Ever since the Massachusetts electoral upset put the brakes on Democrats' health care overhaul campaign, some are hoping to cut their losses by passing a scaled-back overhaul bill later this year. That may mean shopping around for uncontroversial ideas to lower the plan's price tag and maybe even attract support from the other side of the aisle.
One catalog Democrats might peruse offers a litany of just such provisions: the aptly named, annual "Compendium of Unimplemented Office of Inspector General Recommendations."
One cost-saving idea is to buy oxygen equipment for patients rather than renting it.
One cost-saving idea is to buy oxygen equipment for patients rather than renting it. Abalcazar/istockphoto.com
The 2009 edition, published by the inspector general at the Department of Health and Human Services, lists 30 cost-saving ideas that could add up to at least $9 billion a year according to our extremely crude estimate, as well as other ideas for improving the quality and effectiveness of government health programs. A chief criticism of Democrats' proposals is that they wouldn't wring enough savings from the system.
The expansive health overhaul legislation proposed by the House and Senate would cost around $900 billion over 10 years — though congressional analysts said that it would be deficit neutral over that time frame because of some cost-saving measures. So, if the inspector general's proposals could save $90 billion over 10 years, this could in theory help cover about 10 percent of the cost of the overall plan. And if the overhaul is scaled back at all, it could amount to a bigger chunk.
The compendium lists savings estimates across varying time frames and for different fiscal years, so we had to employ a little mental math to guess the total. There were also several suggestions where no cost estimate was offered, which means that the overall savings could be even greater.
Perhaps most important, the inspector general's proposals are straightforward and not likely to arouse the kind of "death panel"-fervor sparked by an end-of-life planning provision in one version of the health overhaul. The recommendations include cutting duplicate payments for home health supplies from both Medicare and Medicaid, buying oxygen equipment for patients rather than renting it at a far greater cost, and requiring Medicare patients to pay for portions of their lab tests, as they do for most other services.
Only a few issues raised by the inspector general, such as bridling excess payments to Medicare managed-care contractors, were included in the House and Senate version.
As for the rest, even though many are relatively non-controversial, they won't make everybody happy. For instance, the idea about changing the payment system for home oxygen equipment rentals has already met fierce resistance from some suppliers who stand to lose.
Separately, Michael Reinemer, a spokesman for the American Association for Homecare, an industry group that represents businesses such as oxygen suppliers, told us changing the rental rules "would further limit access to providers [and] restrict a patient's ability to switch providers if they are unhappy or need to move." He added that the services help Medicare patients "receive high-quality care in the most cost-effective setting — the home — rather than in hospitals and other institutional settings."
But don't hold your breath waiting for all these to materialize. Some of these proposals — such as saving $45-million-a-year by decreasing payments for dialysis, prompted by a revelation that one provider earned a 29 percent profit margin — have been shelved for as long as 20 years.
An spokeswoman for the inspector general wasn't sure whether the office revisits the oldest recommendations to determine whether they're still relevant, but the compendium notes that dialysis payments were increased by legislation as recently as 2006.
Still, these recommendations could at least offer a starting point for one of the administration's self-proclaimed goals for health reform: reining in an estimated $700 billion in health spending each year that doesn't contribute to better health.
An independent paper by Thomson Reuters backed the $700 billion claim. An author of the report said, "The good news is that by attacking waste we can reduce health care costs without adversely affecting the quality of care or access to care."
Update: A spokeswoman for the inspector general's office, Dee Ellison, got back to us with some more answers this morning. Ellison said the office is especially proud of its annual compendium — which it compiles on its own initiative, rather than at the behest of Congress. "We track the reports to make sure American taxpayers are getting value for their tax dollars," Ellison said.
She also clarified the inspector general's views on older recommendations that turn up year after year. "If they stay [in the report], they are there because we think that substantive improvements and more progress can be made in those areas. It stays in if we think the problem still exists," she said. OIG officials review recommendations each year to determine if they're still applicable before publishing the updated compendium.
Weaver is a reporter for Kaiser Health News, a nonprofit news service.