Medicare should rethink its 'cost-saving' strategy

When Vice President Dick Cheney experienced an irregular heart rhythm earlier this year, he was able to have a defibrillator implanted -- as an outpatient. Being spared a hospital stay obviously appealed to him.
But such convenience may become a thing of the past for many patients if the Center for Medicare and Medicaid Services has its way.
CMS, as it is called, is proposing to slash payments for some crucial outpatient procedures -- devices and drugs -- in an attempt to hold down costs for such treatments.
However, this move could become a classic pennywise-pound foolish proposition. That's because cutting back on payments for such things as chemotherapy treatments for cancer and implantation of pacemakers would result in hospitals keeping patients overnight. That, in turn, would result in larger amounts of federal reimbursements that are permitted for inpatient care.
Congressional edict: What's behind this action? Simply put, CMS is being guided by a 1999 law passed by Congress that placed a ceiling of 2.5 percent of all outpatient spending on high-technology medical care. Current spending is hitting up against the ceiling, but the savings that Medicare anticipates won't materialize.
"It's the wrong direction to go," Dr. Michael Karpf, vice provost of the University of California, Los Angeles, Hospital Systems and director of the UCLA Medical Center, told the Los Angeles Times. "Our patients have understood it is better to go home than to stay in the hospital, and we agree with that."
Indeed, that's the argument health maintenance organizations have used to justify shorter and shorter hospital stays, even after major surgery.
It is true that Medicare, like Social Security, will collapse financially unless something is done to bolster it.
Surpluses: We have long held to the belief that federal budget surpluses should be used to pay down the debt and make Social Security and Medicare financially secure. But now, as a result of a worsening economy and the huge tax cut orchestrated by President George W. Bush and the Republican leadership in Congress, the federal budget surplus is shrinking.
Nonetheless, we believe that before the Center for Medicare and Medicaid Services takes the extreme step of reducing payments for high-tech outpatient procedures, a cost benefit analysis should be conducted. And, the decision-makers in Washington should answer this compelling question: If a procedure is good enough for the vice president of the United States, why isn't it good enough for any other American?

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