The New York Times “Gets Cracking” on Rising Health Care Costs

On Sunday the New York Times published an editorial that set out to analyze “The High Cost of Health Care.” The result might best be described as “muddled.”

What is exasperating is that about 85 percent of the facts in the editorial are true. But a good 15 percent are simply wrong.  And the Times’ editors managed to weave truth and error together in such a way that it would take a knitting needle to separate the two. As Matthew Holt put it on The Health Care Blog: “the piece looks entirely as though it was written by a committee that couldn’t agree with itself.”

As you read the editorial, you can almost see the editors sitting around a table, negotiating. “Okay,  we’ll let that sentence about the value we’re getting for our dollars stand—as long as well keep this sentence about  ‘skin in the game.’”  The result, a mix of propaganda and analysis, is far more dangerous than outright lies because the many true facts make the whole thing sound credible.   

Because I hate to see our paper of record disseminate disinformation, I am going to try to separate the wheat from the chaff. Begin with the truth: Near the top of the story, under a sub-head that reads “Varied and Deep-Rooted,”  the Times provides a nice summary of the main reasons why we lay out roughly twice as much as the average developed nation, without getting care that is twice as good:

“we pay hospitals and doctors more than most other countries do. We rely more on costly specialists, who overuse advanced technologies, like CT scans and M.R.I. machines, and who resort to costly surgical or medical procedures a lot more than doctors in other countries do. Perverse insurance incentives entice doctors and patients to use expensive medical services more than is warranted. And our fragmented array of insurers and providers eats up a lot of money in administrative costs, marketing expenses and profits that do not afflict government-run systems abroad.”

Spot on. If only this section of the editorial had not begun with a casual half-truth: “Contrary to popular beliefs, this is not a problem driven mainly by the aging of the baby boom generation, or the high cost of prescription drugs, or medical malpractice litigation that spawns defensive medicine.”

They first part of the sentence is correct: the aging of the boomers is not a major cause of health care inflation.  The last clause of the sentence is debatable, though probably true.
What’s troubling is the middle clause:  Why does the Times feel obliged to declare that the “high cost of prescription drugs” is not an important factor behind soaring medical bills?

Perhaps the Times’ editors have read the oft-cited “fact” that drugs
account for only 10 percent to 11 percent of the nation’s total health
care bill.  But those numbers reflect only the cost of drugs purchased
retail, by the patient at the pharmacy. That 10-11 percent does not include drugs that
are administered in a hospital, a nursing home, or a doctor’s office.
Think of cancer drugs—an area where prices are spiraling. Morgan
Stanley reports that in 2002 cancer drugs accounted for 13 percent of
the nation’s drug bill; in 2007 spending on these treatments is projected to almost double, to 22 percent.

Meanwhile we’re popping more pills. According to the Kaiser Family
Foundation’s newest report on Prescription Drug Trends, from 1994 to
2005 the average number of prescriptions purchased in the U.S. climbed by 71 percent.
Over the same span, the price of prescription medications jumped 8.3
percent a year—more than triple the average annual inflation rate of
2.5 percent.

Direct-to-Consumer advertising has much to do with the rise in the
volume of pills that we ingest: In 2005 the drug industry spent fives
times more on consumer advertising than it did in 1996.  Over that
period the budget for pitching to physicians barely doubled, showing
that the industry was shifting its priorities. Typically,
direct-to-consumer advertising is reserved for new drugs that are hard
to sell to doctors—because the drug companies don’t have enough
evidence that they work. Why else would the industry spend billions on
TV ads aimed at people who can’t even write prescriptions?

Looking ahead, despite the fact that many patients are switching to
generics, the Kaiser Foundation reports that spending on prescription
drugs is expected to rise from $188.5 billion in 2004 to $446.2 billion
in 2015, a 118 percent increase in eleven years. And again, this is
just the retail portion of the total bill.

