Pessimism Reigns About Health Reform at ACHE Congress

Philip Betbeze, for HealthLeaders Media , March 23, 2010

Kaufman said healthcare reform has a better than average chance of having made things worse. Change is needed, but the change we're going to get is based on compromise. The bill was written by people who don't understand healthcare, he said. Kaufman listed a number of thoughts about reform:

  • Pharma "gives up" $27 billion a year, other interest groups are also "giving up" some future revenue in the healthcare bill, but Kaufman argues that they're all going to make this up somewhere else. All of these companies are winners.
  • "Sometimes change can make things worse, and that's what's going to happen here. The Congressional Budget Office's estimate of Medicare Part D's cost was off by 40%. What makes you think they'll get this right?"
  • Rate of spending on healthcare is fiscally unsustainable because 80% of spending is on chronic care, which is lifestyle-related. Yet there's nothing on that in the bill.
  • There's a difference between coverage and access to care, which was learned in Massachusetts. As a result, the Massachusetts commission is cutting fee schedules and will phase in capitation.
  • This bill, as in Massachusetts, puts providers at risk. In Massachusetts, they paid 82% of cost on Medicaid before reform. Now they pay 70% of cost, even with the federal government shoring up the program. Boston Medical Center, a hospital that was breaking even before reform, is now losing $12 million a month.

"Those who don't respond to these lessons will go out of business unless the government bails you out, which, I predict too, by the way," he said.

The bottom line is that hospitals did not do well under this bill, he said. Kaufman's theory is that comprehensive reform is working to hasten the crisis rather than solve it. Healthcare reform is just the beginning. An estimated 30-50% of hospitals will operate at a deficit, he said.

Philip Betbeze is senior leadership editor with HealthLeaders Media.

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