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Key Obama Health Cost Saver Fails to Save Much

Well, gosh, this was buried on the Washington Post website and exiled over to page six in the print edition today, so I figured I’d unearth it, wipe off the dirt, and show it to you.

One of President Obama’s key selling planks for the $1 trillion Obamacare health system revamp is that it’s going to help cut the cost of providing health care. And one of the major ways he plans to cut costs is through Accountable Care Organizations, or ACOs.

Under the law, ACOs will start to become part of Medicare starting this January.

Unfortunately, according to the results of a test program described by the Washington Post, they don’t save much money.

The idea of an ACO is that hospitals and doctors will band together into a kind of large unit to provide the best and most “efficient” care. If they obey certain standards of care and are able to achieve cost savings, ACO members will reap financial rewards, gaining a share of the savings. Which means your doctor will be answering to a Higher Authority.

No, not God, but possibly people who think they are. These people are often known as bureaucrats.

Doctors and hospitals will be incentivized to cut costs – “Hmm, let’s wait on an MRI. Why don’t we try some Tylenol first?” – and forced adhere to specific guidelines of care or be punished.

And who will set the guidelines for care? Big Brother, of course. According to the law:

The Secretary of HHS is required to determine appropriate measures to assess the quality of care furnished by the ACO, such as measures of clinical processes and outcomes; patient and, where practicable, caregiver experience of care; and utilization (such as rates of hospital admissions for ambulatory care sensitive conditions) . . . a participating ACO is eligible to receive payment for shared savings if the ACO meets the quality performance standards established by the Secretary of HHS and the ACO meets the saving requirement  . . .

Phew. Sounds like a lot of paperwork and oversight. I hope your doctor doesn’t turn out to be some kind of individualist.

In the study written up by the Washington Post, ten health systems from around the country formed an ACO and were followed for five years. Not much money got saved, even though the groups participating were long-established players and were subject to less stringent rules than those participating under the health law must submit to.

From the article:

Gail Wilensky, who ran Medicare and Medicaid under President George H.W. Bush, said  . . . it is “astounding” that savings were not greater among 10 long-established groups that she said “should have blown it out of the water. . . . It’s like, are you kidding me? . . . If it was this tough for this group that I had just assumed would be hands-down winners, what does it say for groups that don’t have a long history of coming together?”

The experiment, she and other health policy experts point out, was less risky financially for the groups than the proposed ACO rules, because the participants were not penalized for overspending.

Well, let’s try it anyway. That effectively was the quote from Medicare administrator Donald Berwick, who, you may remember, was never confirmed by Congress but rules his kingdom nevertheless.

20 thoughts on “Key Obama Health Cost Saver Fails to Save Much”

  1. Related–out here in the Great Hated State of AZ, the state pool plan for people who were turned down and had had no ins for 6 mos went begging–they had to make it easier and cut the cost 40% to see if that would make people buy–if it goes that way, all this?

  2. My latest doctor “encounter.” New primary (old one left, no one told me). From Indiana, the medical board said–I am thinking India. I needed an eye doc referral–she left after asking me did I snore and why was I there (yes, I know I was just there in Jan, but they said I had to come to get the referral). Oh. She excused herself. She never came back. Finally, my sister, who has claustrophobia, and can’t stand “the little room,” demanded the referral. We got the wrong thing–I needed an auth–anyhow, this woman is now my doctor of record. WhatEVER!

      1. Oh–it cost me $10, a ride (sister’s time and patience), and 2 billable hrs. Of course, we know the patient has no time or money constraints.

  3. Both sides of the political landscape will argue non stop about the viability of such programs and get caught up in statistics, projections, etc. but at what point can they all just realize or admit that the federal government is simply incapable of running any program, big or small, in an efficient and cost effective manner. It just doesn’t happen! Even our military, which has been complimented on Keith’s blog recently as the best of all times (of which I agree) is still guilty of waste and ineffieciency when it comes to its management.

    This drives me crazy.

    1. MT for re-redistribution

      I agree 100%. It is insane to think the feds can take on health care. We hear about substandard care in other countries that have centralized health care, but I guarantee ours is going to be much worse, and much more expensive. For the feds to actually think they can pull this off, is this deception or denial? Which is worse?

      1. Cutting costs means cutting care.
        Stinky homeless guy vs senior who can pay the deductible.
        Bullet-riddled gangbanger vs 12yr old disadvantaged youth.
        Senior needing heart stent vs 30yr old needing..anything.
        We know how that’s going to go.

