What is the biggest threat to the U.S. economy?
According to Congressional Budget Office Director Peter Orszag, it is not credit famine, the long-term price of energy, competition from China, the loss of jobs overseas, or even a surfeit of Chrysler SUVs.
It is, Orszag declared in October, “the nation’s looming fiscal gap — which is driven primarily by rising health care costs.” Healthcare inflation cannot be ignored, Orszag added, because “If we fail to put the nation on a sounder fiscal course. . . we will ultimately reach a point where investors [will] lose confidence and no longer be as willing to purchase Treasury debt at anything but exorbitant interest rates.”
Today, investors outside the U.S. hold $2.74 trillion of Treasuries, or 52 percent of the $5.22 trillion in debt that the U.S. has issued. But now foreign buying of our Treasuries is falling. And, as Orszag has explained elsewhere, if we have to pay “exorbitant interest rates” to persuade foreign investors to continue buying our Treasuries, “over time, foreign investors would claim larger and larger shares of the nation’s output and fewer resources would be available for domestic consumption.” Put simply, our standard of living would fall.
Why does Orszag single out soaring health care costs as the driving force behind our fiscal woes? Because healthcare spending accounts for over 16 percent of GDP, and it continues to grow faster than other sectors, outpacing both growth in GDP and workers’ wages. At $2.3 trillion a year and counting, our national health care bill is rising so fast that it threatens to crowd out other priorities—like spending on education, the environment, and infrastructure repair. Some in the health care industry point out that spending on medicine creates jobs, but as the cost of care levitates, we spend less in other sectors, and jobs in those areas disappear.
Moreover, unlike spending to repair bridges, strengthen schools, or protect the environment, Orszag suggests that the “excess” growth in health care spending is not adding to the wealth—or the health—of the nation. “The gains from higher spending are not clear” the Congressional Budget Office noted recently. “Substantial evidence exists that more expensive care does not always mean higher-quality care.”
Some observers took Orszag’s statement about the importance of health care spending as a signal that he was calling for universal coverage. He was not—not without simultaneously contain costs.
Orszag made it clear, as he has before, that if we don’t put a brake
on health care inflation we won’t even be able to sustain the national
health care programs we have now—Medicare and Medicaid—let alone cover
everyone: “Rising health care costs and their consequences for Medicare
and Medicaid constitute the nation’s central fiscal challenge,” the CBO
observed in a recent report. “Without changes in federal law, the
government’s spending on those two programs is on a path that cannot be
sustained.”
Well-meaning reformers sometimes have suggested that if we just
rolled out “health care for all” medical care would magically become
less expensive. After all, if everyone is insured, they argue, everyone
will receive more timely care, and fewer people will wind up needing
expensive hospital care.
But as I pointed out in a recent post,
the research points in the other direction: “Studies consistently show
that when a large portion of the previously uninsured population
becomes insured, total health care spending rises by 10 to 13 percent.
“ This is because while the uninsured are more likely to land in the
hospital, they also die significantly sooner than the rest of us—saving
society the money that might have been spent treating them for
Alzheimer’s or other diseases of old age.”
Indeed, as Paul Ginsburg points out
in “High and Rising Health Care Costs: Demystifying Health Care
Spending,” the Center for Healthcare Systems Change (HSC) report that I
quote in part 1 of this post, “over the past decade, the decline in
the percentage of Americans who have insurance has slowed the rate of
health spending growth. “ If everyone had been insured, our national
health care bill would be even higher.
Orszag knows this. Universal coverage is possible only if we
contain the cost of care. But, here is the good news: there is so much
“excess” in our health care system that, Orszag observes, “there are
opportunities to reduce costs without impairing health outcomes
overall.” Less costly care does not mean lower-quality care. We can
provide good, comprehensive care for everyone.
Orszag on Medical Technology
“High and Rising Health Care Costs: Demystifying Health Care
Spending,” reviews the literature on health care spending and makes the
consensus clear: the major factor driving sky-rocketing health care
spending is advanced medical technologies.
