By Dr. Jim Dahle, WCI FounderI know this isn't a strictly financial topic, but I can't resist writing about it from time to time. I often think about starting a third career trying to reform health care. Sometimes it is so embarrassing to be part of it. To make matters worse, both major political parties keep missing the forest for the trees. They focus so much on insurance reform that they forget that the problem isn't insurance, it's health care. I was reminded of this as I received my annual health insurance renewal in November of last year. We buy our health insurance on the open market and, as you might expect, receive no subsidy or employer assistance. Our premiums for 2018 are 13% higher than 2017 ($1345/month including dental if you care.) That's okay, our deductible went up even more – 16%. (Yes, that's sarcasm.) Our out of pocket max went up and our prescription coverage got worse to boot.
I understand why people are mad at the health insurance companies–the insurance companies are the ones you write the checks to. They're the face of a health care system with runaway costs. But they're only that. The face. The symptom, not the disease. The disease is that health care spending is way, way out of control. So naturally, the next place you look is to the providers of health care–the doctors and hospitals and drug companies. If they wouldn't charge so much for that health care, we wouldn't spend so much on it, right?
While health care reform is complex (and anyone who thinks the solution is simple doesn't understand the problem), only a small part of the problem lies with the insurance companies, the doctors, the hospitals, and the drug companies, who are really just doing what they are incentivized to do as any rational economist would expect. The main part of the problem, dear patient, lies with you. “What?! How can that be?”, you say to yourself. Let me explain, and when I get to the end, I think you'll agree that the patient himself shares a large part of the blame, if not all of it. The rest of this post will discuss the four keys to fixing the US health care system, but an almost subconscious theme of it will be that nobody here is innocent.
4 Keys to Fixing Healthcare
#1 Effectiveness Transparency
Problem number one with our healthcare system is that we consume a whole lot of health care that doesn't do any good. Yup. That's right. There are a whole lot of health problems that modern Western medicine simply doesn't have a good answer for. Sometimes we can't even treat the symptoms effectively, must less cure it. A while back I wrote about the importance of understanding the concept of the Number Needed to Treat (NNT). That's the number of people who actually need to take a treatment or have a test done in order to help one person. For most medical therapies and tests, that number is NOT a single digit. That's right. You have to treat more than 10 people in order to help one of them. For some therapies, that number is over 100. Sometimes it is infinite. There is a number needed to harm (NNH) for every test and treatment too. And that number is often lower than the NNT.
What does that mean? That means 90% or more of the healthcare we engage in is unnecessary. People like to blame emergency departments for unnecessary care (even though emergency care is less than 2% of the healthcare dollar.) But the truth is that EVERYBODY is engaging in unnecessary care. Physicians, hospitals, drug companies, device companies. You name it. We're all guilty. But so are the patients. Since healthcare, like everything else in this country, is a business, you can't place all the blame on those who provide goods and services when you can't resist buying them. I see the silly stuff you're coming into the ED for. I can't imagine the silly stuff you're seeing neurology, orthopedics, gynecology, and your primary doctor for. And that doesn't include all the nonsense you're paying cash for outside the Western medical system. We have a serious problem with health care overconsumption. Take a look at your 85-year-old relative on 25 meds if you don't believe me. Think of all the appointments, tests, and pharmacy visits required to keep that list of medications going month after month after month, not to mention the hospitalizations required to treat the interactions.
Doctors and patients need to have A LOT more conversations about whether to do a test or treatment. About what the NNT and the NNH really are for each of them. For those things that we don't know how well they work, we need to focus our limited research dollars there.
But wait, there's more. We're spending a ton of money on stuff that is even LESS EFFECTIVE than western medicine. You think the data is bad on drugs and surgeries and x-rays? Wait until you see the data on chiropractic and essential oils.
For sure there are aspects of Western medicine that are incredibly effective and have helped us to reduce morbidity and mortality. But you might be surprised how few and far between super effective things like clean water, vaccines, insulin, seat belts, and surgery for necrotic bowel really are. Government, doctors, hospitals, and patients all have a role here in really looking at what is effective and what isn't. If we can simply drop the ineffective stuff and most of the barely effective stuff, we can dramatically decrease the cost of health care.
