HEALTH CARE REFORM: DOLLARS AND SENSE
The reading for today is from the words of Max Baucus, the “blue dog” chairman of the senate finance committee:
“Why? Because health care reform is not just a moral imperative. It is also an economic imperative.
“The consequences of not enacting comprehensive health care would be dire. The costs would be unsustainable for individuals, families, employers, and state and Federal governments alike. The costs of not acting are high. “
Baucus’ statement echoes the sentiment of President Obama in his recent press conference, as well as many other health care and economic experts. Obama noted that failure to control the costs of health care would jeopardize the economy and hamper any recovery from the recession.
In addition, for many people, the rising cost of health care jeopardizes access to health care itself.
Most experts on health care and most economists, both in and out of government, share these opinions.
However, these calls are countered by statements from others suggesting that it is not time to address health care costs quite yet. Liberals suggest that if we just attain universal coverage it would be enough for now. Conservatives caution against trying to do too much at once. Political and health -industry figures worry out loud about “interference in the doctor patient relationship” (Sometimes they voice these concerns at the end of a hard day spent interfering in the doctor- patient relationship– for instance by putting “direct to consumer” ads on television )
In order to have health care reform that meets the needs of all our people – and it is imperative that all Americans emerge from the reform with excellent health care – we will need to offer more than minimal care, or a two- tiered system. We must offer comprehensive, high quality care for everyone. Anything less is to fail large numbers of people, and to create a dangerous dichotomy of health, and human rights.
But it will cost money. A lot of money.
The problem.
Health care in the US just costs too much. We will spend $2.5 trillion this year, at least 17% of GDP, and over $8,000 for every American.
Government at all levels and through myriad programs will contribute about half of that, around $1.2 trillion. Businesses and private individuals will pay the rest.
If we are successful in attaining universal insurance, the best estimates are that it will cost another $150 billion a year. Even that may be conservative, since many of the uninsured are low income people with a long history of neglect, and evidence from the Medicare experience shows that patients in that situation require spending and care substantially above average for at least three to four years after getting insurance.
If we also address the problem of under insurance and make sure that everyone has insurance with reasonable co-pays and deductibles (insurance that does not deter them from using health care), this could cost an additional $150 billion a year. Most of that money will come from the federal government.
The government component of health spending also will increase because of the impact of the recession: many more people will lose health insurance, some because of losing jobs, others because their employers will no longer be able to afford insurance.
We can expect that, within two years, the government will be paying at least 60% of the nation’s health care bill.
All the while, health care costs continue to rise at a rate that is roughly three times the rate of anticipated economic growth. If we continue on the current path, even if we trim some marginal costs we can expect health care to grow at least 7% per year. Adding tens of millions of new people to the ranks of the insured will drive health care inflation higher.
At these rates, by 2020 health care for Americans will cost at least $5 trillion a year. That will be 25% of GDP, forecasting a very optimistic 3% rate of economic expansion. The government share will be at least $2.8 trillion. Family health plans through private insurance will cost $25,000 a year. Individual plans will cost $9000.
The longer term projections almost become a joke. By 2050, at current rates of growth, health care will absorb 100% of current government spending at all levels. By 2075 to 2080, health care spending will exceed the projected GDP. Clearly, this is absurd, and can’t and won’t happen.
The impact.
The projected cost for health care is just too much money. At that level of spending, health care as we know it will be too expensive to continue. Businesses will drop insurance coverage, offer poor quality coverage, or require huge employee contributions. Our government will have to cut coverage drastically. Health care insurance as it exists today will gradually disappear, both in private and government programs. The middle class will join low-income families in the ranks of the uninsured. At best they will have insurance that requires such high co-pays and deductibles that they will be effectively shut out of health care.
Rather than having an improved health care system with universal access, we will have good health care only for the famous “top 5%” of earners. When it comes to medical care, we will have become a third world country.
How we pay now.
Currently, health care costs are covered in a wide variety of ways. State and local governments finance their share from taxes and fees and from federal aid. Businesses pay out of their profits, out of reserves, or with borrowed money. Individuals pay out of their own funds. The federal government pays out of the dedicated Medicare payroll tax, out of general revenues, and out of deficit spending. A substantial amount of health care is not paid directly at all, but is financed by health care providers out of profits from other patients.
How will we pay in the future?
Most of the sources for health care dollars are running dry. Most businesses cannot pay substantially more for health care and still remain profitable and competitive. Individuals are stretched to the limit, with medical costs already accounting for over 50% of bankruptcies. State and local governments are hard pressed to pay the costs they have now, and are already receiving substantial bailouts from the federal government to cover their budgets. Though there are many wealthy health centers with their elaborate facilities and huge budgets, many other health care institutions, especially those in inner cities and rural areas, already are operating at a deficit.
The federal government is the one funding source that has some reserve, simply because the federal government can operate at a deficit, as it has for years. The government could fund health care by issuing debt. But as budget director Peter Orszag has warned, if we take that route we can forget hopes for economic recovery. Both President Obama and Orszag have said that health care reform must be deficit neutral – not adding to the deficit for the first five to ten years of reform, and then actually working to reduce the deficit.
The federal government also can raise taxes. Both payroll and income taxes could be increased. The president already has suggested hikes in taxes for the top to help provide start-up money for health care reform.
In addition, a small amount of money will come from people with reasonable incomes who have been excluded from insurance by underwriting standards or who have neglected to purchase health insurance as a gamble against having to use it. A universal mandate requiring that every America contribute to the insurance pool will raise some money. Another relatively modest sum will come from businesses required to provide health care for employees for the first time. But most of the additional money will come from Washington.
Taxes.
Tax hikes could help. But, if we continue to spend on health care in the wasteful way that we do now, raising taxes to cover the increase in health care costs expected in the next decade would require an additional $1.5 trillion a year by 2020, and would continue to rise every year. That is a very large added tax burden.
It’s worth noting that during the Great Depression and World War II, US taxes were much higher than they are today. The marginal rate for income over $200,000 (almost $2 million in
today’s dollars) rose to 94% in 1945 and stayed in the 90% range until 1963, when it fell to 77%. Some say that high tax rates undermine the economy; nevertheless this was the era of the greatest economic growth in US history. To some extent, it can be argued that distortions occurred because of the high taxes, but that the distortions were actually a benefit to the economy. Wealthy people were motivated to invest in tax free bonds that financed growth of infrastructure and education, or to reinvest profits in their businesses to shelter them from taxes, leading to dramatic growth in business infrastructure. Businesses were motivated to raise the standard of living for ordinary workers, since higher wages and benefits were paid out of money that would otherwise go to taxes.
However, there have been significant changes in the world since that time. In the 50’s and 60’s international competition was not a threat. Today, other countries are much more open to capital flows in and out of their economies, and economic growth and opportunity are spread much more widely. The US has benefitted from these trends. Other countries finance more than 50% of our debt, provide capital for American companies, provide high quality low cost goods, and serve as markets for our own products. This has helped hold down inflation, kept the government operating despite high levels of debt, and helped our economy to grow. Foreign competition has cost us jobs, but has also benefitted middle class consumers who buy imported goods at reasonable prices.
But this competition means that the economy must be managed much more carefully than in the past. Increases in marginal tax rates are inevitable, and most financial advisers are counseling their clients to be prepared.
Rises in the estate tax also are likely. Some very wealthy people – Warren Buffet and William Gates Sr. among them – are advocates of those changes out of a sense of fairness and moral responsibility. However, by their very nature, estate taxes tend to apply to only small numbers of people and would result in collections only in the range of $20 billion a year, a relatively small contribution to the rising cost of health care. Also, estate tax collections, while predictable in the long run, are volatile in the short run, since the small number of estates involved resist the usual reliable statistical projections.
Finally, while we can expect tax increases, we cannot expect taxes to keep up with health care inflation. If we do not rein in spending on healthcare, a gigantic tax hike n the area of 15% to 25% of GDP would be necessary to deal with rising health costs in the next decade. And if we did that, using taxes to fund an extraordinarily expensive health care system would block the use of taxes to pay for other important programs that are critical for quality of life and economic strength in the US.
Deficit spending.
Deficit spending is another possibility, but adding an additional $1.5 trillion to 2.5 trillion a year to the federal deficit would be potentially catastrophic. This is a different sort of deficit than other more temporary deficits aimed at driving economic recovery. The health care deficit is huge and ongoing, with no end in sight –just ever larger deficits, interfering with plans for deficit control and balanced budgets.
Economists can discuss the impact of deficits at length. Despite Dick Cheney’s assurance that “deficits don’t matter,” most economists on both sides of the political spectrum believe they do.
Beyond economic theory, large deficits carry other more obvious risks and problems. There is a risk of the deficit financing overwhelming credit markets and locking out businesses and others needing to finance debt to function. The amount of money available for investment worldwide is always large, even during this current crisis, but it is not unlimited. Large US federal borrowing can act as an investment drain, pulling available money away from private investment and into investment in government debt. There is even a risk that we would not be able to finance the debt itself in financial markets, at least not without paying interest rates on our treasury instruments that would be ruinous. If very large deficits weaken confidence in the stability of the dollar or the reliability of US credit, our economy is in for a disaster that will make the last year seem mild. China has already issued a polite warning that we must keep our deficit in order or risk losing them as a source of credit. This last month we witnessed a situation where Britain was unable to sell a government bond issue. If the US, with its large debt, were to find itself in a similar failure, that could be the beginning of a financial disaster that would (cut rival or) exceed the Great Depression.
Finally, large deficits cripple the ability of the federal government to take care of other business. Interest paid on debt interferes with other spending. The existence of large deficits creates a political climate in which necessary spending becomes very difficult. Spending reduction becomes the byword. Vital programs, including education, environment, infrastructure, security, research, transportation, and justice would face potentially disastrous cuts, or at the very least would not be able to find money for necessary new programs.
Aren’t there other ways to get the money?
There are some attractive ways to cut health care spending. Reducing wasteful overhead, refusing to pay exorbitant prices for drugs and equipment, slicing some highly paid doctors’ fees, lowering pay for high ranking administrators in hospitals and health systems who take home seven-figure salaries, and cutbacks in the “Taj Mahal” syndrome in hospital and health center building all are appealing ideas. .
But while spending reform in these areas is important as a symbol of commitment to change, the amount of money that can be saved will not do the whole job. It cannot keep up with health care bills that are growing by 7% a year, compounding, year after year
.
Ending the Bush tax cuts for the wealthy would save around $150 billion a year at best. That would cover only about two years of health cost growth.
Money saved by ending the wars in Iraq and Afghanistan is often mentioned as a potential source of health care funding. Putting aside the fact that much of that money may be already be committed to rebuild the war- damaged countries and to provide for non-military peacekeeping efforts in the region, the cost of health care could erase the $150 billion a year that would be saved in just a little over two years.