        1. Not too sure those stinkies or bangers would get it over the Medicare pt. They would have to go on Medicaid. But yes–anyone “young” will as a rule get it over the older person who has outlived everyone’s interest. Maybe not the banger, tho. These streets are getting mean–in FL they are now going to pee-test anyone on food stamps,..on drugs? No soup for you! Oh, this cost a ton for no real results? We’re used to that.

  4. I’m in Canada. My elderly mother, with moderate dementia broke her leg last year, had to get knee replacement #3. They were just going to release her without physiotherapy. I had to fight to get her into a place with rehab for the elderly. The hospital said that having dementia,meant that there was no rehab place in Ottawa that would take her. She went for 2 weeks, with me there twice a day, smoothing over her inadequacies. She walks very well now. My mother fell through the cracks, and it took a huge effort on my part to get her placed. Good Luck with your system

      1. Ok, I said this drives me crazy. Now, having read your comments, the car has come to a stop. I’m officially crazy!

        Question. How is it that Americans (most of us) can be so smart and see things for what they are and our politicians all seem to be on the short bus? (I know, politically incorrect)

  5. Because who wouldn’t want an unelected bureaucrat with no medical background determining how well doctors and hospitals are doing their jobs?

    1. I miss a doctor who knew who you were at least. They might as well just go to clinics–take pot luck. You would get more opinions–maybe someone who listened the day in med school where they talked about what you might have. They are debating on the NYT whether medical school should be free so all docs won’t have to be radiologists and dermies to pay their loans. This crew in the WH wasted more money on nothing with those stimuli than this would cost–but now we are out of money…and the docs prob would still opt for radiology–fewer crazy, large, or sick people to come in personal contact with. Yes, I am cross! I decide I don’t need everything–no cardiologist, no this, no that, bec going is such a nuisance. I am my own death panel. I have no body to blame but myself.

      1. Star, time for a Bloody Mary! I sympathize. My family doctor moved and I am back to square one after a twenty year relationship. The group has been unable to replace him. His partner is good but now he is busier than heck.

  6. 3000+ pages later and HHR is still writing rules and regs. The whole thing needs to be thrown out along with anyone who voted for it!

    1. One page would suffice. Allow competition in insurance policies across state lines, encourgage more to become doctors (several ways to do this), tort reform, eliminate bureaucratic requirments on physicians, allow doctors to run a business.

      Call and ask a mechanic how much it costs for an oil change and he will tell you $21.95. Ask you doctor how much to get a wart removed and the questions begin; do you have insurance (why should that matter), if so who is your carrier, etc. I would rather pay for the day to day things and reserve my insurance for the big ticket items. It is upside down the way it is now. We go for every sniffle and bump.

  7. The progressives in the bureaucracy know Medicare is broke, that is why Obamacare guts $500B from it. Same reason why Dodd-Frank was passed to cover for the failure of Fannie and Freddie. They want to regulate your personal IRA or 401K. Why is that? So they can siphon off your hard earned money the way they did with Social Security and Medicare piggybanks.

    The best way to save Medicare is to pass the Ryan budget. It reforms Medicare and puts it back in the hands of the people. Why do you think they are telling these bald face lies about Ryan’s plan? They are trying to dispirit seniors and their children into believing the Republicans want to push Granny over the cliff. We laugh at that video, but it is working on the people who get their news from the liberal press. Medicare reform is the only way we have of stopping Obamacare dead in its tracks. Reform would cripple Obamacare, hopefully mortally, and neutralize that monster, Donald Berwick, and stop him from dismantling Medicare.

    We can’t put our faith in the courts to to rule Obamacare unconstitutional. Has anybody seen how may progressive judges are now in the federal court system? The next election is do or die for this country and for our constitution. If Obama wins, we the people will become slaves to the government. It really is that cut and dry.

  8. “I hope your doctor doesn’t turn out to be some kind of individualist.”

    Oh it is happening already Keith, even before Obamacare kicks in. My personal doctor was part of a group practice. She saw what was coming down the road with Obamacare and decided to quit her practice rather than be forced to deliver inferior medical care to her Medicare patients. The faster this hideous program is implemented the more frequently we will see our doctors retire or leave practice rather than violate their Hippocratic oath. The only doctors left will be the less qualified public service physicians.

    Obamacare was meant to destroy the finest healthcare system in the world and Obama’s unelected bureaucrats are doing just that…bit by bit, day by day through the regulatory process.

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