Obama: Overtreatment Drives Health Care Costs President Obama, and experts from the Mayo Clinic, are advocating an end to the "fee for service" system that encourages doctors to order more office visits, tests and procedures — and pushes up costs for health care.
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Obama: Overtreatment Drives Health Care Costs

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Obama: Overtreatment Drives Health Care Costs

Obama: Overtreatment Drives Health Care Costs

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From NPR News, it's ALL THINGS CONSIDERED. I'm Robert Siegel in Washington.


And I'm Madeleine Brand in California.

President Obama promises to overhaul the nation's health care system so that more people are covered in an economically responsible way. Critics, including some Democrats, say his plan doesn't do enough to control costs. The White House says Congress could help by ceding controls of some of those costs to an expert panel. NPR's Scott Horsley reports.

SCOTT HORSLEY: Minnesota's Mayo Clinic is famous for providing world-class Medical care. It's also one of the health care industry's great bargains, with costs 28 percent below the national average. Mayo President Denny Cortese says the U.S. should aim for that combination of high quality and low cost, that he calls higher value care.

Dr. DENIS CORTESE (President, Mayo Clinic): And by higher value, we mean better outcomes, better results, better safety, better service — at lower cost over time.

HORSLEY: Unfortunately Cortese says the health care legislation that appeared so far would do little to encourage that kind of care.

Dr. CORTESE: We don't see anything in there that - as of any real substance with regard to paying for value. To us, that's real health care reform — paying for value.

HORSLEY: So late last week the Obama administration stepped forward with an eleventh hour tourniquet. The president called for an independent council of medical experts to oversee Medicare payments and recommend cost-saving changes.

President BARACK OBAMA: Our proposal would change incentives so that providers will give patients the best care — not just the most expensive care — which will mean big savings over time.

HORSLEY: The government already has a Medicare Advisory Commission, but its advice on cost-cutting is often ignored by lawmakers. The president's plan would give teeth to the recommendations by requiring Congress to approve or disapprove them as a package, much as it did with the military-base-closing commission.

Pres. OBAMA: What we want to do is force Congress to make sure that they're acting on these recommendations to bend the cost curve each and every year.

HORSLEY: The administration suggests one way to bend the cost curve down would be to change the way doctors and hospitals are paid. Massachusetts, for example, is exploring a system that would set fixed prices for treating patients of a given age with a given illness. MIT economist Jon Gruber says the idea is to discourage unnecessary tests and procedures that often go along with the existing fee-for-service model.

Mr. JON GRUBER (Economist, Massachusetts Institute of Technology): The fee-for-service model is sort of like asking the butcher how much steak you should eat. Basically, the fee-for-service model just rewards doctors the more that they do. This would be the opposite. In this model, doctors would get a fixed amount no matter how much they did.

HORSLEY: That's a pretty radical overhaul, but there are examples, including the Mayo Clinic, where doctors are on salary, so they have no financial incentive to order extra procedures. Mayo's Cortese strongly supports the idea of using an expert panel to recommend such changes. He says by adjusting Medicare payments, the government could have ripple effects throughout the health care system.

Dr. CORTESE: It will change the delivery system over time, and it will end up getting the country where we've all been saying we'd like to be, and that is getting our money's worth.

HORSLEY: The White House argues that using an expert panel to recommend changes every year would provide flexibility to adjust to changing needs. It also allows the administration to promise health care savings in the future, without having to detail just how those savings would be achieved.

Scott Horsley NPR News, Washington.

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