Ah, yes, newspapers, the web, the politicians… ok, that’s not really the subject of this post.   But…

I read various reports (for example, this one in the Washington Post:  Experiment to lower Medicare costs did not save much money) with headlines that imply that the 2005 bill setting up the “Physician Group Practice Demonstration”, passed under Bush (and, now, a fundamental component of the 2010 healthcare insurance reform bill) is not making a difference.  Why?  Because there are no reported tremendous savings, when expenses are compared from year to year.

OK.  I admit it.  One of the best examples, the Marshfield Clinic in Wisconsin only saved $23 million in costs from 2006 to 2009 and another $ 35 million the next year.  Sounds like a waste to you, too, right?  WRONG!

From 2006 to 2009, health care costs increased from $ 6500  to $ 8500 per person. That’s right, overall health care costs in America rose some 30% over these three years.  And, this hospital clinic only saved $ 23 million.  Another example of factual news that is absolutely incorrect.

Let’s get back to real facts, though.  This experiments deals with “accountable care organizations”, a take-off of the old managed care organizations. And, many hospitals complain that the rules are too onerous.  (Of course, having to deliver overall health care, instead of providing individual health services, is something new and alien to these hospitals.  The goal is to keep the patient healthy, not let the patient develop nosocomial infections as a result of his/her stay, for example.

How did Marshfield accomplish this feat?  It staffed a hotline for nurse triage 24 X 7.  It set up a special program for patients with congestive heart failure.  It set up a patient reporting system (via telephone) to input various vital signs, with deviations from expected results insuring a follow-up call. By the way, it is critical to note, that quality improvements (better patient care) were also required as part of this experiment, not just cost reductions.

But, that’s not all.  Marshfield had an electronic health care record system.  That’s what separated it from the Billings Clinic (MT), for example, which did not achieve the savings.

If a clinic, physician or hospital has not been modernizing for the past few years, the initial year or two may cost the clinic more money during this experiment.  That is a primarily a result of the more stringent record keeping that is required for the program. So, yes, the results won’t appear overnight- one needs that health care information system, for example.  However, there have been incentives for physicians, clinics, and hospitals to adopt these systems for several years now.

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