#2 Price Transparency
Imagine going to a restaurant and ordering a meal off a menu without prices. You then walk out of the restaurant without paying any money. Six weeks later, the bill is sent to your “restaurant insurance” company. Six weeks after that, the insurance company sends you a bill for your portion of the meal. Crazy, right? You don't even remember what you ate 3 months ago. If we're going to have health care be a business in this country (and having worked in socialized medicine, I don't necessarily think that's a bad idea) you have to have a functioning market. And guess what you need for a functioning market? That's right. Prices. You need to know the price of stuff. Both patients and doctors. You want to bring down the cost of health care? You want to see what competition and a true market can do to reduce costs? Mandate that every health care provider in the country post its prices in the waiting room and on the internet.
Now I know it's complicated. You don't exactly know what a patient is going to need when they check in to the ED or show up in clinic. But you can post averages. You can post the price of common tests and treatments. You can post a sample bill for your most common complaints. As it is right now, even a savvy consumer (or a savvy doctor) has no idea what the price of anything is. Doctors, hospitals, pharmacies, and drug companies are all incentivized to make this as opaque as possible. Nobody is going to post their prices unless consumers (probably through their government) force them to do so. But you can't have a market without prices. And I'm not talking about chargemaster prices. I'm talking about the real prices. It's ridiculous that every patient has a different price list. It's amazing how much the price can come down when insurance is taken out of the equation. I drive by an outpatient plastic surgery center every day and they have a big flashing billboard- “Saline $4800, Silicone $5800.” LASIK surgery is similar. Concierge clinics have proven effective in some specialties, but surely we can come up with a system where we can have both insurance coverage AND price transparency.
# 3Skin In the Game
The other factor required for a market solution to bring down health care costs is skin in the game. When you're spending someone else's money, you're far more likely to overspend. Too many health care consumers in our country don't have enough skin in the game. They're on Medicaid, or Medicare, or Tricare, or VA care, or a plan subsidized by their employer. Or perhaps most of the cost of it is covered by the taxpayer through PPACA tax subsidies.
My family buys our own health insurance on the open market, but we are a tiny minority- just 16%. It's not that I'm against insurance, even insurance run by the government. But people need a meaningful amount of skin in the game in order to have a functioning market. Even having to pay $100 for that MRI is going to make most people think twice about it. If Levaquin costs you $75 and Cipro costs you $4, you might rationally conclude that you'd rather take the whole family to the movies twice and have to take Cipro twice a day instead of Levaquin once a day. But if they're both $10 after the prescriptions get “run through insurance” what do you care? You don't.
I had a patient the other day who I shocked out of a-fib after he came off a cruise and flew across the country to see me. He didn't have health insurance because it was too expensive. Yes, that's right. He can afford a cruise and airfare, but not health insurance. I didn't entirely fault him. He had made a rational decision that he'd rather go on several awesome vacations a year than have health insurance. When people have skin in the game, they can make rational economic decisions. An MRI or a used car? Knee replacements or taking the extended family on a cruise to Alaska? An expensive arthritis drug or living in twice as nice of a house? Chronic suboxone treatment or a live-in masseuse for your fibromyalgia? You could do this all day, and when people do, they will spend less on health care.
This is actually the area where recent healthcare changes have had the most effect. This trend toward higher deductibles has made many of us reconsider how we want to spend our dollars. But there has to be a middle ground somewhere between $3 ER Medicaid co-pays and $8,000 annual deductibles.
#4 Death Panels
There, I said it. I'm a huge fan of death panels. In fact, nearly everybody I know who works in health care is a fan of death panels. They get a bad rap, of course, but they exist all over the world. A death panel is simply a group of dispassionate professionals who look at various tests and treatments in various medical scenarios and decide whether they should be allowed or not. It breaks our hearts to hear “no more should be done,” especially when it's our beloved grandma on the vent or a 23 week million dollar preemie. We hear about the miracles and say “there is no price too high for life.” Well, guess what? That's not true. Want to know what a life is worth? Check out the latest round of malpractice awards. Most of our lives are worth less than policy limits (generally $1 Million.) And if the number needed to treat to put grandma on a vent for a month is 200, and it costs $100K, well, you can do the math. We're saying Grandma is worth way more than any reasonable jury would indicate.
“But we don't want to ration care,” you say. Don't kid yourself. We already ration care. We do it all the time. Usually by what type of insurance a patient has or how much money they have. What do you think insurance pre-qualification is all about? Do you really want the insurance company or your wallet functioning as your death panel rather than a committee of docs guided by the data? “I see everybody,” you say. Try calling your front desk sometime and pretend you're a patient without insurance and try to book an appointment. See how that goes.