Later in the editorial, the editors do acknowledge that “it would be
beneficial to allow Medicare to negotiate with manufacturers for lower
prescription drug prices and to allow cheaper drugs to be imported from
abroad,” but still they insist:  “The prospect for big savings is
dubious.”

Why? Unlike Medicare, the Veterans Administration is allowed to
negotiate for deep discounts, and it has shown that when the government
uses its clout it can be very successful. The VA lays out 50 percent less than Medicare does for ten of the top 20 prescription drugs sold to seniors.

There is good reason to pay special attention to spending on drugs:
this component of our national health care bill is snowballing faster
than many other items on the list, including most  physicians’ fees,
the amount that Medicare pays hospitals for specific procedures, and
the amount that private insurers take from premiums to cover
administrative expenses, salaries and profits for investors.  On
average, insurers are spending roughly 85 percent of those premiums
directly on medical care, just as they did in the past. But the cost of
that care and the volume of over-treatment (which often includes using
the newest, most expensive drugs and devices) are climbing, pushing
premiums ever higher.

“Does It Matter?,”  the next section of this fractured  editorial asks.
After all, the writers assert:  “By some measures, Americans are
getting good value. Studies by reputable economists have concluded that
spending on such advanced treatments as cardiac drugs, devices and
surgery . . . have more than paid for themselves by extending lives and
improving their quality.”

This simply is not true.  As Dartmouth economist Jonathan Skinner and
Dartmouth Medical School’s Dr. Elliott Fisher pointed out in Health Affairs last year,
“When you look at Medicare costs and survival gains for acute
myocardial infarction (AMI) from 1986–2002 (as David Cutler and Mark
McClellan did in earlier work), you find that overall gains in post-AMI
survival more than justified the increases in costs during this period”
(Cutler and McClellan are the “reliable economists” the Times cites.)
But when the Dartmouth researchers honed in on the newest data they
discovered that “Since 1996, survival gains have stagnated, while
spending has continued to increase.
” [my emphasis]

In other words, we have reached a point of diminishing returns.

The New York Times’ own health care reporters know that when it comes
to many cardiac procedures, we are squandering billions every year. In
story after story, they have revealed how, when it comes to cardiac
care, supply drives demand.  For example: “a study published in The
Journal of the American Medical Association in March found that in
regions where cardiac hospitals have  opened, the overall rates of
angioplasty and open-heart surgery more than doubled after four years.”
Did patients in those regions suddenly need twice as many
procedures? Build the beds and they will come.

Meanwhile, the same article reported
“recent studies are raising doubts about the value to many patients of
widely used medical devices like heart defibrillators." Or turn to the
article that begins:
“Many heart patients routinely implanted with stents to open arteries
gain no lasting benefit compared with those treated just with drugs.”
Finally, consider the story where a Times reporter describes what he calls


“a nearly perfect example of what’s wrong with our health care
system…See, there was an elephant in the hearing room last week that
went almost entirely ignored. One study after another has found that
whether or not a stent is coated, angioplasty — the process of opening
up an artery before a stent is inserted — and stenting do not actually
reduce the risk of heart attack or extend life span for most patients.


‘There’s a much more liberal use of angioplasty and stenting than there
needs to be,’ [the Cleveland Clinic’s] Dr. Eric J. Topol, a member of
the panel, told me last week.


“Dr. Calvin L. Weisberger, the top cardiologist at Kaiser Permanente,
said, ‘A large pool of angioplasties and bypass surgeries are being
done without scientific evidence.’


“The problem is that there’s nobody whose job it is to say no. The
F.D.A. steps in when there are safety concerns. But no federal agency
or medical group takes action when an expensive form of treatment
becomes far more common than it needs to be — which is a big reason
that health care spending is rising so rapidly.”

Note to the New York Times editorial board: If you don’t read some of your paper’s best stories, who will?

