The Higher Costs of Better, More Efficient Medicine

One big thing the Medicare bill forgot to fix (from PPI):

No Good Deed Goes Unpunished in Medicare Among the many complaints about the new Medicare bill signed into law by President Bush on Monday, one of the most important is seldom heard. The bill fails to fix the penalties on doctors and hospitals that improve care. In a New York Times article last Friday, reporter Reed Abelson explained how Medicare has undermined leaders like Dr. Brent James at Intermountain Health Care, a hospital network in Utah and Idaho. James has saved hundreds of lives each year and prevented costly hospital care by educating doctors on best practices and using computers to make health care more effective. For example, James' efforts help ensure doctors prescribe the most effective antibiotic for pneumonia patients, which in turn avoids complications. But Intermountain loses $14,000 in Medicare payments every time it prevents complications that would otherwise cause pneumonia patients to be put on a ventilator. Abelson summed up the problem perfectly: "Medicare, the nation's largest purchaser of health care, pays hospitals and doctors a fixed sum to treat a specific diagnosis or perform a given procedure, regardless of the quality of care they provide. Those who work to improve care are not paid extra, and poor care is frequently rewarded, because it creates the need for more procedures and services."

We can't possibly expect the incompetent Bush Administration to take the initiative, much less understand how, to fix this costly (in both $ and lives) problem.