By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    bowl of vegetable salad
    Raw Foods: benefits and harms
    November 9, 2021
    pros and cons of the keto diet
    Read This Before You Follow the Keto Diet
    May 18, 2022
    spinal cord injuries
    4 Potential Causes of Spinal Cord Injuries (and How to Seek Compensation)
    May 25, 2022
    Latest News
    Grounded Healing: A Natural Ally for Sustainable Healthcare Systems
    May 16, 2025
    Learn how to Renew your Medical Card in West Virginia
    May 16, 2025
    Choosing the Right Supplement Manufacturer for Your Brand
    May 1, 2025
    Engineering Temporary Hospitals for Extreme Weather
    April 24, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    4 Reasons Why Medical Device Compliance Matters
    May 22, 2020
    What To Know About The Importance Of Healthcare Marketing
    November 23, 2019
    healthcare courses
    6 Supplemental Courses in Healthcare to Support Your HR Degree
    August 20, 2021
    Latest News
    Building Smarter Care Teams: Aligning Roles, Structure, and Clinical Expertise
    May 18, 2025
    The Critical Role of Healthcare in Personal Injury Recovery: A Comprehensive Guide for Victims
    May 14, 2025
    The Backbone of Successful Trials: Clinical Data Management
    April 28, 2025
    Advancing Your Healthcare Career through Education and Specialization
    April 16, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Stop the Pilot Programs
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Health Reform > Stop the Pilot Programs
BusinessHealth ReformNewsPolicy & LawPublic Health

Stop the Pilot Programs

JohnCGoodman
Last updated: March 21, 2013 7:21 am
JohnCGoodman
Share
8 Min Read
healthcare reform
SHARE

The federal government has been spending billions of dollars on health care pilot programs and demonstration projects. President Obama has explained their purpose: “We need to find out what works and then go do it.” In other words, the exercises are supposed to discover how to lower costs and raise quality so that everyone else can copy them.

The federal government has been spending billions of dollars on health care pilot programs and demonstration projects. President Obama has explained their purpose: “We need to find out what works and then go do it.” In other words, the exercises are supposed to discover how to lower costs and raise quality so that everyone else can copy them.

healthcare reformThere are five problems. First, three Congressional Budget Office reports (see here, here and here) have found that these programs are not working. Second, even where there is evidence of success, the gains are usually too small to warrant much hope for meaningful change. Third, no matter how successful a project, it is not of much value if it cannot be replicated — which appears to be generally the case. Fourth, even in the rare instance where a pilot program is remarkably successful and there is every reason to think the results are replicable, Washington will ignore the project if it does not fit into the bureaucratic vision of how health care should be delivered. (I produce a stunning example below.)

Fifth, and this is the real killer, we don’t need pilot programs and demonstration projects in the first place. Why? Because we have hundreds of natural experiments where costs have been lowered and quality raised without any cost to the taxpayer at all. This is because of:

More Read

Doctors 2.0 – First Blog Post
New Surgical Technologies Are Improving Healthcare Outcomes
Examining Whether Socialized Medicine Will Ever Happen in America
How Will the Supply Chain Support Vaccine Distribution?
HOW Can VNA Help in Boosting the Healthcare Industry?

Goodman’s law of medical innovation: For whatever we are trying to do in medicine, there is someone, somewhere, who has found a way to do it 50% better.

For almost any kind of surgery — mastectomies, knee or hip replacements, spinal fusion, etc. — there is someone in the United States who has discovered how to cut the patient recovery time in half. Partly for that reason, there is someone who has discovered how to cut the cost in half. For infection rates, readmissions and other indicators of quality care, there is some institution, somewhere, that is chalking up rates that are half that of what the country as a whole is experiencing.

If you think we can copy excellence, don’t run a demonstration project. Just go copy what’s already working and working well.

We got to stop and
Think it over.

