Health costs ease up ? but may not last

WASHINGTON?? Is it too good to be true?

Health care spending has eased up recently, bringing a welcome respite for government and corporate budgets. But experts who track health care's economic indicators like the vital signs of a patient disagree on the diagnosis and what the future holds.

One explanation for the slowdown says it's a temporary consequence of the recession and an economy that can't seem to hit its stride. A more hopeful view says American medicine is moving from disjointed solo practice to teamwork models aimed at keeping patients healthier, and that's a permanent change.

It's not a stretch to say the future of U.S. health care depends on the answer. If the system can reform itself from within to reduce waste and deliver better results, it will help stave off sharp cuts to hospitals and doctors, as well as more cost shifts to their patients, working families with employer coverage and older people in Medicare.

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Two doctors ? one in Washington state, the other in Montana ? come to different conclusions about what they're seeing.

Dr. Glen Stream of Spokane, Wash., says he sees the reason for the slowdown through patients in his examination room. A 55-year-old tech worker with diabetes, self-employed and uninsured after being laid off, is unable to afford brand-name medications. A 50-year-old woman at risk of liver cancer is refusing regular MRI scans for early detection. Although she has fairly good insurance, the copayments are too high.

"Far and away it is related to economic issues," Stream said. "I see people who have medical conditions who I should be seeing every three months. They tell me they can only afford to come in every six months or once a year."

Dr. Doug Carr of Billings, Mont., doesn't dispute the impact of the economy, but says long-lasting improvements are coming together beneath the surface and will emerge.

Carr is medical director for education at the Billings Clinic, in the forefront of developing something called a "patient-centered medical home." It's basically general-medicine doctors, physician assistants and nurses who closely follow patients with chronic illnesses to try to keep them from developing complications that require hospital treatment. More than 30 states are experimenting with the model, as are Medicare and major insurers and employers.

"We are seeing in early pilots up to a 10 percent reduction in premiums," said Carr. The savings stem mainly from fewer trips to the emergency room and less hospitalization, but also from better coordination that avoids duplicative and pricey imaging tests.

"You can pay for an awful lot of doctor visits by avoiding a single MRI," Carr pointed out. Medical homes embrace computers for tracking blood pressures, blood sugar levels and other vital indicators of how their patients are doing.

So far, the officials keeping score of the nation's health care costs are skeptical.

"It's too early to say that something significant and dramatic and permanent has occurred," said Stephen Heffler, director of national health statistics for Medicare's Office of the Actuary, responsible for economic estimates.

The country's health care tab grew more slowly in 2009 and 2010 than at any other time in the more than 50 years the government has tracked it closely. Estimates suggest the 2011 increase stayed under 4 percent, in line with overall economic growth. That dry statistic has huge implications because health care costs had been growing about 2 percentage points faster than the economy, a pace that breaks the bank. Unfortunately, Heffler's number-crunching unit sees an eventual return to the earlier trend as the economy fully recovers.

But one of Washington's prominent economists says he's convinced something different is happening.

"For the first time, providers are beginning to ask how much their recommended interventions cost and whether there isn't a way to reduce those costs," said Robert Reischauer, former director of the Congressional Budget Office. "Younger physicians are more tech savvy and more interested in a balanced work-family life and more willing to work in teams. So there is lots going on that quite frankly never happened in a convincing way before."

President Barack Obama's health care law, awaiting a Supreme Court decision on its fate, attempts to nudge Medicare into a leading role in the wave of experimentation. The program is trying various strategies to change the behavior of service providers, such as penalizing hospitals with too many preventable readmissions, offering to share savings with medical networks that can operate more efficiently, and promoting coordination among hospitals, rehabilitation centers and home health agencies.

Stream, the Spokane-area doctor, says he hopes such reforms do work. He doubles as president of the American Academy of Family Physicians, a professional society heavily committed to the new direction. But in the meantime, Stream worries about his economically pressed patients.

The woman at risk for liver cancer is doing well, but Stream said he is concerned she may eventually develop a tumor that is not detected early enough.

The tech worker with diabetes is on maximum doses of generic pills, the best he can do on his budget. But his blood sugar is not well controlled. He is beginning to develop complications.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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