We need to return to the basics for health reform

One point six trillion dollars times two. Our annual deficit now equals what we spend each year on chronic disease in this country.

Two huge numbers have collided, forcing us to ask if there is anything we can do about either.

The answer is yes.

America doesn’t run from its problems. We generally run toward them. Now is no different. But what it will require is going back to the beginning, where it all started.

Early on in the health care debate, including the presidential campaign, the health reform discussion was focused on two major components.

The first: that we have to find a way to control the growth in health care costs. The second: that we ensure every American has access to health insurance.

A year later, we’re embroiled in a tactical debate over how to achieve those ends, with particular focus on coverage and the public option.

It’s an important discussion, but by making the details the focus and the “be-all end-all” of the debate, we’ve lost sight of what reform was supposed to be about: lowering cost, improving quality and increasing coverage.

It’s not too late to return to that conversation. In fact, the basic questions that were driving health reform then are more relevant now than ever: Where do we spend our money, and how do we control health care costs?

The root of spending starts in our nation’s poor health. Three-quarters of what we spend on health care in this country — $1.65 trillion annually, the same amount as our deficit — is linked to patients that have chronic health care conditions like diabetes, high blood pressure and abnormal cholesterol.

So it follows that any plan that includes a greater focus on chronic disease prevention and management would effectively “bend the spending curve” and control costs.

Our system also suffers from wasteful spending in the form of overly complicated administrative costs, like claims handling, and a lack of care coordination. In the Medicare program, one in five hospital patients are readmitted within 30 days — at a cost of $13 billion a year to taxpayers — because of poor care coordination.

There are known solutions to address these problems, and they won’t require huge investments. All of them would improve people’s health as well as bring savings.

1. Turn the clock back on obesity. Estimates show that obesity is responsible for nearly a third of the rise in inflation-adjusted health spending between 1987 and 2006, or about $220 billion. If we cut excess from consumer behavior due to conditions related to obesity and overweight, we could save that amount per year.

2. Streamline administration of benefits and reduce waste. Administrative costs like coding, forms and claims handling and credentialing account for an estimated 30 percent of total health spending. Simplifying and standardizing paperwork (i.e., claims processing), moving to an electronic-based system where information is available in real time, eliminating paper prescriptions and improving staff turnover would bring savings as large as $315 billion over the next 10 years.

3. Reduce hospital readmissions and better coordinate care in Medicare. Because of a lack of care coordination and poor payment mechanisms, Medicare is plagued with high rates of preventable hospital admissions and readmissions. Randomized controlled trials show savings potential of at least $10 billion per year in Medicare by reducing readmissions and improving existing care management protocols.

4. Design a system that helps patients follow doctor’s orders. Many patients do not follow the advice of their physician or health provider, leading to costly complications. For example, if patients were to take their prescription drugs as directed, we could (conservatively) save an estimated $100 billion per year, according to a report by PriceWaterhouseCoopers.