Orszag agrees. In a presentation
to Stanford University’s Center for Public Health last month, he
pointed to several studies which suggest that “technology-related
changes in medical practice” account for 38 percent to 65 percent of
the growth in health care spending from 1940 to 1990.
During the same presentation, Orszag used the chart below to
illustrate how cutting-edge care does not always mean better care. In
states like New York, Massachusetts, Florida, California, and Texas,
where Medicare spends far more on aggressive, high-tech care (see dots
on the far-right of the chart), the quality of care is often lower than
in states like Iowa, Minnesota and Northern New England, where Medicare
spends much less on very similar patients. (Spending is adjusted for
differences in local prices, race, age and overall health of the
population).
As I noted in Part I, the problem is that we use costly new medical
technologies (which include drugs, devices, tests, equipment and
surgical procedures) so inefficiently. Frequently, excess capacity
leads health care providers to prescribe new products and services for
a much broader swathe of patients than actually benefit. We now have
medical evidence that too many cath labs and too many specialty heart
surgery centers have led to too many angioplasties; many patients would
have fared just well with simpler, less risky treatments.
“The variability in benefits that different patients achieve
from similar interventions is at the heart of the conflicting views of
the value of medical technology.” Ginsburg observes. “Championing
technology does not have to be inconsistent with advocating vigorous
attempts to limit use to patients most likely to benefit.”
How Can We Slow Health Care Inflation?
Some believe that private insurers are responsible for the high cost
of care in the U.S. But in fact, it is Medicare, not the insurers that
sets the pace for our soaring medical bills. When it comes to decisions
about what to cover—and how much to pay—these days, private insurers
merely follow Medicare’s lead.
Granted, private insurers add to the administrative costs in our
health care system. But these costs are a constant: they do not
contribute to health care inflation. And it is the growth in the nation’s health care bill that threatens the economy.
In “High and Rising Health Care Costs: Demystifying Health Care
Spending,” Ginsburg explains: “Another key conceptual distinction is
between the level of spending during a period of time and trends in spending over time.” Healthcare spending represents a danger to the economy not so much because it is so high Ginsburg notes, but because “it is increasing rapidly over time.”
“The distinction is important,” he adds, “to understanding what is
driving spending and what can be done to address it. For example, many
[supporters of a single-payer plan] believe that the fragmentation of
health care financing and delivery in the United States is a factor
behind high spending per person”—and, I would add, this is absolutely
true. Having so many different insurers—all spending money marketing
and advertising their programs to consumers and employers and all
requiring that hospitals and doctors fill out thousands of different
reimbursement forms—does add to the total cost of care.
“But,” Ginsburg points out, “this may not be an important factor
behind the growth in spending over time. If fragmentation leads
spending to be X percent higher than it could be, that X percent could be relatively constant over time.” By contrast, “other factors, such as medical technology, lead both to high spending per person—and spending increasing over time as new technologies are developed and diffuse.”
Here I would point out that the amount that private sector insurers
add to our healthcare bills is, in fact, “relatively constant” over
time. Insurers are not “developing” new administrative costs the way
the health care industry is spawning new technologies.
Why, then, have insurance premiums risen so sharply in recent years?
Because the amount that insurers are laying out for medical care has
been rising, in tandem with health care inflation. As the chart below
shows, insurers’ reimbursements have been rising by 8 percent to 8.5
percent a year since 1999. That was the year that the insurance
industry responded to the backlash against HMOs and more or less gave
up on “managing care.” Rather than saying “no” to many new
technologies, it said “yes”—and passed the additional cost along in
higher premiums.
Meanwhile, the share of our premiums that insurers skim to cover
their administrative costs has remained relatively stable. As I explained
in a post nearly two years ago, on average, insurers keep 15 percent to
20 percent of our premiums to cover their “administrative
expenses”—including salaries, executive bonuses, lobbying, marketing,
advertising, underwriting and profits for shareholders. (They pay out
the other 80 percent to 85 percent of our premiums in reimbursements to
doctors, hospitals and patients. These are public figures.)