In fact, the rate of growth and size of the health care budget dwarfs even our whole military budget. Honest appraisal of military spending shows that it costs about $1 trillion a year. However, only about $650 billion of that is for current spending; the rest covers costs related to the past, including care of veterans, pensions, and most importantly the interest and principal payments on the huge amount of the federal debt due to past military spending.
Even if we were to stop all current military spending cold, the savings would be consumed in less than seven years of health spending growth, and after that we would once again need more money.
All of this excludes any consideration of using these potential savings for anything else. Education, the environment, infrastructure, transportation, and other national needs would go begging.
The growth in health care costs is huge and relentless. Even if we find money to pay for one program here, money for another program there, there will be new spending increases occurring elsewhere that will demand large new commitments of dollars. It is an endless cycle.
In the end
, health care costs are a fire that is out of control, growing to consume everything around it.
The inferno of health care costs also is threatening health care itself. Faced with the rising costs, third party payers in both the private sector and government will be forced to cut benefits. For some people, coverage will be ended completely. For most others, as I have suggested, it will be replaced by high deductible, high co-pay programs that have been proven to prevent many people from using their insurance and to cause them to defer preventative care, to skip screening tests, to not fill prescriptions, and to defer treatment of health problems until they reach catastrophic stages. Research has shown that these “skin-in-the-game” programs paradoxically often lead to higher costs, since efficient and effective low cost/low tech care is not obtained, leading eventually to the necessity for expensive high tech care to deal with the resulting health catastrophes.
Financing health care from health care.
There is only one practical source for covering the costs of health care, and that is health care itself. It is the only sector of the economy that is big enough to do the job.
First, we must stop the runaway growth of health care costs. That in itself will make health care more affordable in the future.
Then we need to reverse the growth.
Fortunately, there is abundant information on how that can be accomplished and not undermine the quality of care, but actually improve care for Americans.
Our costs are 30% more than the second most costly health program in the world –Switzerland‘s, a program run completely with private insurance (although a private insurance that is much more regulated and considerably different from private insurance in the US.) Our per capita costs are 70% more than many of the countries that have, statistically, the best health care in the world: France, Germany, and Sweden for example.
Our costs are 100% more than the average developed country.
These countries have health care systems that range from 100% private insurance (again, considerably different from US insurance because of non-profit status and tight regulation) to near 100% government owned health care, so there is no clear evidence that the answer lies in whether payment comes from carefully regulated private insurance – usually non-profit — or the public sector.
But critically, all of these countries do one thing that the US doesn’t. They all have systems in place to evaluate health care management patterns in terms of effectiveness, and they all use medical practice guidelines to cause utilization of proven effective techniques, to encourage the use of lower cost alternatives if they are just as effective or more effective, and to discourage high cost management patterns of questionable effectiveness.
The result is not just lower costs, but better results. The US trails these countries in terms of effectiveness of medical care, both in terms of the overall health and life expectancy of its population and in terms of results of management of individual health care problems.
Even in the US, when scientifically proven health management practice guidelines have been applied either through indirect standards as part of institutional cultures or through direct statement of standards in systems like the Mayo Clinic, the Cleveland Clinic, Kaiser in the Bay Area and Oregon, Group Health in Puget Sound, and other institutions identified by the Dartmouth Atlas data, the results have been more effective care at a lower cost.
Widespread application of health care practice standards could save hundreds of billions of dollars each year. Combined with some of the smaller cost reductions noted earlier, we could reduce the cost of care so that we could afford to provide high quality care for all Americans.
In addition to setting practice standards, we should apply quality assurance techniques like checklists and team “time outs” to prevent expensive and dangerous mistakes. Medical errors and poor technique add to the nation’s health care bill—not to mention the additional suffering caused by as many as 100,000 unnecessary deaths and millions of days of added hospital and ICU time.
Practice standards and quality assurance could also help contain the growth of future medical costs. Evaluating new technology, procedures, treatments, and drugs in terms of their effectiveness when compared to existing. less expensive techniques can prevent premature adoption of advanced technologies do not lead to improved results.
The great bonus is this: health care quality would improve for all Americans, regardless of their financial situation.
Now is the time.
As Obama, Baucus, and others have told us, reform of health care costs is as important as reform of health care access. It is an economic imperative, but is also a health care imperative, since quality health care cannot be obtained and preserved if costs continue to rage out of control. The longer we wait to begin the process of reform, the worse the problem will become.
We have a great challenge. The challenge is to do health care right. To make health care available to all Americans, to make health care better for all Americans, and to make health care affordable both for individuals and for the nation as a whole. If we want to accomplish that, we have to start work on all three problems right now.
According to this analysis costs are due to:
1. Bureaucratic waste
2. Poor treatment choices
3. Excessive compensation
4. Overpriced treatments
How do the more successful countries do?
1. Assume they eliminate the 3% (Maggie) or 30% (me) overhead.
2. Offer only proven treatments, saving how much ?
3. Clamp down on medical fees and/or administrator’s high compensation
4. Control costs of expensive treatments
Steps 3 and 4 require a change in attitude, the government would need to regulate prices explicitly, both for service providers and for medicines and other treatments.
This sort of price control has failed every time it has been tried. At best it works for a short period as in WWII. Either there is cheating and/or a need for a huge structure to evaluate what valid prices are or the courts invalidate such actions.
Unaddressed is what to do about expensive treatments that actually “work”. Also skipped is the effect of lifestyle on basic health issues.
Medical costs can’t continue to go up, when something becomes unaffordable its price drops. The results may not be pleasant, but that what happens. Health care is having its own inflationary bubble and for people to expect it to continue at its present rate is too pessimistic. The real issue is how are we going to handle the decline. In the case of home prices, we did this by throwing people out on the street. I don’t see anything in our history to expect that a similar outcome wouldn’t happen with health care – we already see signs of it, and not just with the uninsured.
Personally I think a government-administered program is the only one which will do the job, but I also don’t see any signs of this being implemented. I think the present reform fervor will be directed into a bit of fiddling around the edges, just enough to move the topic off the front pages.
I also disagree with the idea that militarism isn’t a big factor in how spending is allocated. No other country has anywhere near the level of spending that we do, and these are the countries that are handling health care better. To deny there is a cause and effect relationship seems to be blind to the obvious.
It is not only the crowding out that the military spending causes, it is the diversion of the creative forces into unproductive endeavors. Raw budget numbers don’t reflect the total picture.
Robert–
Thanks for your comment.
I dont’ want people to be confused about what you say about overhead being either 3% or 30%.
A I have explained in the past, private insurers keep 15% to 20% of the premiums that they receive to cover overhead.
Because they are publicly traded companies, this is a matter of public record.
When single payor advocates say the overhead is 30% they are including hte administrative cost for the many solo practioners, small hostpials,etc. filing for reimbursement.
Whether we have a single payer or private insurers, those small practices and hospitals will still have high administrative costs filing for reimbursements.
So the for-profit insurers
keep 15% to 20% of premiumums for overhead, and spend 80 to 85% of premiums on healthcare.
When You Add Up the MOney that All Private Insuers
Keep for Administrative costs, it equals roughly 3 percent to 4 percent of the $1.5 trillion that we,
as a nation spend on health care each year.
That’s where the 3% to 4% number comes from.
3% to 4% of $1.6 trillion is a hefty chunk of change. but even if we eliminated private insurers tomorrow, that savings would be wiped out by less than one year of healthcare inflation– our $1.6 trillion bill is growing by 7 percent a year.
I hope that’s clear.
As to how other coutnries do it, as we’ve explained on HealthBEAT in the past:
a) they don’t use nearly as many advanced medical technologies on as many people.
b) they pay much less for drugs and devices (which now accoutns for roughly 20% of our $1.6 trillion bill–much more important than insurers’ administrative costs
c) patients see more primary care docs, fewer expensive specialists.
d) when people are in the hospital, they may stay longer but much less happens to them while they are there– fewer tests adn procedures. They see fewer speicalists. And ther are fewer errors and infectoins. (Our hospitals spend so much money and attention on frills to attract well-heeled customers,and too little on
systems to prvent errors, electronic medical records to make sure the right patient gets the right medicatoin, and too little focous on controlling infections.
In additoin, as economists have pointed out for years: the healthcare market is different from any other market. In healthcare, when something becomes unafforable PRICES DO NOT GO DOWN. PRICES HAVE NOT COME DOWN IN ANY MAJOR AREA of U.S.
HEALTHCARE FOR THE PAST 60 YEARS.
This is completely different from a stock market bubble or a real estate bubble. Stocks and expensive real estate are not necessities. When they become too expensisve–and people suspect that prices may collapse, they stop buying them.
By contrast, a cancer drug is a necessity. You cannot wait until prices come down,or decide not to buy it (unless you’re willing to die.)
Keep in mind that Eighty percent of our healthcare dollars are spent when people are very, veyr sick suffering from chonric disesases like cancer or congestive heart failure.
They have no choice but to pay whatever the seller demands. Even if they have to pay out of their own pocket, people mortgage their hosue to pay for a $100,000 cancer drug,, or a %40,000 hospital bill
This is why the media and patients have put so much pressure on insurers to pay for these $100,000 cancer drugs–saying that if they refuse, they are killing the patient. .
The price of those drugs have not come down and insurers (including Medicare) have caved to the pressure and are paying for them.
Now Medicare is begining to show some spine. For example, it is refusing to pay for the extra cost of “virtual colonoscopes” rather than
regular colonsocpies, for instance..
Medicare will be doing more of this–it has no choice, it is running out of money. And this is what the Obama administration wants it to do because we Cannot Afford to Cover Everyone–or Even to Cover the People We Now Covering Unless we Begin saying NO
to over-priced, marginally effective care.
Occaionally, the most expensive care is the most effect. Usually, the most expensive care is no better than less expensive care for the majority of patients. (We have two decades of Dartmouth Research showing that outcomes are no better and often are worse when Medicare spends 50% more.)
Often the most expensive treatment is better for a very small group of patients who fit a certain medical profile and can not tolerate the older, cheap treatment for some reason or other. But once the new treatment comes to market it is Hyped as the Best Treatment for Everyone–even if risks are higher.
We must stop over-using these advanced medical technologies.
The alternative, as Dr. Pat
explains is to ration care by income, and increasingly, that will mean not providing care for the working class, the middle class and the upper-middle-class. Only the wealthiest 5% will be able to afford care.
We will be like Brazil or India.
When it’s a choice between that and regulation, most people understand that regulation is necessary.
robertdfeinman –
Maggie has already addressed quite a few of your points, but let me add some things.
“This sort of price control has failed every time it has been tried.”
