Rx For Health Reform

Whatever the final national solution for healthcare reform looks like, Georgia and other states will still be in search of ways to further reduce healthcare costs, which are expected to continue to climb.

I thought it might be helpful to review the original and stated goals of national healthcare reform: Expand access, decrease costs and end cancellation of coverage.

Despite flaws, our U.S. healthcare system continues to be the envy of the world. Ask Danny Williams, the Canadian premier of Newfoundland, who just visited Florida for heart surgery, opting out of seeking care from Canada’s well-regarded single-payer system.

Premier Williams defended his decision saying, “…This is my heart. It’s my health and it’s my choice.” The marketplace and his belief in a superior product brought Williams well south of the Canadian border.

From the marketplace, here are some paths towards the originally stated goals of reform.

Pricing Transparency: When a drug goes off-patent and moves from prescription and into the over-the-counter (OTC) marketplace, its price drops like a rock. The same is true for the pricing of cosmetic dentistry, lasik surgery, weight loss and maintenance or most any area of healthcare not covered by insurance.

What do these products offer that most medical services and procedures don’t? Clear and transparent pricing. In Singapore, the government mandates tax-favored Health Savings Accounts (HSAs), and consumers control how each and every dollar in their HSA is spent. As a result, they comparison shop, and hospitals offer bargains, such as mid-week surgeries and seasonal treatment specials.

The Georgia Public Policy Foundation, a nonprofit free market think tank, is advocating the use of pricing transparency, as well as private sector healthcare exchanges and marketplaces, across state lines, to drive down healthcare prices in Georgia.

The Health Strategies Council of Georgia, appointed by Gov. Sonny Perdue to advise the Department of Community Health, is also looking at pricing transparency as a tool to reduce the cost of healthcare for state employees as well as the public. Medicaid costs are the fastest rising portion of Georgia’s budget.

Collaborative Care: Lower price does not equate to lower quality of care. In the area of cardiac surgery, St. Joseph’s Medical Center in Atlanta is among the best in terms of patient outcomes, and this comes from third parties like Health Grades (www.healthgrades.com). St. Joe’s also offers some of the lowest fees for cardiac care and related outpatient rehabilitation services.

The Cleveland Clinic in Ohio, another low-cost leader in medical innovation, offers something called “collaborative care.” Instead of doctors charging per visit or per test, patients are treated and charged by several physicians for each full and complete “episode of care.” A patient is given pricing particulars and details prior to treatment. Doctors on the care team meet and share data; tests as well as pharmaceutical needs are evaluated and coordinated by the care team, as opposed to a single primary care physician.

Allow Pharmaceutical Price/Fee Negotia-tions: A huge flaw of the Bush-era amendments to Medicare/Medicaid prohibit federal and state governments from negotiating prices with pharmaceutical manufacturers. Those same companies also manufacture OTC drugs: Walmart is not banned from negotiating what price it will pay and what shelf space it will give.

Although pharmaceutical companies do devote billions to the new drug pipeline and research and development, there are ways to compensate that expense that don’t involve gouging every U.S. consumer.

Each of these no- or low-cost market-based initiatives could be piloted, along with allowing insurers to compete and sell across state lines. Before spending a trillion dollars in these times of unmatched deficits, it seems only logical to give regional trials a try. Clinical trials, completed on a small and monitored population, are how drug companies and the FDA bring new drugs into the marketplace after all. You might think that inventing a cure for cancer would be tougher than pricing the treatment.

Categories: Political Notes