Health care reform in the U.S. inevitable

Opinion: February 6, 2010 at 12:00a.m.

By JIM LANDERS

WASHINGTON — It’s now apparent that an overhaul of the medical care establishment won’t emerge from Congress any time soon.

For employers trying to figure out health insurance mandates, penalties and taxes contained in the legislation, this impasse may be a good thing. It could unlock some hiring decisions otherwise clouded by uncertainty over employee benefit costs.

For the governments (meaning taxpayers), companies and individuals who now pay for health care, however, this is another bleak year.

In a recent report, PricewaterhouseCooper’s Health Research Institute points out:

“Flat is the new growth for many industries outside of health care. Consumers and businesses have less money to spend on everything, including medical care and treatments. The recession crushed prices throughout the economy — with the exception of health care.”

While the rest of the economy went down in recession, health care costs increased 4.4 percent in 2008, reports the federal Center for Medicare and Medicaid Services.

Pricewaterhouse Cooper’s Health Research Institute estimates costs increased 5.5 percent in 2009.

Health economist Mark McClellan of the Brookings Institution said the legislative stalemate in Washington has prompted more communities to ask for help.

The December PricewaterhouseCooper report is called “Top 10 Health Industry Issues in 2010: Squeezing the Juice out of Health Care.” It warns health care providers that even without sweeping federal legislation, change is coming.

Information technology

The economic stimulus law, for example, included incentives for health care providers to upgrade their information technology. Hospital systems were offered incentives to use electronic medical records that can be read by different hospitals and physicians. Physicians were offered incentives to use electronic prescriptions.

In the next few years, those incentives will become penalties. For providers who treat Medicare patients, reimbursements will be cut if IT systems aren’t up to par.

The Justice Department, meanwhile, is stepping up its hunt for Medicare fraud, which costs an estimated $68 billion a year. Medicare billing overcharge errors, worth an estimated $36.1 billion, are getting closer attention, as well.

Companies are looking for plans to improve the health of their workers. Chronic diseases such as diabetes and hypertension consume the lion’s share of the nation’s $2.5 trillion in health care spending. Many cases of these diseases can be avoided with changes in lifestyle habits, and employers want to know which incentives will lead their employees to make those changes.

Democrats can’t get their ambitious plans through a Senate where Republicans can now block action with a filibuster. But both parties have reason to work on a bill dealing with the cost of medical care, McClellan said.

A current budget law virtually demands it.

“As of March 1, physicians are scheduled to get a 21 percent reduction in payment rates for Medicare patients,” McClellan said. “That’s not sustainable very long. It will have an impact on access to care” for seniors.

X Jim Landers is a columnist for The Dallas Morning News. Readers may write to him at the Dallas Morning News. Distributed by McClatchy-Tribune Information Services.