Costs change health care delivery

April 1, 2012


— Listening to the lawyers talking nonstop last week about health care gave me a headache, so I decided to consult one of the nation’s top doctors. He offered a real-world diagnosis of what’s happening in health care — and a reminder of how much it’s changing, regardless of what the Supreme Court decides about Obamacare.

My medical guru is Dr. Delos “Toby” Cosgrove, the chief executive of Cleveland Clinic, a $6 billion network that’s one of the biggest and best providers in the country. Cosgrove explained how the health system is being transformed by basic economic pressures that predated the new law and will continue, regardless.

Talking with Cosgrove, you get the sense that the political (and now, legal)  version of the health care debate is in many ways a distraction from what matters most, which is how care is actually delivered to patients. And that’s changing, inexorably, because of underlying cost pressures.

The Supremes could throw Obamacare out the window, and we’d still have a revolution in health care delivery that promises better treatment for Americans, at lower cost. The Patient Protection and Affordable Care Act (humor me, while I use its real name) will make this revamped system accessible to more Americans, so I’m for it on equity grounds. But even if the mandate to buy insurance disappears, hospitals and docs will keep moving into the new world of care.

We should understand that the current debate is over financing and access — not health care delivery. As Cosgrove says, “That train has left the station.” Drawing on Cosgrove’s analysis, here’s a summary of the changes already in play:

l Hospitals are consolidating. Today, says Cosgrove, 60 percent of hospitals are part of consolidated systems; an example is Cleveland Clinic, which now has locations in four states including its headquarters in Ohio. These systems will keep merging as they drive toward greater efficiency. It’s the same process that happens in every industry, from banking to book retailing. It will make care a little more impersonal — but also cheaper and better.

This rationalization will close small and inefficient community hospitals — one U.S. official estimates that up to 1,000 hospitals should be closed. As a result, we’ll have fewer hospital beds and more outpatient and home care. What’s forcing consolidation is that reimbursements from Medicare are going to be reduced, requiring hospitals to cut costs.

l Doctors are becoming salaried, joining the trend pushed by the Cleveland and Mayo Clinics and some other top providers. Today, about 60 percent of doctors nationwide are on salary, up about 10 percent from several years ago. Cosgrove predicts that this will rise to at least 70 percent over the next decade.

Salaried doctors won’t have the same economic incentives to provide expensive treatments that may not make sense for patients. They’ll be paid well (an internist at Cleveland Clinic starts at about $120,000) but not the stratospheric salaries that once encouraged every doc to dream of driving a Porsche.

Meanwhile, a shortage of doctors and nurses means that less senior (and less expensive) practitioners are providing more care. A physician’s assistant, increasingly, will treat minor ailments; in operating rooms, says Cosgrove, 40 percent of those present are technicians, rather than doctors and nurses.

l Health records are finally going electronic, which should allow additional big savings. It’s an expensive transition (Cleveland Clinic has spent $300 million on electronic records systems over the past decade) but it will pay huge dividends, in terms of cheaper and better care.

l The federal government is gathering better data on health outcomes, which will encourage national standards for care. Hospitals already report 65 metrics for care to the Centers for Medicare and Medicaid Services. By 2014, they will be reporting 85 items that will measure everything from patient satisfaction to infection and mortality rates.

The health care overhaul is happening whatever the Supreme Court decides. The main consequence of the Obamacare case will be whether the justices toss out the existing rule book, forcing everyone to start over again. The justices can slow things down in this way, and they can make the system more equitable or less, but they can’t stop the revolution.  

— David Ignatius is a columnist for Washington Post Writers Group.    


Richard Heckler 6 years, 1 month ago

This will be the most efficient and effective medical insurance for consumers. Health care in and of itself will remain a private industry.

IMPROVED Medicare Single Payer Insurance for All leaves choice of doctors,clinics,hospital and services across the board to the consumer.


Healthcare Reform Report Card

Single-Payer (HR 676 and S 703) Expanded Medicare for All Vs. Proposed Healthcare “Private insurance with Public Option”


Richard Heckler 6 years, 1 month ago

This plan reduces cost substantially which should be offered up as a choice for consumers. Let the consumers make the choice not shareholding congress people and special interest campaign money.

Improved Medicare Single Payer Insurance for All is one substantial part of the solution.

  • Easy to Implement: Medicare has been in existence since 1966, it provides healthcare to those 65 and older, and satisfaction levels are high. The structure is already in place and can be easily expanded to cover everyone.

  • Simple: One entity – established by the government – would handle billing and payment at a cost significantly lower than private insurance companies. Private insurance companies spend about 31% of every healthcare dollar on administration. Medicare now spends about 3%.

  • Real Choice: An expanded and improved Medicare for All would provide personal choice of doctors and other healthcare providers. While financing would be public, providers would remain private. As with Medicare, you choose your doctor, your hospital, and other healthcare providers.

  • State and Local Tax Relief: Medicare for All would assume the costs of healthcare delivery, thus relieving the states and local governments of the cost of healthcare, including Medicaid, and as a result reduce State and local tax burdens.

  • Expanded coverage: Would cover all medically necessary healthcare services – no more rationing by private insurance companies. There would be no limits on coverage, no co-pays or deductibles, and services would include not only primary and specialized care but also prescription drugs, dental, vision, mental health services, and long-term care.

