Healthcare Reform and Cost Control

| Wed Jan. 13, 2010 12:33 PM EST

Will healthcare reform help to cut the growth of Medicare costs? Skeptics are....skeptical, but Austin Frakt has a guest post by Randall Brown, Vice President and Director of Health Research at Mathematica Policy Research, that provides some real-world evidence about proven ways to make Medicare more efficient:

Mary Naylor and Eric Coleman provide clear, rigorous evidence on how to reduce the appallingly high readmission rate (20 percent within 30 days) for Medicare patients discharged from a hospital. Their “transitional care” programs reduce the need for re-admissions by providing much closer attention to patients and their families as patients move from hospital to home. Randomized trials, the most rigorous and credible type of evidence, showed these programs reduced readmission rates by 18 to 35 percent, resulting in reductions in costs that substantially exceed the intervention costs.

....Following the evidence also means establishing a care coordination benefit for a well-defined high risk population of beneficiaries....Randomized trial studies of programs serving beneficiaries with chronic illnesses have found that targeting is critical. For a subgroup of beneficiaries at high risk of near-term hospitalization — which comprises 18 percent of Medicare beneficiaries and 38 percent of Medicare expenditures (those with congestive heart failure, coronary artery disease, or chronic obstructive pulmonary disease and a hospitalization in the past year) — 4 of the programs in the Medicare Coordinated Care Demonstration had significant and sizable reductions in hospitalizations over the 6-year life of the study.

These two ideas are nowhere near enough to solve Medicare's funding problems on their own. However, unlike other "curve bending" proposals, which are admittedly speculative, these are proven to work. And in the end, that's why funding pilot programs and research studies is such an important part of healthcare reform. Not all of the ideas will pan out, but a billion dollars on research will identify which ones work and which ones don't. Sometimes this means hard choices, but like the programs Brown cites, sometimes it doesn't. Sometimes cutting costs actually means providing better care.

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