Many people believe that those administrative costs account for a
major portion of our national health. But as the pie chart below
reveals, when you total it up, the 15 percent to 20 percent of our
premiums that each insurer holds onto adds up to only about 4.5 percent
of the $2.2 trillion that we, as a nation laid out last year for health
care—or roughly $100 billion. There is no question but what $100
billion is a nice chunk of change, and I should add, I don’t think
we’re getting a reasonable value for the money from most insurers.
But here is my point: compare how much insurers add to the tab to
how much the rising cost of medical technology boosts the bill. In
recent years, the whole $2 trillion-plus pie has been expanding by 6
percent to 8 percent annually—driven in large part by inefficient use
of ever more expensive technologies. Even if we switched to
single-payer tomorrow, and eliminated the $100 billion in extra costs
that private insurers bring to the party, the $150 billion to $200
billion annual rise in health care spending would wipe out that savings
in less than a year. This illustrates what a powerful force health
care inflation is. Unless we tame it, it will undo our best efforts at
reform the system.
In “High and Rising Health Care Costs: Demystifying Health Care
Spending,” Ginsburg points out that while the insurers’ slice of the
health care pie has not been expanding much in recent years, three
other pieces of the pie have been growing: hospital care (which now
accounts for 32 percent of spending), physician and clinical services
(22 percent) and drugs and devices (roughly 16 percent). Often, health
care analysts estimate that prescription drugs account for only 10
percent to 11 percent of the bill, but that includes only the drugs
that patients buy retail at a pharmacy. Add in the cost of drugs
administered in a hospital, a doctors’ office, or a nursing home, plus
a wide array of medical devices (from stents to knee implants) and you
arrive at approximately 16 percent.
These are the three biggest slices, and they are growing faster than
the remainder of the pie, in large part because they reflect both the
spiraling cost and soaring use of advanced medical technologies.
Doctors and hospitals are not, by and large, being paid more for what
they do, but they are doing more to more patients.
Meanwhile, often the patients do not benefit. Take another look at
the chart above showing the “Relationship Between Quality of Care and
Medical Spending, By State.” More intensive care often is not better.
As Ezekiel Emanuel, director of bioethics at the National Institute of
Health points out in his 2008 book Healthcare Guaranteed:,
“Recently, a study by Dartmouth researchers showed that patients who
had suffered heart attacks did no better at hospitals in which they saw
more physicians. Similarly, hospitals in which patients underwent more
tests and interventions were not the places where patients were more
likely to survive after a heart attack; in fact, seeing fewer
physicians was associated with a higher chance of surviving a heart
attack.”
The solution seems clear. As CBO director Peter Orszag testified
before the Senate Committee on Finance last year, “we need to adopt
“costly new medical services more selectively in the future than we
have in the past…” and the diffusion of existing costly services”
should be “slowed.” He acknowledged that this approach “would mean
fewer medical services, but evidence suggests that savings are possible
without a substantial loss of clinical value.” Too often, “newer, more
expensive services are used in cases in which older, cheaper
alternatives could offer comparable outcomes for patients.” And
sometimes, better outcomes. Because the one thing that can be said with
certainty about the newest treatments is that we know less about them.
And thus they are riskier.
But if we became more careful in our use of medical technologies,
wouldn’t this discourage innovation? Writing for the Centers for Health
Systems Change (HSC) Ginsburg tackles that question: “The subtext is
whether steps that would make new technologies less profitable for
their developers—for example, through guidelines leading to their being
applied to fewer patients—would reduce the development of the valuable
new technologies. Although it goes without saying that less profitable
research and development will reduce resources going into these
activities, it is far less certain that it would reduce the flow of
high-value new technologies.”
U.S. healthcare is awash in innovation, and as Ginsburg notes “the
law of diminishing replies certainly applies to [medical] research and
development.” Too many new products are of marginal or no value,
leading Ginsburg to question whether putting a brake on pricing would
reduce the flow of the most valuable technologies.