No. Putting aside the fact that it works in virtually every other health care system in the developed world, it actually has worked and continues to work in the US.
Medicare sets fees for all of its services. There has been considerable slippage due to lobbying efforts and political interference over time, but Medicare fees are set by the government and always have been. They are slightly lower than average fees for private insurance, and frequently deny payment for procedures and management techniques that are not scientifically proven. Maggie’s example of CT “virtual” colonoscopy is one case. Restrictions on the use of CT coronary angiography is another. In times past there have been many examples of this, some of which came to be allowed when better evidence was collected and some of which disappeared over time.
In addition, Medicare has from time to time engaged in direct cost controls, cutting or controlling fees for hospitals and doctors. The most famous example was the “DRG” system of compensation for inpatient care, begun in the 80’s and with us still today. Medicare has successfully lowered fees for many services, including cataract surgery, joint replacement surgery, professional fees for interpretation of CT and MR, and many others.
We do not have the systematic control of costs that many countries have, but we certainly have successful ongoing examples of cost control.
“Unaddressed is what to do about expensive treatments that actually “work”. Also skipped is the effect of lifestyle on basic health issues.”
Expensive treatments that work should not be denied people, assuming that they have outcomes that are better than other less expensive treatments. For example, no one would suggest that coronary artery bypass should not be performed in left main coronary disease, just that it is questionable in many other applications.
Lifestyle does have an impact on basic health issues, but, as we have discussed at length in other threads, it does not have a positive financial impact. Hard data, mostly from the Dutch National Health system, shows that over the course of their whole lives people with good health habits actually are more expensive to care for, since they live longer and thereby get managed for a whole set of problems unrelated to lifestyle but related to aging. We need healthier lifestyles in the US, as Maggie addressed at length in her own current article, to make people’s lives better, but we cannot expect that to save money overall in the system.
“I also disagree with the idea that militarism isn’t a big factor in how spending is allocated.”
I do not disagree that military spending is a major cost in our society and has many negative effects, and that other countries escape most of those costs and problems. What I was pointing out is that even though the military budget is huge, it is dwarfed by the current health care costs, and even if the money from military spending were diverted to health care funding, it could not provide enough money to deal with health care unless cost increases are brought under control and reversed. The math is simple.
Maggie already did an excellent job of addressing the fallacy that health care costs will decline if they become too high. I agree that costs can’t continue to go up, and therefore we must control them, but must control them in a way that provides quality care for all Americans, not by allowing costs to exclude more and more people.
Finally, taking your first point last, I did point out that bureaucratic waste, very high compensation for some doctors and other health workers, and high costs for drugs and equipment are factors in US health care costs, but specifically made the point that, although those problems are worth addressing and could save some money, the amount of money involved is too low to have a significant effect on the problem of runaway health costs in the US.
My main point is that the major difference between the US and other more successful and less expensive systems elsewhere is that they make appropriate use of management techniques that work and don’t use management techniques that don’t work or don’t work any better than techniques that cost far less. Differences in incomes for providers and administrators, differences in overhead costs, and so on all account for a small percentage of savings compared with the US, but the huge difference that accounts for our care costing from 30% to 100% more and attaining worse results for that high cost is in our failure to embrace scientifically proven practice standards that provide better, less expensive results. If we want to be able to afford health care for all Americans and attain better health care outcomes, we need to embrace those patterns.
I do not expect that we can attain that change overnight. I believe we need to address those changes one standard at a time, embracing standards that have been definitively established first, then commissioning research that provides assessment of other areas over time. However, the severity of the problem demands that we start this process as soon as possible if we want to protect the right of Americans to health care and protect the economy.
What good is it to have all the money to finance healthcare if you don’t have doctors? A look at some of the doctor’s blogs reveals that they are frustrated and feed up with insurance companies and the goverment. This is illustrated by a recent NY Times article on Medicare:
http://www.nytimes.com/2009/04/02/business/retirementspecial/02health.html?em
Here are some URL of Doctors blogs that clearly explain the plight of the primary care phisician:
http://blog.getbetterhealth.com/sneaky-things-that-doctors-do-to-survive-financially-introduction/2009.02.04
http://blog.getbetterhealth.com/sneaky-things-that-doctors-do-to-survive-financially-part-2/2009.02.18
http://www.getbetterhealth.com/sneaky-things-doctors-do-to-survive-financial-reality-part-3/2009.03.04
We need doctors to take care of people. Adding to their current administrative burden is not going to help improve the acute shortage of primary care doctors!
I will chime in with Maggie and Dr. Pat regarding administrative costs by saying this. Anyone can go to the Centers for Medicare and Medicaid Services (CMS) and download the pie chart that itemizes what we spend health dollars on. The administrative piece is 7% and has remained so for some time. The 3-4% is what private companies spend and the rest is what government spends. To be sure, that money may not be well spent, but even if we convert to an all government plan the 2.5% or so will stay. I think we should be looking harder at the $700 billion or so that we spend on unproven, ineffective and redundant care. That is real money. It’s almost a third of what we spend.
Martha, Pat S. and Teo
Martha–
Thanks so very much for verifying what I’m saying about adminsitrative costs. (I sometimes feel like a voice in the wilderness on this issue, even though it is a matter of public fact.)
As you point out, Medicare and other goverment programs also have administrative costs.
Their adminsitrative costs are lower than private insurers’, but the bottom line is that a) we will always have adminsitrative costs and b)private insurers extra costs accout for only 3% to 4% of the nation’s heatlh care spending.
Eliminating that 3% to 4% won’t solve the problem in a system where costs are growing by 7% a year.
Pat S.–
Thanks for doing such a great job of responding to
reader’s comments. This seems to me key to blogging; it’s supposed to be interactive.
I’m just chiming in . . I hope you’ll continue.
Teo– You are right to
call attention to the shortage of primary care doctors.
This is a major problem that we need to address.
Universal coverage will increase demand for primary care–but it will not increase supply.
In terms of the amount of paperwork that doctors do today, the answer is for doctors to join together in very large multi-specialty group practices where a large back office takes care of all of the paper work–and enjoys economies of scale.
Going forward, Medicare is going to want more documentation when a particular patient needs a treatment that is not approved for the majority of patients (because not needed by the majority of patients.
But in large group practices this documentation can be handled by the back office.
The business model of
solo practioners or small
group practices is no longer viable. Overhead (everything from administrative costs to the cost of real estate ) makes it impractical.
Today, labor also is more expensive.
At one time, a doctor’s wife could (and often did)
serve as receptionst/ book-keeper,sent out the bills etc, all at no cost.
Today, the doctor’s wife may well be a doctor herself, and not available for the job.
“I think we should be looking harder at the $700 billion or so that we spend on unproven, ineffective and redundant care. That is real money.”
While I absolutely agree with this, I wonder if Dr. Pat could tell us how we can identify this ineffective or inappropriate care at the individual patient level before services are rendered. With practice patterns varying widely among regions, it could be that all or nearly all doctors in a particular region treat a given condition too aggressively or inappropriately. Suppose, for example, most spine surgeons in a given area are performing way too many surgeries on patients who would be just as well off or even better off with physical therapy. As a practical matter, how do we put a stop to that?
Doctors cherish their independence and bristle at any systemic changes that would reduce their autonomy. However, if post-treatment audits were to find significant and costly inappropriate practice patterns by specific doctors, nothing will ever change unless there are adverse consequences for the doctors and they know it and they know that audits are likely. The same is true for doctors who prescribe medications that are much more expensive but no more effective for treating, say, hypertension.
From a hospital perspective, aggressive treatment by doctors generally means more revenue for the hospital. Hospital managements may not only encourage but reward doctors based on the revenues they drive or even worse, penalize them if they practice too cost-effectively.
I’ve said numerous times that every stakeholder group is going to have to give up something if we are to achieve meaningful healthcare reform that can bend the medical cost growth curve while bringing coverage to the currently uninsured and underinsured. For doctors, that means less autonomy and more insistence that they follow evidence based standards. For hospitals, it will mean less revenue and the probable need to reduce both physical plant and staff. At the same time, we should enact the tort reform that doctors want in order to protect them from inappropriate lawsuits based on a failure to diagnose a disease or condition as long as evidence based standards were followed.
As I’ve also said before, as a patient, I would be willing to completely give up the tax preference for employer provided healthcare even though it would cost my family over $4K per year in higher taxes. We could reduce other taxes to protect lower and middle income people. Drug and device manufacturers will probably have to accept lower prices for their products while insurers will be subject to tighter regulations. The greatest resistance is likely to come from the doctors followed by the hospitals and the trial lawyers. I once again challenge them with the question: What’s your contribution to healthcare reform?
Maggie’s post yesterday went to the same point. She also underscored the compelling connection between lifestyle and health. Lifestyle may be driven by choice at the top end of the economic pyramid, but the lower on the pyramid you fall, the fewer the choices become. And by then none of the options are good.
Income distribution has everything to do with health, both good and bad. Her suggestion to revisit the progressive income tax is long overdue.
It is time for our elected representatives to see that the last twenty-five years has resulted in a near-fatal harvest of unintended consequences. The progressive income tax was essentially abandoned when three income tax tiers went into effect. Since that time the gap separating rich and poor has opened wider every year.
The time has come to set things right and return to a meaningful update of the Sixteenth Amendment.
http://hootsbuddy.blogspot.com/2009/03/top-tax-tiers-history.html
Barry –
Doctors do love their autonomy, but people who talk about the problem of interfering with autonomy – and the doctor patient relationship – are ignoring the fact that medicine already is one of the most — if not the most — regulated activities in the US. Doctors are actually used to giving up large swaths of autonomy to the government at both the state and federal level, to third party payers both private and public, to various national organizations, and to hospitals and health care systems. They complain a lot sometimes, but it is standard.
In terms of how to “put a stop” to poor practice patterns, there are various approaches. There are and have been numerous abrupt changes in practice patterns in response to research and regulations. Many of these changes happen because evidence and the pronouncements of national organizations have made it clear that changes need to be made, and doctors have complied — the use of hormone replacement therapy for women being one of the more spectacular recent changes. Others have been driven by mandates from the government – the regulations set up to govern mammography specified rules for qualifications for doctors, physicists, and techs, defined how machines had to work and be tested and maintained, what records had to be kept to document effective work, and even specified how the reports of the results of mammograms had to be worded. Failure to comply could result in the loss of ability to bill Medicare for mammography and shut down of mammography services, something I have actually seen happen to some centers. Radiologists and health systems screamed, cried, and moaned, but in the end complied. As a physician closely involved in mammography, I can assure you that mammography and the diagnosis of breast disease is far better off for those regulations.