I could go on, but I’ll offer just one more example of how the Times
editorial contradicts what it’s own reporters have shown.  First the
editors acknowledge “the sad truth that less than half of all medical
care in the United States is supported by good evidence that it works,
according to estimates cited by the Congressional Budget Office. If
doctors had better information on which treatments work best for which
patients, and whether the benefits were commensurate with the costs,
needless treatment could be junked, the savings the savings could be
substantial, and patient care would surely improve.”  But, they add:
“It could take a decade, or several, to conduct
comparative-effectiveness studies, modify relevant laws, and change
doctors’ behavior.” 

The first two sentences are true; the last one is not. Granted,
comparative-effectiveness research is still in its infancy. But there
are many things that we do know: for instance, that we’re doing too
many angioplasties, without evidence that we’re saving lives. And this
is just one of many areas where Times reporters have exposed waste
while citing  important research from the best medical journals. 
In some areas—for example, treatment of low-back pain—specialists have
begun to set up guidelines to avoid over-treatment. (See the story in
the most recent issue of JAMA.)
These are not hard and fast “rules”—no rule could apply to all
patients—but guidelines can set parameters.  Clearly some guidelines
are needed for cardiac procedures.

Would it take “decades” to “change doctors’ behavior?” Not if Medicare
refused to pay for procedures that fell outside of the
guidelines—unless the physician could explain why an exception should
be made. And once Medicare decides not to pay for a service, private
insurers are quick to follow.

But for some reason, even after offering every solution ever proposed
by any interest group (or favored by any individual on the writing
committee) including “More Skin In the Game,”  “Managed Care,”  “ Pay
Providers Less,”  “Information Technology,” and “Single Payer,” in the
end, the Times’ editors seem bent on concluding that far-reaching
health care reform just isn’t possible. At least not anytime soon. After all, it is not the Times’ custom to call for revolution. 

Moreover, one suspects that the editors who put their thumbprints on
this piece may have been divided on whether we really want to rein in
health care spending. On the one hand, that might be best for the
nation—not to mention for the many middle-class Americans who cannot
afford health care today. But on the other hand, does this mean that a
New York Times editor might not get an MRI for his unspecified back
pain when he wants one—just because  the guidelines (and his doctor)
say he doesn’t need one?

By the final paragraph, the writing committee seems to have given up
any hope of rational compromise. Here, the group allows the editorial
to collapse into a confusion of contradictory clichés:  On the one
hand, we’re told, “there is no silver bullet.” On the other hand, a
wide range of factors “need to be tackled” with “no guarantee they will
have a substantial impact anytime soon.” Nevertheless, “we need to get
cracking” on solving this problem, all the time keeping in mind that
“the cascade of knowledge flowing from the human genome project, new
nanotechnologies” etc.  “may well accelerate, not mitigate, the rise in
medical spending.” And “if we want the benefits, we will need to make
them affordable.”

How?

9 thoughts on “The New York Times “Gets Cracking” on Rising Health Care Costs

  1. I was much less critical. Yes, it was not high art, and certainly would get red marked to the heavens if it it was a submission to a reputable health policy journal, but on the plus side:
    1) It got the problems right, as you point out (the “85%”). In line with your essay yesterday, which I thought was on the mark, folks need education. Refocusing audience on real evils, ie, efficiency and waste, as opposed to demagoguery on the campaign trail, only helps advance the debate. Ordinary citizens need to know that high tech and non-EBM practices are the source of our ills, not the illegal immigrants “flooding our ERs.” The op-ed did that effectively and on a large scale.
    2) It emphasized the “lingo” of the health care debate: consumer driven health care, IT, etc. Again, folks need to absorb what is at the margins and what they will be seeing more of. Getting the appropriate terms in the narrative only helps. I don’t know beans about the current real estate meltdown, I am not in that line of work, but reading the op-eds, however skewed they might be, taught me CDO from SIV, etc. It all helps and the overall thread was not far off the mark.
    3) I don’t think it leaned to far left or right. No Krugman or Gratzeresque detours, and did not come off as blowhard propaganda.
    Anyway, they might have missed the boat a bit on prescription drugs (not a major gaff in my book), and did not exactly offer a prescription for the overall fix, but that is not what I was looking for–that is too complicated even for us on the blogs…sometimes. Regardless, I think the highbrow NYT ‘s reader learned something, and that is a start and a good thing (it was on the top 10 emailed pieces list for a bit). I was even surprised at the length of the tome, and that also speaks volumes to the readership.
    Ironically, the docs I work with only complained about the knocks on doctor salaries. So much for seeing the forest through the trees.
    I am anxiously awaiting letters to the editor.
    Brad