Moreover, we shouldn’t encourage manufacturers to pour resources
into developing technologies that only a few can afford. “The inability
to afford health insurance now affects many in the middle class,”
Ginsburg observes. “For many, whether advances in medical technology
are valuable or not has little relevance if their inability to afford
insurance puts those technologies beyond their reach.”
The goal is not simply to contain spending, Orszag concludes, but to
“restrain the growth of costs without harming the incentives to provide
appropriate care and develop valuable treatments.” He recognizes that
this will not be easy; and it cannot be done quickly. “Moving the
nation toward that possibility—which will inevitably be an iterative
process in which policy steps are tried, evaluated, and perhaps
reconsidered—is essential to moving the country toward a sounder
long-term fiscal footing.”
Pilot projects will be needed as we experiment with ways to measure
outcomes and restructure payment systems to encourage effective
treatments. As we learn more, guidelines will have to be revised. But
“selective” medical care—delivering the right care, to the right
patient at the right time—will not only save money, it will also save
lives.
Insurance executives will tell you that one factor contributing materially to increasing medical claims costs paid by insurers is cost shifting, especially by hospitals, and, to a lesser extent, by large physician groups. As Medicare and Medicaid squeeze providers’ payments to below the cost of providing care, providers look to private insurers to make up the difference. For well regarded hospitals that everyone wants in their network and those with significant regional market share, the balance of power tends to favor the providers. According to Charlie Baker, CEO of Harvard-Pilgrim Healthcare, insurers pay, on average, 120% – 135% of Medicare rates for most services, tests and procedures. Most hospitals claim they would go broke if they had to accept Medicare (let alone Medicaid) rates from all comers. While inner city safety net hospitals which treat large numbers of uninsured patients and patients on Medicaid might be better off if they could get paid Medicare rates across the board, most other hospitals would not do as well, especially considering that the average operating profit margin for hospitals (85% of which are non-profits) is in the low single digits. Medicare and Medicaid can get away with their current approach because costs could be shifted to private insurers. Under a single payer system, that would no longer be the case. It’s a classic example of what economists call the fallacy of composition.
Separately, for pre-Medicare eligible retirees who were uninsured before becoming eligible for Medicare, Jonathan Gruber of MIT told a conference I attended a few months back that such patients cost Medicare 20% more on average for their first seven years in the system than newly eligible Medicare beneficiaries who previously had health insurance.
We will never get healthcare costs under control until we learn how to start saying NO to overly expensive new drugs, devices, tests and procedures. Only CMS can provide that leadership. Just as it took President Nixon, with his unquestioned anti-communist credentials, to go to China, it should be easier for a Democratic administration and Congress to provide the leadership to start to make the tough choices that are long overdue in healthcare. I hope both President Obama (assuming he wins tomorrow) and the overwhelmingly Democratic House and Senate are up to the job. It usually takes a crisis to bring about substantive reform. We have one (financial system related) now.
Barry–
Thank you very much for your comment.
Over the two years that you have been a regular reader, we have disagreed–and agreed –on
many topics.
But I can’t think of a time when I have so completely agreed with your comment.
Both on the politics of the situation, and on the eocnomics, you offer an incisive summary of where we stand today.
And yes, it usually takes a crisis to bring about substantive reform.
That is the silver lining in today’s economic crisis.
And we are, beyond doubt, facing a crisis.
Addressing below, recent Health Affairs article looked at cost shifting in hospitals and “price” of uninsured. Surprising to see smaller than expected effect:
http://healthaffairs.org/blog/2008/09/04/covering-the-uninsured-springing-a-leak-in-the-cost-shifting-hydraulic/
Also, recent CBO report on the power of MCOs vs providers in marketplace. Again, answer not so clear. Cant find the link.
Brad
Once again I’m a one note whiner, I fear. Where are the costs for professional nursing? I’m guessing they fall somewhere in the hospital, nursing home and other wedges.
