The High Cost of Reducing Waste in US Healthcare

The High Cost of Reducing Waste in US Healthcare

69
SHARE

thcbRecently, a jury awarded a young California resident $28.2 million for a delayed diagnosis of a pelvic tumor. The jury found Kaiser Permanente (KP) negligent. Doctors in the system, touted to be one of the finest systems by the President, allegedly refused an immediate MRI for back pain in a 17 year old. The patient eventually received an MRI three months after presentation, which found a tumor so extensive that the patient needed an amputation.

The case is instructive at multiple levels. It shows a tense dialectic between the individual and society. It also highlights a truism that many don’t understand or don’t acknowledge – missed/ delayed diagnosis and waste are reciprocal. They’re birds of a feather. You can’t have less of one without more of the other.

The patient presented with back pain. MRI for back pain is the poster child of waste. Why so? Because so many are negative. Even more are meaninglessly positive –disc bulges which simply mean “I’m Homo sapiens and I wasn’t intelligently designed to be sitting at the desk.”

High quality doctors don’t order MRI for back pain immediately, reflexively and incontinently. Think about this. A high quality doctor should say “I don’t think you need an MRI because it won’t change the management and doesn’t improve outcomes.” That’s the resounding message from the top. If it doesn’t improve outcomes it’s not a worthy test. High quality doctors will, once in a while, cost their organization a lot of money.

But quality is still not settled. Quality doctors must satisfy patients. If a patient asks for an MRI for back pain the quality doctor must acquiesce, if that refusal dissatisfies. I’m confused. Ordering an MRI for back pain is poor care. But not ordering an MRI for back pain is poor care. Which is it?

We don’t know the facts of the case. It’s possible that the patient had a neurological deficit that should have raised the urgency. It’s possible that the physician didn’t examine the patient and had he/ she examined, the tumor might have been detected. We don’t know. We shouldn’t judge (1).

But we know that the delay in getting the MRI was 3 months. Three months are an eternity. Right? The wait time for MRI in Canada is 18 months (eighteen, BTW, is six times three). Many yearn for the Canadian healthcare system like I yearn for a Bentley. Many believe, and I’m disposed to that camp, that the Canadian system is equitable, just, fair and efficient. Swallow those words one at a time, particularly justice, social justice.

Social justice means equality. Equality means that we can’t throw bundles of cash chasing rare events, particularly if, like Canada, when we chase rare pelvic tumors there’s less change for public education for the poor.

Still want social justice? No, I didn’t really think so. Yes, you protest. Then put your tort where your mouth is. But please don’t pander the individual whilst making false pretenses about the population. Which one is it, individual or society? Decide.

Three months.  In 3 months did the tumor change from curable to ‘unresectable without amputation’? Unlikely.

Sorry I didn’t ask you about the probabilities I asked you is it conceivable that had the MRI been done immediately and the tumor detected, and the diagnosis not delayed by 3 months, patient might not have lost her leg? Possible, doctor, possible. Don’t you understand the meaning of possible?

Yes, it’s possible. Possible encompasses probabilities from 0.00001 % to 100 %. Here we have another tension. FDA wants probabilities. Medicare wants outcomes and probabilities. Insurers want any excuse not to pay, and lack of probable will do. In courts possibility delivers a knock-out punch to probability.

Doctors must be guided by probability, the essence of evidence-based medicine (EBM), but be mindful of possibility. Cognitive dissonance, anyone? Probability screws possibility. Possibility nullifies probability. Which one? Make up your minds.

The award might not have been as high if the defendant wasn’t an integrated system such as KP. In the era of shared risk, ACOs and shared savings this merits introspection.

Remember that equation: value=quality/ cost? Bonuses will be doled out for high value care. High value is moderate quality/ super low costs.

Excited, are we, to be incentivized to reduce waste? Think about the denominator. Think how it sounds to the jury as the plaintiff attorney grills the CEO of a cost-cutting, highly successful integrated system.

“Ms Thrifty, your organization prides itself on cost cutting. Was my client’s life not as important as the bonuses of your doctors? You apply principles of Lean. Do you treat people like widgets?”

“Ladies and gentlemen of the jury, I submit to you that my client would have lived were it not for the doctors and their greed for the bonuses from Medicare for restricting care. They chose their pockets. I urge you to teach them a lesson.”

Money for thrift doesn’t sound good. Still excited about shared savings?  You may retort that doctors should decline an MRI for the right reason. The “right reason” is determined after the fact by the jury, who will find it offensive when doctors don’t do a test, ostensibly, to save money, particularly when there are CAT scans and MRIs every nook and corner.

Every era has its David vs. Goliath. Once it was Erin Brokovich vs. greedy polluting capitalists. The greedy capitalists are hiding in corporate clothes. Who’s the next Goliath? There must be a Goliath. We need good vs. evil narrative. Who better a Goliath than a cost-cutting integrated healthcare system endorsed by POTUS?