 

Of course, in a normal market, if someone discovered how to lower costs by half for a given level of quality or to increase quality by 50% for a given level of cost, that person would have a huge advantage over his competitors. The rivals would have to quickly discover how to emulate the innovator, lest they be priced out of the market. Only in health care, where normal market processes have been systematically suppressed for decades, can widely different levels of efficiency coexist, side by side, for year after year.

How do I know that Goodman’s law is true? Because I meet people every day who appear to affirm it. Many of them have been profiled at this blog. We have posted before about American Physician Housecalls, which appears to cut the cost of care in half for chronically ill Medicare patients. To my knowledge, Health and Human Services has made no effort whatsoever to even investigate this successful venture. (They’re not ACO? Forget it!) And then there is Jeffery Brenner, the “hotspots” doctor who is saving millions of dollars for Medicare and Medicaid, and getting nothing in return. The problem: Brenner is changing patient behavior mainly through “social work” and Medicare doesn’t pay for social work. (Besides, he’s not an ACO either!)

Here’s another fascinating example (sent to me by Dr. Brenner). Health Quality Partners, in Doylestown, PA, participated in a 10-year Medicare chronic care demonstration project, with a 1,700 patient randomized control trial run by Mathematica. They used a nurse outreach model to visit the homes of frail, elderly Medicare patients. As explained by Dr. Brenner:

The project showed a 25% sustained reduction in death rates, reduced cost, and reduced hospitalization (33%). It’s really groundbreaking [with] stunning results. There are no pills or treatments that come close to these kinds of results. For the frailest patients the death rate dropped 50% and the results were sustained. They essentially discovered the fountain of youth.

So what is the federal government doing with this information? CMS is about to end the demonstration project with no plans to replicate the results.

So, back to the title of this post. There are really three questions to be asked:

  1. Are there techniques that will substantially reduce cost and/or improve quality?
  2. Will entrepreneurs discover them and implement them, given market incentives?
  3. Can a centralized planner manipulate doctor behavior in this regard, with small penalties and rewards?

The answer to the first question is clearly “yes.” The answer to the second is also “yes,” but let’s be clear about what that means. If an entrepreneur saves a million dollars for the system, he is going to want to bank, say, $500K for himself. No one is going to take big risks for a normal rate of return. Right now, no one is out there trying to copy what Dr. Brenner is doing in Camden, New Jersey, or what American Physician Housecalls is doing in Dallas, Texas, because they can’t capture a significant part of the huge value such activities create for the system.

To solve our problems with entrepreneurship, we have to free the market and let entrepreneurship bloom.

That brings us to the third question, which I think is the real reason why so much money is being spent on pilot programs when we could learn so much more without spending any money at all.

It turns out that the answer to that question is apparently “no.” Big bureaucracies cannot manipulate doctor behavior with small penalties and rewards.

Darn. The world would be so much simpler if only socialism worked.

TAGGED:ACApilot programs
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

Do You Grind Your Teeth at Night? Here’s How Night Guards and TMJ Treatments Can Help
Do You Grind Your Teeth at Night? Here’s How Night Guards and TMJ Treatments Can Help
Dental health
May 21, 2025
The Secret To A Confident Smile: Top Tips For Better Teeth
The Secret To A Confident Smile: Top Tips For Better Teeth
Dental health
May 21, 2025
Clinical Expertise
Building Smarter Care Teams: Aligning Roles, Structure, and Clinical Expertise
Health care
May 18, 2025
Grounded Healing: A Natural Ally for Sustainable Healthcare Systems
Grounded Healing: A Natural Ally for Sustainable Healthcare Systems
Health
May 15, 2025

You Might also Like

state power and the ACA
Health ReformPolicy & Law

Giving Power to the States, But at Whose Expense?

March 6, 2015

Anavex Receives Approval to Commence Phase I Clinical Trial in Alzheimer’s Disease

March 25, 2011
health startup
BusinessFinance

Want to Land a Spot in That Startup Accelerator? Smart Tips from Health Startup Founders

November 16, 2013
Healthcare CEO mobile training
eHealthHospital AdministrationMobile HealthTechnology

Healthcare CEOs Want Mobility Training

April 3, 2014
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?