More than inflation is pushing up costs of Medicare. While it's true that doctors and hospitals are charging more, there's also the added cost of new treatment and services.
For example, take a new device that permits a doctor to monitor blood flow in the brain during open-heart surgery. For years, physicians have been able to keep track of brain waves through electroencephalographic monitoring (called EEGs). Now a company has developed an attachment for an EEG machine that puts brain wave information through a computer and displays it as a series of colored bar graphs on a television screen indicating what the situation is and what it was three minutes earlier.
The screen, placed near the operating table, gives the anesthetist an immediate benchmark to see if the patient is having a blood flow problem.
There is no doubt such a device can be helpful during an operation as complicated as open-heart surgery. But is it so necessary for a patient that the government ought to include it in the services that are paid for by Medicare? If it's covered under the government program, it is certain it will be employed in every operation on a Medicare patient.
A new government bureau, the National Center for Health Care Technology, has been created to review new medical devices and procedures and recommend to the Health Care Financing Administration (HCFA) whether it should be included in Medicare coverage. In the March 3 Federal Register (page 14972), the center announced it is looking into the new EEG device.
The dilemma that can be created by such an evaluation is illustrated by another of the center's reviews, into a propoposed new treatment for rheumatoid arthritis. The process, which could cost up to $20,000 per patient, does offer some relief from this painful affliction. But the center -- which estimates some 50,000 to 100,000 patients might use the process if it is covered by Medicare -- must decide whether the benefit to patients is worth the potential $2 billion additional cost to the government.