The death panel could also get involved in malpractice situations. There are plenty of guidelines out there for doctors to follow, but there is no back-up for the doctor who does less (per the guidelines) and then suffers the inevitable bad outcome. She still gets drug through court for 5 years. It would be far better to have a “No-fault” system where those who are harmed are compensated whether there was an error or not and the frivolous 85% or so of lawsuits never get filed. And instead of having attorneys and courts police the medical profession, the death panel can do it. Everybody already hates them anyway.
While I'm on this rant, let's talk about the whole “healthcare is a right,” thing. What a ridiculous bit of poppycock. You can't go to the store and get food without having to pay, no matter how hungry you are. You can't go to a hotel and sleep in their beds without having to pay, no matter how tired you are. If we don't have a right to food or shelter, why would we have a right to healthcare? That doesn't mean that government doesn't have a responsibility to its least fortunate citizens to provide some basic level of necessary health care just like food and shelter. But doctors, hospitals, and pharma companies seem to only recognize one level of healthcare without regard to the patient's ability to pay. It sounds super noble, I know, but it becomes much less noble once you bankrupt the patient. “First do no harm” applies to their wallet too. The death panels can determine what that basic level of health care looks like, and if people want to get the deluxe version, they can go without $1,000 iPhones and cruises to get it.
Healthcare reform is a huge, complex problem. We're all part of it–government, healthcare providers, and patients. But if we want to bring down the cost, the best way to do so is to consume less healthcare. These four keys will help us to do that.
What do you think? Do you agree these are the four keys to bringing down the cost of healthcare? What would you add or take away? Comment below, but avoid inflammatory and ad hominem statements and references to political parties and figures if you wish your comment to still be there when you come back.
How bout trimming the fat off the coding game. A whole department with masters level nursing sitting at a computer reviewing charts and then hounding me to include “mild malnutrition” in my progress note to upcharge. Or needing me to say vasogenic cerebral edema even when the pt is admitted with large McA stroke with neuroradioligists read of cerebral edema with shift. It doesn’t exist until the CDI me to add it to my stroke plan. Had a patient go to OR and surgeon op note states in dx ischemic colitis…why does the CDI dept need me to say those same words in addition to septic shock plan as an intesivist.. Why do they inquiry me when a pt is on 2 pressers with a lactate of 9 but that doesn’t exist until I say “lactic acid acidosis” in a note. It’s a game of reimbursement that we allow the payors to require and it falls on us who are burnt out by the EMR Burdon.
Death Panel is intersting. Would that mean 93 yo demented patient wouldn’t be allowed to go for neuroendovascular clot retrieval? Oh…the horror
as a retired dentist there is much overtreatment as well
I think one of the first things we need to do is loosen up the supply constraints on foreign medical grads to increase the supply of primary care doctors. We need to let NPs and PAs practice at the top of their skill set. From a supply perspective, shifting work from more expensive doctors to less expensive physician extenders could be a step.
A second thing, which the insurance companies and CMS are working on, is to move the payment system from paying for volume of services, procedures, etc.. and to pay doctors to keep patients healthy. I think a fundamental shift is needed to move the needle. This could lead to less use of unnecessary procedures (e.g., C-sections) and tests (MRI, CT imaging).
I agree with your comment on skin in the game and 19% of the population is on Medicaid which typically has no cost sharing. However, the population on Medicaid is not exactly rolling in the dough like the docs on this forum, and a copay for an insulin drug may be the difference between their kid managing their diabetes or not. I think copays for things we feel are not necessary care (most of the time) would be worth a shot. Some states want to experiment with work requirements, but no comment from me on that. As you state, many people are not exposed to the true cost of health care (your $1,300 in premiums withstanding).
On death panels, you should check out the UK’s National Institute for Clinical Excellence (NICE). They apply cost-effectiveness to new drugs/procedures to determine if they will be covered by the NHS. There is a clear prohibition of any cost-effectiveness analysis in the US.
Finally, and I hate to agree with Donald Trump, but the US should be negotiating drug prices. This was part of the deal to pass the MMA in 2003, but legislation can be changed.
Also, if you had Medicare for all (socialized medicine) prices would go down, but you can bet doctors will be paid less. Probably not a popular solution on this forum.
