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A relatively obscure paper (gated) published in an academic journal the other day was completely ignored by the mainstream media. Yet if the study findings hold and if they apply to a broad array of health services, it appears that the orthodox approach to getting health services to poor people is as wrong as it can be.

At first glance, the study appears to focus on a rather narrow set of issues. Although most states try to limit Medicaid expenses by restricting patients to a one-month supply of drugs, North Carolina for a period of time allowed patients to have a three-month supply. Then the state reduced the allowable one-stop supply from 100 days of medication to 34 days and at the same raised the copayment on some drugs from $1 to $3. Think of the first change as raising the time price of care (the number of required pharmacy visits tripled) and the second as raising the money price of care (which also tripled).

The result: A tripling of the time price of care led to a much greater reduction in needed drugs obtained by chronically ill patients than a tripling of the money price, all other things remaining equal.

This study pertained to certain drugs and certain medical conditions. But suppose the findings are more general. Suppose that for most poor people and most health care, time is a bigger deterrent than money. What then?

If that idea doesn’t immediately knock your socks off, you probably haven’t been paying attention to the dominant thinking in health policy for the past 60 years.

What I call health policy orthodoxy is committed to two propositions: (1) The really important health issue for poor people is access to care and (2) to insure access, waiting for care is always better that paying for care. In other words, if you have to ration scarce medical resources somehow, rationing by waiting is always better than rationing by price.

[Let me say parenthetically, that the orthodox view is at least plausible. After all, poor people have the same amount of time you and I have, but (unless you are a student) a lot less money. Also, because their wages are lower than other people’s, the opportunity cost of their time is lower. So if we all have to pay for care with time and not with money, the advantage should go to the poor. This view would be plausible, that is, so long as you ignore tons of data showing that whenever the poor and the non-poor compete for resources in almost any non-price rationing system, the poor always lose out.]

The orthodox view underlies Medicaid’s policy of allowing patients to wait for hours for care in hospital emergency rooms and in community health centers, while denying them the opportunity to obtain care at a Minute Clinic with very little wait at all. The easiest, cheapest way to expand access to care for millions of low-income families is to allow them to do something they cannot now do: add money out-of-pocket to Medicaid’s fees and pay market prices for care at walk-in clinics, doc-in-the-boxes, surgical centers and other commercial outlets. Yet in conventional health policy circles, this idea is considered heresy.

The orthodox view lies behind the obsession with making everyone pay higher premiums so that contraceptive services and a whole long list of screenings and preventive care can be made available with no copayment or deductible. Yet this practice will surely encourage overuse and waste and in the process likely raise the time prices of these same services.

The orthodox view lies at the core of the hostility toward Health Savings Accounts, Health Reimbursement Arrangements (HRAs) and any other kind of account that allows money to be exchanged for medical services. Yet it is precisely these kinds of accounts that empower low-income families in the medical marketplace, just as food stamps empower them in any grocery store they choose to patronize.

The orthodox view is the reason so many Obama Care backers think the new health reform law will expand access to care for millions of people, even though there will be no increase in the supply of doctors. Because they completely ignore the almost certain increase in the time price of care, these enthusiasts have completely missed the possibility that the act may actually decrease access to care for most low-income families.

The orthodox view is the reason why there is so little academic interest in measuring the time price of care and why so much animosity is directed at those who do measure such things. It explains why Jon Gruber can write an NBER paper on Massachusetts health reform and never once mention that the wait to see a new doctor in Boston is more than two months.

Yet the orthodox view may be totally wrong. Clearly, time prices matter to low-income patients. As the new study concludes:

The observed decreases from the days’ supply policy were larger than those from the copayment policy, indicating that the increase in the time costs from more frequent trips to the pharmacy were more of a barrier to medication adherence than the increased copayment…. The decrease in adherence occurred at a mean level of usage generally thought to show clinical effects. The probability of being 80 percent adherent decreased between 1 and 13 percentage points, implying that the policy changes resulted in a substantial decrease in medication adherence for the chronic medication users.

John C. Goodman, PhD, is president and CEO of the National Center for Policy Analysis. He is also the Kellye Wright Fellow in health care. His Health Policy Blog is considered among the top conservative health care blogs where health care problems are discussed by top health policy experts from all sides of the political spectrum.

