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Monday, January 4, 2010

Eliminating Fraud And Waste In Medicare

The lack of action in this area has (and will continue to have) a big impact on the overall cost of health care to small business. This is a low hanging fruit that doesn't get the attention it needs.

The President told the American people that he could pay for a large portion of Health Care Reform by reducing the fraud and waste in Medicare. If that is the case why is he waiting for Health Care reform legislation? Why not begin the eliminate it last February when he first said it?

This is not the first time rhetoric is followed up with maintaining the status quo in the health care debate. It's much easier to first lock people into an expensive health care bill and then go about cutting waste and fraud. We could always say, "Well, we have a budget for it (the Health Care bill with or without a public option) and we tried to cut waste but we didn't find that much, really..."

For example, in 2002 a biotech in St. Louis, MO, published a peer-reviewed study showing that 90% of kidney dialysis patients wouldn't need the treatment, potentially saving a substantial portion of the $35 billion and growing budget currently spent on this often fatal treatment in the US alone. The NHS refused to acknowledge the scientific results. A more recent study by AstraZeneca confirmed the 2002 findings. Again, nobody cared. This year, legislation in Congress noted that kidney disease and associated treatment options is the largest and also the fastest growing cost component of MediCare, yet nobody cared to look for a cost-cutting solution. Rather, Congress focused on increasing the budget to allow for the cost increase.

Now that the President has proposed to cut MediCare and shift the funds to a different part of the budget, you are right, there is again no solution. Of course, vested interests have a lot to lose, yet change is inevitable. The quality of health care in this country is declining rapidly. The model we have now doesn't focus on results (healthy people), instead it rewards doctors and pharma companies who keep people coming back for more.

We need more competitive health care options, not fewer. Deborah Williams, Dir. of Policy at Baxter wrote "We as the health care community should begin with building incentives for the right care at the right place. If we can't do it in an area where the answers and data are readily available and relatively robust, it points to a serious societal problem." Note her choice of words, "relatively," not "absolute." She acknowledges that nobody is perfect, but she does stress that we need to focus on the right care for patients.

In the January 2008 Congressional Budget Office (CBO) report on Technological Change and Healthcare Spending, CBO points to development of dialysis of patients with kidney failure as increasing costs. The development of renal dialysis therapy and the many improvements made to it over the past several decades have vastly improved the ability of providers to care for these patients, but at the same time this led to higher costs because patients stayed in treatment longer. In other words, no effort was made to prevent the onset of kidney disease... It further noted that the costs will continue to increase as the prevalence of patients with end stage renal disease has been estimated to increase by 62% by 2020 (Gilbertson and Collins, USRDS (the NIH US Renal Data System)). Whatever happened to prevention...don't we need an SEC type body for health care?

To answer the question in the post title ..... I can give you two reasons:

1. The Congress (both Republican and Democrat controlled) has consistently failed to fund staff and technology in order to do so. (For every $1 spent on exam of suspicious claims $50 comes back to Medicare, yet Congress keeps cutting the exam and technology budget)

2. The President has little influence on the process beyond the selection of an Administrator who will focus on the issue.

Congress micro-manages Medicare and Medicaid, that micro-management is single largest contributor to the 9% of each year’s payments, which constitute Fraud, Waste and Abuse. Yes, that is roughly $22 billion and over the last 20 years the only impact made on fixing that problem was in the first term of the GWB administration when the number went from 11% to the current 9% number.

However, remember, the currently Democratic controlled Congress is telling us they will add millions of people to Medicare and Medicaid and yet it will cost us less than it does today.

I guess they really think we are just that stupid, and from the look of the current polling and who we elected maybe they are correct.

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