The carrot: prominent education efforts and information for doctors, patients, and media coupled with an impact, both positive and negative, on malpractice, would do a lot on its own. Most doctors want to practice the best medicine, and think they are, and are alert to changes when the status is clear. I am very fond of the idea of programming the electronic medical record system to contain clear prompts to act as a checklist for doctors at the point of diagnosis and treatment to remind them of the best practice standards. In many cases doctors just need to be informed about what is the best practice and disabused of incorrect ideas implanted by incorrect hypotheses and sometimes promoted by players with a financial stake in the situation.
The stick: just as Medicare and many private insurers will not pay for quite a few services today, it may be necessary to link reimbursement to compliance. If you choose to leave the appropriate path, you may not be paid – and your hospital or health system may not be paid.
I would like to make the additional point that one thing that many non-physicians do not understand is the degree to which the practice of medicine is all about the close compliance with set ways of doing things in a standard way. Doctors – at least doctors who are honest – would tell you that it is very lucky that is true, since if every case involved reinventing the wheel we would be in terrible shape. There are cases which depart from standard practice situations, but fortunately they are very rare – despite the fact that they make very good stories to fill non-fiction books by doctors and episodes of “House, MD.”
Adopting practice standards for many well proven situations would be just one more thing that would fit with typical ways of doing things.
Hootsbuddy–
You write: “the lower on the pyramid you fall, the fewer the choices become. And by then none of the options are good.”
Well-put.
And I agree it is time to return to a more progressive tax policy.
It doesn’t have to hurt the middle class, and it doesn’t have to be draconian. But the very, very wealthy (those in the too 2% to 5% ) can afford to pay more.
And because they take home such a huge share of the nation’s income, the revenue that the government would receive by lifting their taxesis subatantial.
It could make all of the difference in helping the other 95% –especially in this recession –without hurting the very wealthy, or disturbing their lives in any significant way.
Maggie:
Won’t the net effect of Federal Ponzie-care be to have the frugal low utilization states subsidize the indulgent high utilization states?
Since we believe we have an emergency, shouldn’t we craft the leanest possible federal mandate to allow us time to tame the utilization problem? It is going to be difficult to put this rabbit back in the hat if it turns out that we have to scale back our Federal basic program. Or is that the point?
It seems fuzzy logic to me to say that business can’t afford health insurance, but somehow the government can?
A few minor points:
I don’t know of any evidence that other country’s doctors make fewer errors. I imagine if you let them count their errors and we count ours, we probably would have more. What does that mean?
Not mentioned above: other countries ration elective procedures, end of life care and expensive care to treatable chronic diseases such as renal failure.
Naturally, out fabulously wealthy tort lawyers have essentially no role outside of the US. None of the reforms imported from Europe could be implemented here without iron clad tort protection.
I think our overhead problems are understated. Mandates, insurance credentials, Government credentials..the paperwork would fell a rainforest. Also, Medicare’s overhead is understated since the compliance requirements are onerous and borne by the physician office.
Price-fixing in the Old Medicare at a relatively high level resulted in many distortions in the medical world; most of these were unforeseen. Isn’t it reasonable that price fixing at a low level in the new Medicare may result in some unforeseen problems?
Who exactly is going to be a doctor in this brave new world, where doctors are paid like European doctors. This while accountants and lawyers and business men will continue to be paid like Americans.
Remember also, the European system that we all seem to admire so is not very old. We may be copying a model which itself is unsustainable.
What country are the doctors of the future going to come from? Most European doctors I know think they are poorly paid, so they won’t be filling our needs.
“In order to have health care reform that meets the needs of all our people – and it is imperative that all Americans emerge from the reform with excellent health care – we will need to offer more than minimal care, or a two- tiered system. We must offer comprehensive, high quality care for everyone.”
Sounds great – just like Lake Woebegone where all the women are good looking and all the children are above average.
In reality, it won’t happen and striving for an excellent system for all will only get in the way of achieving a good or decent system for all.
Our country is like a family that can’t afford its food budget, but refuses to stop buying steak, champagne and imported cheeses. Steak, imported cheese and champagne are excellent food. Striving for “excellent” health care for everyone (unless “excellent” becomes re-defined)will bankrupt us.
“Not mentioned above: other countries ration elective procedures, end of life care and expensive care to treatable chronic diseases such as renal failure.”
Reformers don’t think we have to address this. They say that if we can “eliminate the waste” there will be no need to ration care. The other developed countries, however, seem to have reached a societal consensus that this IS waste. I would love to see an estimate of how much we could save if we adopted the UK’s approach to end of life care, kidney dialysis, and duplicated its waiting times for elective procedures. Replace our medical tort system with theirs for good measure.
Separately, Schroeder’s estimate that the quality of healthcare that an individual can access only accounts for about 10% of health status with the rest due to lifestyle choices (diet, exercise, smoking, etc.), genetics, and socio-economic status / environmental factors suggests that all the statistics around life expectancy and infant mortality don’t have much credibility as indicators of healthcare system quality. Just because they are easy to measure doesn’t mean they’re relevant. The infant mortality stats are further complicated by varying definitions among countries of what constitutes a live birth. I wish we would stop using them.
Agree with Barry Carol . we must “bite the bullet” on ethical and compassionate rationing especially toward the end of life.
Politicians literally need another word for “rationing”
My mantra to my family, friends and patients is that “more is not always better”. But even THAT is a tough sell.
Dr. Rick Lippin
Southampton,Pa
Barry, Legacy Flyer —
There is a lot of misunderstanding about what other countries do or don’t do in terms of rationing, and some misunderstanding of what excellent care means.
First of all, what a lot of Americans describe as rationing of care really means not providing ineffective care — the example of waiting six months before using MR and surgery to address back pain without motor deficits is an example. That seems like rationing to a lot of people, but in reality the patients are better off.
Second, as I have said elsewhere, in the US we tend to define excellence of care based on use of complex, technical, and expensive interventions following health crises, while in most other countries excellence means using lower tech approaches to avoid crises. There is no reason to think we cannot afford excellent care for everyone, since most other developed countries do that already for a lot less money. We just can’t continue profligate waste of money for what is not really excellent care, if you consider outcomes.
Finally, the comparison between our health results and other countries IS problematic. There are valid arguments that gross population assessment is not a fair comparison, and there is no doubt that some differences — our poor results for infant mortality for example — are related to some things that are seperate from the health care system itself. Neonatal mortality is more closely related to exclusion of large numbers of people from the system through cost and red tape than to what happens to women when they are actually plugged into the system, and is also heavily influenced by the societal impacts on health that Maggie discusses in her current post. Reform of the health care system to improve access would be beneficial for that statistic, but changes in how we handle neonatal ICU’s not so much.
However, there are comparative statistics that do mean something in terms of health care effectiveness. When data shows that the lowest economic quintile in Britain has better health care results than the top quintile in the US, that means we are doing something wrong in the health care system itself. Maggie cites data that shows that race and ethnicity are not significant factors in differences in outcomes between the US and other countries. Most important, there are several studies that look at outcomes AFTER entering the health care system with a diagnosis. When we see results that show that management of diabetes, renal disease, coronary disease, lung disease, trauma, and other conditions shows that the US is fifth out of five, seventh out of seven, and so on, then we are saying something specifically about how our system handles the actual medical management, not about more general national statistics that are harder to assess.
As far as the idea of rationing end of life care, that is more closely related to expectation than to policy, although obviously the two interact. Americans need to be educated as to what end of life care can and can’t accomplish, and what quality of life is like during end of life care. Europeans and others already know these things, and their systems act on them. We are victims of a set of myths about heroic intervention that just are not true. There is a bill in congress right now to require that health professionals be paid to spend time counseling patients and their families about this issue. If it passes, it will be interesting to see the data on what happens where it is.
Anyhow, we can expect we can afford excellence for everyone, if it is defined in terms of results not technical complexity, simply because other people have it already. Achieving it will not be easy and will take some time, partly because it will involve a change in culture. If it is not possible, we are in deep trouble in the long run, since we can’t afford our existing system, even for the middle class, in the long run. So we need to get started on it now.
Apparently I didn’t make my points clear, so…
1. My problem with the solutions being discussed is that they are too timid. Dr. S. said that price controls can work and cited Medicare. But Medicare is, essentially, a monopsony. The entire consort of old people is in the program and if doctors are going to treat them they will have to accept the payment rules.
Mixed private/public plans won’t provide the same monopsony power (one buyer of services). Price controls can only work if there is no alternative market. The case with Nixon’s try shows that such controls are hard to administer, disliked by consumers and vendors and lead to cheating.
There is also a strong libertarian streak in this country which is influential in congress that opposes “regulation”.
2. The entire system has become corrupt, it is not just at the final step where patients meet doctors that needs reform. Government paid research is now turned over to private firms for their own profit, with the public getting nothing in return. Firms distort research results, bribe doctors with perks, put out out false advertising, give kickbacks to hospitals and insurance companies, etc.
Rating firms which are supposed to determine fair market costs for services are owned by insurance companies. Medical journals and professional societies take money from providers which compromises their objectivity.
There are about 16 million people employed in health-related jobs, threatening the livelihood of even a small fraction of them will lead to a strong push back.
If one is going to reform the field than start off boldly and only compromise when forced to. The administration is already offering timid ideas before the battle has even begun. This is not a recipe for success.
robert:
I agree with your two enumerated points. My question is: If the administration is being “timid” what would you have then do? Dr. Pat in this post has elaborated very convincingly the idea that we will be absolutely unsuccessful if we do not take on costs along with access. Peter Orszag and others seem to be on board with this. As has already been pointed out in this thread,educating folks in the fact that we cannot afford to give everything to everyone is going to be a very heavy political lift because the bogeyman “rationing” will raise its head.
What are you saying should be said/done?
robertdfeinman —
I think the problem we are having is that I am not at all clear about what you are trying to say at the root of your argument. To make this clear, I would suggest you make a statement about what you think should be done — a plan of some sort. Unless, of course you think that nothing can be done and that by 2050 we will have Mumbai style health policies.
As further evidence that something can be done, I would offer, in addition to evidence from overseas and evidence from US health care systems that have been able to provide better care for less money, the latest study from the Lewin Group. The Lewin Group, which is of course the research wing of giant insurer/services company United Health Group, has just published a study in which they suggest that a federal option medical insurance program that was allowed to combine with Medicare for administration and payment plans would save 32% compared with the cost of private insurance. That would be about $300 billion in additional savings this year — one more big piece in the job of finding a solution to our crisis.