The problem with paying doctors to keep patients healthy is a huge percentage of the things that keep a patient healthy are completely out of the doctor’s control:
Luck
Genetics
Bad habits
Whether they come see the doctor when told
Whether they get the recommended tests
Whether they take the recommended pills etc
That’s why just “paying for health” probably can’t work.
The issue with automatically substituting NP/PA care for physician care is you’re not getting the same product. Might not matter in some cases, but it’s not the same thing. If it were, why have medical schools at all? Far better to just do two years of PA school, a year residency, and a year or two of closely supervised practice. Of course, at that point, you’re getting awfully close to the 4+3 a doc goes through.
Heh….
I’ve said many times….if you take a reasonably intelligent person, put them through a detailed A&P/pharmacology/clinical program, you can have someone that’s as good as a doctor…..WAIT…that *is* medical school/residency.
Thank you for having the guts to say….”it’s not the same product”. The current wave of PhD nurses, representing themselves as physicians…is going to be interesting as they become known as “doctors”…and imply to patients that they are “the same”.
At a university medical center where I formerly worked….we had a CRNA (who indeed had a PhD) who would introduce himself to patients as “Doctor”…what patient would know the difference?
4+8 in some cases. Each branch of medicine has its own training and certification. Nurse, PA, Nurse Practioner and Doctor are tags the public doesn’t understand. Throw in sub-specialties and it is mind boggling. Then throw in PhD, MBA, MPH with or without MD and it gets lost in the healthcare debate about “costs” of physicians. Each physician is unique and deserves to get paid according to their skills. It’s not the years, it’s the knowledge and finesse that enables patients to heal.
The patient looks at three “Doctors “ and is thankful each is a “living legend “ in their specialties.
I’m not so sure that loosening up the supply restraints on primary care is actually helpful.
I’m a firm believer that we have an efficiency problem, not a shortage problem.
Insurance based docs spend between 2-4 hrs per day charting a bunch of nonsense to get a billing code for some corporate overlord to determine a wage.
As a Primary Care Doc, I think allowing us to practice at the top of our skill set will help reduce the overall burden on the system.
I’ve tried training PA’s and NP’s and, unfortunately, their training is about 12,000 hours off.
Plenty of studies showing they order more tests, refer to specialists more frequently, and although they do have good relationships with their patients, the overall cost burden is higher.
I just took out a toenail that a patient went to the ER for 2 yrs ago because his PCP didn’t have time in his schedule – He was charged $400 – I did it for $45. This inappropriate triage of patients from ER’s to Urgent Care’s (now even MORE of a health care burden than ever) to Primary Care is what needs to be addressed at it’s core.
As an ER doc, 70%+ of what comes in doesn’t need to…but it and the ICU are the highest acuity care = Highest $$$
Uggh…thanks for letting me rant!
Agree 100%. I wish this could be printed on the front page of the New York Times…or at least as an op-ed.
I like your points overall and while it seems reasonable that patients will spend less with skin in the game, I think it’s been shown in research studies that the problem with this approach is that patients wind up making bad decisions and forgoing things fairy randomly rather than just care this is ineffective or wastefulI. So we have to help them make better decisions, but at a time when expertise is held in such low esteem it’s not clear to me that there is any easy way to do that on a large scale even if all doctors and nurses get on board with this approach.
How do the French manage Universal health care at much lower costs than the US healthcare system? I don’t know much details but they seem pretty happy with how it works. It is a hybrid of Govt. Healthcare supplemented by Private insurance. Also, some of my Australian Physician friends are happy with their system as well. I am sure all the policy wonks have looked into what works but have been bogged down by special interests.
So much yes to the death panels! I remember when Sarah Palin demonized them (saying they would happen under ACA) and the whole time I was yelling “NO! We need somebody to tell families that the 10 million dollar hospital bill for this definitely dying grandma isn’t going to save anyone!”
I have gone on that rant (some could have come straight from your article) I think 1000x (my wife has had to hear it a lot) and we very much need them. Spent a lot of time covering ICUs and your rant could not be more true/apt.
