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Sunday, June 21, 2009

Level Health Care Payment Field for All

By James H. Hinton
Presbyterian Healthcare Services
      President Obama addressed physicians at the American Medical Association in Chicago on Monday, explaining his ideas for national health care reform. Describing a future of rising costs, increasing uninsured and fractured systems of care, he said plainly, “The status quo is unsustainable.”
       I couldn't agree more.
       There's much in health care that needs to change and much more that is worth preserving. I know there are many elements of the reform debate that will lead to honest differences. But there is one issue that I hope every New Mexican can agree on, and one that we must insist on fixing. That is the issue of having our government pay less for the care of patients in New Mexico simply because of where we live.
       This problem of payment disparity works this way: Through the Medicare program, the federal government sets the reimbursement rates to providers for most services and procedures. These Medicare rates then drive payment rates from private health plans (which typically pay about 20 percent more than Medicare) and Medicaid (which typically pays less).
       But the problem is that these Medicare rates have been set in the political process and reward communities that have historically had more physicians, hospitals and services. So today, geography is destiny in the Medicare system. Since New Mexico has fewer citizens and has historically had fewer health care providers, our rates have always been lower.
       How much lower? Imagine two Medicare patients, one in Albuquerque and one in Miami. In the course of a year, each sees her primary care physician routinely, each receives specialty care and maybe each visits the hospital that year. We know from the most recent data made available (2006) by the Dartmouth Institute, our government paid $16,351 for the average Medicare patient living in Miami and paid $6,661 for the Medicare patient living in Albuquerque.
       No matter how you choose to factor in cost-of-living or rent or anything else about life in Miami, it is hard to believe that patients in New Mexico and the providers who care for them deserve two-and-a-half times less.
       In case you are thinking that patients in Miami are somehow getting much better care for all that money, it is not the case. Researchers who have studied high-cost and low-cost areas of the country for years have never been able to find a difference in the quality of care.
       As President Obama reported to those same physicians in Chicago, “You're no less likely to die from a heart attack and other ailments in a higher-spending area than in a lower-spending one.” Patients in high-cost areas may get more unnecessary services and tests, but they are not getting better health for the extra money.
       There is an upside to this payment disparity. Communities like ours have proven that we can produce the same health outcomes for less money than the providers in those high-cost places. It is time to hold high-cost areas of the country to the same standard.
       I believe that is the key to paying for the health care reform we need. In fact, it would be malpractice on the part of Congress and the White House if they choose to further the same broken reimbursement system and reduce rates proportionately to providers across the country.
       New Mexico's congressional delegation understands how this payment disparity penalizes our state, and we have to support them in sending the right message to their colleagues from high-cost areas.
       The policy prescription can be found in a recent New England Journal of Medicine (Feb. 26, 2009): “To slow spending growth, we need policies that encourage high-growth (or high-cost) regions to behave more like low-growth, low-cost regions — and that encourage low-cost, slow-growth regions to sustain their current trends.”
       The article points out that curbing the Medicare inflation rate to what we find in low-cost areas would produce a savings of $1.42 trillion over the next 14 years. That savings is very close to the estimated cost of insuring today's 45 million uninsured in America.
       I realize that many New Mexicans do not consider their health care “low cost,” and we take very seriously our responsibility to make care more affordable. There is much more we need to do in health care reform, but fixing payment disparity is the right place to start.
       Our policy-makers in Washington should seize this moment to change the broken notion that a patient's geography determines his or her worth. It is time we insist for payment parity as we reform health care.
       Hinton is president and CEO of Presbyterian Healthcare Services, a private, not-for-profit New Mexico health care system.
       

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