Editorial: Knowledge is power for health care cost control

The Obama administration on Wednesday released 880,000 reasons why compensation for medical care in the United States should be shifted away from a fee-for-service model that encourages some doctors to bill, and bill, and bill.

The breakdown of Medicare payments to the nation’s doctors – an action the American Medical Association has fought since 1979 – helps explain a hemorrhaging of health care money that consumes one of every seven dollars expended in the U.S. economy. A Florida ophthalmologist, billed the program $20.8 million; the top 2 percent of all doctors pocketed $15 billion – almost 24 percent of the $77 billion included in the newly released information.

Not surprisingly, it also revealed cozy relationships between some of those doctors, including the Florida uber-biller, and politicians in Washington, D.C. With the names and numbers available for all to see, lawyers, public interest groups and political action committees will be pawing through the data looking for clients, skunks and potential donors.

Private insurers can dive into billings by procedure and compare their costs. The details are extraordinary, but do not necessarily separate doctors milking the system from those providing genuine value to patients.

Ophthalmologists in Spokane and Miami, for example, charge about the same – roughly $320 – for a single Ranibizumab injection. The drug, which is typically injected monthly, treats macular degeneration, a common eye problem among the elderly. Ophthalmologists say most of the cost is the drug, which explains why those practices are among the most highly compensated by Medicare. But the Florida ophthalmologist billed Medicare for more than 37,000 of the injections in 2012, 10 times the number from Spokane’s biggest Medicare biller.

The drug is also a gold mine for maker Genentech, which simply reformulated another, much less expensive compound to make it.

Practitioners say many costs like that for Ranibizumab are built into their billing. It would be highly constructive for them to break down some of those Medicare billings so taxpayers and health care consumers better understand why Medicare costs $600 billion per year.

Congress was close to a comprehensive reform of the Medicare payment system last month. A bill that had the blessing of two Republican-controlled House committees and the Democrat-led Senate Finance Committee – truly bipartisan legislation – would have measured quality, efficiency, improvements in treatment and adoption of medical record-keeping. Those vital parameters are not in the information released Tuesday.

Doctors would have been scored and compensated according to how they compared against the mean of all providers. The deal was stymied by more squabbling over Obamacare, and killer amendments. That system might have been a boon to Washington health care providers, who were penalized for their efficiency delivering care when Medicare was established and have suffered for their trouble ever since.

All the more reason the stalemate in the Capitol should not be allowed to frustrate the examination of medical payment practices illuminated by the Medicare data.