An instant classic from That Mitchell and Webb Look (H/T Kevin, M.D.). Enjoy.
The Homeopathic ER
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Category Archives: Health Care
The tough choices of health care finance reform
Following on a point made in this recent post, this Avery Johnson/WSJ article addresses one of the tough issues that must be addressed if there is going to be any meaningful reform of the U.S. health care finance system:
The widespread use of expensive cancer drugs to prolong patients’ lives by just weeks or months was called into question by an article published Monday in the Journal of the National Cancer Institute.
Crunching data from published studies, the authors found that treating a lung-cancer patient with Erbitux, a drug that costs $80,000 for an 18-week regimen, prolongs survival by only 1.2 months.
Based on that estimate, extending the lives of the 550,000 Americans who die of cancer annually by one year would then cost $440 billion, they extrapolated.
How to control escalating spending on end-of-life care is one of the thorniest questions facing lawmakers working on the overhaul of the U.S. health-care system. [. . .]
“Many Americans would not regard a 1.2-month survival advantage as ‘significant’ progress,” the authors wrote. “But would an individual patient disagree? Although we lack the answer to that question, we would suggest that the death of a mother of four at age 37 years would be no less painful were it to occur at age 37 years and 1 month, nor would the passing of a 67-year-old who planned to travel after retiring be any less difficult for the spouse were it to have occurred one month later.”
While some policy experts consider the rationing of health-care resources inevitable in the quest to control medical spending, many Americans have long resisted putting the collective fiscal good over their individual health. . . .
Read the entire article. I have many reservations about the direction of the Obama Administration’s proposed reforms of the U.S. health care finance system. But that the proposed reforms are triggering discussion of key issues such as the one set forth above is not one of them.
Will Obama address this key health care finance issue?
Marginal Revolution‘s Tyler Cowen penned this insightful NY times op-ed over the weekend that addresses the problem of the elephant in the parlor in regard to Obama’s proposed reform of America’s dysfunctional health care finance system:
MEDICARE expenditures threaten to crush the federal budget, yet the Obama administration is proposing that we start by spending more now so we can spend less later.
This runs the risk of becoming the new voodoo economics. If we can’t realize significant savings in health care costs now, don’t expect savings in the future, either.
It’s not the profits of the drug companies or the overhead of the insurance companies that make American health care so expensive, but the financial incentives for doctors and medical institutions to recommend more procedures, whether or not they are effective. So far, the American people have been unwilling to say no.
Drawing upon the ideas of the Harvard economist David Cutler, the Obama administration talks of empowering an independent board of experts to judge the comparative effectiveness of health care expenditures; the goal is to limit or withdraw Medicare support for ineffective ones. This idea is long overdue, and the critics who contend that it amounts to “rationing” or “the government telling you which medical treatments you can have” are missing the point. The motivating idea is the old conservative chestnut that not every private-sector expenditure deserves a government subsidy.
Nonetheless, this principle is radical in its implications and has met with resistance. In particular, Congress has not been willing to give up its power over what is perhaps the government’s single most important program, nor should we expect such a surrender of power in the future. There is already a Medicare Advisory Payment Commission, but it isn’t allowed to actually cut costs. [. . .]
Those cuts alone will not solve the fiscal problem, but if we aren’t willing to take even limited steps to conserve resources, we shouldn’t be spending any more money elsewhere. [. . .]
The demand for universal coverage sounds like a moral imperative to “take care of everybody,” but in reality it would make only a marginal difference when it comes to the overall health of the American population. The sober reality is that universal coverage is another way to spend money, which may or may not be a good idea.
The most likely possibility is that the government will spend more on health care today, promise to realize savings tomorrow and never succeed in lowering costs. It is rare that governments successfully cut costs by first spending more money.
Mr. Obama has pledged to be a fiscally responsible president. This is the biggest chance so far to see whether he means it.
Read the entire op-ed. Any reform of the U.S. health care finance system will not be successful in controlling costs unless or until a consensus is reached on a fundamental issue that most Americans do not even want to discuss — that is, what is the basic level of health care that every individual in the U.S. is entitled to receive regardless of cost? For example, what level of care is an insolvent, uninsured, illegal immigrant entitled to receive? How much care should we be willing to subsidize to extend the life of a seriously-ill 90 year-old? A terminally-ill 50 year-old? These are thorny issues, but they must be addressed if we are ever going to achieve a coherently-financed health care system.
As Arnold Kling has been saying for years, many of us live under the delusion that we cannot possibly afford health care if we pay for it individually, but of course we can afford it if we pay for it collectively. For those of you who think that the government can magically make health care more affordable, just remember what happened after the government directed Fannie Mae and Freddie Mac to make home ownership more affordable.
Update:Charles Kenny makes a good point that better health care is not necessarily expensive.
Update II: Steve Chapman chimes in with a timely observation:
There are only three ways to pay for this expansion of health insurance coverage: increased taxes, reduced benefits, or shiny gold ingots falling out of the sky. Voters emphatically prefer the latter option, so that is the one most likely to be embraced by Congress and the administration.