I suspect that one of the things we are arguing about is that you may feel we need a big bang approach to achieve reform, and see that kind of huge change to be hard under our political system. I am arguing that we don’t need a big bang — instead a lot of much smaller steps. I like to refer to this as a “brick by brick” approach, and would envision a series of steps: adoption one at a time of a number of health care standards that are supported by current research, each of which would save from $25 billion to $75 billion a year. Adoption of a federal plan that would take advantage of savings available by merger with Medicare would save between $150 billion and $300 billion, to be more conservative than the Lewin Group. Negotiation for drug and equipment prices that could save $75 billion. Decreases in payments to highly paid specialists. Savings from preventing medical errors and complications using off the shelf low cost techniques. Etc. etc. etc.
When you start adding up all the pieces, it turns out that savings of up to 1/3 of health care spending are not out of reach over time. In addition, I would speculate that there will prove to be many more opportunities to save significant amounts as more good quality effectiveness research is performed.
By chipping away at the problem like this, I think we can change our health care system to make it both excellent and financially viable, working in an evolutionary rather than revolutionary approach.
But the news isn’t all bad (or, worse, confusing). We need not search far for a model “public plan” proposal built around expansion of an employee insurance pool – the “latest” proposition that seems quite promising.
In Connecticut, HB6600, or “SustiNet,” just got a favorable report from the state legislature’s Public Health Committee and is gaining momentum. SustiNet ensures that the state wisely uses the dollars it is already spending on state employees, HUSKY (for low-income children) and SAGA by uniting them into a large self-insured health plan. It uses this critical mass of insured residents to improve how health care is delivered in our state and to phase in the enrollment of more residents of Connecticut, including: the uninsured; people with unaffordable or inadequate insurance; sole proprietors and other self-employed people; small businesses, municipalities, and non-profit employers; and businesses of any size.
SustiNet was developed with extensive input from all health care stakeholders and with the expertise of Stan Dorn of the Urban Institute and Jonathan Gruber of MIT. They estimate that, when fully operational, SustiNet could save Connecticut employers and employees some $1.7 billion/year (over the status-quo expenditures). It has the support of, among others: the Connecticut Realtor’s Association; the Connecticut State Medical Society; the Connecticut Public Health Association; and Small Businesses for Health Care Reform.
For more information about the bill, you can go to: http://www.healthcare4every1.org/site/PageServer?pagename=learn_thesolution
I hesitate to make policy suggestions since I have no feel for political realities, however…
1. Cover all uninsured (and under-insured) immediately using something akin to the Massachusetts approach.
2. Reform Medicare drug plan to make it mandatory and to give Medicare the ability to negotiate prices. Firms would have to offer the same prices (with some slight adjustment for volume purchases) to all other buyers.
3. Reinstate the prior rules about the licensing of government sponsored research (and not just in biomedicine). Alternatively require any such commercial use to require granting licenses to any other firms wishing to produce the same products. I think HIV drugs follow this model in some countries.
4. Change the tax laws so that more wealth for the top is captured and available for social programs. This means some combination of a more progressive income tax, treating non-earned income the same as earned income and reinstatement of meaningful estate taxation.
5. Make medical education free or almost free in exchange for working in needed areas (either geographic or by specialty). The same for nursing and other skills in short supply.
6. Require all medical practices to adopt computerized medical record keeping using a standard storage and interchange format. The government can set the standards (or appoint a specialized committee to handle the technical details as is done with the internet) and leave the development to private industry. Walmart is offering a package to small practices, so it can be done.
7. Impose cost controls on non-profit health firms. This has to go beyond a simple list of prices paid for services to the types of actions they take. Around here there is a huge building boom by the local hospitals, which seems totally unneeded, the population has been stable for decades.
For profit firms would also have their non-care expenses monitored and if they are excessive they would be excluded from the government payment system. This allows the boutique medical services to continue and charge whatever they wish to their wealthy clients.
8. Stiffen the way drugs are approved and remove advertising both to the public and to doctors. Eliminate freebies and fake educational seminars, for example. Comparative effectiveness is needed, but is only one part of the problem.
I could go on.
It is just as hard to get a small step passed in the current environment as a big one. Just look at, say, the flap over Obama’s proposal to change the deductibility for charitable contributions for the top 1-2% of earners. If such a small step provokes such strong resistance than what will happen with the step-by-step approach you favor? Death by 1000 cuts is my prediction.
FDR was able to push through (with a lot of effort and some setbacks) a range of radical changes because the country needed it, we have a similar opportunity. Timidity is not the right approach, boldness is.
When will the time be better – Dem majorities in congress and many states and a huge popular support for the president. If not now, when?
Pat S.
It may be that incremental is the way to go. You could, perhaps compare it to politcal acceptance of gay couples. 15 years ago it was controversial to even consider allowing gays in the military and we had to adopt the ridiculous “don’t ask don’t tell” mandate. Now we have whole states adopting the idea of gay marriage. Maybe the people need to swallow the medicine a bit at a time.
This is a great thread.
Let me just make a couple of comments–in response to recent comments–
Pat S. Christopher, Robert, Martha
Pat S.– Thanks for your
excelletn responses to readers.
I agree on most points, and won’t repeat them here.
But a caution about the Lewin Group analysis and what it says about how much Medicare can save.
When the Lewin Group talks about “medicare’s savings” they are assuming that Medicare will adhere to the sustainable growth rate rule for health care providers–i.e. that it will cut doctors’ fees by
20% this January.
(Jacob Hacker –who uses the Lewinanalysist to mark up his plan, has acknowledged to me that the Lewin group assumes those savings)
We all know this won’t happen. Medicare is not going to cut physicians fees by 20%, across the board. Nor is it going to cut even highly paid specialists by 20%. Nor is there any other way for Medicare to save 20% in one fell swoop.
Some people seem to feel that the main problem driving spiraling costs is that we pay doctors and hopsitals too much and if we just cut their payments, everything would be fine. (I am seeing this argumemt more and more often in white papers and the like. Maybe people feel it woudl be easier to take on physician lobbies than to take on other lobbies.)
But the truth is that while some doctors and some hopsitals are overpaid,the big problem that drives health care inflation is over-use of
advanced medical technologies–i.e. overtreatment.
Slash how much you pay providers, and they’ll increase the volume of what they do to make up the difference.
Also, when comparing Medicare’s ability to control costs to private insurers’ the Lewin Group
“cheats” by comparing spending since 1997.
From 1993 to 1997 private insuerers did a much much better job of controlling costs.
Overall, going back to 1970, if memory serves, Medicare spending has been sprialing by over 6 percent a year while private insurers’ spending has been growing by over 7 percent a year. Both are
unaffordable.
Pat, as you have said, there is nothing magic about public sector vs. prviate sector. There are administrative
savings –but when you look at the whole picture, they are not that great.
I’m not sure why the Lewin Group is distorting the numberes. But they are owned by an insurance company, and insurers are desperate to get universal coverage as soon as possible–they need the new cusotomers.
So it is in the insurance industyr’s interst to pretend that universal coverge is eminently affordable–NOW.
The Lewin Group claims that there is a firewall between it and its parent company. Perhaps this is true.
Then again, a great many people told me that Eliot Spitzer was an stand-up guy, and that I was too hard on him. When I interviewed him, he made my flesh crawl. Call it
woman’s intuition if you will (I call it reporter’s intuiton), but in this case, I just don’t believe there is a firewall.
What’s clear is that the providers are not the major problme–every single sector of the health care industry is involved in the waste.
This is why saving money will involve a great many
changes–which will take time.
Again, the fat is marbled in the meat; it is not hanging off the sides.
Christopher–
Actually, there are plans afoot for Medicare to begin holding hospitals in high-spending regions to benchmarks of efficient hopstials (usually located in low-spending regions.)
First the hopsital will be notified that it is an “outlier” too far from the benchmark. Over a period fo a few years, if it doesn’t succeed in approacing the benchmark, ti will no longer get Medicare business.
This means it would close.
Regarding hospital errors: these studies have been done by American researchers looking at hospitals here and abroad.
We are not talking about self-reproting.
Robert– I agree with many, if not all of your
recommendations.
But here’s teh political reality: liberals do not have enough votes to get most of these votes through teh Senate.
There are too many Republicans in the Senate and they are quite united in their opposition to anything that would interfere with the for-profit healthcare industry continuing to make its profits.
So anything that involves really standing up to lobbyists is not going to get through the Senate.
In 2010 quite a few Republican Senators will be running in states that Obama won. That could give the Democrats the votes they needed.
Martha–
I agree– this will take time, and many thoughtful reforms. I don’t
call that incremenal reform, I call it intelligent reform.
Robert —
I was interested in hearing this not so much as a hard and fast plan for reform, but to get an idea of what you were trying to say in your comments. This makes it more clear.
My only comment on most of the ideas is that many of them are interesting and potentially useful, but just don’t save enough money. Many of them should be implemented since they will save some money and add to total savings needed.
However, the MA model for health reform, while it does improve availability of insurance coverage, is very flawed in that it has no controls on costs, and depends partly on high deductible coverage that still acts to exclude people from access to care. MA is trying to address that now, but has not made much progress so far.
Tax increases can be useful for financing health care, but the problem is that without cost control there is no way we can make taxes high enough. Also, taxes need to cover many other programs we need as well, especially education and the type of reforms that are needed to address the changes that are required to fix the problems that Maggie discusses in her current article.
Money to cover health care as to come from savings in health care itself, since there is no other viable way to do it.
I warned that I wasn’t being practical about getting legislation passed, however I still maintain that one should give it the old college try before trimming back on demands.
I do think that some of my ideas will save money. The over expansion of hospitals and their excessive compensation packages, for example.
Similarly, prohibiting drug advertising and all its related efforts will lead to less over prescribing.
Forcing patent holders to license others will cut costs as well.
Maggie seems to think that over treatment is a big issue, but over treatment is a result of the environment that doctors are placed in.
Administrative costs also need trimming. If Medicaid set prices then all those intermediaries who negotiate prices for hospitals and others of their ilk would disappear. I don’t care what arguments middlemen make, doing without them is always cheaper.
The Mass plan has problems because it can’t control costs and it can’t control costs because it is one state out of 50. A national mandate to enroll everyone (public or private) would give the government the leverage that is lacking for a single state.
We can certainly afford to cover everyone even with the present cost structure, it’s just a matter of priorities. 42 million more people covered or $1.2 trillion for the financial sector. Expanding health care or expanding the war in Afghanistan.
Why is militarism untouchable?
robert:
I think that many of your suggestions will save money but it is doubtful that they will save enough. You may be right that overtreatment happens because of the situation doctors are put in but that doesn’t mean we shouldn’t try to cure it. I think we will have to decide how much health care is enough and how much we are willing to pay for it. Militarism is not untouchable, far from it, we spend way too much on it, but again, you won’t squeeze enough dollars out of stopping both wars right now.