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36 Responses for “Why Everything We Are Doing in Health Policy May Be Completely Wrong …”

  1. Maggie Mahar says:

    This post ignores the fact that under heatlh care reform many more nurse practioners will be providing care to the formerly uninsured (and many others) in Community Heath Centers.

    The Affordable Care Act provides funding to expand the capacity of CHCs by 50%.

    The ACA also provides generous loan forgiveness and scholarships for nurses as well as higher pay for nursing school teachers. This will expand the pool of nurses and nurse practioners available in 2014.

    Increasingly, nurse practioners will be providing more and more of the primary care, preventive are, pediatric care and obstetrical care that Americans need. (In Europe the vast majority of babies are delivered by
    nurse-midwives. Mortality rates are lower–even when you compare only white mothers and babies in the U.S. to white mothers and babies in Europe. C-section rates also are much lower in Europe.

    By and large, there is no shortage of doctors in the U.S.– nor is there expected to be a shortage. (When it comes to healthcare, Bostson is an outlier in many ways. A recent survey by Merritt Hawkins, a company that
    specializes in recruiting physicians, show that wait times in Boston are
    2 1/2 times longer than in the the average city.

    The Dartmouth research also shows a high level of overtreatment in Boston–Medicare patients seeing more specialists than they need to, undergoing more tests and procedures than they need to– with outcomes that are no better than in regions where care is less aggressive.

    • DeterminedMD says:

      You know, Ms Mahar, I honestly do not know if you are just being clueless or blatantly dishonest, but to say “By and large, there is no shortage of doctors in the U.S.– nor is there expected to be a shortage.”, is a lie. And your expectation that Nurse Practitioners will just fill the void you say in the prior sentence is not there anyway is not a realistic solution.

      Admit it, you truly hate physicians, your rhetoric in your posts and thread comments has consistently revealed this intent. Cite away all your “contacts” and alleged physician allies, you are just a Democrat hack in the end. PPACA is not going to help health care, and I hope readers who are not sucked into this pervasive lie campaign get all the facts and info from non partisan sources.

      Besides, Boston Massachusetts is not an example of Americana, ma’am.

    • Nate Ogden says:

      “This post ignores the fact that under heatlh care reform many more nurse practioners will be providing care to the formerly uninsured (and many others) in Community Heath Centers.”

      What a tortured definition of the word fact. There is no fact that there will be more nurse practitioners, there is funding that might create more nurse practitioners that might treat formally uninsured.

      By your twisted logic Maggie it was a fact 200,000 uncoverable people would be have coverage under the PCIP program. A real fact, not a Maggie fact, is only $12,437 were enrolled first part of this year.

      “The federal Pre-existing Condition Insurance Plan (PCIP) program — a program that has the capacity to cover about 200,000 uninsured people with serious health problems — had 12,437 enrollees Feb. 1, officials say.”

      Liberal healthcare bills are not facts, they are agendas and plans that seldom achieve a fraction of what is promised.

  2. Devon Herrick says:

    Nearly 34 million uninsured individuals will gain health coverage under PPACA. Expect them to nearly double their consumption of medical care. Seventy-eight million Baby Boomers will retire in the next two decades. As they age their health needs will rise. Some practicing doctors are part of the Baby Boom generation. They will retire. Medical science is expanding the definition of disease and the number of conditions that can be treated will rise over time. I believe all these factors point to the possibility that demand for doctors could exceed the supply in the coming decades.

  3. Dr. Mike says:

    CHCs (aka FQHCs) are extraordinarily expensive places to receive care. They receive 2 to 3 times as much money from the federal and state government as is received by private practices for the exact same care. They have extremely high overhead (Local FQHC with 5 providers has a CEO, CMO, CFO, COO, etc. which are all high paying administrative positions – my three provider clinic only has a part time practice manager). The extra funding for identical care was intended for the CHC to provide free or nearly free care to the uninsured. With the passage of the PPACA it is likely that the ratio of government insured to uninsured will increase significantly, with the coresponding increase in routine office visits that cost the taxpayers $120-$140 instead of the $40-$60 I get FOR THE SAME SERVICE.
    There is absolutely a skewed concept in the country of what poverty is. Having traveled in Asia and Central America I can tell you that those we classify as “poor” in this country are truly rich by the standards of those other countries. There is no scientifically valid evidence that I have seen that the MAJORITY of Medicaid recipents would suffer any real harm from bearing some financial responsibility for their care. If a minority would suffer, then there are ways to deal with that separately.

