Thursday, November 10, 2011

Public vs. Private Initiatives In the US

One of the latest "new" ideas proposed by government health policy gurus to reduce costs is through "bundled payments". Doctors and hospitals would get a fixed amount to take care of a patient's health problems. In theory, this should increase efficiency and reduce unnecessary tests and procedures. But this is simply a variation of the HMO-style "capitation" system that many Americans rejected during the 1980s.

The 11/7/2011 Wall Street Journal health blog reports on results from this latest attempt, "Study Raises Questions About 'Bundling' To Pay Doctors".

They note:
...[A] new study published in Health Affairs raises questions about the feasibility of bundling. The researchers, from the Rand Corporation and the Harvard School of Public Health, looked at three sites that were trying to implement a bundling methodology developed by the nonprofit Health Care Incentives Improvement Institute. (The method is called Prometheus.)

The short version of their findings: the efforts moved along slowly. In two to three years of trying, none of the providers or insurers actually made or received a bundled payment, or even implemented a contract to start them. That "lagged months or years behind their planned milestones," notes the study, which reflected results up to May of this year.
Of course, setting hard payment caps in the form of "bundling" will reduce costs, but by creating incentives to ration and/or deny care.

Meanwhile in the private sector, NPR reports, "Wal-Mart Plans Ambitious Expansion Into Medical Care".

These "retail health clinics" have proven successful in providing patients will affordable access to decent primary care services. As is typical, the profit-driven private sector is meeting the needs of patients in away that the government central planners do not and cannot.