Transparency is key to reining in health care costs

By  Paul Gagliardi 
 
As health care costs continue to skyrocket and medical mistakes continue to impact tens of thousands, transparency will play an important role in reining in costs and achieving accountability.

The Institute of Medicine's seminal study of preventable medical errors estimated as many as 98,000 people die every year at a cost of $29 billion.  (To Err Is Human: Building a Safer Health System, Institute of Medicine, 1999)

The New England Journal of Medicine (June 2003) found that patients in 12 U.S. metro areas were given the standard recommended medications, screening, testing, surgery and interventions only 54.9 percent of the time.

Tens of thousands of deaths occur each year from medical errors that could have been prevented, according to Jim Hall (New York Times Op-Ed. July 28, 2009).  He said that all errors, even the non-fatal, are costly. Hall noted that 10 years prior to the writing of his article, the Institute of Medicine estimated the impact of medical errors accounted for $17 billion to $29 billion in domestic health care spending.

Transparency is a major component of the health care reform package and it will help keep health care providers and costs in-check.

One area where great improvements can be made is hospital readmissions.

Starting in 2012, the Department of Health and Human Services (HHS) will publish each hospital's readmission track record and Medicare will stop paying for preventable readmissions for heart failure and pneumonia.  Hospitals will be given incentives based on patient satisfaction reports. Readmissions cost the health care system about $25 billion every year, according to PricewaterhouseCoopers, a consulting firm.

In 2015, HHS will start reporting patient errors and infections. There are over 15 million such cases yearly. Despite this high number, resulting medical malpractice lawsuits are low. In 2009, only 137 medical negligence cases were filed in Wisconsin. Lawsuits cannot adequately deter costly medical mistakes but trial lawyers applaud any changes that make health care more accountable and safer.

Also in 2015, Medicare will reduce its payments to hospitals with the highest rate of medical errors and infections. This would affect a medium sized hospital by over a million dollars.

Hospital errors and infection rates will be published. This helps consumers in making smart choices on deciding which hospital to be treated at. Again, the transparency to patients will create additional incentive through competition.
 
People will not be forced to stop seeing the doctor of their choice. Health care providers will be given incentives to satisfy patients and treat them safely. Insurers will be scrutinized before increases are approved.

The government's own accounting department readily concedes we could not continue down the road we were headed. There is a window of hope that has opened. Here's to your health.

Paul Gagliardi is the President of the Wisconsin Association for Justice, the state's largest statewide voluntary bar organization. The Wisconsin Association for Justice stands with consumers to promote a fair and effective justice system for every citizen, not just the privileged and wealthy.

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