  4. Lynn in SC says:

    The research was done in North Carolina and not South Carolina. Two different states with two different Medicaid programs and policies.

  5. I’m sorry, but I don’t quite understand.

    Somebody increased the price by $2 (I know tripled sounds more ominous), and found that poor people were more willing to pay 2 more dollars, than they were willing to travel 2 more times to the pharmacy, which with gas prices today costs way more than $2.

    From this extraordinary finding, we deduce that poor people are not sensitive to price, but are sensitive to convenience?
    Which of course is an indictment of the liberal advocacy for providing financial aid to the poor in general.

    • steve says:

      Poor people can calculate the price of gas or subway tickets. Quite the revelation. John Goodman is a genius.

      Steve

    • Nate Ogden says:

      I thought all the poor had to take public transportaiton? And why couldn’t they pick the Rx up went they went shoping for all their other groceries and such or do the poor only shop once every three months? It didn’t cost them a penny in extra gas unless they were truly stupid in how they plan their errands.

      “we deduce that poor people are not sensitive to price, but are sensitive to convenience?”

      I pretty clearly grapsed they are more sensitive to convenience then price , I don’t see how anyone could read into this a lack of any price sensitivity….oh wait let me put on my liberal blinders…..How dare you John, to claim they are not price sensative is unheard of, how does John get away with saying stuff like that. I just saw him kick a kitten and took candy from a baby as well. Its amazing what you miss when you don’t have your liberal blinders on.

  6. Steve Barrett says:

    This is a provocative article. There is an old saying that contemporary, business-driven healthcare does not take into account: “Time heals.” We nurses see the truth of the saying, but we work in institutions that abuse the “healing powers of time.’ So our jobs force us to try to cheat the client of time (the time required to heal) and abuse our selves (our bodies/our selves) in the meantime. So I appreciate the emphasis on time int he article. I am a Licensed Vocational Nurse working in an Alzheimer’s Unit in Texas.

  7. Health Forum says:

    I think we have no clue what direction we should go to.

  8. Peter says:

    More all the poor to the wilds of North Dakota and their health care access to Florida, but reduce their co-pay – that will keep costs down.

  9. Peter says:

    Of course first word above is “move”. D’OH

  10. Melissa S says:

    I understand those who are exceedingly rural might have some issues with traveling to the pharmacy every month. But those not living on the edge of the remote and are only paying only a dollar or 3 for prescriptions should have no complaints.

  11. Amy Berman says:

    John, you shared an intriguing piece of research from Health Services Research (HSR). You supposed that “for most poor people and most health care, time is a bigger deterrent than money”. But it may not have been time alone. Some responses to the blog have mentioned the cost of gas or other transportation. But for some of the most vulnerable there may be real issues with their physical ability to travel. How do we balance such creative alternatives with meeting the needs of those most at risk, not just the relatively well population? The high costs come with acute care, which can be precipitated by lack of medications.

    The HSR article suggested that increasing the copay, even though the increase was a modest few dollars, was a deterrant to needed medication. The increased time price of care had a larger negative impact. Neither had a positive effect.

    I will continue to read your blogposts for approaches that improve quality and bend the cost curve, of primary importance to our nation. Respectfully, I am not certain the HRS piece provided one of them.

  12. Maggie Mahar says:

    Melissa–

    I understand why going to a pharmacy once a month should not see like such a big deal for someone living in an urban area.

    But imagine that you are a single mother, poor, with two children. Your time is very limited.

    Of perhaps you are parents in a two-parent family where you both work two jobs (probably one,is part-time), minimum wage. Poor people who are lucky enough to be employed have less time than the rest of us.

    • Nate Ogden says:

      “But imagine that you are a single mother, poor, with two children. Your time is very limited.”

      Is it? Signle moms don’t feed their kids or does the grocery fairy fill the cubbard? Have none of your liberals been outside the city or meet a poor person? I know many poor people and very few of them are short on time, most of them have to much time and that is why they drink and smoke so much. picking up an Rx when they get their ciggs or groceries is not going to cost them an extra minute or dollar in transporation cost.

