March 16, 2012
Similar to last week’s post on the varying cost dilemmas affecting the health care “ecosystem,” the reality of our nation’s health crisis continues to pose significant financial and care hurdles for healthcare providers and patients in particular. In light of rising health costs, a down economy and quickly changing insurance policies, providers and patients are not only increasingly faced with making difficult decisions that affect the physical care they either provide or receive, but the state of their financial health is in jeopardy as well. More details on this and other figures and insight released this week can be found below.
- The Wall Street Journal highlighted the financial challenges doctors in private practice around the country are facing, as insurers increasingly target the traditional fee for service payment system in their efforts to improve care and reduce medical costs. In the past few months, several large insurers have announced plans to reward “medical home” practices who not only meet certain quality goals, but also for taking steps to upgrade their equipment and integrate more coordinated care services into patient treatment plans. For many providers particularly those in smaller practices, the upfront costs of technological and staff improvements can be financially out-of-reach. The article pointed to Westminster Medical Clinic in Denver, CO, as an example – who turned a frighteningly low net profit of $29,261 last year.
- Equally as devastating, CNN reported on a new paper in the Annals of Family Medicine that projects the average family will face medical costs that are higher than their total income in less than 20 years. Though some experts say this estimate is an overstatement, medical costs have risen faster than inflation since the 1960's, and while the rates may be slowing, the growth is still occurring. With the implementation of the ACA, it is unclear what growth will be in the future as the authors of the paper cited the average annual increase in insurance premiums was 8%, between 2000 and 2009. Meanwhile, ACA supporters point to provisions in the act that are meant to slow or reverse the growth in spending - especially with the added emphasis on preventive care, which is supposed to reduce the need for expensive hospitalizations and emergency room visits.
- CNN Money also reported on the new Congressional Budget Office (CBO) estimates surrounding the Affordable Care Act (ACA). Though the government is now projected to spend $48 billion less to subsidize insurance coverage, CNN writes “the CBO now expects more people to be eligible for Medicaid and the Children's Health Insurance Program, increasing the government's costs by $168 billion compared to last year's estimates. The reason: higher unemployment projections and lower income expectations.” It’s estimated that the total number of uninsured will be reduced by 30 million people by 2016 while those covered by employer-based coverage will slowly decrease. The CBO has not released estimates for the entire ACA.
- Lastly, a New York Times blog post took a closer look at young doctors and equipping them to handle issues of cost and their desire to provide quality care for their patients. According to the blog post, “the patchwork of payment patterns that mark the American medical system makes it particularly difficult to teach young doctors. Net costs for treatments and medications vary depending on region, payer and even specific hospitals, so medical students and trainees often end up learning what is relevant only to their particular workplace.” To combat these issues, Dr. Neel Shah, a senior resident in obstetrics and gynecology at Brigham and Women’s Hospital in Boston, formed the nonprofit organization, Costs of Care, and has been collaborating with medical educators and health care economists at Harvard Medical School and at the Pritzker School of Medicine at the University of Chicago. Together, they’ve designed a series of videos and educational materials to help medical students and doctors-in-training learn to make clinical decisions that optimize both quality of care and cost. With support from the American Board of Internal Medicine, these educational modules, called the Teaching Value Project, could represent a significant breakthrough in how medical students learn how to consider the cost of care in their future practices.