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Thursday, June 05, 2008


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Mike Pringle

Nick, it has been far too long since my last comment on your site. In any event, "never lists" cuts in reimbursement rates from government and private payers as well as a host of articles regarding quality of care, provider ranking, hospital ranking, and lots of other similar issues have been playing out every day in the news. It's overwhelming and all seems to becoming a blur.
I keep coming up with the same question regarding all of this. Everyone in healthcare wants to mitigate costs while still providing high quality service. The insurance companies seem to be driving so much of healthcare’s financial issues without regard for the consequences. Why is the healthcare industry letting payers dictate cost control measures? It seems to me that reducing reimbursements from whatever payer source is the wrong approach. Paying less for something on the back end does not influence the cost of that particular item. It would be as if you and I went into a store and decided not to pay full price for something and we only paid what we thought we should. The store loses money. The cost of the item is still the same. By us paying less for the item we are not controlling the cost of the item. All we are doing is reducing our own out of pocket costs as a payer. The cost of manufacturing and providing that item is still the same.
If we as a nation of interested in controlling the costs associated with healthcare it would seem prudent to develop cost controls on the front end of products and services and not the back end which is what we are doing now. If payers are looking to force a change in the current with lowering reimbursement rates, and omitting payment for items of their own choosing - never lists - how does anyone expect hospitals and other healthcare facilities to survive?
I agree that as a nation we need to raise the bar with respect to quality in all of our hospitals, however even in the best of conditions it is unlikely that errors and mishaps will completely become extinct. In fact if hospitals are truly looking to completely moderate errors and mishaps they are going to have to spend a lot more on payroll and the integration of technology in providing services. I don’t see how that can be done in the face of our current and future reimbursement strategies.

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