What I’d like to see is that overall pie chart stacked up against the segment of US patients who receive their primary health care from a community health clinic or equivalent. I’d also like to compare the types, acuity and costs of end-of-life care for the overall and the community health groups of patients. Same with use of high tech and extraordinary care for the two with morbidity and mortality rates and causes associated presented.
Again, we’re always addressing our problems and reform from a top down view. I think we must take the view from the ground and work upwards until we plateau available scarce resources.
When everyone has coverage that includes preventive care, safe food, water, shelter and air, and a regular primary care provider who has a real and sustained relationship with the patient, then we can go to the next step and add on acute and chronic illness care and management, etc. to continue building the health system.
But without a solid foundation, everything else is simply jerry rigging and cosmetic patchwork.
Your post is most insightful and illuminating, Maggie. I hope the right sets of eyes see it and think about it.
Random Comments:
1. Insurance companies typically make money off the investments that they engage in using the premiums as a source of funds. In certain areas the “insurance” part of the operation only breaks even or loses money. So if health insurance companies are keeping 15-20% of the premiums and making money off their investments they are doing better than those in other sectors. The fact that they have been seeing loses recently is more tied to the performance of the stock market, rather than rising payouts. Insurance is still a dead weight cost on the system, no matter how you measure it.
2. As I’ve said before the health care equation does not include credits for the benefits conferred by treatment. We only see the expense side of system. Where is the value of the improved quality of life, increased productivity, increased lifespan or heightened earnings capacity of the successfully treated factored in? I’ve given the example of Bill Clinton and Dave Letterman before. They are earning millions since they are now in good health after their bypass surgery. In earlier times they would either be invalids or dead. Where is this credited?
3. Using GDP percentage figures is a poor way to measure things since there has been a decline in other sectors of the economy – especially manufacturing. So if one sector declines that others will get bigger as a percentage even if their dollar amounts remained relatively stable. I admit that health spending is going up, but using GDP is not giving a balanced picture of the economic trends in the country.
4. Orszag didn’t get into money-driven medicine. This is a result of shifting funding for research to private firms rather than via government programs. Even those funds which go to universities via NIH or other agencies are tainted by changes in patent laws. In an earlier age those getting government grants had to turn the rights to their discoveries over to the government. Now they can keep them and set up private firms to exploit their results. The government spends, but private industry benefits. In addition this slants research into areas where there is a potential for high profits, me-too and lifestyle drugs, for example. Compare how the polio vaccine was distributed with Gardasil.
5. Over treatment is wasteful and pointless, but is a direct result of the money-driven medicine economic structure that we find ourselves in. It may be politically difficult to eliminate this, but tweaks around the edges won’t do the job. It will be just as big a battle to get a UK or Canadian style of health care as it will be to expand coverage to the poorly insured, so why not go for the whole thing. The Clinton plan failed because they tried to accommodate all the special interests. The Gordian knot needs to be cut, let’s see if the new administration has the willingness to attempt this while they are coasting on their “mandate”.
Here I go again.
One of the MAIN reasons we are NOT selective about studying the merits(efficacy and safety)of any medical technology is that we want to believe that the next medical “breakthrough” has just been discovered or is on the immediate horizon. We engage in this self deception and misperception because we actually have the hope and the hubris to believe that technology will cure all diseases including the “disease” of death.
We need to grow up as individuals and as a nation.
Dr. Rick Lippin
Southampton,Pa
ralippin@aol.com
Dr., Rick, Robert,
Dr. Rick.
You write: “that we want to believe that the next medical “breakthrough” has just been discovered or is on the immediate horizon. We engage in this self deception and misperception because we actually have the hope and the hubris to believe that technology will cure all diseases including the “disease” of death.”
Yes, I’m afraid this does go a long way toward explaining why we are not more “selective” —and skeptical–about medical technology.
Robert, Thanks much for your long, thoughtful comment.
I have to disagree on a number of points, but as always, you’ve raised excellent points.
First, let’s look at the “benefit” to Clinton and Letterman . . .
