The High Costs of Ill-Considered Cost-Cutting
If I had the ability to make anything required reading for the powers that be in Washington, D.C., it would be Dr. Marc Grodman’s blog post on The Hill’s website. Dr. Grodman is CEO of Bio-Reference Laboratories, Inc., a New Jersey-based clinical lab and is also a member of the Healthcare Leadership Council. In his post, he explains clearly and compellingly that simply cutting healthcare spending is not inherently synonymous with achieving a more cost-effective healthcare system.
Dr. Grodman uses the Medicare reimbursement cuts faced by clinical laboratories as his example, pointing out that simply chopping away at Medicare payments for lab services will undermine the advancements laboratories have made in developing genetic testing “that precisely identify disease, (enabling doctors) to select the best treatment for each patient,” speeding the healing process and reducing overall healthcare costs.
If reimbursement cuts hamper this progress, he writes, physicians must rely more on trial and error, leading to greater redundancy, higher cost and reduced quality.
This is true for clinical labs, but it speaks to a larger issue surrounding healthcare policymaking. Even though per-capita Medicare spending is at historic lows, many on Capitol Hill insist there’s a healthcare spending problem. In part, they are right because the aging of the baby boom population and the rapid growth in new Medicare beneficiaries will lead to a rise in utilization of healthcare services. We can’t address this rapid growth in patient numbers and demands, however, by enacting healthcare budget cuts that have no correlation with healthcare value.
As Dr. Grodman writes, “We have yet to establish the balance between managing the cost to provide and access healthcare with maintaining the ability for development at all levels of the care spectrum.”
Finding that balance is imperative if we’re to meet the daunting healthcare challenges that are inevitable and that can’t be addressed without health innovation.
