Healthcare Financial News

Slowing the annual growth rate of healthcare costs by 1.5 percentage points would boost GDP growth by more than 2 percent by 2020 and nearly 8 percent by 2030, states a report on the economic impact of healthcare reform by the Executive Office of the President's Council of Economic Advisers. The resulting growth in GDP would translate to a $2,600 increase in income for a family of four in 2020 and $10,000 in 2030.

The report also outlined other economic advantages of slowing health cost growth: reducing the government’s budget deficit by 3 percent of GDP by 2030, lowering the unemployment rate by one-quarter of a percentage point for several years, and raising the standard of living by devoting resources to producing other goods and services. In addition, expanding coverage to the uninsured would increase the labor supply by reducing worker disability and absenteeism, improve the way the labor market functions by removing barriers to job mobility and allowing small firms to compete for workers, and “increase the economic well-being of the uninsured by substantially more than the costs of insuring them.” Removing inefficiencies and variations in Medicare spending alone could save up to 30 percent of health care costs—or about 5 percent of GDP—without negatively affecting health outcomes, said the report.

Hospitals that provide more intensive and costly care do not provide better-quality care, and hospitals that spent the most often deliver the worst care, says a new study recently published on the Health Affairs web site. The study examined care given to Medicare beneficiaries for acute myocardial infarction, pneumonia, and congestive heart failure and is one of the first nationwide analyses of quality and spending at the individual hospital level.

The authors found that average end-of-life (EOL) spending was $16,059 for the lowest-spending quintile of hospitals and $34,742 for hospitals in the highest-spending quintile. Hospitals that spent more actually performed worse on overall quality measures than lower-spending hospitals. When the analysis was limited to academic medical centers, there was no positive association between quality and spending. The only statistically significant finding was a negative relationship between EOL spending and the quality of treatment for heart attacks.

When each hospital was compared only to others in the same region, the negative correlation between EOL spending and the quality of treatment for heart attacks was eliminated, but strong negative correlations remained between spending and the quality of treatment for pneumonia. “This shows that the failure of higher-spending hospitals to produce better care reflects more than the fact that quality is not higher in higher-spending regions. Within each region, some hospitals are able to do more with less, achieving better quality while spending fewer dollars,” said the researchers.

HHS Secretary Kathleen Sebelius announced the appointment of Cindy Mann to serve as Director of the Center for Medicaid and State Operations (CMSO). Mann most recently was a research professor and executive director of the Center for Children and Families at Georgetown University’s Health Policy Institute. From 1999 to 2001, Mann served as director of the Family and Children’s Health Programs at CMSO and played a key role in implementing Medicaid and the Children’s Health Insurance Program.

In a new report on hospital emergency department overcrowding, the U.S. Government Accountability Office said that patient wait times are getting longer and that one-fourth of hospitals diverted ambulances from their EDs at least once in 2006. In 2003, the average time patients waited to see a physician was 46 minutes; in 2006, it was 56 minutes, according to the report. Half of the patients whose medical problem required attention within 14 minutes of arriving at an ED waited an average of 37 minutes before receiving care in 2006, a timeframe that exceeds national standards. And 74 percent of patients who should have been treated immediately waited longer than the recommended minute; the average wait was 28 minutes. The GAO attributes ED overcrowding primarily to a lack of available inpatient beds, citing hospitals’ desire to fill beds with scheduled admissions. Patients without primary care doctors and a shortage of on-call specialists also contribute to the problem.

During his meeting with Democratic senators on Tuesday, President Obama stressed that he expected Congress to deliver a healthcare reform bill by October, reports The New York Times. He also gave his support to a public health plan favored by Democratic lawmakers while acknowledging that including the government-sponsored health plan in the bill will guarantee opposition from Republicans.

Obama also told the senators that he is open but reluctant to taxing employer-provided health insurance to help fund healthcare reform, a tax that would raise $246 billion each year, reports The Washington Post. The lawmakers are also considering proposals that would impose the tax only on the wealthiest employees, or reserve the tax for particularly rich health benefits. The Center on Budget and Policy Priorities issued a report the same day stating that financing universal coverage is unlikely unless Congress moves to limit the tax exclusion for employer-sponsored health insurance.