How to cut health care costs without gutting Medicare or Medicaid
In case you missed it, national consumer group Community Catalyst’s Robert Restuccia and I wrote an op-ed in the Charlotte Observer this past weekend on this topic. The take-home message? We can improve health care and save substantial amounts of money with some common-sense changes both in Washington and Raleigh. And no, it doesn’t involve making huge cuts in services and provider reimbursement to NC’s Medicaid program or raising the Medicare eligibility age to 67. Basically:
Today, if a person is hospitalized with a broken arm and gets an infection in the hospital, the hospital gets paid twice: once for setting the arm and again for treating the infection. That’s what economists call “moral hazard” – the hospital benefits financially from the infection. This is not to say the hospital is malicious – just that the incentives are stacked against quality care. If, instead, we base payments in part on how well providers avoid such problems, we can align the incentives with what we actually want – quality health care.