Update III: Arnold Kling notes the problems with Obama’s “dessert now, spinach later” approach.
Nice job, Doc
Check out this Lisa Sanders/NY Times article if you think that a trail of specialists is the surest way to figure out a knotty medical problem:
How come not one of the dozens of doctors ó including an endocrinologist ó that he saw over the nearly 15 years of interrupted sleep and other symptoms figured out that he had acromegaly? Perhaps because the various symptoms of his tumor were, for the most part, common problems: insomnia, high blood pressure, allergies and acne. They developed separately, years apart, and each was addressed by a specialist. It would take an act of imagination to link these symptoms. The patient never made that leap, and neither did any of his doctors. [. . .]
Not long after meeting [the doctor who finally made the correct diagnosis], the patient visited his primary-care doctor ó the doctor who had known him for years ó and told her that acromegaly was being considered. No way, she first told him. But sitting there, looking at his face and thinking about the changes caused by this disease, she began to reconsider. He did have the characteristically broad chin and nose. He was wearing braces because of changes in his jaw and teeth. His hands were huge. Suddenly, she could see the possibilities. Maybe he did have acromegaly.
The diagnosis was staring her in the face for years, but she did not see it. Psychologists call this inattention blindness ó instances when we donít see something because itís not what we are expecting to see; itís not what we are looking for. Sherlock Holmes had a somewhat different description. ìI have trained myself to notice what I see,î Holmes says.Arthur Conan Doyle, himself a physician, imbued his character with the kind of keen observational skills so essential to a good physician. This ability consists of casting a wide net to see the whole picture ó even when the complaint that brings the patient to medical attention is commonplace, like insomnia.
A big risk of health care finance reform
In addressing issues relating to health care and health care finance reform over the years, I’ve tried to be careful to differentiate America’s Byzantine and inefficient health care finance system from the quality of America’s health care, which remains very good overall.
But strains in the quality of care are definitely beginning to show as America’s existing health care finance system crumbles under the weight of, among other things, excess government regulation on medical insurance markets, unrealistic expectations regarding the supply and allocation of medical resources, over-reliance on third-party payors and the failure of American society to confront the issues pertaining to the limits of care.
The following is an email from a friend of mine, who is a first-rate internist who has been working as a hospitalist for the past several years. He is preparing to leave a hospital for which he has worked for the past couple of years because of the failure of the hospital’s administration to address worsening working conditions for the hospital’s primary care physicians:
I’m down to ten days left there, and those days can’t go by fast enough for me.
The average number of admissions in a weekday day shift (7 a.m. to 7 p.m.) is 12.
We had 23 yesterday.
When you take the standard estimate of an average of 75 minutes necessary to complete a new patient admission to the hospital — with the attendant patient interview and data collection, physical exam, review of lab and x-ray results, formulation of treatment plan, preparation of admission orders, and dictation of the official patient history & physical for the medical record — the amount of work requested from our hospitalist group yesterday was 13+ hours over average. This is more than another full-time equivalent doctor, yet we can’t persuade the national hospitalist company managing the hospital to provide any more help for us.
As a consequence of the barrage of admissions, I did not complete my "morning" rounds on existing hospital patients until 6 p.m. There were a couple of patients who could have been discharged from the hospital yesterday, but by the time we got to them, it was too late in the day to discharge them (area nursing homes won’t take transfers after 2 p.m.).
As you can imagine, this type of delay causes longer length-of-stay and more expense for the system. And this does not even begin to address the mistakes in care that may have been (or more likely WERE) made due to all of us rushing around as if we were in a 12-hour long fire drill.
It’s a bad way to practice medicine.
Contrast this to my new situation, which is a hospital-administered program. They believe in and adhere to the notion that the risk is high that patient care is likely to suffer once a doctor is required to see more than 15 hospitalized patients per day. Inasmuch as they don’t have the heavy administrative overhead that national hospitalist companies are required to service, my new hospital can allow their docs to work at a more controlled pace and still make ends meet.
Ten more shifts and I’m gone.
Thanks for letting me vent.
Believe me, my friend is the type of doctor that you want to have taking care of you if you find yourself in the hospital. That a hospital administration is willing to let him get away is a sure warning sign that the problems in the health care finance sector are adversely affecting the quality of care.
Defining Health Insurance
All sorts of interesting debates regarding reform of the American health care finance are breaking out across the blogosphere, which is a good thing.
Those discussions prompted one of the best thinkers on health care finance reform — Clear Thinkers favorite Arnold Kling — to provide a particularly lucid explanation of the illusory nature of American health insurance and, in so doing, highlight one of the key issues to implementing reform of the current system:
Let me offer two choices:
(a) Health insurance is the collective provision of all health care.
(b) Health insurance is the sharing of extreme risk in health care spending.
In my view, (a) represents what most people think of as good health insurance. For example, I have a friend who says her health insurance is great because she can get new eyeglasses every year for everyone in her family for a co-payment of only $10.
