After health bill, a push to curb costs

Profs study medical inflation

Though the effects of the health reform bill have yet to be felt, the passage of the bill shined a hard light on health care inequities and runaway medical costs. Professors, and staff at MIT Medical are already preparing for the bill’s consequences by conducting new research and looking for new ways to fix health care inefficiencies.

“This is a clarion call to the MIT community,” said Jonathan H. Gruber ’87, an economics professor who has worked extensively with Democrats on health care reform. ”The U.S. government now takes health care cost control very seriously, and the folks that can lower costs without sacrificing health are the ones who will determine the future of the nation. And those folks should be at MIT.”

Gruber served as a technical consultant to the Obama administration and developed a micro-simulation model that estimates the cost effects of health care policy. In a July 2007 article, The Washington Post called Gruber the Democratic Party’s “most influential health-care expert.”

His method of cost estimation is faster and more formal than that produced by the Congressional Budget Office. Gruber concluded that under the bill, Americans buying individual coverage will pay less than what they currently do for typical individual market coverage. Americans with individual coverage might also be protected from high out-of-pocket costs, which would be an important accomplishment for the health reform legislation.

Gruber said that the technological advances in medical technology for the last 50 years has been cost-increasing. In the future, new technology will need to reduce costs. In order for this to happen, several areas including drug formulation and surgery need greater innovation.

According to Gruber, the health care reform can be divided into two rounds: The “coverage round,” which was answered by the new bill, and the “cost-reduction round,” which will require long-term technological innovation and creative thinking. “I can see MIT faculty being more involved going forward,” he said.

MIT research targets spending

Other MIT faculty are involved in whittling down the costs of health care. Joseph J. Doyle, an associate professor in Sloan School of Management, is researching the returns on medical spending. Doyle found that a extra night of in-hospital care does not decrease the likelihood of mortality in newborn infants. Examples like this, where spending results in few benefits, are prime targets for cuts.

Doyle said that while the health care bill only begins to tinker with how to control medical spending, the strength of the bill lies in the expanded coverage it provides. “I don’t like the idea that if you get sick, you might stop working, and if you do that, you will lose your insurance,” said Doyle.

Frank S. Levy ’63, a professor in the Urban Studies and Planning Department, is also working on identifying areas that could reduce spending and waste in medicine. His research has exposed waste spending in medical imaging. Levy said that unnecessary images are frequently ordered by doctors to increase their own incomes, prevent malpractice, and compete for patients by agreeing to their requests. In fact, a recent study in the Journal of the American College of Radiology found that 26 percent of these expensive imaging requests were inappropriate.

“Patients have gotten to the point, that if you won’t give them an image they will go to a different practice,” Levy said. He is now writing a book on the history of how insurers and hospital groups have tried to define what constitutes as necessary imaging and how they have worked to get both patients and doctors to accept those definitions.

MIT Medical reacts to bill

Before the health care bill passed, MIT Medical has already been trying to manage its resources in a more cost-effective way. It has already proposed to cut its 24-hour urgent care center to open hours 7 a.m. to 11 p.m. and eliminate its inpatient unit. The in-patient unit provides sub-acute supportive care and takes care of patients recovering from gastritis, mononucleosis, appendix-removal surgery, or intoxication.

Medical Director and Head of MIT Medical William M. Kettyle said, “Our patient census is very low, and the costs of staffing are significant.” According to the MIT Medical website, the average daily census in 2009 (1.8) reached an all-time low.

According to Kettyle, the direct impacts of the bill on MIT Medical’s health coverage may be limited because MIT is self-insured, thus it may not be subject to some federal requirements. However, more students may not need MIT’s health coverage because the new legislation allows students to stay on their parents’ insurance plan until age 26. The health care bill will also increase insurance premiums as a result of the expanded coverage. As a result, students will need to make the financial decision of whether to stay on their parents’ plan or buy into MIT’s insurance plan.