Back to Washington and How to Look at Overall Spending

Monday (3/1) I will be flying to Washington DC for the 2010 AAHomecare Legislative Conference and Lobbying Day. It will be my third trip to this event and I believe my sixth or seventh trip to DC on legislative related business in the last few years. Too many trips because we remain under almost constant attack from miss-guided and ill informed policy initiatives which threaten to undermine beneficiary access to durable medical equipment and homecare and concurrently increase overall healthcare costs as patients are forced to move to higher cost institutional settings as a result of their inability to receive adequate care in the home.

The message this trip is two-fold; thank the local legislators who supported H.R. 3790, the bill to repeal the miss-guided policy dubbed by policy makers ‘competitive bidding,’ and to continue to meet with policy makers to discuss how we create net savings within the healthcare systems and how we can provide the key to unlocking additional savings and values for years to come.

In recent days there has been a barrage of coverage on rising costs in Medicare Advantage plans. The issue of rising insurance costs remains peculiar to me; our industry has seen deep and meaningful reimbursement cuts over the last 10 years, most recently 9.5% cut on 10 product categories in January of 2009. So reimbursement for our services continues to go down, overall healthcare costs continue to go up. Is there a direct correlation between the two, or are policy makers simply attacking the wrong problem? Why not look at both issues, in as brief a nature as possible;

Correlation
One of the issues we have always struggled with policy makers on is the issue of “Dynamic Scoring,” when costs go up in one sector of healthcare spending there exists no meaningful way to examine the impact that might have on another healthcare sector. Think of the analogy this way; you avoid preventative maintenance on your car. For a period of time your personal profit and loss statement (spending on vehicle) shows you have produced a method of savings, great idea right? Eventually your car wears out and you have to purchase a new one, perhaps well before it would have had you maintained it properly. You show vehicle acquisition costs that are higher, or perhaps your loan balances go up, but your variable maintenance payments remain low.

We all know this is not good policy, which is why we make at least superficial efforts to maintain our vehicles; we understand if we don’t there is a greater cost to pay in the future. Same goes in healthcare; if we continue to cut out safety nets, reduce payments to homecare and hospice agencies, as well as other homecare providers, we continue to marginalize a system (homecare) the produces tremendous cost efficiencies for our healthcare system. Because of this we push patients into higher cost care settings and we have bought ourselves more expensive care and a less satisfactory lifestyle – remember, to the extent that it is reasonable, patients overwhelmingly want to be at home.

Wrong Problem
Is homecare the problem in the domestic healthcare spending debate? Would policy-makers time be better spent focusing on the 60+% of Medicare spending going to hospitals, and physicians? DME is around 1% of the Medicare budget, is that a reasonable target to be chasing so aggressively, or are we an easy target for policy makers to chase, providing less push back and more political expediency than trying to deal with payments to physicians and hospitals? The crux of the question is this; are policy makers making the easy moves and changes because they know the real fix is politically impossible, or would result in certain jeopardy for their elected status?

This is typically the point in the conversation with a political employee that I run into the, “what about all the fraud and abuse…didn’t I see something on 60 Minutes about DME in FL?” To which I respond, “I am so glad you asked about that…” Fraud and abuse is a real issue, across the healthcare spectrum and policy makers need to get very serious about addressing it and fixing it. We have operated as an honest, forthright and community minded provider since our inception, as have the vast majority of people who do what we do. I am not to blame for Medicare’s inability to police their payments, but I would be more than happy to help and our industry has time and again come to the table with ideas and policies to fix the problem – the silence from the other side has been deafening.

In summary on the Wrong Problem issue; homecare is a big part of the solution to the problem of skyrocketing healthcare costs. Better use of technology and equipment in the home is the key to unlocking real and dynamic savings within our healthcare system – I believe this to my very core and so do many others. In fact there is very little push back, with President Obama himself commenting on the issue more than once. So, we need to end the miss-guided attacks on all parts of homecare and get serious about reigning in the bad actors – fraud has to be reduced if we want to maintain our healthcare system as we have it today.


So, I remain frustrated by the overall direction of healthcare policy, but hopeful that I can help guide better policy direction moving forward. At the end of the day I am not just a guy who runs a home medical equipment company, I am a citizen and tax payer and I believe that we need to work towards a system that promotes affordable coverage, better financial management of the overall system and a more strategic approach to how we care for our sickest in this country. I look forward to another trip to meet with those charged with policy making on the issues, remain strong in my conviction that homecare is the direction we need to go in, and look forward to the time when we see policies promoting access to homecare, not eroding it.

I will be sure to let you know how the trip goes…