Would Letterman have been dead if he didn’t have the operation? We don’t know this. We do know that a large percentage of by-passes are unncessary.
As the COO of a major NY hospital once said to me: we always ask, “Did the patient live or die after heart surgery? What no one ever asks is the really important question–did he need heart surgery in the first place?”
As for Clinton, there is a real possiblilty that he suffered some brain damage (as a significant number of patients do.) Secondly,
many physicians believe that the type of cutting-edge surgery that he had was too risky and will cause problems moving fowared.
Finally, there is much evidence that improvements in longevity have much more to do with cleaner water, sewage disposal, better food, and other changes in our environment that have nothing to do with advanced medical technologies.
See the Medical Humanities blog here http://www.medhumanities.org/medical_humanities_dialogue/
Also, keep in mind the pie chart that I’ve posted in the past, showing that “medical care” (or lack thereof) accounts for only 10% of premature deaths.
Genetics, environment and behaviors account for the other 90%.
We’re beginning to realize that medicine isn’t quite what we hoped (or what it has been cracked up to be–see Dr. Rick’s comment.
On insurance companies —
No, if you read the best Wall Street analysts on what has happened to insurance companies you will find that a) their biggest problem is that more employers have backed out of providing health insurance or are buying less expensive insurance
combined with the fact that payouts are rising 8-8.5%. They’ve had a hard time raising premiums enough to keep up with health care inflation.
Health insurers were in deep trouble long before the current stock market meltdown.
As for their investments in bonds–this is the other side of the business where they do well, or badly, depending on how shrewd their investments are and now the bond market is doing. This has nothing to do with how much they shoudl be charging for insurance or paying out in premiums.
Using GDP is the best way to look at how healthcare is taking over the economy. Yes, manufacturing has been shrinking–but health care spending has been expanding, faster than GDP growth, year after year.
It’s not that healthcare “looks” like a bigger piece of the pie becaues manufacturing is shrinking– the amount of money we spend on healthcare in real terms (after adjusting for inflation) is way out of whack. And, all of the reserach shows we are getting very little benefit for the dollars.
Overall health is not better than it was 18 years ago, and we are no longer making “miraculous” breakthroughs. We’ve reached a point of diminishing returns.
This is Orszag’s point –and I should add that he is brilliant. One of two or three truly deeply intelligent people in a position of power in Washington at this time.
Moreover, unlike manufacturing, healthcare is competing for taxpayers dollars. (Governemnt pays roughly 55% of all healthcare bills.) So we’re most interested in how the healthcare sector is growing when compared to spending on the environment, the arts, education, etc.–other areas that compete for taxpayers’ dollars.
Orzsag is getting into money-driven medcine insofar as he realizes that
cutting back spending on very expensive technologies will make manufacturers re-think their reserach priorities. If the market for a $600,000 treatment is going to be much smaller, then they put fewer resources into trying to develop $600,000 treatments (that are often of marginal value.)
Finally, cutting back on our overuse of advanced medical technologies isn’t “tweaking around the edges” — it’s the major structural reform that we need.
At the same time, we need to change how we pay for healthcare. Fee-for-service encourages over-use of these very expensive technologies.
The main difference between the U.S. and Euorpean health care sysems is that a) we “do more” to patients– more procedures, more tests, more drugs) and b) we pay more for everything.
And the secret of success in Europe (where they spend so much less and have generally higher quality care) is not single-payer. The vast majority of European health care is a combination of private sector and public sector–like Obama’s plan.
Canada and the U.K. have single-payer care–but the quality is not as high as in Germany, Sweden, Denmark, France . . .So
single-payer isn’t a magic answer. (It could work as well as a hybrid approach, but doesn’t necessarily.)
The key is that in Europe the private sector is Regulated– there are limits on spsending, the government sets prices in some areas; it refuses to over-pay for drugs; it refuses to let hospitals invest in frills that have nothing to do with medical care, and insurance does not cover nearly as many ineffective treatmetns.
