The Deficit – what to do?

At the state and national level a new era of congress has begun.  Over the next few months there will be many difficult decisions made on both fronts and many of those decisions will deal with the deficit our country faces the revenue shortfall our state faces.

At the national level the deficit is a huge threat to our fiscal “health” and since this is a health care blog I thought I’d talk about where things may go and how a focus on deficit reduction might affect health care.

There are several deficit reduction proposals on the table and each includes a recommendation to reduce the growth in Medicare spending over time.  I’m not going to bore you, or bewilder you, with a summary of each proposal but here’s a link that provides a side by side comparison http://www.kff.org/medicare/upload/8124.pdf .

What’s interesting is that each of the proposals considers health care as part of the problem and part of the solution.  My hunch, and the worrisome part, is that the solution talked about most will be to reduce provider payments. 

The health reform law that went into effect January 1, 2011 and continues to ratchet up over the next few years includes significant payment reductions for hospitals.  Any additional reductions in payment will reduce access to services for those needing it most and limit our, and other hospital’s, ability to provide care.

It will be important for all of us to do what we can to urge lawmakers to look under the unturned stones to find money to reduce the deficit.  Liability reform would go along way to reduce health care expenditures.  We see every day physicians ordering tests and treatments for patients that wouldn’t be needed if they weren’t forced to practice defensive medicine but we live in a world of no tort reform and a physician must protect his or her reputation, practice and family.

Big pharmacy was essentially spared by health care reform and if you’ve purchased prescription medications lately you know the cost.  I’m all for company profits.  All companies need to make a profit to stay in business and in the drug world profits help pay for the research and development of new life saving drugs but I’m not sure pricing drugs beyond the affordability of those who need them serves anyone well.

Another area of opportunity are medical devices and implants.  It’s common for a replacement joint for the knee or hip to cost in excess of $40,000 and for the mark up on these devices to be more than 1,000%. 

I don’t want my two-year old son to have to pay for the deficit we’ve created but further reducing payments to hospitals and providers is not the solution.   If you want to reduce the cost of the final product, reduce the input cost.  If GM wants to build a car for less money they must spend less money on all the parts that go into the car.  If the government wants to reduce the cost of health care they need to reduce the input cost.

About Craig Thompson

I am a young professional with two great sons, and I work in the healthcare setting. I am employed in hospital administration and serve as Chief Operating Officer at Golden Valley Memorial Healthcare in Clinton, Missouri. These are challenging and exciting times in healthcare and my blog will focus on healthcare, raising boys or being raised by boys, and living in mid America.
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