KP is efficient, you say. Six sigma, reduced variation, reduced waste, improved outcomes, population health. Efficient like Toyota.

Bring it on! Any skilled plaintiff attorney will reframe waste reduction, population health, EBM, and that hilariously Orwellian term, resource stewardship, as soulless, greedy rationing. And will find a bunch of MDs willing to muddy the case. There’s a reason Health Maintenance Organizations (HMOs) failed. HMOs are not American (2). I’m not American. I get it. I’m amazed 47 % don’t (3).

As a foreigner I’m frequently awed and sometimes puzzled. Awed because the system often achieves a Lazarus-like feat. Puzzled because people ask why healthcare is so expensive.

Why so expensive? Must you ask? Because everyone must live. There can be no harm. There can be no outlier. We chase possibilities. Canada and Britain are garrisoned by probabilities. Possibility costs. Probability can be demonized – Mrs. Jones is a person not a statistic. I’m not saying people get the healthcare system they deserve. I’m saying the system makes perfect sense, given the ethos, culture and expectations of the people.

As a radiologist, physicians chasing possibilities have often frustrated me. Deep down, though, I’ve known two things. First, they’re patient-centered. Yes, that dull cliché. Sorry, I couldn’t avoid it. Second, I might have done the same thing in their shoes.

I have sympathy for the patient. The lottery of life was unfair to her. In her position I would have sued as well. Juries compensate for cosmic injustice as much as they restitute medical negligence. I know that.

 

 

 

 

The patient said that she hoped the verdict would “teach doctors a lesson.”  Doctors don’t need to be taught a lesson. We know when it comes to thrift and waste reduction we’re on our own. If we stick our neck out no one will rescue us when something goes wrong. We know that the same physicians who write editorials in high impact journals promising utopia and waste reduction will testify that we so patently missed a red flag. We know that in the muddy world of uncertainty the charlatans in our midst proliferate disingenuity faster than fecund rabbits on ginseng.

Yet I refuse to practice defensive medicine.  I know there’s a risk I’ll be sued. But what of the thousands I stop from going down anxiety-provoking imaging rabbit holes? They’re people, too. I’m patient-centered as well.

Footnotes

(1)   When new facts emerge I will change my mind about the appropriateness of immediate MRI. But my point about the uncertainty regarding the harm because of a delay of 3 months remain. I thought I would commit myself to this.

(2)   ACOs are not HMOs. ACOs are HMOs plus quality. In ACOs doctors will be incentivized to do the right thing not ration. (yawn)

(3)   “47 %” obviously has connotations. Please don’t get in to an argument about this number.

About the Author

Saurabh Jha is a radiologist who is on a mission to remove “cannot rule out” from radiology reports. His views do not represent the views of his employer, spouse, fourth grade teacher, personal trainer or anyone remotely associated him. Follow him on Twitter @RogueRad

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leave a Reply

69 Comments on "The High Cost of Reducing Waste in US Healthcare"


Guest
Legacy Flyer
Apr 6, 2015

Allan and Saurabh,

At this point in time, your disagreements are producing more heat than light. I would suggest that both of you “live to fight another day.”

Or to put it another way – “the problem with wrestling in the mud with a pig is that that the pig likes it.”

Peace dudes

Guest
Allan
Apr 6, 2015

“At this point in time, your disagreements are producing more heat than light.”

At this point in time it is time to go to sleep.

Goodnight Saurabh.
Goodnight Legacy.

Guest
Saurabh Jha
Apr 6, 2015

That’s right Legacy.

Single malts all round.

Plus we have to stand united for ICD 10.

Peace.

Guest
Apr 6, 2015

Just for completeness, the wait time for MRI in Canada is NOT 18 months. The wait time in my hometown in Ontario is 89 days (a little under 3 months). If a patient presents with red flag symptoms we scan them emergently.

For fun you can check out the wait times in Ontario, Canada here: http://www.ontariowaittimes.com/Surgerydi/en/PublicMain.aspx?Type=0

Guest
Saurabh Jha
Apr 3, 2015

“So what is the “take home message” of this suit in California?”

No fault tort might alleviate some of the problems.

Guest
Legacy Flyer
Apr 3, 2015

Don’t hold your breath

Guest
Apr 2, 2015

That is a powerful point about more MRI’s leading to surgeries of questionable usefulness.
American medical care has many areas where we do vast amounts of over-treatment and over-testing, in effect to prevent a tiny number of bad outcomes.
We medicate millions of persons with high blood pressure to prevent a few hundred heart attacks — and I am not an expert in health care, so I am sure that there are many other such examples.
Arnold Kling did some good writing a few years ago on the dominance of a perfectionist, ‘premium’ model of health care being a great strain on us.

Guest
Legacy Flyer
Apr 3, 2015

So what is the “take home message” of this suit in California?