      From my experience actually working in this industry I would also guarantee you most of these people are already going to the Pharmacy multiple times. For what ever reason people do not have all their Rx filled at the same time. They are comming up for refill at all times during the month.

  13. waste_of_time says:

    this article is a waste of time…

    a high school student could write better….

  14. Reality says:

    I suggest that M Mahar, and all those who fanatically oppose physician autonomy and identity, to shadow a real doc in a busy hospital or practice for one week. I bet it would be an eye opening experience. It may even trigger a re-evaluation of their motives.

    The sole reason why HSAs and similar constructs are being resisted is because they change the flow of healthcare dollars, granting more control to patients (consumers) and physicians (providers). That’s it.

    There is tremendous activity right now to turn healthcare delivery into an activity with a defined set of deliverables to ensure that the flow of dollars is further controlled by third parties and tied to an arbitrary set of “quality” measures. This is generating a lot of business for the big consulting firms like McKinsey who are well versed in quatifying processes into units of production to measure productivity. Applying the same principles to healthcare delivery, means cookie cutter medicine for most with more personalized care for those who can afford it. Quality is just a buzz word used since there is no evidence that centralized care delivery and ACO type arrangements actually improve quality. The real gain is more CONTROL to third parties.

    In the push for expanding coverage and central control, good enough is the goal, thus the chatter about mid levels and so on. Since the actual premise is not based on increasing quality but controlling costs and maximizing control over the flow of healthcare dollars, all genuine attempts that oppose this core principle, regardless of their potential to reduce costs or improve quality, will be shut down with the full weight of the system.

    • DeterminedMD says:

      Hit it right on the head, autonomy and independent thinking is contraindicated to what government these days wants from those it controls, not a typo, as they in DC are not interested in representation, just resentment they have to put on the dog and pony show of elections every 2 years. And those who write for either side of this monolithic party of Republocrats are the modern day Goerbels of this onslaught of public interest being smothered by a septic tanked soaked pillow.

      Yeah, harsh and irritating analogy, bringing up Nazi references, but, isn’t this kind of propaganda the benchmark for what goes on to this day? After all, isnt PPACA in the end a slow death for many in this country who have to turn to corrupt government? You all have the ability to read and dissiminate the facts versus fiction. So do so!!!

    • Nate Ogden says:

      more then McKinsey the government wants every healthcare dollar to pass through it. Even has cost skyrocket out of pocket spending is projected to drop to single digits between now and 2020. Individuals engaging in activity outside of government control means loss opportunity for government to tax and profit from it.

  15. Maggie Mahar says:

    Nate writes: ” does the grocery fairy fill the cubbard

    I think you mean cupboard.

    Why is it that so many trolls are semi-literate?

    • Nate Ogden says:

      name calling, that is a sure fire way to win an argument and show how much smarter you are, THCB taught me that, when they started their campaign for civil and respectful debate. I guess they didn’t invite Maggie to turn over a new leaf.

      “Why is it that so many trolls are semi-literate?”

      Maggie writes: fact that under heatlh care reform many more nurse practioners

      I think you meant; fact that under health care reform many more nurse practitioners

      Health and practitioners are the correct spelling, you misspelled practitioners numerous times, obviously not a typo. Also Boston is spelled Boston, only one S not two. Under that you normally don’t follow the with a second the.

      Maggie writes: (probably one,is part-time)

      We use spaces to separate words in the English language.

      Maggie…..I’m betting you really wish you had your editor right about now don’t you? So I mistype one word and I am a semi-literate troll. You missed multiple words and punctuation does that mean your illiterate? Maggie the illiterate Troll, hads a nice ring to it.

      That was a fun exercise, can you try to stick to the arguments so I don’t need to take you to school again?

  16. Maggie Mahar says:

    I’m disappointed to see THCB continuing to spread misinformation.

    Different opinions are one thing, but lies only add to widespread confusion about heatlhcare. This is not what the Wall Street Journal was reocgnizing some years ago when it gave THCB high praise. . . THCB has changed since then.

    Consider Nate’s response to my comment:

    I wrote: “This post ignores the fact that under heatlh care reform many more nurse practioners will be providing care to the formerly uninsured (and many others) in Community Heath Centers.”

