Saturday, February 12, 2011

Monopolies Threaten Health Care Cost Controls

Merril Goozner via The Fiscal Times.How do bugs get into Computer Programs? Well, the programmers put them there. Same can be said with this train wreck called Health Care Reform. The Social Engineers in the cab steering this monster off the tracks. Short of Nationalizing the whole Industry (and maybe that's the goal) the reform achieves the opposite of it's goals: high costs and short supply. Great..just great...
Beyond the legal challenges, a major new hurdle is emerging for the health care reform law. Recent studies show that the major players in the health care marketplace – insurers, hospitals and physician practices – are consolidating, which increases the likelihood they will collude on prices charged to employers and to consumers and defeat cost control measures in the law.

Government officials are already grappling with the issue as they move to implement one of the signature cost control elements of reform – the formation of Accountable Care Organizations (ACOs). Conceived as a delivery system alternative to health maintenance organizations, ACOs are supposed to achieve greater coordination of care by linking together physician practices and hospitals, and will be financially rewarded if they improve quality while lowering costs.

The rules for ACOs, which are being written now, won’t go into effect until next year and will only apply to the Medicare market. While the Centers for Medicare and Medicaid Services (CMS) is likely to endorse several different payment models, the law calls for sharing savings when the Medicare payments for beneficiaries covered by the ACO fall below recent regional trends.

Top officials at the Centers for Medicare and Medicaid Services are already worried some of the new entities will become a vehicle for recouping Medicare losses. Raising rates in the private market would ultimately undermine any short-term savings achieved by Medicare, since increases in a region’s top line health care tab would eventually force Medicare to raise its own rates.

“There will be parties out there who want to repackage what they do and call it an ACO,” CMS administrator Donald Berwick told a forum at the Brookings Institution earlier this week. “We have to maintain the integrity of markets and not let concentrated entities emerge.”

No comments: