Sometimes commonalities arise in the darndest, most seemingly unrelated of venues. Such is what I've noticed in two recent, otherwise dissimilar Medicare rulemakings. 
First, the commonality: a retreat from giving providers incentives to make rational clinical choices within a fixed "bucket" of money. Choices . . . you remember them . . . the gravamen of many a health reform notion -- DRGs, Part D, consumer-driven health plans -- idea being that as long as the spigot of dollars is controlled, people can make their own decisions (at least above some base minimum of clinically supportable care). Yet in these two rulemakings Medicare proposes not to let the fish swim free in a relatively spacious fiscal bucket, but instead to drive the unit of analysis down to so tiny a pool as to leave little room to paddle.
Fish kill 1: The proposed 2007 DRG rule, about which much has been written, said, emoted. But while CMS's cost-center pyrotechnics have been the understandable focus, there's a more subtle revolution underway, too. Specifically, DRGs have always been about averaging out payments on a hospital-wide basis. Ask for higher payment for a new service, and the Medicare reply has often been something to the effect that, "you may be losing money on this DRG, but you'll make it up on others." There's a logic to that; an overall construct within which rational planning can ensue. Now, though, Medicare, in its latest DRG rulemaking, is demanding fiscal fidelity not at the hospital level, nor even at the DRG level, but instead at the specific-service level -- with a charge-to-cost ratio of 1.0 representing nirvana in a very small place.
The same constricting focus is also engulfing the proposed rule on DMEPOS competitive bidding. The idea, of course, is to save money. Fair enough. But how broad is the terrain over which the savings/costs are to be calculated? The law would seem to allow the spreadsheet to stretch across a competitive bidding area -- that is, you could win some, lose some, but overall you'd have to achieve area-wide savings. CMS, however, drives the analysis down to the level of the individual item -- requiring palpable savings for every little DMEPOS sliver. And even that isn't sufficient -- the agency proposes a complex median-based calculation that can require some bid "winners" to sell at a price less than their (already savings-certified) bid amounts. Call it belt and suspenders, with the waist taken in.
Batting averages even for Cooperstown's fixtures rarely breached the .400 level. Shouldn't health economics allow a little margin for error . . . even for the kinds of choices that over time can drive down costs?
Makes you want to kick the bucket.
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