Just perhaps a clarification. In the paper written by Uwe Reinhardt and colleagues the major driver of cost was in the pricing of services. The paper focused on the fact that as Americans we consume healthcare at a lower rate than many other countries . An MRI that costs more than a 1000 dollars in this country is $500 in Switzerland and less in Japan. Price transparency and consumer education may lead to more competitive pricing for some services. In most other healthcare systems there is control over unbridled increases in drug costs through government oversight. What should the role of government be wrt healthcare. We love technology ( also cited as a percapita driver of cost). The splintered supply side of the insurance system is redundant and fraught with expensive overhead cost 28-30%. There are 20000 coders in the U.S Who is that benefitting? Just some thoughts
The other side of this coin is that most if not all of these technologies and medicines are developed in the US and their development is supported by the high prices that Americans pay for them. Other countries are therefore free to “negotiate” (if that is the right word for what happens between private companies and government/national health service monopsonies; maybe “shake down” would be more apt) prices that cover little more than the unit costs of the instrument or pills in question. Therefore:
1) The low prices that Swiss or Japanese pay for MRIs is not really reflective of the efficiency or effectiveness of their national health systems as much as it is a form of “freeloading” by having those low prices be subsidized by the higher prices Americans pay; and
2) If our government did something similar, nobody would be left to pay the development costs of the new technologies/medications yet to come, so either:
a) they wouldn’t be developed because they couldn’t be funded; or
b)the “freeloading” would have to end because the developers of the new technologies/medications would be forced to spread their development costs equally over all comers so no health care system could be allowed to get the “shakedown” discount any more.
Since politics would be involved, I imagine that the result would be situation a) and we would end up with a significant drop in medical innovation worldwide.
Price transparency is coming
https://www.advisory.com/research/health-care-advisory-board/blogs/at-the-helm/2018/08/ipps-final
I agree with most of your point. However you can’t change a system that won’t change and can’t change, so either you go on your own like creating another system with the aim that it that will work- I think the AMAZON/Berkshire/Chase partnership is going along this path.
Excellent post and comments, WCI. For anyone interested in digging into health care reform even further, I highly recommend the book “The Innovator’s Prescription,” by Clayton Christensen. If that’s too long of a read (though it goes fast), check out my post/book review here: https://hormonesdemystified.com/doing-the-impossible-fixing-healthcare.
Amen! I’m an anesthesiologist and I get so tired of cases that shouldn’t happen. General anesthesia for a 20 minute MRI of a knee! The patient is on Medicaid and pays little to nothing. I and D’s that could be done in the ED. D and C’s that probably would pass the uterine contents on their own. Its both providers and patients. I talke a 10 year old boy out of anesthesia for an MRI the other day (I doubt he even needed the study) I asked if he could lay still for 45 min and he did. Just saved the healthcare system a grand. Don’t even get me started in the ex-laps for patient’s who have lactates in the mid teens and ABGs that are incompatible with life. We have a major overuse problem!
CJ MD…
I whole-heartedly agree.
I’m also an anesthesiologist. Had a case on the schedule….95 year old lady for a G-tube. Went to do the preop…patient with contractures, in the fetal position. Had been a nursing home patient for more than 20 years. Discussed with family (patient completely noncommunicative). Family agreed that they really didn’t want the procedure. Case cancelled.
Next day back on schedule…surgeon says “family insists”….
Who knows? I don’t…but family had no “skin in the game”. Had they had to be paying for some of that…I suspect that their decision might have been different.
The tragedies are the simple preventative things. I’ve done a general anesthetic…twice…on a 7 year old. Totally normal at birth…but had prolonged high bilirubin after birth…and wasn’t put under “bili lights”. Was it that mom didn’t follow directions? Was it a “provider” that slipped up? I don’t know. But I do know that had this kid received proper care early in life, the multiple procedures/cost of care/family tragedy could well have been prevented.
Any of us who practice medicine have seen similar things.
As a Non medical professional fan of your blog I want to THANK YOU for writing this. Heath care reform in the US is a personal passion of mine and I think the number one domestic issue our political leaders need to solve.
So many good points but especially your focus on patients can’t treat healthcare like a “all u can eat buffet” ( my words) without regard to cost and outcomes.
People like to try to point to “one thing” all the time. Your post shows how multi faceted this is and how sound bite solutions won’t solve it.
Thanks for being a well articulated voice of reason on this important issue.
There are a number of flaws in the development of technologies argument here in the U.S. we pay a lot more for Viagra than the French even though it was developed in France. We are subsidizing their cost. Technology is a disproportionate percapita cost driver. For a 2 million dollar up front cost a Davinvi Robot will likely only ever impact 5 % of the population. Thalidomide is the worst example of a drug with no development cost that went from pennies to 1000 dollars a pill as Revlimid for Myeloma. Insulin was extracted at the University of Toronto in Canada with the patent being sold for 1$ With the hope of Frederic Banting that all who needed it would have access. The government can fulfill a role in healthcare to protect patients from corporate greed but it doesn’t always Historically it supported the development of infrastructure , jet propulsion, the internet etc.