  2. Thanks Maggie and Brad F
    I liked the Times piece generally but appreciate Maggie doing the deconstruction.
    Hey -in the TIMES Magazine there was a lengthty piece written by a Doc who is repenting that he “sold his soul” to Big PhRMA. Any comments from you?
    All things considered the NYT is helping the cause-I think?
    Rick Lippin

  3. Good analysis of the content but I think you’re missing the political dynamics that are emerging, and perhaps may explain this “muddled” editorial. The “responsible” Democrats are consolidating around a “whatever it takes to insure the uninsured” position, and will throw cost-control, which alienates providers, from the train if necessary to get there. The Times editorialists are definitely in this camp.
    I just wonder how smart that is going to look in six months if we’re entering a recession, business is desperate to cut costs, and public sector budgets are collapsing (my morning paper brings news that Montgomery County here in Maryland faces a $400 million shortfall because of the housing downturn). Health care reformers who sally forth with a proposal to raise taxes by $100 billion to insure the uninsured may have egg on their faces.

  4. You only touched on their dicussion of physician salaries, so I thought I’d take a swing at it:
    I’m perfectly happy to be paid what my counterparts in Europe do. However, I additionally demand the same rights they have: four to six guaranteed weeks of vacation, longer training with less demanding hours, 50-hour weeks, and free or extremely discounted medical school. Since competition will likely be high for a moderately-paid job with free post-graduate education, why not throw in the recent protectionism laws the UK established against non-UK citizens?
    If you pay back my loans and slash my hours, of course I’ll settle for a lower salary (and let’s be honest, it wouldn’t be terribly lower than an US pediatrician is paid now). I think many doctors would. Believe it or not, money wasn’t why we chose this career. It became a much more important issue when we realized we’d have, in effect, a second mortgage into our 40s.
    It’s easy to look at lower salaries and say “Hey, we’re being ripped off with our current system.” Maybe we are. But I’m truly sick and tired of people who argue this ignoring the OTHER incentives foreign doctors get in return for their lower pay. Much like those who argue socialized medicine is a bright and shiny toy always seem to forget that an NHS dentist is more elusive than a unicorn.

  5. Thank you all for your comments– I can see that this is going to be an interesting discussion.
    I’ll be back this afternoon with responses–I hope more of you join in!
    mm

  6. I think you are letting the Times off too lightly.
    There was no mention of the 30% overhead that private insurance imposes. There was no mention of the obscene earnings of those who manage for-profit hospitals and insurance firms. When the top management of UHC gets a pay package worth over $1 billion then that warrants notice.
    Instead we get the usual blame the doctors for over treating and blame the patients for demanding unnecessary services.
    What is needed, in my opinion, is to stop talking about universal insurance and talk about universal coverage. Talking in terms of insurance means that we will continue to give away the store to the private sector.
    How many pages of ads does the Times run from drug firms and hospitals? They are not about to bite the hand that feeds them.
    The Times is not the paper of “record” it is the paper of the establishment and status quo.