We have never observed (b). (b) would mean something where you only make a claim when your expenses are going to run into the tens of thousands of dollars. Claims would be rare and large, as in fire insurance. Premiums would be low, as in fire insurance.
Since we never have observed (b), we do not know whether it is something that could be provided by the market or would have to be provided by government. I am willing to concede that it may be the latter. However, what most people mean by universal health coverage is (a), which has some pretty obvious incentive problems. [. . .]
The bottom line is that what we think of as health insurance is not going to survive if we are going to get control of health care costs. Either health insurance is going to become very intrusive about our choices of medical services (the top-down, government option, under the guise of "health care quality"), or we are going to see much higher deductibles and co-payments (the bottom-up option).
Rationing health care
One of the common complaints heard regarding government-controlled, single payor health care finance systems is that they ration care in a manner that often results in long delays for even routine procedures.
However, as this MedPage blog post points out, private providers in America’s Byzantine health care finance system also ration care, and the results aren’t all that satisfying, either.
Meanwhile, this NY Times article reports on how many private physicians are rationing care by choosing not to accept patients who use Medicare for payment because the net reimbursement for services rendered is simply not worth it. The article also notes the growing trend of physicians opting for a concierge practice, a development that is the subject of earlier posts here and here.
Finally, Arnold Kling, who has done some of the best thinking on health care finance in the blogosphere over the past five years, sums up a big problem with the way in which the American system currently rations care:
In America, about 90 percent of health care spending is paid for by third parties–most individuals do not fend for themselves. . . . My view of the American health care system is that it hardly rations health care at all. That is why we spend so much more than other countries. I wish we put more responsibility on individuals. Instead, we have this delusion that we cannot possibly afford health care if we pay for it individually, but of course we can afford it if we pay for it collectively.
The Postrel Health Care Finance Articles
Clear Thinkers favorite Virginia Postrel (previous posts here) is well-known in health care finance circles for her authorship of a reasoned critique of one-payor, centralized health care plans back in the 1990’s. She now writes for The Atlantic.
Over the past year or so, Virginia has been experiencing serious health care issues, so she has recently penned two extraordinary articles in The Atlantic (here and here) chronicling her personal experience with America’s Byzantine health care finance system. Both articles are must-reads for anyone interested in these important issues, but here are a couple of snippets from the second article that are representative of the wisdom that Virginia provides:
Mr. Daily [a critic] shares a common belief, expressed less dramatically in other letters, that there is somewhere a pot of money dedicated to “health care” which “society” divides between winners and losers. In the United States, at least, there is no health care pot, any more than there is a pot for housing or education or magazine subscriptions. There is simply an economy, which includes health care among other goods, and the amount we spend on health care grows out of the largely decentralized decisions made by individuals and organizations. As productivity increases and prices drop in some areas—food, clothes, entertainment—we can afford to spend more on health care (even without overall economic growth or increased health-care efficiency). [. . .]
. . . We do not currently treat health care as a right. That we don’t is, in fact, what most letter writers are objecting to. Neither do we regard it exactly as a privilege, to be allocated to the worthy few or even to be limited to those who can afford to pay for it, directly or indirectly. Rather, it is a good, produced and purchased in a complex marketplace through a combination of individual, organizational, and political decisions.
Even this formulation is misleading, however. Health care isn’t a single good, nor, like food, is it easily defined in terms of a minimum to sustain life. Studying other countries’ supposedly universal systems only demonstrates how fraught the concept of “health care” is: one bundle of services in British Columbia and a less-generous one in Nova Scotia, one in England and another in Scotland, one in New Zealand before the election and another afterwards. Arguably the U.S. already has universal care, in the sense that everyone can get some care—if only from an emergency room—for some things, and that citizens (a critical word in this context) without money are covered by Medicaid.
The real issue is how you define “health care.” What gets included is a matter not only of medicine and economics but of culture and politics.
What limitations on health care are Americans willing to accept in return for universal coverage? That is one of the core issues that those who are currently crafting health care finance reform are assiduously avoiding. But true reform will never occur without addressing that issue.
An unintended consequence of drug prohibition
While this post from earlier in the week highlighted the historical backdrop to the United States’ failed drug prohibition policy, this Telegraph.co.uk article passes along an unintended consequence of that policy that should put to rest any concerns about reconsidering it:
The Home Office has admitted that the street price of both cocaine and heroin has fallen by nearly half in the last ten years, making the most dangerous illegal drugs cheaper than they have ever been.
That means a line of cocaine can cost as little as £1, with an average price per line of between £2 and £4.
The average price of a pint of lager is around £2.75, although some pub chains have reacted to the credit crunch by cutting the price of a pint as low as 99p. A glass of wine typically costs £3.50. . . .
Vitals
Vitals is an ambitious project — providing free information and patient ratings on doctors throughout the U.S.
I’ve checked on a number of my doctor friends and every one of them is included in the database, so it appears to be quite thorough. Inasmuch as the project is quite new, there are not many patient reviews yet. But the information provided is cleanly presented and quite helpful.
My sense is that this is a very good idea.