Maggie and Pat:
I am more and more convinced that the brick-by-brick approach is best. We didn’t get here overnight, it makes sense we won’t get out overnight. I hesitate about being too optimistic, however, about Senate races in the states that Obama won. 2010 is an age away in political time. If any of his initiatives get thrown off, or defeated we could be looking at a hard time ahead.
Funny… I was actually getting nostalgic for Spitzer. I never met him, but we are so tied up in knots here in NY, I sort of miss him.
Always an interesting dialogue here at Maggie’s. I’m pondering aloud…often it comes up here at Maggie’s blog about overtreatment, futile care, “rationing” end of life care, etc. I hear it more and more and think about unintended consequences. How would these theories and ideas have played out during our hospital experience and what would have been different?
My husband was hospitalized for over 3 months with burn injuries. He had catastrophic “complications” and the catalyst for this life-threatening downward spiral was a diagnostic error, followed closely but lackadaisical infection control. My husband had lots and lots of medical treatment and procedures, what necessatated a lot of it was poor quality care to begin with. Here’s what crosses my mind…at a certain point during his hospitalization he would have gone past the point of no return…they would have turned to their charts and math and standards of care and determined, basically, that he was no longer worth saving. In this new, reformed healthcare world, it’s very likely the rationing would have started and the medical care would have stopped. Unintended consequences. What would have driven him to that point (of no return) would have been poor quality care to begin with. “I’m sorry, Ms. Lindell, we’re just not going to perform a 9th bronchosopy” Maybe it would have stopped at 5. Who knows? I keep coming back to the firm belief that we need a lot more oversight of the medical world, that should be first. Standards of quality in healthcare should be set and followed and enforced, period. By virtue of this alone costs would start to fall. Am I alone in this belief?
Lisa–
You are entirely right that we should pay make hospital errors and what you quite rightly describe as “lackadaisical”
infection control a priority.
No patient should wind up in an end-of-life situation where it doesn’t make sense to spend another $25,000 on futile care (he is going to die in a week anyway) because that patient received poor care in the first place.
So medical errors and sloppiness deserves at least as much attention as over-treatment.
But the fact is that there are already forces in our health care system protesting errors and poor care: the plaintiff’s bar and the threat of malpractice (though often the people who actually have a case don’t have a case that will bring enough money to attract a lawyer), patients’ advocates like you, and the media.
Whenever the media gets wind of a story where a patient died or was seriusly hurt because of poor medical care, that’s a story that sells newspapers.
Overtreatment, on the other hand, doesn’t garner as much attention. Instictively, most Americans believe that more care is better. They really don’t want to hear that more care isn’t good for them. From the media’s point of view, this isn’t a sexy story. And it is very, very rare to hear of a malpractice case where the provider is being sued for overtreating the patient. The accusation is always that the doctor didn’t do enough.
Finally, there are few patients’ advocates standing up against overtreatment. It is very hard for people to wrap their minds around the fact that too much medical care can kill them.
This is why I (and other people like me) do what we do. It’s a cause that doesn’t have enough advocates.
Moreover, if we continue on the path that we’re on– overtreating patients, squandering billions– 10 years from now (or even five) someone like your husband won’t have insurance from his employer. It will just be too expensive for even a well-meaning employer to
provide health care benefits.
Can you imagine what would have happened if you hadn’t had health insurance when that terrible accident happened?
You probably would have spent most of what you have trying to pay the intiial bills,until eventually, you qualified for Medicaid.
And on Medcaid, his care would have been much worse. The specalists who showed up late wouldn’t have shown up at all.
Even if you weren’t on Medicaid, but were not able to pay the ongoing hospital bills on time, there is a good chance that the hosptial would have transferred him to a nursing home when he was “stable” (but still very sick and not able to go home.)
If you read our nursing home posts, you can imagine the care he would have gotten there.
I’m afraid there is a very good chance he wouldnt’ have survived; very likely he would have lost his eyesight. (I remember that part of the story from your book.)
So for the sake of your husband, and your children– and everyone else’s husbands and children– we have to make sure that we don’t let this
healthcare system go off the cliff.
Pat S. is right. This country is very, very close to moving to a tiered healthcare system where middle class poeple will have little or no insurance and very poor care (because most doctors won’t take the low-paying insurance they have.–if they have any. )
Many wealthy people in this country who have great power would be okay with a two-tier system. They feel that people like your husband should get “adequate care” but not
“top of the line” care.
Those are the folks you should fear, not those who are concerned about over-treatment.
Robert Feinman,
You say: “Require all medical practices to adopt computerized medical record keeping using a standard storage and interchange format. The government can set the standards (or appoint a specialized committee to handle the technical details as is done with the internet) and leave the development to private industry.”
Is there any evidence that such an approach saves money or improves efficiency?
Spoke to my internist the other day. He is in a small, non-boutique practice and was a med school classmate of mine. He says that he can’t afford an electronic medical record and that he expects that the government will soon start penalizing him for not having one, but that it is preferable to pay the penalty rather than pay for an expensive system that cuts his efficiency. The hospital that he admits to has an electronic medical record which he says is inferior to the paper based system it used to have.
My wife’s internist (a member of a large group) just went to an electronic medical record and has been pulling her hair out and staying late in the office every night trying to get caught up with her work.
I am a Radiologist. Ever since hospitals have gone to electronic order entry, the quality of clinical information provided has deteriorated. Hospitals are pushing us to use voice recognition, which saves them money but slows us down.
I think the electronic medical record is probably a hoax and its support mostly comes from the ignorant or those with a financial ax to grind. Another less charitable interpretation is that Big Brother wants easier access to everyones medical information.
I don’t fear the overtreatment advocates. I fear hospitals. Sometimes I feel like I’m alone in my principle and the elephant in the room is getting ignored.
“No patient should wind up in an end-of-life situation where it doesn’t make sense to spend another $25,000 on futile care (he is going to die in a week anyway) because that patient received poor care in the first place.” That’s a good statement to remember in future discussions.
The threat of malpractice doesn’t improve the quality of care, it tightens lips and changes medical records and leads to “tort reform.” Y’know what’s scary? My husband DID get “top of the line” medical care. Money was no object. I say we’ve already gone off that cliff. Thanks for the response.
Wow, good article and amazing comments, I have nothing to add!
Maggie —
I agree that the Lewin Group has a tendency to put up some odd numbers. That’s why I suggested discounting their results by more than half. Even that may be not enough.
The current study suggests that a federal option working within Medicare would sieze up to 3/4’s of the private insurance market on the basis of much lower prices. This may be intended to scare people about a Part E type of approach (Private insurance will die!)
In addition to this last study, a few years ago they did a study for the state of Colorado on a potential state universal coverage system that showed results for a state single payer system with extremely large savings over every other choice.
Don’t know what exactly is going on over there, but they tend not to have the results you would expect in their models.
Lisa —
Lisa, I read your book. Thanks for sending it.
You are dead right on the importance of quality assurance, both for its impact on preventing horror stories like your husband’s, and as a way of saving large amounts of money that are now wasted cleaning up the messes that could have been avoided.
Maggie is right that there is a strong movement in that direction in health care today and that there are important forces pushing medicine in that direction. However, there is resistance to implementation of necessary changes too. The whole “checklist” experience detailed by Atul Gawande regarding following appropriate sterile technique while putting in central lines is a good example. Powers that be tried to block the wider study of the approach, which had had spectacular results in its early settings, on the grounds that it interfered with the rights of doctors, and that they should have to sign consents before new application sites were added. If you (and everyone else) have not read Gawande’s article in the New Yorker (“The Checklist) or his angry editorial in the NY Times about the threats to block the program by the federal government, I suggest you do. It has obvious applications for your own experiences. Both articles are accessible on line.
The pioneers of quality assurance are tireless, but work against an incredible amount of resistance that is hard to understand if you do not have experience working in health care alongside doctors and other health professionals who resist any suggestion that they are not doing everything right already and are very vocal about suggesting that formal quality techniques are a waste of their time and an insult. Given your experience in Houston, I’m sure that all sounds familiar to you.
Maggie is right that overuse of expensive high tech management is the most important cost issue in US health care, and an important quality issue as well. You are right that implementation of quality assurance still has a long way to go as well, and is important both for cost issues and human rights issues.
Lisa:
I agree with you about hospitals. I fear them too. I have been lucky enough to have been hospitalized very few times and each time I had a very hard time getting discharged. The nurses don’t have time to do the requisite paperwork to get you out because they are too busy doing crisis intervention in the other rooms. The last place I want to be is a hospital unless I am incapacitated. I do question your assertion that your husband got “top of the line” care. It sounds from your narrative as though the care was disgracefully negligent. “Money was no object.” One thing I think we are learning is that the price we pay for care and the quality of care we get are not necessarily well associated.
Legacy Flyer:
I am skeptical about electronic records also. Not as skeptical as you are, but I worry about security of the records. I also think that there is no real proof that they will save significant amounts of money, though I think the case can be made that they may improve care. I heard a doctor complain that in his handwritten notes, he makes sketches and other entries that would be hard to make electronically. I wonder if some of the systems are too close to the “bubble” system that teachers often have to use. You pick a comment that is provided and then “bubble” it in. I think something will be lost if systems are too hard to personalize.
Martha —
Just a comment on your comment about incrementalism.
I want to make it clear that I think we need to implement national universal care, ideally including the Part E federal option, RIGHT NOW. We also need to find the money to make the $150 billion we will need to make implementation of universal care budget neutral right away. As Obama said in the debates, health care is a basic human right and we are denying that right to too many Americans.
The “brick by brick” approach to cost control will take some time. Some of the steps could be and should be begun from the beginning, but the effect will take some time to occur. There will be other new steps we can take discovered and implemented later, once we develop the mindset and the infrastructure to make health management effectiveness implementation and research a cornerstone of our system
Pat S:
No one feels the urgent need for reform more than I, whose premium is expected to rise 30% in May. I worry about this delicate balance: The idea of reform of the way health care is delivered will need to be accepted by large numbers of Americans in order to get the mandate that we need. This may take a while, thus the need for a bit by bit approach, especially given the balance of power in the Senate. At the same time, I worry that costs will escalate so fast that we will run out of political capital before real reform is even begun to be accomplished.
While I have no specific evidence, I’ve heard on several different occasions around the industry that the Lewin Group has long had a strong bias in favor of a single payer approach to health insurance, current ownership by UnitedHealth Group notwithstanding.
If we actually ever got a single payer health insurance system, even for a single state, there would likely be material unintended consequences as providers would no longer have a private sector to shift costs to. In addition, experts like Ezekiel Emanuel worry about possible adverse effects on both competition and innovation. Any projections made based on extrapolating the current Medicare system to a Medicare for All system are likely to be wide of the mark no matter how much money Lewin claims can be saved.
