ack when health care reform was wearing us all down with its Bataan-like march through the legislative process, I remember thinking, Well, maybe there’s an upside to this. At least the country is being forced to have a more substantive discussion about the need to lower health care costs and improve quality. Even if the ultimate bill doesn’t wholly deliver on those fronts, I figured, certainly all the big problems are being exposed.
Yet amid all the wonky coverage—of public options, insurance exchanges, comparative effectiveness research, electronic medical records, and so on—do you remember reading anything about GPOs? Have you even heard of GPOs? Me neither. Turns out the acronym stands for “group purchasing organization.” These are companies that serve as middlemen for hospitals in buying their medical supplies—everything from anesthesia to syringes to heart monitors.
In theory, GPOs lower health care costs by pooling the buying power of numerous hospitals to negotiate better prices from manufacturers. But as Mariah Blake explains in her cover story in this issue (“Dirty Medicine”), GPOs make their money from commissions and fees paid by the manufacturers they’re supposed to be haggling with—an obvious conflict of interest made possible by an obscure provision in Medicare law. In practice this gives big medical device makers and other suppliers extra clout in negotiations, which they use to set prices and terms and to keep small manufacturers—and the often lifesaving, cost-saving new products they make—off the market. It’s a murky system with very little disclosure. But Blake uncovered strong evidence that in general GPOs increase rather than lower the prices hospitals pay for supplies.
The problems with GPOs are not unknown to the federal government. The GAO is investigating them, as is Congress. But there has been virtually no coverage in the press. And without such coverage, the corporations that profit from current arrangements and their D.C. representatives—from whom we got an earful in preparing this story—will snuff out such inclinations toward reform as exist. Already, we hear, Senate investigations that began last year won’t lead to hearings until next year, if they happen at all.
In Washington, health care reform fatigue has set in. The epic legislative drama is over, health care reform passed, and now everyone’s moved on to other concerns—in particular, mounting government deficits and debt. But the biggest long-term drivers of federal deficits and debt are … rising health care costs, specifically Medicare. Nothing else comes close.
So if deficits and debt really are a top concern, then the plight of Dr. Donald Berwick should be front-page news. He’s the Harvard scholar and longtime critic of the current health care system whom President Obama has nominated to run the Centers for Medicare & Medicaid Services (CMS), the agency that manages Medicare. If confirmed, Berwick will be the person most directly in charge of implementing the new health care reform law. He’s widely respected, and his supporters include the man who ran CMS under George W. Bush. But Senate Republicans—who claim to be the most concerned about government spending—are (as of this writing) fighting his nomination. It’s a hugely consequential confirmation battle that has attracted little media attention.
This is not a good sign for the state of journalism. The new law contains some powerful tools to rein in health care costs and improve quality, but it will take careful and sustained reporting by the press to ensure that these tools are wielded wisely. Most notably, the law creates a new fifteen-member Independent Payment Advisory Board that will mandate cuts and changes to Medicare reimbursement formulas if costs rise beyond a certain level. Journalists should keep a close eye on who the president appoints to that board, and on its subsequent activities. There are also billions of new dollars CMS can dole out to health care providers willing to experiment with radical new ways of delivering health care better and more cost-effectively, like the Veterans Affairs health care system does. News organizations ought to be embedding reporters in these new experiments the way they do with military units in wartime; the fiscal stakes for the country are that high.
Unfortunately, the press has never covered regulatory agencies or program implementation particularly well. That tendency is made worse by the hollowing out of newsrooms and, now, by heath care reform fatigue. But like a marathon runner around mile fifteen, we’ve got to figure out a way to push past it.