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Health Reform: Balancing Access & Costs

Posted Oct 11 2010 8:55pm

They say that timing is everything. With the recent passage of federal health care reform, the timing and topic of our annual breakfast for healthcare /life sciences attorneys couldn’t have been more appropriate.

Last Wednesday, 4/14, Eric Schultz, Schwartz Center board member and President CEO of the highly regarded health plan, Harvard Pilgrim Health Care , presented his perspective on the impact of health reform on costs and the implications for patient-caregiver relationships.


Eric supports federal health reform as a way to expand coverage to the uninsured however he raised concern that more work needs to be done to address costs. Eric identified four areas that must be considered to control costs as we move forward:

1. Medicare Reform. As the single largest payer, Medicare policies have a huge impact on overall health costs. Eric questioned whether it makes sense to eliminate the Medicare Advantage program which, unlike traditional fee-for-service Medicare, pays a set amount of money to participating private health plans for each enrolled individual.

2. Fee for Service Payment Reform. Fee for service medicine can create incentives that lead to decisions which increase costs and are not in a patient’s best interests. Eric recounted the story of his elderly aunt to illustrate his point. Last year his family decided to keep his elderly aunt, an Alzheimer’s patient, in the nursing home after her health suddenly deteriorated. His family made their decision based on wishes previously expressed by his aunt; however, his aunt’s physician contacted the family and suggested rethinking their choice. The physician wanted to conduct further testing, assuring the family that cost would not be an issue because of Medicare reimbursement. The family remained firm. Eric’s aunt died peacefully five days later, according to her wishes, illustrating how less intensive care can be compassionate.

3. Increased Consumer Engagement. Eric suggested that physicians and patients need more complete clinical information to make better decisions. When data is incomplete it can result in bad decisions for patients.

4. Address End of Life Care. Hospital and physician costs for care administered in the last months of life approach $50 billion per year. Eric cited estimates that suggest twenty to thirty percent of these expenditures brought little or no value to the patient care.


We thank Eric for sharing his insights with us. He skillfully outlined how compassion and cost control can coexist in health care. Let’s continue this conversation. How would you balance the issues of cost control and expanded coverage?

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