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‘Rescue the economy’ by cutting health-care waste: Berwick

Economists have warned health-care interests for decades that the system is inherently wasteful and unsustainable. Little happened.

But now, the financial crunch has opened a window of opportunity. Nearly 6,000 caregivers and health executives meeting in Orlando this week at the Institute for Healthcare Improvement say they now have a message that sells: There are many ways to improve quality and cut spending at the same time.

“It’s a very exciting time to be in health care,” said Michael Dowling, president and CEO of North Shore-Long Island Jewish Health System in New York. “A lot of good things are going on, especially for people who want to do things differently.”

“The best days of American medicine are ahead of us,” agreed physician Gary Kaplan, chairman and CEO of Virginia Mason Medical Center in Seattle.

Since Sunday, they and many others have shared ideas on how to reduce duplication and avoid costly mistakes. More than 350 of those attending were from Florida, IHI organizers said.

Today, the IHI audience -- 20,000 counting those viewing by satellite -- will hear from IHI's founder, Dr. Donald Berwick. It is likely he will include many things he couldn't say publicly while serving as administrator of the Centers for Medicare and Medicaid Services for the past 18 months. He resigned Nov. 23, when it became clear that Senate Republicans could block his confirmation.

The gist of Berwick's message, as he explained to reporters Tuesday evening, is that hundreds of billions of dollars -- 20 to 30 percent of health-care spending -- are wasted on investments or actions that don't help patients.

If that waste were removed, patients' quality of care and quality of life would actually improve, he said. So would the budget problems that government and business face from health-care inflation.

Health spending is now estimated at $2.5 trillion, accounting for 17.6% of the nation’s gross domestic product, according to a report released todayby the National Bureau of Economic Research. If current trends continue, the health sector's share of the budget would grow to 26 percent by the year 2035.

During Berwick's tenure at CMS, much of his job was to implement the Affordable Care Act, which introduced sweeping changes to both the private and public sectors with the aim of expanding access to care and changing the perverse incentives in the payment system.

Berwick said events have conspired to make necessary changes finally possible, because the alternative -- budget-slashing across the board -- would be worse.

Already some states have dropped patients from their Medicaid programs in order to plug budget holes. And a 27-percent cut in Medicare's payment to physicians is pending in Congress; while action to avert it is expected, something will have to be cut in its place.

“We’re in a horse race right now,” Berwick said.

Of course, cutting waste isn't as easy as it sounds. "It's always easier to stay in the status quo. ..That's where courage and backbone matter," Berwick said. "It's the moment of truth."

Berwick identified six areas of wastein health care that should get more attention because they raise costs and lower the quality of care: lack of coordination between players in the health-care system, resulting in patients falling through the cracks; preventable errors; overtesting and overtreatment; administrative complexity, both public and private; overpayments from government's failure to price products properly; and fraud or abuse. 

IHI leaders don't get much argument when they push coordination of care, stamping out errors, streamlining administrative procedures and cracking down on fraud and abuse. Those efforts take energy and resources, but no one argues that they're unimportant.

But the agreement ends when it comes to overpayments, overtesting and overtreatment. An overpayment is, after all, somebody's paycheck.

For example, Congress' decision to let Medicare seek competitive bids for durable medical equipment, such as wheelchairs, in a nine-city test saved an estimated $130 millionin six months. Two of the metro areas in the test were in Florida, and protests from vendorsspurred an effort by several members of Congress from Florida to repeal the law.

Over-testing and over-treatment are even more controversial, as in 2009 when the U.S. Preventive Services Task Force decided not to recommendroutine mammographyscreening for women in their 40s who had no more than average risk for breast cancer. That ruckus still hasn't died down.

A few weeks ago, a similar kerfluffle arose when a task force on prostate cancersaid there appears to be no benefit to doing routine PSA screening for men over 40 in the absence of "highly suspicious" symptoms.

The IHI forum ends today.

--Health News Florida is an independent online publication dedicated to journalism in the public interest. Carol Gentry, Editor, can be reached at 727-410-3266 or by e-mail.



Carol Gentry, founder and special correspondent of Health News Florida, has four decades of experience covering health finance and policy, with an emphasis on consumer education and protection.