The new strategy of bundling charges may save money but also might stifle innovation. Bureaucracy is wherever people are public or private. I certainly agree with the argument that people need to take more responsibility with there culture of health but let’s not let device makers, pharmaceutical companies ,the insurance industry get so easily off the hook with their large profits as they are some of the largest drivers of cost. There simply is no mechanism in healthcare to actually save money. Someone currently will take said saving home as profit. How can I as apracting primary care internist save Medicare any legitimate amount of money by jumping through hoops and ultimately likely being penalized for “poor outcomes”. Where my fiends will that savings go?
Some 96 percent of people who die in La Crosse, WI have an advance directive or similar documentation. Nationally, only about 30 percent of adults have a document like that. Bud Hammes, medical ethicist at Gunderson Health System in WI started training nurses to ask patients about advanced directives. “It turns out that if you allow patients to choose and direct their care, then often they choose a course that is much less expensive,” says Jeff Thompson, CEO of Gundersen (https://www.npr.org/sections/money/2014/03/05/286126451/living-wills-are-the-talk-of-the-town-in-la-crosse-wis). In fact, La Crosse, Wisconsin spends less on health care for patients at the end of life than any other place in the country, according to the Dartmouth Health Atlas.
I wonder how much money could be saved if this practice was universally adopted. A practice that is directed by patients, doesn’t cost a lot of money to implement, and saves patients and families from enduring painful, prolonged and ineffective end-of-life care.
I just want to say thank for this article. I couldn’t agree more. You were brave to write it.
I think there is one more related thing that you only got at tangentially. Medicine and science need to slow down on helping everyone live longer without regard to costs to our wallets, families, society and ultimately planet.
Jim,
Great article and just about word for word on what I talk about regarding our current system. The way I see it, if nothing changes, prices will continue to increase for middle class Americans where they will choose to opt out of insurance which will force an even faster price spiral upward for everyone else. It will be the collapse of our health insurance industry and maybe even turn into a recession as an entire industry that employs 100s of thousands will have layoffs and cost cutting measures.
I have wanted to be a force of change for many years and as a relatively financially independent physician such as yourself would be thrilled to team up with you on this venture. Feel free to email me if you are actually interested and we can maybe spit ball some ideas to introduce our thinking to the people, and our politicians including our president.
Not quite ready to start my third career in earnest yet!
All excellent points. However no one addressed the real reason that no meaningful reform or reduction in spending can or will take place… Because our financial system is totally dependent on it! “Healthcare”and all it’s peripheral sectors, or the healthcare-industrial complex, make up a huge portion of the US economy. The business of our country is in being sick and consuming anything to get better, even if not much of it works. Everyone forgets that all of that money that is “spent” on healthcare is money that someone is making, including physicians, both directly and indirectly. Any significant cuts to healthcare spending will lead to unemployment, market crash, etc. The financial guys on your blog know that, so do the politicians. Nothing significant will change until market forces do.
I fully agree which is why change must happen piecemeal. I would start with 100% mandatory transparency is pricing. Easily legible and accessible.
I commend WCI for writing this article and the discussion it would generate. I actually agree with pretty much all your arguments.
But also for the sake of discussion: physician ownership of imaging/treatment centers is often discussed here. What do you think are their impacts on healthcare spending?
“One last point worth remembering here: McAllen’s spending was almost identical to El Paso’s in the early nineteen-nineties. By the late nineties, however, it had become one of the most expensive regions in the country for Medicare and it has continued that way. Yet, public data show no sudden decline in health status or income for the McAllen population.
The biggest changes? A dramatic rate of overutilization during a period that saw a marked expansion in physician-owned imaging centers, surgery centers, hospital facilities, and physician-revenue-sharing by home-health agencies. Home-health agencies there, for example, spent more than $3,500 per Medicare beneficiary—not only five times more than in El Paso, but also more than half what many communities spend on all patient care.”
– from “The Cost Conundrum Redux” by Atul Gawande, 6/23/2009 in The New Yorker
Yes, I have similar mixed feelings about free standing emergency departments. As an entrepreneur and physician advocate, I am fully supportive. As a patient advocate and would-be reformer of the system, I have grave reservations about their benefits.