    Nate replied “What a tortured definition of the word fact. There is no fact that there will be more nurse practitioners, there is funding that might create more nurse practitioners that might treat formally uninsured.

    “By your twisted logic Maggie it was a fact 200,000 uncoverable people would be have coverage under the PCIP program. A real fact, not a Maggie fact, is only $12,437 were enrolled first part of this year.

    “The federal Pre-existing Condition Insurance Plan (PCIP) program — a program that has the capacity to cover about 200,000 uninsured people with serious health problems — had 12,437 enrollees Feb. 1, officials say.”

    I call this misinformation because the facts show that, regarding nurse practioners: The trend began a few years ago: “In the past five years, this nation has seen a 75 percent increase in the number of nurse practitioners, states data from the American Academy of Nurse Practitioners.” http://fremonttribune.com/news/local/article_719ab9bc-4b37-11e0-b5b9-001cc4c002e0.html#ixzz1TRcR2wFY

    Nurrse practitioners can now write prescriptions in all 50 states. Nurse practitioners now are allowed to practice independently in 16 states.

    Given the trend over the past 5 years, the increased funding of scholarships, loans and treachers, the 50% expansion of community clinics– often staffed with nurse practioners, adn in some cases managing these clinics–plus the ability that NPs now have the write prescriptions and practice independently, it takes only a modicum of common sense to realize the ranks of NPs will cotinue to expand. .

    Secondly,I have never written about the PCIP program, and so never predicted (nor would I have predicted) that 200,000 people would be covered under that program. This is a lie.

    Lies in the blogosphere hurt us all.

    • DeterminedMD says:

      “Lies in the blogosphere hurt us all.”

      As far as I am concerned, one of the most definitive projective statements you have made at this blog. I mean, where is your logic in starting this thread with two completely inconguent statements that nurse practitioners will be providing more of the primary care in this country, and yet you say in the next paragraph there is no shortage of doctors nor expected to be a shortage.

      Then why do we need more nurse practitioners, Ms Mahar? Is it you are pissed you do not control this site as much as you pine to do? Yeah, it gets more press and attention than yours.

      In the end, yet another example of government obsessed control over the media and internet to spread those very lies you complain “hurt us all”. As George Costanza so well said it in the Seinfeld episode, “it is not a lie if you believe it to be true.”

      Yeah, well those who are paying attention and want truth to pervade will not buy the mixed messages and trumped up statistics false messagers of empty hope try to cram down our throats.

      By the way, to tie in your little series of malpractice legislation, how many of those nurse practitioners in states that do not require supervision will stay in place once their malpractice coverage doubles or even triples once they join the company of physicians in providing that unsupervised care and following liabilities? Didn’t quite account for that consequence in trumpeting that alleged fact, did ya!?

    • Nate Ogden says:

      You are desperate to shred any last bit of creditability you might have aren’t you?

      “This post ignores the fact that under heatlh care reform many more nurse practioners will be providing care to the formerly uninsured (and many others) in Community Heath Centers.”

      Maggie, until a nurse practitioner actually provides care to a formerly uninsured it is not a fact. A simple logic test proves this; the world ends today, did nurse practitioners provide more care? No not yet, maybe they would have, but it didn’t happen so it’s not a fact. If Obama shocked the world and repealed HCR for an increase in the debt ceiling then more nurse practitioners didn’t provide care to formerly uninsured under HCR.

      Then you link to a study showing the trend started a few years ago, your actually arguing against yourself then and don’t even realize it. If the trend started a few years ago then where can you show MORE under HCR then when have been in place with the already evident trend? Maggie did an excellent job debunking Maggie’s argument. Let me warn you though Maggie, Maggie plays mean, she will probably call you names and label you sexist if you keep debunking her.

      As we all can clearly see the misinformation comes solely from your desperate attempts to seem logical and informed. You’re the only one misleading people here.

      “Given the trend over the past 5 years”, “it takes only a modicum of common sense to realize the ranks of NPs will cotinue to expand.”

      It takes even less common sense to read your own comment and realize it’s not under HCR, it was already there.

