Healthcare and the Supply Chain: Double-Counting Potential Savings — Nice Headlines, Bad Practice

With much fanfare, the Senate passed its version of health-care reform on Christmas Eve morning. In spite of the victory laps run after every step in the process, there is every reason to believe that some of the projected Medicare savings were counted twice in order to arrive at an expenditure figure below the ten-year/one-trillion-dollar threshold.

Not only did they count savings twice, they made an enormous assumption that they would magically be able to eliminate $500 billion in Medicare waste over ten years. (Note to those closely following health-care reform: Could comparative effectiveness now determine as wasteful the care that a senior citizen would have received in the past? Is that the waste that is being cut? Something tells me that most people would not consider going the extra step to take care of an elderly loved one a waste.)

Moral of the story: Bad accounting might make a compelling story, but once the truth comes out, the storyteller's credibility will be in question. As you seek savings in order to get 2010 off to good start, don't forget the perennial practice of the old man from the North Pole (who is no doubt relaxing and watching football): Make a list (of savings) and check it twice (do the math). Unlike our politicians, you will no doubt be accountable for the savings stories you tell at work.

Have a great 2010, or Twenty Ten, or Two Thousand and Ten, or whatever you decide to call it.

Lynn James Everard

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