I have mixed feelings as well. I’m in a specialty that center ownership isn’t uncommon. Certainly can lead to excessive care, but that’s also the general nature of fee-for-service medicine. On the flip side, if not physician ownership then who else? If it’s hospital owned, they sometimes get reimbursed up to 2x as much for the same imaging/procedure leading private practice to sellout to hospitals, leading to even higher healthcare costs.
I wouldn’t give the insurance companies a free pass. They’re satisfied with negotiating discounts off the ludicrous master list instead of negotiating reasonable fixed rates for treatments. Insurance companies are in an ideal position to reign in prices (aside from denying coverage), but are content to simply raise premiums to guarantee ongoing profits. That’s one of the single biggest differences in pricing philosophy between the US and single payer systems.
I would suggest that the first thing that needs to be decided about healthcare is whether it is a right or a privileged. Once you decide that, many of the other issues become (slightly) easier to deal with as you try to figure out what needs to be done.
That is a familiar question, especially during the time of the ACA’s passing – and a moral one where reasonable people can disagree. I argue that’s not the correct question. How about: Is universal health care good policy? I believe the answer is YES, as I benefit from everyone else being healthier, just as I benefit from everyone else going through grade school. Generally speaking people are more ‘productive’ the more educated they are, and the same logic can be applied to health.
The definition of Universal is the “sticking point”.
I have a sis in law that is kind of a hypochondriac. Been that way for 40 years.
It includes taking an infant to the emergency room for a runny nose and crying.
Basic, any penalties for abusing healthcare services? She is basically in the doctor’s office for “tests” once a month. No continuing ailments. It’s like an all you can eat buffet on a monthly plan. Don’t have time to work because of all the appointments.
All procedures or is there a “basic plan” with controls to pay for waste? Should she order lobster and ribeye at the buffet? When it come to using “Universal” you really need to define that.
I guarantee her definition is much more “gold” and “platinum” regarding frequency, time and extent.
No way do I want to fund her copays. By the way, not enough money for rent so she lives for free with a sister.
You already fund all the hypochondriacs. It doesn’t matter who is providing the insurance (gov’t vs private). If you get insurance through your employer, you pay for all the hypochondriacs in your office, all the surgeries for coworkers injured driving without seatbelts, all the dependents on the plan going to the ER instead of PCP or telemedicine, and all the other treatments received by members on your employer’s plan you don’t want to fund. I’d rather share this cost with 150 million American households than the 200 households among my employer.
I’d like to see some basic public insurance offered to everyone, then private insurance to buy into broader networks, better coverage, lower ded/copays, etc. I’m not a policy maker, but it seems that is a decent framework. Having so many get insurance through their employer is silly and arbitrary. An outdated perk that has run its course. Employers commonly spend over $10,000 per year on each covered employee. That’s a huge expense. People start companies wanting to, say, build widgets. They end up having to specialize in widgets and health care.
I agree that basic healthcare is needed. However, the definition of “basic” and “universal” and the coverages available is the question. At some point requested coverage or treatment will not be covered. You are right in the model needs to be changed. Half of the population seems to be outside of the employer provided model. Most employer models allow choice of upgrades as well.
What I don’t understand is having the government run “basic coverage” efficiently. Conceptually, I am in 100% agreement, affordable basic coverage and an option to pay for bells and whistles. Does everyone pay the same price for basic, or is it different based on income or assets?
https://www.kff.org/other/state-indicator/total-population/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Those are great questions for smart people with more gray hair than me to answer. Surely cost would be based on geographic area and income. Also, would this be just for those not on Medicaid/Medicare? Or would we get one system to replace them both?
Fun to have this academic discussion, but it is dispiriting to realize it’s just a dream.
Wouldn’t it be nice if rates were set with a government backstop for covering “castastrophic losses”?
My dream would be “basic”, pay for premium care plans, cover the disasters of catastrophic losses for that were acts of nature with a “standard” that denies unwarranted bills.
Great post. I like that you come at this from a rather neutral standpoint. Unfortunately many people are dug into their ideological corners and most discussions on health care reform are people shouting their talking points. A few comments:
As far as death panels, I think a lot of it is cultural. In many other countries patients that have little chance are not offered life prolonging treatments because the doctors know it’s not going to help. Here we often offer patients a chinese menu of options for their family members at the end of life. People feel guilted into “doing everything” especially when you do not have to pay. Look at the reaction to the Charlie Gard case where England unilaterally refused treatment.
