Can Increasing the Role of Primary Care Doctors Help Cut Costs?

There was an article in the most recent issue of Businessweek about the growing popularity of giving primary care doctors a larger role in health care to help cut costs. The idea is that these doctors would serve as a "medical home," and handle almost all health issues instead of referring people to specialists. The problem is only 17% of medical graduates enter this field, and some say many primary care doctors do not have the expertise to handle issues ranging from helping people lose weight to chronic pain management.

One major advocate of this idea is President Obama, who will be holding an online health care forum tomorrow, with questions being submitted via twitter, facebook, and youtube.

Obama Health Care Forum on ABC

Last night, President Obama appeared on ABC for a health care forum. In case you missed it, and are interested the transcript is available here.

There were two questions that I found to be particularly interesting. The first came from an Epilepsy specialist named Orrin Devinsky, who asked what Obama would do if a member of his family became seriously ill, and the only option to help the family member was to go outside the coverage in the national plan. Obama inferred that he would go outside the system, saying "if it's my family, member, it's my wife, if it's my children, if it's my grandmother, I always want them to get the very best care." He also stated we need to find a way to remove skewed incentives but at the same time not prevent people from getting the care they need.

The other question I thought was interesting was posed by moderator Charlie Gibson, who asked how the health care system will be able to deal with 46 million more patients, when the number of doctors will not grow at that same pace. Obama said that the policy will be phased in over time, and that removing beauracracy, getting nurses more involved, and lowering ER visits through wellness programs will help ease the burden.

OU Economics Professor on Obama Health Care

Over the past several weeks health care reform has been a major topic of discussion in congress and it has been generating a lot of controversy. As many already know, President Obama will be appearing on ABC in order to discuss his health care policy tomorrow night, so I thought it would be a good time to ask Oakland University professor of Economics and Management Miron Stano what his thoughts were about Obama's policies.

Professor Stano has a few concerns with the Obama plan, mainly revolving around the potential cost and its effectiveness. Obama originally estimated a net additional cost of $50-56 billion for health care reform, but Professor Stano believes this is too low. “One independent estimate projected costs of $1.63 trillion over the 10-year period ending 2018 while still leaving 33 million people uninsured in 2018 compared with the projected 67 million under current policy.” He cites another recent estimate which says full year coverage would cost at least $123 billion per year, and “if more generous plans become the minimal standard, and fees increase as a result of additional demand for health care, the projected costs would be correspondingly greater.”

Obama plans to cut health care expenses by utilizing electronic medical records (EMR), as well as reducing payments to pharmaceutical companies, hospitals, and other health providers. Professor Stano is not convinced that EMR will be effective in the short run, although they have good potential long term. He says that analyses of EMR have only shown minimal improvements to patient safety so far, and that “it may take many years before any IT investment will pay off.” Reducing spending on pharmaceutical companies and hospitals sounds like a great idea at first, but there are drawbacks, and Professor Stano believes that these cutbacks may slow down innovation, and potentially lower the quality of care patients receive.

If health care reform is indeed on the way, and reducing costs or taking on new debt will not be the method of funding, then we will be looking a new tax of some kind to pay for the system. Which tax would be best? Professor Stano says no matter what method of taxation they choose to fund these reforms, ultimately the cost comes back to the individual in the form of lower wages, higher prices, or higher taxes. With this in mind, he believes “It is probably time that we look at a value added tax to deal not only with health care but also Medicare and Social Security. Even though a VAT is regressive, it may well be the best option.” The issue of a regressive tax can be dealt with by offering additional income tax credits to lower income families.

Although there may be problems with Obama’s health care plan, Americans want something to be done with the system. The professor cited a study that showed 16% of Americans thought the US system needed only minor changes, and 34% believed the system should be totally rebuilt. With numbers like these it appears Obama has a mandate to do something, and that “Americans are ready for change.”

Introduction

My name is Rob, I am a student at OU, and I will be running this blog for the Oakland University Executive MBA program. My goal will be to provide updates on current events in health care and information systems, as well as discussions of the issues with different professors who have taught in the program. I plan to update this blog with new content on Tuesdays and Thursdays. Hopefully I will really kick things off next Tuesday by posting a substantive piece with one of the professors from the program.