In a word, care is “managed.” When we tried to do that here, in the 1990s, for-profit insurers “managed” care on price, not on quality. (IF they had been regulated they could have been required to make coverage decisions based on medical evidence, but they were not.)
Today, Kaiser Permanente, like the VA and the Mayo Clinic does make such decisions based on medical evidence. This shows that this is something that for-profit, not-for-profit or goverment run health care can do. But the for-profit sector will do it only if government insists.
Annie & Brad-
Annie- I agree, we need to
pay more attention to community care–which also means puttng more of an emphasis on public health.
Brad- thanks for the link–which does suggest that the uninsured don’t “cost us” in the way people imagine.
what’s critical about the Orszag initiative is that he’s trying to share the insiders conventional wisdom about efficiency (too many getting too much) with politicians and the wider public, a group that generally believes the problem is that patients are being denied what they need by a miserly financing system. defining what the fat is and how to squeeze it out is a daunting task, but one that won’t begin until the public understands that’s central to the problem. it doesn’t now.
Jim–
I entirely agree that public education on this point is key–and hard.
But the number of expensive new devices and drugs that have been withdrawn from the market in recent years is beginning to make some people aware that the FDA isn’t doing the job people expect it to do.
Products are coming to market that haven’t been fully tested to prove that benefits outweigh risks.
If people understand that, then it is easier to persuade them that products are coming to market that are no better than the older, less expensive products that they are trying to replace.
Also, the public is accepting generic drugs– another example of how the less expensive product may be just as good.
All in all, I do think that the pubic is becoming more skeptical about drug-makers (and device-makers who bribe doctors to use their products.) That skepticism will help tham understand that Medicare is trying to keep taxapayers from being gouged–and to protect seniors from being used as unwitting guinea pigs for
unproven products . . .
Finally, I’m very hopeful that new leadership at the FDA, at CMS and in the White House may be successful in winning the public’s trust and getting people to understand that CMS is simply trying to pave the way to make effective health care affordable for everyone.
If Medicare manages to rein in spending, and eliminate some of the waste, that will be a huge step toward being able to offer sustainable universal ocverage.
Sorry to be late in the comment section. I always thought the FDA had a mandate to only approve new drugs or treatments in a class if they were shown to be superior to those already on the market. My impression is that the last 8 years or so the FDA has gotten neutered like Wall Street regulators. Maybe that will switch…
I agree with your reply to Dr. Feinman about the “benefit” of treatments. I always cite the data. Intervention(CABG, -plasty) for acute MI over”conservative”= drugs O2, improves mortality and outcomes for 4/1000 treated, NNTT=250.
“BUT YOU WOULD HAVE DIED” makes heroes of us docs but more difficult decisions need to be made.
Have you read about “disruptive innovation”?
http://www.12manage.com/methods_christensen_disruptive_innovation.html
Seems like health care could use some…
dxdx,
Actually the FDA has never required that drug-makers, device-makers or surgeons with new techniques test them against existing rivals–and they don’t
Head to head comparisons would create winners and losers. And when there are billions at stake, who wants to be a loser?
But you are right, in teh last 8 years, the FDA has become a rubber stamp for whathever the profit-makers want. At the beginning of the Bush administration the person actaully running the FDA
was the FDA’s chief lawyer–just before Bush appointed him, he had been
respresenting tobacco companies in their fight Against the FDA.
Morale within the FDA has been bad for the last 8 years– For most of that time, the Bush administration has been starving it for funds, making it that much harder to do its job.
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The Silence Of The Left Ben Smith at Politico has a story called ‘Left Silent On Social Security, Medicare’: “Strikingly, however, Obama appears to be getting unusual room to maneuver on entitlements by most of his liberal allies. On the…
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Separately, for pre-Medicare eligible retirees who were uninsured before becoming eligible for Medicare, Jonathan Gruber of MIT told a conference I attended a few months back that such patients cost Medicare 20% more on average for their first seven years in the system than newly eligible Medicare beneficiaries who previously had health insurance.