Advice To The President On Controlling Health Care Costs

Gov. Deval Patrick signs a sweeping health care cost-containment law. (Photo: Jesse Costa/WBUR)

At WBUR’s Cognescenti today, four health care heavyweights offer President Obama some advice about controlling costs under the Affordable Care Act now that the law is here to stay.

The advice, from David Seltz, James Roosevelt Jr., Regina Herzlinger and Stephen D’Amato, is based in part on Massachusetts’ landmark cost-containment law which was approved in August and took effect earlier this month. Here’s a taste:

Seltz, a special adviser on health care cost containment to Gov. Deval Patrick writes: “Health care costs have grown so much that the next president could effectively solve much of our federal deficit crisis by getting health care costs under control.” Do do that, he says, model a national cost-control plan based on Massachusetts’ new law.

Roosevelt, president and CEO of Tufts Health Plan writes that “The Affordable Care Act does not go far enough on cost containment.” He says a using a combination of “global payments that reward providers for keeping patients healthy” and “extensive prevention and wellness provisions” costs can and will decline.

Hertzlinger, professor of business administration at the Harvard Business School, believes transparency is key. “Right now, you can get more and better information about the quality and price of a container of yogurt than you can about the quality of a surgeon’s work compared to his or her peers — or the price of a medical test or procedure. Transparency in health care leads to better outcomes at lower costs. When consumers have access to reliable information about price and quality, their choices lead to lower prices and better quality. We see this for example with Lasik eye surgery. Because it’s optional, consumers are spending their own money. Because they’re spending their own money, they care about quality and price. As a result, in recent years the quality of Lasik has improved, while the cost has decreased by about 30 percent.”

And D’Amato, a health care advisor to the Massachusetts inspector general asks: “Why settle for containment? The president should aim higher –- he should try to achieve cost reduction….investing in wellness and prevention programs is the key to unlocking the door to health care savings. It’s much cheaper to pay for smoking cessation programs than it is to treat lung cancer and other smoking-related illnesses. Effective weight loss programs and nutrition education initiatives cost far less than treating diabetes. Subsidized exercise programs can generate significant savings in cardiac care.”

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    Health care is too emotional for people to be true consumers. LASIK is a voluntary cosmetic procedure hardly comparable to serious health problems.

  • The_Mad_Hatter

    As long as medicine is a business than a flat rate service, healthy people are not good for the professionals practicing in this business. So, they have no incentive to keep you healthy except with the platitudinal “exercise more” comment during visits.
    Roosevelt, as the head of an insurance company (HMO’s are insurance companies) is disingenuous saying that this provision will lower costs.
    Cost will be lowered if first, we have laws that allows foreign educated doctors to gain licenses a lot easier. We can import people far smarter than the average doctor in the the US, then pay those countries for what they had spend on their education, so that they can produce more of the same quality doctors.
    Second, if the NIH and HSF who fund lots of research that lead to drugs that private pharma the patents and sells at 1000 times its real cost, more than half that patent would belong to the people (AKA, tax payers) and the price per dose would be far lower.
    Total removal, or at least shortening the period of patents protections will not affect creativity and humanitarian urge in people. At least, it will attract a lot more such humans than damned business people whose only goal is to suck blood of the ill.
    That is how costs will come down.
    If we paid as much as they do in Germany or Sweden, or even the bashed up UK, our deficit would turn into a super surplus we wouldn’t know what to do with.
    Maybe we would have money to spend on cleaning output from coal burning plants!
    Medicine is not a business. Mr. Roosevelt and people like him are part of the problem.