Maggie,
To clarify, when I say two tier, I dont’mean adequate vs. top of the line acute care. I think everyone should get top of the line acute care and necessary care. Acute care actually works. I mean the breast MR, the endless workup of questionable abnormalities, test NOW versus expectant observation, screening cardiac testing, almost all back surgery, non-generic drugs. I wouldn’t cover, in the Federal Basic Coverage, any of the snake oil treatment that Maggie would address with higher co-pays.
I know that with the trial lawyer party in charge there will be no tort reform or only sham tort reform — on the improbably theory that their profiteering creats any social good. Other countries do it for less is an argument that seems to only apply to medical care, not medical liability.
Tort reform will wait on national bankrupcy. One can have all the guidelines one likes, but when a poorly crafted guideline results in increased mortality, (as in yesterday WSJ editorial) the doctor is sued not the guideline author. The individual doctor assumes the risk and the payer gets the benefit.
Overtreatment is as Maggie points out the general preference of the public. It will flourish long after tort reform is enacted, and tort reform won’t happen for the foreseeable future.
As long as answer to the question, “Doctor, why didn’t you do …?”, MIGHT be a new yacht for the lawyer and years of sleepless nights for the doctor, utilization will continue to climb. Plus, we will have all of the added overhead of expensive “enlightened” (but not practicing) doctors writing guidelines and the even more expensive, in aggregate, bureaucratic overhead for “Skinner boxing” the practicing doctors to use them.
By that time, a new generation of doctors will be trained to practice medicine in an inefficient wasteful manner which will be ever harder to tame.
“Many wealthy people in this country who have great power would be okay with a two-tier system. They feel that people like your husband should get “adequate care” but not
“top of the line” care.”
Maggie,
I think any discussion of two-tier healthcare needs a careful definition of terms. I’m not sure if you are talking about middle and lower income people being unable to find a doctor to treat them or whether they will be denied access to expensive treatments deemed not cost-effective.
In the case of the latter, I think even you previously said that if we refused to pay for ultra expensive cancer drugs that only extended life by a few weeks, you wouldn’t care if wealthy people paid themselves if they wanted to. Along the same lines, in an example that I used previously, Dr. Ezekiel Emanuel characterized standard radiation treatment for prostate cancer as “good enough” while proton beam therapy at five times the price was too expensive and shouldn’t be covered. However, a wealthy person could self-pay if he wanted proton beam therapy while the rest of us couldn’t afford to. Is that two-tier healthcare?
Finally, in the case of newly developed but still experimental surgical procedures or drugs that the system won’t cover, wealthy people who want to try them at their own expense (and risk) can, as a byproduct, contribute to valuable medical research that could eventually benefit the rest of the population.
Barry–
First I feel that many
very expensive marginally effective or unproven treatments simply should not be on the market.
We all pay for them insofar as we all pay for the drug-makers device-makeres and others to lobby Congress to get these products approved, to advertise them, to pay multi-millions in “consulting fees” and gifts to doctors to hype them, and for marketing reserach.
Those costs are figured in to the price of all drugs, devices and treatments. (They don’t keep separate books for each drug!)
There is no evidence that proton beam therapy saves lives.
If wealthy men want it, they should go into randomized controlled clinical trials where we try to gather evidence that it might work. (This means taking the risk that they are in the control group–though that could turn out to be lucky, when we find out what the risks of this therapy are..)
If a great many very lucrative, expensive and marginallly effective or unproven treatments are on the market, as they are now, doctors will prefer to do these treatments (they are paid more for doing them, and if the patient is paying out of pocket, they can charge whatever they want. In addition, they get the bribes from manufactureres if they push these treatments.)
Thus, the only doctors left to see low-income people will be a) those who cannot draw the wealthier patients and b) those who are very honest and refuse to do treatments that are marginally effective (a fairly small group since most doctors will provide a treatment a patient wants as long as they have no clear evidence that it will hurt the patient.)
Barry, we all need to begin thinking collectively about health care. This country (and this economy) isn’t going to make it if everyone still keeps thinking in terms of “me” and “them”.
Obama keeps trying to explain that.
As Pat has said, “equality” is central to health care reform. That’s what makes Medicare work–and so popular. Everyone is treated equally.
Christopher–
See my comment to Barry–I’d like to see those over-priced and unproven treatments off the market.
If neither Medicare nor private insurers will pay for them, this could begin to happen. It just won’t be worth developing and marketing some of these treatments for the small group of Americans able and willing to pay out of pocket.
And, with continuing education even those who can afford to pay may ask themselves, why should I buy this when the Mayo Clinic refuses to use it?
Note: I’m not talking about outlawying these treatments, just lots and lots of publicity about medical hype, and the reverse advertising that Jerry Avorn’s group does at Harvard.,(See his excellent book, “Powerful Medicines)
As for med school education: in two weeks I’m going to a Mayo conference on reforming med school education. A great many people realize this has to happen, starting now.
There is no point in training doctors to work in the old, broken and inefficient system when we’re trying to reform it
Admittedly, this will happen over time, but it will happen. (Because we can’t afford the old, inefficient medicine.)
I find med students are very receptive to what I have to say when I talk about waste, the Dartmouth reserach, over-treatment being hazardous to the patient’s health, lower costs and higher quality going hand in hand.
I’m hoping to get my film (the documentary Alex Gibney has made of my book, Money-Driven Medicine to as many med schools as possible. The DVD will be available at no cost to interested groups.
Soon, I hope to have clips on this blog.
I agree we need to find a different way to handle malpractice, but I think a combination of openness, (sorryworks), guidelines adn the medical professoin doing a better job of policiing itself (blowing the whistle on colleauges who are truly negligent –with changes in the law so that the accused doctor can’t sue you for turning him in) would all go a long
way toward solving the problem.
I hope the educators at the Mayo clinic are not at the Cleveland Clinic, getting educated, during your visit. (Just kidding..) They were teaching lean medicine in Cleveland thirty years ago.
I don’t think the sort of negligence you are refering to is really much of the problem. Medicine is money driven in the NYC area, just as everything else in the NYC area is. That’s why it is nice to visit, but expensive to live there.
If you look again you may find that much of the overuse is due to many of the ills you have mentioned, but also to the hyper-risk aversion of doctors who have zero faith in a truly broken civil liability system.
If we are going to be evidence based, the track record of the reform movement is wretched.(See WSJ yesterday.)
Most likely they will avoid the politically difficult areas like Cardiology, back surgery, and tort reform that are Sacred Cows with powerful friends. Having excluded the heart of the problem, a lot of effort will be expended at the margins, for little result. Sort of a medical version of the Kyoto Accords.
I wish I could share your “faith based” belief in a higher bureaucratic power. I think I am just more secular. The bloated bureaucracy we create for medicine will be just as incapable of getting out of its own way as the bureaucracy at GM.
We are going to have an overarching “All State Extra-ordinary Medical Security Committee”. I am sure they will do their best. I know a few of the proposed members. Good people. (They probably said the same thing about Felix, in Russia.)I just hope history is a poor guide in this case for the effectiveness of this approach.
As long as we are talking about funding: Trial lawyers are supposedly working in the public interest, (sort of like Peace Corps workers, but with their own private jets) why not cap their income at the average income for a primary care doctor per year, and use the excess to fund healthcare for the uninsured? It would fund healthcare (and then some)and provide a very strong lobby to increase primary care salaries.
I didn’t think so.
Christopher George —
I am certain you are well aware of the fact that most other developed countries already use the approach of having national medical effectiveness boards, that that approach is nothing like controls in the Soviet Union, and that the results are better care of problems like heart disease, kidney disease, diabetes, trauma, lung disease, and so on. I know you have been critical of international data, but the data I am referring to is data comparing what happens when you enter a hospital in France with a heart attack compared to what happens here, not comparing overall population statistics on death from heart disease.
You are right that significant tort reform is probably a long way off. That is why doctors in general have to follow the lead of the anesthesiologists and create national practice standards, and back those standards with teams of experts and defense lawyers to protect doctors who can prove they have followed the national standards.
In general, saying that the entire problem with US health care is due to malpractice strikes me as inadequate to explain why so much US practice flies in the face of the best evidence. If doctors are primarily motivated by fear of lawsuits, it would seem to me that they — being smart people — would embrace evidence based practice and reject questionable management. Also, if overuse of ineffective management is due primarily to lawsuits, then it does not make sense that some of the highest regions of overuse are in areas of the country that have had fairly effective tort reform, while many areas with no tort reform have more appropriate patterns of use.
I will admit that there are a few areas of medicine — damaged babies and some other situations — that probably need other approaches because the emotional effect on juries prevents appropriate decision making. I also know there are a few places in the country — Pennsylvania, Nevada, parts of the South — where class polarization has made courts fail to provide reasonable results. But overall, I think that we need to focus on other things if we want to fix what is wrong with US health care.
Martha —
I was not criticizing your comments when you talked about incremental change, and I am aware from your other posts that you strongly favor universal care. I just wanted to make it clear that while I see incremental change to be useful in some parts of reform, I think we need fast reform in others, particularly in the issue of access to care without financial obstruction.
Sorry if I gave the impression I was being critical of you.
Pat S.
Of course litigation is not the only issue. But it will be impossible to really make the drastic reductions in utilization which are necessary without tort reform. Patients don’t like to be told they can’t have something-even if it is un-necessary and dangerous. Angry patients threaten to sue, and presto, utilization goes up. Remember the HMO? Patient resentment with the “gatekeeper” model torpedoed that initiative, but left us with the expensive administrative overhead.
Our current system makes the ER doctor financially responsible for freak outcomes when he exercises his medical judgement to discharge a patient he believes to be not seriously ill without a CT, for example. So here, the rare freak outcomes result in high utilization, very low yields, and eye-popping cost. In Europe, the freak bad outcome is treated as a freak. Here we set protocol based on it. This is very bad and very expensive public policy, It also exposes Americans to an astonishing diagnostic radiation burden.
For practicing doctors, the past fifteen years has been a lot of stick with no carrot. Drastic utilization cuts are needed. Why not offer a variety of guidelines..Mayo Guidelines..Cleveland Clinic Guidelines..American Cancer Society Guidelines..American College of Surgeons guidelines.. Federal Standard Guidelines.. Geriatric Guidelines…and offer IRONCLAD tort protection for those following the guidelines. Over time these guidelines can be honed in view of evolving evidence.
Doctors and clinics could then advertise..we follow this or that standard. Use a carrot, not a stick. Utilization would drop.
We are going to have to limit this trial lawyer profiteering sometime anyway. Its exponential growth is simply unsustainable. (Even in anesthesia, premiums continue to rise.) No other country allows this sort of litigation.
Why not harvest a public good ending something we will have to end sometime soon anyway? Kill two birds with one stone, anyone?