  7. The section of this blog on drug prices refers to the fact that the VA is allowed to negotiate for deep discounts. There is more than negotiation involved in those discounts. Federal law 38USC section 8126 prohibits the VA as well as the DoD, the PHS and the Coastguard from paying any costs that exceed the Federal ceiling price. The FCP is 76% of the average price paid to a manufacturer by wholesalers for drugs distributed to non-Federal purchasers. So when the VA begins to negotiate it is at a price that already has a 24% discount. Try to get a law like that for Medicare!

  8. The NYT has committed heresy! The Gray Lady must recant! Otherwise, intellectual diversity might infect the rest of the “progressive” community.
    You guys crack me up.

  9. Thanks to everyone for your comments.
    Joan C–There are many ways to negotiate drug prices. Every other developed country in the world does this, in one way or another by a)regulating drug-makers the way we regulate utilities (because like utilities, they are selling something that is a necessity); b) capping drug-makers profits and saying that at a certain point, profits have to be used to lower prices, c) establishing a ceiling based on average prices elsewhere d) outlawing direct-to-consumer advertising (which is not allowed in other developed countires) and e) insisting that drug companies use the billions that they now spend on DTC to lower prices f) establishing a formulary and refusing to cover drugs that are no better yet more expensive than their rivals (something that the VA has done a very good job of doing, using its database to avoid exposing its patients to risky drugs that were later pulled from the market.)
    All of the Democratic candidates are calling for an independent institute that would do comparative-effectiveness reserach. We already have some of the reserach needed, showing which drugs are simply over-priced while providing no additional benfit for the vast majority of patients. (There are always exceptions; in the VA system, a doctor can prescribe somethingthat is not in the formulary simply by noting the reason on the chart.)
    RobertFeinman– It is true that the Times is very conscious of being part of the “establishment” and it doesn’t want to step on toes. (I’ve worked there, so unfortuantely, I know how the sausage is made. I remember editing a story about Phlip Morris and being reminded that they are, after all, an advertiser. On another occasion I was told “Maggie, we can’t say this! This is THE NEW YORK TIMES (said in a tone that suggested “THIS IS THE VACTICAN.” (What I wanted to say was a little too progressive.)
    Brad– News stories are one thing–they shouldn’t be partisan; they should be educational and should represent all reasonable points of view.
    But an editorial is something else. It is supposed to take a postion–and in this case, that means taking a position left of center or right of center.
    It’s interesting that all 3 Democratic candidates have very very similar plans for reform. That is becuase if you sit down and study the problem-and honestly believe that everyone has an equal right to equal healthcare–it’s pretty clear what needs to be done.
    Merrill–and a major part of what has to be done is cost control. You’re entirely right about where the economy is headed. But if you sit down and carefully read the 3 Democratic plans, you’ll find that they all include a lot of cost control–particularly HRC and Edwards. On the campaign trail, they may not emphasize this. People really don’t like to hear that we’re going to put a lid on healthcare spending–that makes them worry that they might not get everything they want. (And that, by the way is why the Times editors backed away from saying we’re doing too many anigoplasties. We are not getting value for hte dollars we spend on cardiac care.
    But most of these editors are middle-aged men, and like all of us they have their private fears and prejudices. One of their primary fears is having a heart attack or stroke. So they really don’t want to think about cutting back on the money we’re spending on angioplasties and telling patients that they need to try drug therapy, exercise and better diet.
    And they are not enthusiastic about the idea funneling some of the money now spent on angioplsties into smoking cessation clinics. They don’t smoke. Probably their kids don’t smoke. Not their problem. ( Poor people smoke.)
    But instead of saying that if we cut the waste, and do more preventive care, we can contain health care spending and be able to afford universal care, the Times–which is supposedly a progressive newspaper–throws its hands up in the air and says “what can be done!!”
    While Fox News represents the right of center position (not just in its editorials, but in its news), the Times is too fearful to speak out. (Just as the Times was too fearful to speak out about going into Iraq, and let its reporters swallow lies about weapons of mass destruction. It didnt’ want to cross the establishment-even when the establsihment was the less-than-credible Bush administration. )