  • Everyone In, Nobody Out: Everyone would be eligible and covered. No longer would doctors ask what insurance you have before they treat you.

  • No More Overpriced Private Health Insurance: Medicare for All would eliminate the need for private health insurance companies who put profit before healthcare, unfairly limit choice, restrict who gets coverage, and force people into bankruptcy.

  • Lower Costs: Most people will pay significantly less for healthcare. Savings will be achieved in reduced administrative costs and in negotiated prices for prescription drugs.


Cant_have_it_both_ways 6 years, 1 month ago

To bad Merrill, you just might have to pay your own way.

Richard Heckler 6 years, 1 month ago

As the Supreme Court weighs whether the Affordable Care Act goes too far, we host a debate on whether the law goes far enough. The case is reviving the heated tensions that surrounded the healthcare reform law in the debate leading up to its passage two years ago.

Although support for the measure is often equated with backing the expansion of health coverage for all Americans, there are some who maintain it didn’t go far enough in helping the uninsured.

We speak to Dr. Stephanie Woolhandler, co-founder of Physicians for a National Health Program, and Dr. John McDonough, who played a key role in shaping Mitt Romney’s healthcare reform law in Massachusetts as well as the Affordable Care Act. The new healthcare law is "going to leave tens of millions of Americans woefully underinsured, with gaps in their coverage like copayments and deductibles, so they’ll still be bankrupted by illness.

And it’s not going to control cost," Woolhandler argues. "So we still need single-payer national health insurance regardless of what happens at the Supreme Court."



Richard Heckler 6 years, 1 month ago

How is it that my tax dollars paying for my health insurance is NOT paying my own way? Where does the government get those tax dollars? From me a taxpayer.

I am for IMPROVED Medicare Single Payer Insurance for ALL absolutely!!!

Make IMPROVED Medicare Single Payer Insurance for ALL available to all taxpayers as one of our choices. YES give consumers the choice = politicians,insurance CEO's,insurance special interest money get the hell out of the way!

Leave existing insurance on the table for those who enjoy spending large sums of money for medical insurance. What could possibly be more American?

I want my tax dollars spent on a useful endeavor not on insurance over charges or obscene CEO salaries or golden parachutes or shareholders or special interest campaign funding!!!

It is time for my tax dollars to support this fiscally prudent insurance program.


Repubs have nothing better to offer.

Did you know the health care industry has 6 high dollar lobbyists per elected official? Do you know who is paying for these high dollar lobbyists? YOU ARE!

How is it that my tax dollars paying for my health insurance is NOT paying my own way? Where does the government get those tax dollars? From me a taxpayer.

Cant_have_it_both_ways 6 years, 1 month ago

Nothing would cost so much if everyone that could would pay their own way.

Somehow I question what you mean when you say, "My tax dollars". From what I have heard and observed, other than what little sales tax you might put into the system, paying federal and state income tax is something that is known to escape your attention.

Richard Heckler 6 years, 1 month ago

All of this consolidation talk spells fewer choices not less expensive.

Consolidation puts people out of work.

Richard Heckler 6 years, 1 month ago

"All told, then, tax dollars already pay for at least $1.2 trillion in annual U.S. health care expenses. Since federal, state, and local governments collected approximately $3.5 trillion in taxes of all kinds—income, sales, property, corporate ( the list is long)—in 2006, that means that more than one third of the aggregate tax revenues collected in the United States that year went to pay for health care."


Richard Heckler 6 years, 1 month ago

From what I've learned that $1.2 trillion tax dollars paid out in annual U.S. health care expenses would cover all citizens 24/7 under the IMPROVED Medicare Single Payer Insurance umbrella.

Seems like we consumers should have been given the opportunity to sign up yesterday.

Richard Heckler 6 years, 1 month ago

Physicians for a National Health Program

Currently, the U.S. health care system is outrageously expensive, yet inadequate. Despite spending more than twice as much as the rest of the industrialized nations ($8,160 per capita), the United States performs poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates. Moreover, the other advanced nations provide comprehensive coverage to their entire populations, while the U.S. leaves 51 million completely uninsured and millions more inadequately covered. Health Profits Cartoon

The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one-third (31 percent) of Americans’ health dollars.

Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $400 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.

Under a single-payer system, all Americans would be covered for all medically necessary services, including: doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs. Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.

Physicians would be paid fee-for-service according to a negotiated formulary or receive salary from a hospital or nonprofit HMO / group practice. Hospitals would receive a global budget for operating expenses. Health facilities and expensive equipment purchases would be managed by regional health planning boards.

A single-payer system would be financed by eliminating private insurers and recapturing their administrative waste. Modest new taxes would replace premiums and out-of-pocket payments currently paid by individuals and business. Costs would be controlled through negotiated fees, global budgeting and bulk purchasing.

The links below will lead you to more specific information on the details of single-payer:

http://www.pnhp.org/facts/single-payer-resources Physicians for a National Health Program

Flap Doodle 6 years, 1 month ago

You're recycling all the same old twaddle yet again, merrill?

Paul R Getto 6 years, 1 month ago

"We should understand that the current debate is over financing and access — not health care delivery. " === Painfully obvious, but a good point. This is one reason the debate started by Teddy Roosevelt lasted about 100 years. This is just the latest iteration of this question. The Affordable Care Act has problems, but we all share in the solution, whatever that may be.

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