"...I was fully planning to quit in protest. I’d even started writing op-ed articles. I was going to resign pretty noisily, I’m afraid."
Richard S. Foster is retiring this week after 18 years as the chief actuary for the Centers for Medicare and Medicaid Services. From an interview in KaiserHealthNews.org:
Q: How do we control health care costs in Medicare, Medicaid and the private sector?
A: Years ago, we thought that converting from cost-based reimbursement to prospective payment systems (a set payment that covers the entire cost of the admission) was the magic answer, and it helped a lot. Then, back in the early 1990s, everybody thought managed care was the magic answer. And that helped some, too, although most of their success was in negotiating lower payment rates, which you can only take so far.
We’ve had other instances -- pay-for-performance and consumer-driven health care -- that people had hoped would be the magic answer. Right now, there’s a great deal of hope that further integration of care, greater bundling of payments and other innovations like that will be the answer. I’m not optimistic that these things will, in fact, be any more successful than the best ideas of the past. I think they can all help.
All the insurers and payers tend to adopt and pay for just about any new technology that comes along -- even in instances where the value of the new technology is nowhere near its higher cost. So we could be a lot more prudent in how we adopt new technology. But that’s controversial. We saw in the Affordable Care Act the pushback on comparative effectiveness. If you do comparative effectiveness right, I think it could be very helpful.
Q: How would you adopt technology more prudently?
A: If you have something that is 10 times as expensive as the technology it would replace, and it really is not any more effective, why should we bother adopting that? And yet we do it all the time.
Q: How do we control health care costs in Medicare, Medicaid and the private sector?
A: Years ago, we thought that converting from cost-based reimbursement to prospective payment systems (a set payment that covers the entire cost of the admission) was the magic answer, and it helped a lot. Then, back in the early 1990s, everybody thought managed care was the magic answer. And that helped some, too, although most of their success was in negotiating lower payment rates, which you can only take so far.
We’ve had other instances -- pay-for-performance and consumer-driven health care -- that people had hoped would be the magic answer. Right now, there’s a great deal of hope that further integration of care, greater bundling of payments and other innovations like that will be the answer. I’m not optimistic that these things will, in fact, be any more successful than the best ideas of the past. I think they can all help.
All the insurers and payers tend to adopt and pay for just about any new technology that comes along -- even in instances where the value of the new technology is nowhere near its higher cost. So we could be a lot more prudent in how we adopt new technology. But that’s controversial. We saw in the Affordable Care Act the pushback on comparative effectiveness. If you do comparative effectiveness right, I think it could be very helpful.
Q: How would you adopt technology more prudently?
A: If you have something that is 10 times as expensive as the technology it would replace, and it really is not any more effective, why should we bother adopting that? And yet we do it all the time.
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