Tackling health care costs still not a priority for Washington
Lawmakers in Washington often act as if America’s health care crisis ended with the passage of the health care reform law known as the Affordable Care Act, or Obamacare.
It didn’t.
A federal report released earlier this month should have taxpayers shaking their heads in disbelief — and contacting their representatives in Congress to ask why nothing is being done.
Most experts believe that about 30 cents of every dollar spent on medical care in the United States is wasted — through overbilling, unnecessary care or tests, fraud and general wasteful spending.
The latest report focused on a simple medical device, a back brace. Though a very basic product, the story of the back brace tells a larger story about medical costs.
It turns out that the simple back brace, amounting to not much more than some fabric with straps for adjustment, costs about $99, based on Internet searches. But when bought for Medicare patients, the federal health care program for the elderly pays $900 or more for those braces. The inspector general for the federal Department of Health and Human Services found that suppliers generally have paid about $191, yet Medicare has paid an average of $919 for each brace.
Commenting on the obvious waste due to overcharging, Medicare officials say it is possible that back braces could be added to the list of items bought through competitive bidding. It’s shocking, but not surprising, that Medicare does not use competitive bidding to ensure the best price for all the products it buys.
The reason, of course, is simple: Medical device suppliers want to preserve exorbitant profits, and they fight to prevent any expansion of competitive bidding by putting pressure on Congress. No doubt that pressure involves lobbying and generous campaign contributions to members of the two federal legislative chambers.
Because Medicare spends at least $10 billion a year supplying medical devices, such as back braces, powered wheelchairs and blood sugar monitors, to beneficiaries, the potential savings from across-the-board competitive bidding could be in the billions of dollars. Yet, few people are talking about saving the money. And the ironically named Affordable Care Act apparently has done next to nothing about controlling costs.
The back brace story is similar to the arm sling story that was reported by the Boston Globe in August. In that case, James Dichter, a 59-year-old man with a business background, had undergone minor arm surgery and was released from the hospital with a simple fabric sling to support his arm while he healed. When he received his explanation-of-benefits statement, he discovered that his insurer had paid $83 for the sling made of fabric. After searching on the Internet, Dicter found that the arm sling cost about $7.
Speaking with a Globe reporter, the frustrated patient asked why an insurer would pay 12 times the cost for the sling, adding, “Somewhere in our health care system, common sense has left the building.”
The Globe article noted that the Government Accountability Office has targeted medical equipment as an area of particularly high levels of wasteful spending in Medicare. Total spending, between government programs like Medicare and private insurance companies, is $37 billion. Yet, few in Washington are doing anything about the wasteful spending, like demanding competitive bidding in all equipment purchases.
Medicare was supposed to implement more competitive bidding a half-decade ago, but medical suppliers objected and the cost-saving measure was shelved.
Attacking this wasteful spending is made more difficult because few people understand that waste in Medicare costs them money. Most people think that since Medicare pays for the overpriced back brace, sling or powered wheelchair, it doesn’t affect them.
But they should know that their taxes and the taxes of all other Americans fund Medicare. And, those covered by private insurance should understand that premiums paid by companies or individuals are being wasted on medical devices bought with little regard to cost.
Too many people either don’t bother to find out what their medical services and medical products cost, or they simply don’t care — because they assume, wrongly, that someone else is paying.