      “Secondly,I have never written about the PCIP program, and so never predicted (nor would I have predicted) that 200,000 people would be covered under that program. This is a lie.”

      Let me repeat, “This is a lie.”

      No one ever said you did write about PCIP. It was an example of your logic and never attributed to you. So where is the lie? There wasn’t one, what we do have is classic Maggie. If you get out smarted by an argument, very common, Maggie has 3 defenses;
      1. Censor the comment so no one ever sees she was wrong or disagreed with, not an option on her for her, thank you THCB.
      2. Ignore it and hope people don’t read that far down
      3. Call the person a sexist, troll, liar, and try to distract from the fact she was badly outsmarted once again.
      My PCIP paste is a perfect example of your failure in logic. It shows how a bill attempting to accomplish something doesn’t make the outcome a fact. It’s only a bill attempting to accomplish something. I can see why you don’t like having this clearly displayed for all to see but there was no lie, no one ever claimed you wrote about the PCIP program.

  17. Maggie Mahar says:

    Detemined:

    You write: “where is your logic in starting this thread with two completely inconguent statements that nurse practitioners will be providing more of the primary care in this country, and yet you say in the next paragraph there is no shortage of doctors nor expected to be a shortage.
    Then why do we need more nurse practitioners, Ms Mahar?”

    I’ am sorry you find the logic so hard.

    As nurse practioners provide more care, the need for more primary care docs
    declines.

    .

    • DeterminedMD says:

      Wow, so plain in the end, yet you think saying it without emphasis makes it less offensive and overt:

      “As nurse practioners provide more care, the need for more primary care docs declines.”

      So, one could interpret that simple sentence that you expect Nurse Practitioners to replace primary care physicians (not that there is a shortage of said doctors in the first place), so if the need for access to care declines and there are still doctors to provide care that NPs have allegedly filled this void, what happens to said doctors? They are disposable?

      Your distain for my profession just reeks with sincerity, eh?

  18. Peter says:

    Maggie,

    You misspell words all the time on your blog. Take a look in the mirror.

  19. pcp says:

    “Why is it that so many trolls are semi-literate?”

    Most inappropriate comment I’ve EVER seen here.

  20. Legacy Flyer says:

    I think that the name calling (on both sides) has detracted from the importance of the post by John Goodman.

    In essence, the post questions the wisdom of rationing by time rather than by money. This is an important point, since rationing by time is the traditional way of controlling demand for medical care by poor people.

    It is also clearly true that increased use of nurse practitioners and physicians assistants can substitute for primary care physicians. The question is; “Why do we want to go in this direction?”. Do we wish to abolish teacher certification (or water it down) for teachers? Do we wish paralegals to be able to practice independently? Do we wish to shorten the period of training and decrease qualifications for police officers? Etc.?

    It may be that the answer to all the above is yes, but if the answer is no for teachers, paralegals and police, why is it yes for medicine?

    • Nate Ogden says:

      it should we yes as they all need reform.

      Abolish teacher certification but it needs fixed without question.

      Paralegals should be able to pratice in areas attorneys aren’t affordable. I had an auto accident but made the mistake of not running up the medical treatment so no attorney wants to touch it. I can’t even find one to hire at an hourly rate to help me file suit for the car damage and medical bills so now I have to go pro se. There are entire areas of law attornies won’t touch because its not worth their time, paralegals would be a huge step forward from no justice.

      In Las Vegas and other cities cops wont respond to many types of auto accidents. Do we need full blown cops carrying guns to take traffic accident reports?

      As far as Medicine we don’t need a doctor for many routine simple illnesses, NPs should be an affordable alternative, a nice medium between not getting care and wasting $100 for an office visit.

  21. Legacy Flyer says:

    Nate,

    You may be right. I don’t have a problem with your approach – although others may.

    My point is that many people who support the use of nurse practitioners, etc. would be shocked by the analogous changes in other professions.

    I also have no problem with NPs taking care of many routine problems – the kinds of problems my mother handled very well for many years.

  22. Kilroy71 says:

    If the title of the article were “What if” instead of “Why,” I’d buy it. Health reform is going in many directions at once and it’s too early to tell what’s a win and what’s a fail. And if you guys who think the poor in America aren’t poor at all, you try a month in Section 8 housing and living on food stamps and tell me how rich you feel.

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