For Profit Healthways and Harvard's David Cutler Agree: It's Bending the Curve Stupid

In yesterday's posting, the Disease Management Care Blog briefly touched on David Cutler's recent Health Affairs article on the Obama Administration's cost-reducing logic in the recently passed Patient Protection and Affordable Care Act. In it, Dr. Cutler writes that over the short term, lowering costs is all about reducing Medicare Advantage payments, reducing hospital payment rates and squeezing big pharma (and, the DMCB adds, the taxpayers). Ultimately, however, they represent "one time" gains. Instead, he argues, the real success of health reform, over the long term, will need to come from bundling, provider-hospital collaboration, pay-for-performance and coordinated care.

It's the opportunities in coordinated care that led Dr. Cutler to opine:

"Private-sector providers and large private payers must actively participate in the change to new models of care delivery. For example, we already have much evidence that medical homes, bundled payments, and other reforms can save enormous amounts of money while simultaneously improving the quality of care. Providers need to move into these areas rapidly, and a fair amount of industry integration and consolidation may occur as a result. Payers, including insurers and businesses, need to consider piggybacking other changes onto payment reforms to help speed the creation of new care models and delivery systems."

The DMCB salutes Dr. Cutler's timely reminder to our friends in academia and policy making that non-governmental entities have much to offer in "bending the curve."

To see just how much money could be had from the coordination of chronic illness care, prevention and ultimately wellness, check out this report from Healthways' Center for Health Research titled "Savings Potential From Prevention & Risk Reduction for the Commercially Insured." Mr. Obama and his Democratic colleagues need to read this. It's good news.

Using actuarial methods and U.S. vital statistics, the authors project the health care costs of the approximately 4,257,000 persons born in 2007 by dividing them up into low, medium and high risk categories. As persons move through the known different levels of risk over time, the average lifetime cost for each person from that year until they reach Medicare age is projected to be a whopping $243,804. If movement into the various risk categories can be reduced by 10 to 25%, or, delayed a few years, the savings range from the tens of billions to more than a trillion dollars.

The DMCB figures that may be enough to pay for all the promises of health reform plus years of Gulf spill clean up - and leave some left over for the considerable unemployment benefit needs for Kate thanks to looming Kate Plus Eight viewer fatigue, the cost of Ms. Lohan's future multiple D&A detox admissions and - most importantly to the DMCB spouse - funding for a federal Health Policy Blogger Protection and Guaranteed Income Act.

The folks from Healthways, a company that is rapidly creating a business model so favored by Dr. Cutler in Health Affairs (and the Obama Administration) may have a point. Sooner or later as a nation, we'll need to figure out how to reduce our unsustainable spending in sickness care and invest in wellness. There's too much money at stake and our children's lives depend on it.