    I would have liked to see the editors take a stand on universal insurance by saying that it can be done–but it will involve recognizing the amount of waste in the system–over-using expensive technologiest, etc.
    The editorial mentions the Dartmouth reserach that shows that Medicare spends twice as much per patient in some parts of the country–where are are more specialists and hospital beds–than it spends on very similar patients in other parts of the country. (This is after adjusintg for differences in local prices, race and the overall health of the population in a particular area)
    People in the expensive regions undergo much more intensive treatment–more tests, more procecdures, more time in the ICU, and they see many more specialists simultaneously.
    YET THERE OUTCOMES ARE NO BETTER. OFTEN THEY ARE WORSE. Overtreatment is dangerous to your health.
    The Dartmouth research has been going on for nearly three decades and is now widely accepted (I wrote about this in Dartmouth Medicine last spring. Just Google my name and “Darmouth Medicine” and Spring 2007 and you’ll find the piece.
    All three Democratic candidates refer to it implicitly or explicitly all of the time. And the conservatives have not found any way to refute it.
    The Tmes own reporters have written about how the Dartmouth Research shows that $1 out of $3 of our health care dollars is wasted on unncessary treatments and tests and over-priced drugs and devices that are no better than the older, less costly products they replaced.
    Multi-million dollar salares for insurance executives are a complete waste, but when you look at our 2.2 trillion-dollar health care bill, those salaries are a drop in the bucket.
    We need to focus on the big problem, and the big problem is that in our for-profit health care system, it sometimes seems that everyone is selling something–and selling hard, whether it’s GE selling the newest in MRIs or people selling drugs to medicate young children. (See Niko’s story on ADHD)
    In terms of doctors, the biggest problem is that we only pay them when they “do” something– We pay fee-for-service, so you don’t get paid much (if at all) for sitting, talking to a patient and listening to a patient. You only get paid if you order a test or a procedure. And of course drug-makers and device-makers will pay you in many ways if you prescribe their products.
    As a result, doctors who practice the most aggressive medicine are paid very well. IF you are an oncologist who specializes in radiation, and orders a lot of it, you’ll become rich. If you are a palliative care specialist who tries to make sure that people who are dying understand their options and aren’t in pain, you are paid very little.
    I’m not saying that most doctors “do more” in order to make more money–certainly not consciously. But at some point, you have to be paid for spending a half hour with a patient, and if the only way to be paid is to show that you “did” something . . .
    This fee-for-doing-something payment system also means that generalists (family docs, internists, pediatricans, tec.) are paid less than they should be. (If you look at the loans that the average medical student has coming out of school,it’s really hard for a young family doctor to make it financially.)
    KS– you’re entirely right. Doctors in other countires are paid less, but also don’t come out of school with huge loans. I strongly favor “forgiving” med school loans for doctors who decide, when they graduate, to became family doctors, internists, etc. These are the areas where we have a shortage of doctors. (See my recent post on whether we have too many doctors.)
    That way,the salaries that beginning family docs are paid would probably be sufficient.
    At the same time, I think we need to stop paying specialists for volume, and start paying them for good outcomes–quality, not quantity. We can’t pay them individually for quality because doctors with a few very sick or non-compliant patients would be penalized.
    Paying for quality probably means paying them bonuses as part of a doctor-hospital team (providing bonsues to a hospital and to each of the doctors who refer to that hospital
    if outcomes are better than at other hospitals. Outcomes would need to be measured in mutliple ways. There is an interesting article about this in the current Health Affairs, and I’ll post about it at some point.
    Rick– I found the NYT mag article about the doctor who sold his soul a little creepy. The tone seemed to be “well I probably shouldn’t have done this” but it didn’t make me feel that the writer (or the magazine editor) thought that what he did should be illegal. But it should. He knew he wasn’t telling the whole truth; he knew he was being paid not to tell the whole truth. He has taken an oath. And people’s health and lives are at stake.