Comments on: TECH: 19th Century Economics And 21st Century Medicare — Paying For Modern Diagnosis http://healthaffairs.org/blog/2007/04/19/tech-19th-century-economics-and-21st-century-medicare-paying-for-modern-diagnosis/ The Policy Journal of the Health Sphere Fri, 20 Nov 2009 20:04:42 -0500 hourly 1 By: Health Affairs Blog http://healthaffairs.org/blog/2007/04/19/tech-19th-century-economics-and-21st-century-medicare-paying-for-modern-diagnosis/comment-page-1/#comment-2683 Health Affairs Blog Mon, 04 Jun 2007 21:38:25 +0000 http://healthaffairs.org/blog/2007/04/19/tech-19th-century-economics-and-21st-century-medicare-paying-for-modern-diagnosis/#comment-2683 [...] TECH: 19th Century Economics And 21st Century Medicare – Paying for Modern Diagnosis by Don Rucker [...] [...] TECH: 19th Century Economics And 21st Century Medicare – Paying for Modern Diagnosis by Don Rucker [...]

]]> By: Brad Kirkman-Liff http://healthaffairs.org/blog/2007/04/19/tech-19th-century-economics-and-21st-century-medicare-paying-for-modern-diagnosis/comment-page-1/#comment-2077 Brad Kirkman-Liff Fri, 20 Apr 2007 16:51:39 +0000 http://healthaffairs.org/blog/2007/04/19/tech-19th-century-economics-and-21st-century-medicare-paying-for-modern-diagnosis/#comment-2077 The points made by Dr. Rucker are very good. Of course, movement from fee-for-service payment to episode of care payment or capitaton would also address some of these issues. Dr. Rucker does not mention whose fees should be lowered if the analyses of diagnostic tests would result in their fees being increased. Physician fees? Hospital fees? Home health fees? Dr. Rucker uses the phrase "Medicare’s almost $400 billion of purchases" Medicare, unfortunately, does not really purchase services (in a business sense) . Medicare beneficiaries visit physicians, and the physicians decide what services are clinically necessary and appropriate, and order them - and Medicare pays for the services. There is no true strategic purchasing or selection of vendors as would occur in a supply chain as Siemens or any well-managed firm would organize. The exceptions are the Medicare+Advantage plans, who do conduct strategic purchasing of services in the design of their networks. On final thought: In Germany, the home of Siemens, there is universal coverage through mandated employee-employer coverage through several hundred sickness funds that increasingly are open to competition. What we need from executives working for German firms is support for universal coverage here in America. Once the 40-60 million uninsured and underinsured have adequate coverage, then technical issues like payment levels for diagnpostic imaging should be easier to address. The points made by Dr. Rucker are very good. Of course, movement from fee-for-service payment to episode of care payment or capitaton would also address some of these issues. Dr. Rucker does not mention whose fees should be lowered if the analyses of diagnostic tests would result in their fees being increased. Physician fees? Hospital fees? Home health fees?

Dr. Rucker uses the phrase “Medicare’s almost $400 billion of purchases” Medicare, unfortunately, does not really purchase services (in a business sense) . Medicare beneficiaries visit physicians, and the physicians decide what services are clinically necessary and appropriate, and order them – and Medicare pays for the services. There is no true strategic purchasing or selection of vendors as would occur in a supply chain as Siemens or any well-managed firm would organize. The exceptions are the Medicare+Advantage plans, who do conduct strategic purchasing of services in the design of their networks.

On final thought: In Germany, the home of Siemens, there is universal coverage through mandated employee-employer coverage through several hundred sickness funds that increasingly are open to competition. What we need from executives working for German firms is support for universal coverage here in America. Once the 40-60 million uninsured and underinsured have adequate coverage, then technical issues like payment levels for diagnpostic imaging should be easier to address.

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