As far as the “right” to health care and limiting to just “basic” care I think the devil is in the details. What’s basic? It’s funny unlike the outpatient world where preauths and preapprovals often dictate whats get done in the inpatient setting I can snap my fingers (or click at the keyboard more likely) and spend some 5-6 figure amount on tests. How do you decide who gets what. Biologicals works for some of my sicker kids with autoimmune diseases (Lupus, IBD, etc). They are expensive. Are we comfortable giving only some people these meds as physicians?
I do think our politicians are not being honest with the public. The left basically tells everyone they can have everything and we’ll figure out how to pay for it. The right just wants to cut the costs but do not provide much effort into preserving the safety net.
I learn so much from WCI even though I’m not in medical field. I’m early retiring to Mexico in two weeks, and learning all I can about healthcare there, and how it differs from here.
I’m obviously no expert yet, but medical care in the big cities seems good, and affordable. Doctors in Mexico mostly graduate without medical school debt, although they may have to put in some time at a rural government clinic, ensuring poorer Mexicans get at least basic care. Malpractice insurance isn’t a thing. Doctors often own their own small practices, with little admin help needed because they aren’t dealing with big insurance companies. If you really need a test, you’re sent to a lab or clinic, not an expensive doctor-owned facility. Drugs are much more affordable. Friends say doctors are free to spend more time with you, and often give patients their cell phone numbers and, if needed, can even make house calls. People love their doctors.
Expat friends in Mexico tell me they mostly get catastrophic health insurance, and pay out of pocket for smaller things, because it’s so affordable and pricing is transparent so you know exactly what you’re paying for and how much it will cost.
It’ll be very different, but all part of the adventure of living in a new country.
Excellent points. Health “insurance” in the group benefits world is not insurance against catastrophic risk of loss in the same sense as Homeowner’s, Life, and Disability. It is prepayment of a consumption item that competes on benefits of free or low cost primary care, emergency care, and prescriptions. This approach only preys on the average citizens fear and anxiety of Dr. Google’s worst case scenarios and leads to ever escalating over consumption of “drive through” medical care in a “medical car wash approach” where the pan-CT/MRI customer expectation is the cart before the horse. My self-insured Bronze Plan individual annual deductible is $10,000. and costs $1200/mo. You better believe we think about how we spend our medical dollar with so much skin in the game. I just wish the medical restaurant menu was transparent with its pricing so efficient market competition could keep prices in line so that the consumer can make more thoroughly informed prospective decisions. As far as the “end of life goes”, I agree with Dr. Dahle and would go one step further; we are often more responsibly compassionate when navigating significant illness, death and dying with our family pets than we are with our human loved ones.
[Political comment removed.] Price transparency, competition among insurers, negotiating drug prices, and yes, making canada and europe help subsidize research and technological cost with USA is the solution to what ails healthcare.
Additionally, if economy grows around 3% over next decade, this will fill the coffers and help government subsidize healthcare. [Political comment removed.]
Those who wonder how other countries manage to do healthcare cheaper, and some might say better, than we do might enjoy reading “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care”. It takes a look at healthcare in other developed countries. The writer seems to have some bias but it does give some good details about how other systems work and brings up some very good points.
Consider classifying high costs to prioritize.
1) individuals who have high health care costs because it is their last year of life (population at the end of life),
2) individuals who experience a significant health event during a given year but who return to stable health (population with a discrete high-cost event), and
3) individuals who persistently generate high annual health care costs owing to chronic conditions, functional limitations, or other conditions but who are not in their last year of life and live for several years generating high health care expenses (population with persistent high costs).
Different solutions for different drivers of high costs. Actually, costs CAN be reduced. Death courts, preexisting conditions, lifetime caps could calculated and enforced. NO is not pleasantly received, because it implies a low benefit, which is actually true.
Too old and run down, normal maintenance and repairs, unreliable with frequent repairs. Used cars are a fine example, same basic buckets. Do I fix it or get rid of it? Cost of repair versus benefit. A human life does have a value, just like a car. Emotionally and morally it’s sometimes way lower than expected and difficult to accept. We have to find a compassionate way to deal with it. In healthcare NO eliminates wasteful spending but potentially fatal consequences for the patient.