of their consultation and visit bill first and then submit the claim to Mediciare, the precious taxpayer money wasted on regulators, auditors, chasing wheelchair dealers in Florida and insurance claims processing could be saved. Here is an example of waste: In my "state of the art" medical office less than 15% of our income comes from Medicaid, but Medcaid accounts for over 50% of the employee costs and expenses! Physicians are mandated to do really stupid things like call for authorization of prescription and argue with less qualified people sitting in front of dated guidelines.
4) Hospital charges are the major cost drivers. You may be very surprised to know that the actual physician and Surgeons professional fee for major surgical procedures in the US and India are not very far off, but hospital charges are 75-150 times more! Dr. Atul Gawande did not address this in his fabled article in New Yorker, but WSJ addressed this issue in the front page interview with Dr. Devi Shetty- An article worth reading!
5) US has overstaffed hospitals as many as 3-4 administrative staff for each patient bed. If focus is less on Bean counters and more on direct patient care givers, incorporate negotiated fixed prices for specific diagnosis, quick arbitration and agreement on prices of unusual or more complex cases, prices will drop rapidly.
6) Allow free competition between private sector docs and community hospitals. Provide reasonable tax breaks for indigent care. Stop pilot projects in useless areas ( usually major pork projects).
7) Cut out tax free status for community hospitals. Use local taxes to fund local hospitals. Use local taxes to fund local malpractice pools. This will thrust the responsibility for good health and sensible thinking on the citizens. US has become one huge adult daycare center for people who constantly see value in either hurting themselves or not even doing the bare minimum to stay healthy. Of course no politician will have the guts to tell this to people. Pres. Obama and the democratic senate and congress had the unique opportunity to be a different set of leaders and provide radically new direction, but the cause of the people was lost to the cause of lobbyists. Let us see how all this evolves over the next few years.

Dr Murali is completely wrong when he talks about defensive medicine. More than 100,000 people die every year because of medical malpractice. A doctor in CT inseminated a woman with his own sperm instead of her husband's. That is not defensive medicine. The physician disciplinary system did nothing to punish the physician. Defensive medicine is a phony issue propagated by doctors and republicans. Even after medicare patients with diabetes visit physicians several times in a year, only 60 percent of them get recommended care. So if physicians were practicing defensive medicine, then all patients should be receiving recommended care. They do not get recommended care because these tests do not result in higher incomes. We have so called defensive medicine because physicians want to increase their revenues. Physicians in the US make more money than anywhere in the world. The reason our health care costs are higher because our fees to physicians and other health care providers are higher. Physicians make 50 percent higher fee in the U.S. than average of all other developed countries. So any health care reform that wants to control costs should begin slowing pace at which these fees are raised. Indian physicians typically examine more patients than a physician in the U.S. A significantly high proportion of doctors in India may not even provide recommended care. So comparing fees in India with that of the U.S. is meaningless. It is true that our hospital expenses are almost twice that of other developed countries. So increased prices we pay for physicians, hospitals and pharmaceuticals accounts for about 35 percent of our increased costs. So if we want to control health care costs we should go for price control for pharmaceuticals, and restrain price increases for physicians and hospitals.

Anonymous..Remember there is a difference between defensive test ordering and criminal acts. Doctor inseminating patient with his semen is a criminal act and you do not need medical malpractice attorney. It can be prosecuted by the district attorney. The cost of medicine rises when you have rampant test ordering to prove something is Normal when the overwhelming likelihood is it is normal. In all other countries when decisions are based on commonsense and good clinical practice, there is no outcry when an occasional problem or lesion is missed. In the US the slightest mistake leads to huge settlements. Ask to follow a physician on rounds and you will get an understanding of the problem.

We need to look at innovative ways to be sure that Medicare and Medicaid monies are being spent as effectively as possible.

The Supportive Living program in Illinois is an excellent example. This Medicaid-waiver program benefits both the state as well as older adults and their families.

The program especially benefits older adults who need some help to maintain their independence but cannot afford private assisted living. Moving to a nursing home no longer is the only option covered by the state. They have the opportunity to live in a much more dignified, residential environment where they receive the personal assistance and help with medications they need. They also benefit from meals, housekeeping and laundry services and the companionship of their peers.

Residents pay privately for as long as they have the financial resources to do so. Financial assistance is available from the state for those who cannot afford the monthly fee. According to the State's own figures, it costs Illinois and its taxpayers at least 40% less for an older adult to be living in Supportive Living than in a nursing home.

The program has grown significantly since the first Supportive Living community opened just over 10 years ago. Today, there are nearly 120 communities located throughout the State. Last year, an estimated 6,000 individuals on Medicaid benefitted from the program.