Christopher,
You say: “By that time, a new generation of doctors will be trained to practice medicine in an inefficient wasteful manner which will be ever harder to tame.”
Trust me, it is already happening. I have been a physician since 1980 and out in private practice since 1984. I am in Diagnostic Imaging/Radiology and work at nights covering ER’s (as a “Nighthawk”)
It is clear to me that older ER docs have a much higher threshold for ordering imaging tests than younger ER docs. But what does this greater specificity do for them? It potentially exposes them to a greater risk of malpractice and (according to Maggie) subjects them to pressure from their hospitals to order more tests to create more revenue (I have no personal knowledge of this).
The same “experts” that decry “unnecessary imaging” will be noticeably absent on the witness stand when an ER doc gets sued for not ordering a test. I have been an expert witness for more than 20 years – you don’t get sued for ordering a unnecessary test and you can be right 99 times out of 100 but that won’t protect you from the one time you are wrong.
“I feel that many very expensive marginally effective or unproven treatments simply should not be on the market.”
I don’t want public or private insurance to pay for these either. However, if a wealthy person wants to spend his own money on some new experimental intervention or drug, I have no objection. It may even add some useful medical knowledge that can benefit the rest of us. By the way, according to Dr. Emanuel, the potential benefit of proton beam therapy is somewhat fewer adverse side effects, not longer life expectancy but at enormous additional cost. Again, if a wealthy patient wants to self-pay, be my guest.
I’m also not concerned about the very tiny percentage of doctors who may be able to build their practice around serving the wealthy. Indeed, in vast areas of the country, there are very few wealthy people to serve. In this context, I define wealthy as the top 5% of the income distribution. Most doctors are quite competent and there should be more than enough specialists to provide good care for the rest of us. Primary care doctors are in short supply irrespective of what insurance system we ultimately develop.
My bottom line on this is that I’m all for refusing to pay for drugs, devices, surgical procedures, diagnostic tests, etc. that cannot pass a QALY metric or other appropriate cost-effectiveness standard. Just subjecting them to higher co-pays, I don’t think is good enough. We need to refuse to pay for them. At the same time, anyone who wants to self-pay should be able to spend their own money.
When it comes to futile, high tech and intensive end of life care, as a taxpayer, I’m not willing to pay for it if the normal protocol in other countries calls for hospice or palliative care. This issue of people who want to “do everything” out of religious convictions is a tough one. As a taxpayer, though, I think there is a huge difference between a college student who meets the financial criteria to qualify for a Pell grant and wants to use it to attend, say, a Catholic college or university instead of a state university or other secular school and a family or individual patient who wants taxpayers to pay for care that would not be provided under the standard medical protocol. In the first instance, the college student who wants to go to the religious college doesn’t cost taxpayers any more than the student who doesn’t while the medical patient costs the system a lot more than patients who get the hospice or palliative care because that’s what the standard of care calls for under the circumstances.
Finally, I once again add my voice to the doctors who are calling for tort reform as a critical reform if we expect to drive down healthcare utilization over time. Strong protections for following established standards and evidence coupled with health courts overseen by judges with specialized knowledge in resolving medical disputes that replace juries who are often swayed by emotion should bring more objectivity and consistency across jurisdictions to medical dispute resolution. Such an approach should be attractive or at least acceptable to all parties except trial lawyers. It’s time for Democrats, especially in the Senate, to stand up to this special interest group. Sometimes you have to tell your friends what they don’t want to hear. Now is one of those times.
Legs,
I agree, but I would make a clarification with which I hope you will agree: wrong should be judged not on the result of the test retrospectively, but rather prospectively based on whether the patient’s presentation warrented performing the test in the first place.
If no valid indication is present, then it is “wrong” to have ordered it…not wrong to have rightly decided to not order it. Narative Falacy..Outcome bias…Type I and Type II errors, and all that…
Christopher,
You say: “I would make a clarification with which I hope you will agree: wrong should be judged not on the result of the test retrospectively, but rather prospectively based on whether the patient’s presentation warranted performing the test in the first place.”
I absolutely agree, however in considering whether a test is indicated, one needs to consider what the “hit rate” is. This is done with retrospective data (obviously). If a test done for a particular indication falls below a certain “hit rate” (more on this later), then the test should be considered not indicated.
I support the construction of algorithms to guide the ordering of tests. Theoretically, these algorithms that could be used to protect physicians from malpractice and would substantially reduce the cost of medical care (if followed)
Two huge caveats:
1) As our justice system currently operates, most physicians have no confidence that adhering to guidelines will protect them if a bad outcome occurs. I have reviewed in the range of 80 – 100 malpractice cases in the past 20 years and also have no confidence in our legal system.
2) If human life is priceless, there is no test that is unindicated as long as it has ANY chance of detecting a treatable condition. Put another way, if we can detect 90% of a condition for $100 and 95% for $500 and 98% for $5,000 and 99% for $20,000 – where is the cutoff ? I don’t see our politicians making this decision (and standing by it) instead they try to push this onto physicians, physicians that get sued if they get it “wrong”?
XYZ!#ZXX@ – That’s my frustration boiling over! Why oh why do I keep seeing posts and comments like these that rarely mention single payer healthcare? Here, I find only one. And yet all this chatter about how to save money; how to pay for universal care, and nary a mention–all I ask is a mention, though further comment would be welcome!–of how we could save money by eliminating the mega-profit health insurance system. The figure usually touted is $400B the first year. Now maybe Dr. Pat S. & all these commentators find much to criticize in single payer. So let’s hear it. There are three bills before Congress now calling for single payer of one sort or another: One in the Senate, two in the House. Why aren’t these being discussed? (And how come you have comments dating back to April 8, and today (April 13) is the first day I am seeing the post?)
Tom Robischon –
I can’t explain why you didn’t have access to this thread earlier. It was posted on April 7, and many people have seen it and commented on it since then, as you noted. I suspect it was some local error in your computer or ISP.
The point of this article is that we will need to address the problem of cost of health care regardless of what system of reform we use, or else health care costs will swamp the economy, the government, and health care itself.
Even if your very aggressive estimate of savings from single payer is correct – and it is much higher than most estimates, even by single payer advocates – it would still not be enough to keep control of costs in a setting in which we can expect trillions of dollars of additional expenses in the next ten years. My argument is that it is only by changing standards of health care management to take advantage of research demonstrating that lower cost care is not only less expensive but superior in many areas can we avoid having to adopt cost savings that result in de facto rationing of health care by price to an even worse extent than we have today.
Most of the foreign health systems that are admired by many reformers, including single payer systems, already use health care effectiveness management as their main tool to contain costs. This approach accounts for much more of the difference in costs than savings from overhead reduction and non-profit approaches.
Many of us are admirers of single payer systems. However, we are aware that there is not enough support for single payer among lawmakers who will be making the decision. Only a single senator and about 80 House members have supported single payer. That is nowhere near enough support to pass a bill, and not enough to even make it a viable factor in the debate.
Facing that reality, many of us have decided that we need to work to make sure that any plan that emerges contains some features we feel are essential. Creation of true universal care, including ending high deductibles and co-pays that block access almost effectively as lack of insurance. Adoption of community rating and guaranteed issue, so that insurers cannot cherry pick only healthy low risk customers and abandon others to government programs or coverage too expensive to afford. Creation of a federal alternative insurance program, incorporated in Medicare to take advantage of Medicare’s low overhead and ability to control costs – what some of us have been calling Medicare Part E. Creation of a national health care effectiveness board to discover health management approaches that save money and result in better care and to publicize those new practice standards and work for their adoption.
Given the failure of single payer to achieve political traction, single payer advocates have a choice to make. They can take their football and go home, either blocking health care reform completely or abandoning the issue to conservatives who will create a program that fails to address needs for health care reform. Or they can join the debate as advocates for reform that they may consider suboptimal but which will still work to benefit most Americans. This would include creation of systems that may eventually lead to single payer or social insurance systems by evolution rather than by revolution. Single payer advocates, including me, need to give the ethical and practical aspects of this choice a lot of thought.
I guess there is no doubt where the WSJ stands on the public option. See link below.
Too bad the same old forces that have lead to the totally disfunctional and inadequate and unsustainable system we now have are still blinded to the mission of a real healthcare system.
http://online.wsj.com/article/SB123958544583612437.html
NG:
Excellent point.
Look what we have to choose from: Medicare for All or the commercial health insurers.
Isn’t there another alternative which has not been adequately and fully explored: 501(c)(9) tax-exempt insurers.
To fully earn their tax-exempt status, they are to operate differently than commercial insurers. Once the commercial insurers emulate the 501(c)(9)s, they either lose their tax-exempt status, or continue to innovate.
Now, that’s REAL competition!
Don Levit
NG
Don’t despair.
The Wall Street Journal’s editorials and Op-eds represent a very snall slice of public opinion–or expert opinion.
For many years, I wrote about markets, economics and international finance for Barrons’–which, like the WSJ, is published by Dow Jones.
Many people (including yours truly) admired many (not all) of the Wall Street Journal’s extremely well researched and well-edited news stories.
But most financial jounalists (including many at the Wall STret Journal) considered their editorial page a joke.
This also was true on Wall Street itself. Many saw the WSJ’s “opinion” columns as naive and uninformed.
I mentioned in my earlier referral post about the mission of a real healthcare system. I really think we could benefit in our system reform efforts by trying to first define what the real mission of an ideal healthcare system would be. Then we should attempt to define what the mission of our current and recent past healthcare system has been. What do we want in the future??
Dr. Pat S.: On the $400B I said single payer would save in its first year: The Physicians For A National Health Program–a strong advocate of SP–referred to that figure in a subhead of an article on its site March 26. And it has referred to it numerous times in the past. There even are reliable studies that have used it.
I reject your either-or choice you hand to us SP advocates: Either take our football home, thereby blocking reform completely, or turning it over to the conservatives. It is a viable position to continue to advocate SP without doing either. I think an excellent way to be sure SP will never receive the public attention it deserves is to say it hasn’t, and it won’t. Ås you do. It’s a self-confirming proposition. I have the vision of SP in its grave before the arrival of the hearse. But I’ll tell you one thing, Doctor, whatever we do wind up with, so long as the health insurance industry is involved, we’re not going to have affordable healthcare available to all. This incremental, band-aid approach has been going on ever since the AMA killed the proposal for universal healthcare when Social Security was adopted in 1937. “When will they ever learn. When will they ever learn?”
If you are uninsured and does not have insurance, you should check out the website http://UninsuredAmerica.blogspot.com – John Mayer, California
Now that the new health care reform bill has passed- it will be very,very interesting to see how privatized insurance companies will “really” deal with pre-existing conditions-I cannot possibly imagine how they are going to do this!