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Friday, September 24, 2010

Cutting Healthcare costs

There are a myriad of proposals to cut healthcare costs. In the last year, despite all the attention that has been given to healthcare, not much has been done to reduce costs. The federal government has done nothing at all. Rather than strive for a comprehensive overall restructuring of healthcare, it would make sense to try to do what we can right away to cut medical costs. Everyone would benefit from this. here are a few suggestions:

First, there needs to be better enforcement to stop fraud and waste in teh Medicare program. while the Democrats claimed that they would cut half a trillion dollars of fraud and waste from Medicare, they have done nothing in the six months since obamacare was signed into law to even attempt to reduce fraud and waste. I am going to suggest that the country adopt a proposal first mentioned to me by Steve Brill: we need undercover medicare investigators who look for the phony medicare mills that bilk so much money from the system. Most people I know have seen evidence of doctors who bill Medicare for treatment that was never given and even visits that never occurred. So, for example, a senior goes to the doctor and medicare gets billed for a visit and an xray even though no xray was taken. Or, a senior visits a doctor on three consecutive Mondays and medicare gets billed for six visits. It happens all the time. An undercover force of elderly inspectors would be able to catch those who are ripping off the system. The penalty for a doctor who files phony claims should be a major fine and removal from the medicare system for a year for a first offense and a larger fine and prison for a second offense.

Another area of possible savings would be the adoption of a comprehensive arbitration statute for medical malpractice. Arbitration before panels that included medical professionals would speed up the malpractice process. A limitation of attorneys' fees to 15% of any settlement or 20% of any recovery would again reduce the likelihood of bogus claims that waste assets. Arbitration panels also would not be able to award punitive damages, so the recovery would be for the damages actually suffered by the injusred patient. All of these moves would decrease the costs of the litigation/arbitration dramatically from the present system. this cost reduction should result in lower insurance premiums which in turn should mean lower fees to patients. Another aspect of this arbitration system could be that the standard for recovery could be lessened while at the same time the amount of recovery for specific types of injuries could be set at lower levels -- a system not unlike workers compensation. All of these together would mean that more people would get compensated for doctors' mistakes but at much lower levels and with very much less cost incurred to achieve the recovery. The trial lawyers would lose in this system, but everyone else would win. Indeed, with medical professionals on the arbitration panels, some of the idiotic verdicts that come from juries would be avoided.

One last note: for those who think that the current system is so wonderful, they would be able to use doctors who would work without a pre-agreement for arbitration. My guess is that this would be few doctors, but it would remain their choice.

There are other ideas that I will write about in the near future.

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