Should We Change How Much Medicare Pays for Treatment vs. Prevention? --i.e. should smoking cessation cost more than cancer treatment?

The writer of the HealthBeat blog, Maggie Mahar, writes a very good and sometime provocative journal on healthcare in America. However, while I do see the merits of her recent column on pricing of healthcare services, questions have to be asked regarding how changing the pricing schedule would affect insurers’ behavior.

I can well imagine insurers’ reluctance to fund open-ended smoking cessation treatment even tho it may ultimately cost them less than treating the complications of smoking. The fact is, they are much more nervous about UNKNOWN total costs than they are about KNOWN costs for cancer treatment. For example, they can calculate to the dollar what a given course of treatment for a lung cancer is; they know how many radiation treatments will be requested, they know if chemo will also be part of the treatment protocol and how many chemo treatments, they know how many days of hospitalization will be involved. What makes them really nervous, again, is an unknown dollar amount for something like smoking cessation -- which does not end till the patient can actually give up cigs for good, and who knows how long that will take?

Look, Maggie Mahar, I agree with you completely on the relative worth of preventive or wellness interventions vs. treating the disease. But I think you have a real selling job to get the insurers behind any such pricing system.

It’s worth having a full and public discussion on these issues, tho, so I hope that this is not the last we hear of this idea.

When Medicare first created a fee schedule, critics suggested that it was a Marxist invention. Nevertheless, the schedule, which lists what Medicare is willing to pay for some 7,000 procedures, has become the master list for physician reimbursement in our health care system: most private insurers peg their payments to the Medicare schedule.
The notion of deciding the precise worth of some 7,000 diagnostic and therapeutic procedures is mind-boggling. How exactly does Medicare do it?
The process began in the late 1980s when officials at the Department of Health and Human Services decided that the way Medicare paid doctors should be overhauled. At the time, Medicare was reimbursing physicians based on what was considered “customary, prevailing and reasonable” in a particular market —in other words the “market value” of the service in that region.
Instead, reformers urged Congress to begin paying doctors in a way that reflected the real cost, to the doctor, of providing the service.

Please see her full article on this valuable issue at http://www.healthbeatblog.org/2008/08/today-we-pay-fo.html#more