For a doctor, it is: “when in doubt, order tests WHETHER THEY ARE INDICATED OR NOT”. Because doctors know that if they miss something – regardless of whether or not they were being prudent and following guidelines – the politicians and other health care “experts”, who preach about cost control and outcomes will say: “YOYOMF” and leave them to the “tender mercy” of the Courts.

I see indiscriminate use of diagnostic tests every day and it is a huge driver of medical costs.

Guest
Apr 2, 2015

Yes I was wrong about the $98 figure. That originally came from T.R. Reid’s book a few years ago.
But it does not dilute my only point, which is this:

if preventive screening tests were as cheap as they could be, then doctors might order more of them, and this would result in fewer lawsuits.

Guest
Legacy Flyer
Apr 2, 2015

Bob,

You say: “if preventive screening tests were as cheap as they could be, then doctors might order more of them, and this would result in fewer lawsuits”

That is a valid point. However, probably not a good idea for MRI of the Spine. Here are some of the many reasons:

– MRI of the Spine is already vastly over ordered already, lowering the price will worsen this problem.
– There are huge “downstream” costs to an MRI, including surgery of questionable usefulness and follow up MRI. These “downstream” cost vastly outweigh any savings in the cost of the initial MRI.
– Most screening programs of proven usefulness (Mammography and CT of the Chest in smokers) are already offered at reduced prices. On the other hand, screening MRI of the Spine has not proven to be useful.

This is a case of “even a broken clock is right twice a day” – meaning that by any reasonable criteria a patient with new onset back pain does not need an MRI right off the bat. (Obviously, I don’t know all the circumstances of this case, but I will bet that NOT ordering an MRI was the medically appropriate course of action – despite what the jury found)

In summary, the major problem with the cost of MRI in the US is NOT that they are too expensive (although in some locations they are) but that too many of them are ordered.

Guest
Apr 1, 2015

Here is one source of my info on cheap MRI’s in Japan:

http://www.npr.org/templates/story/story.php?storyId=120545569&ft=1&f=1006

thanks, bob hertz
The Health Care Crusade

Guest
Legacy Flyer
Apr 1, 2015

Read (part of) the article.

– Says MRI costs $160.00 not $99.00.
– Also says machines are older/cheaper machines
– Does not discuss any government subsidies or differences in cost of doing business. (Malpractice for one)
– Compares it to the cost of an MRI at Yale. Meaningless comparison – should compare to Medicare rates which are much lower
– In our private practice, we do some MRI for close to $160. If we were able to use old/cheap machines we could do it for less too.

Another meaningless Apples to Oranges comparison.

I will repeat my offer. If you want to invest all your money in an MRI that charges $98 per scan, I will let you live in my tool shed after you go bankrupt.

Guest
Legacy Flyer
Mar 31, 2015

White House Man speak with forked tongue.

1) “We must do everything we can to provide efficient, cost effective medical to reduce costs”

2) But when physician gets sued for not ordering tests – “YOYO MF” (translation – you’re on your own my friend)

Guest
Saurabh Jha
Mar 31, 2015

““YOYO MF” (translation – you’re on your own my friend)”

Are you sure Legacy?!

Guest
Legacy Flyer
Mar 31, 2015

Hey, its a family blog

Guest
Mar 30, 2015

Last I heard, Japan limits the charges for an MRI to something like $98.

And Japan is not a low wage nation.

If MRI’s were priced here at $98, doctors could order them defensively, and the total system costs would be negligible.

Once again, it’s the prices, stupid.

Bob Hertz, The Health Care Crusade

Guest
MD as HELL
Apr 1, 2015

Prices are uncontrolled because there is so much money sloshing around chasing healthcare.

Same with education.

Both healthcare and education are controlled by the White House.

Guest
Legacy Flyer
Apr 1, 2015

Bob,

The charge port on my iPad mini went bad. Apple wants $199 to fix. I am getting it fixed locally for $99.

A good MRI is a million dollar machine, add in installation (including RF shielding), service contract, tech salary, rent for office space, etc. etc. And that doesn’t include any reading fees. You can not BREAK EVEN at $98!

I encourage you to mortgage your house, liquidate all your investments and invest them in a MRI center that charges only $98 for an MRI. After you go bankrupt, I will let you sleep in my tool shed.

As for whether it costs $98 for an MRI in Japan, I have no idea. But absent some kind of significant government subsidy – I highly doubt it.

Guest
Perry
Mar 30, 2015

There are 2 ways to reduce waste, aside from what we are currently doing:

1. Give the patient an insurance “allowance” if you will, to spend as they please. That way, the patient and the physician become the drivers of care. If you are going to do that, though, you have to make testing more affordable. But the patient can still decide to do or not to do the MRI. If the physician thinks it’s necessary, she can encourage the patient and document if the patient refuses. If the patient wants the test just to “make sure” the patient can spend their allowance accordingly. If the doctor insists the patient doesn’t need it and turns out to be wrong, the doctor is potentially liable.
2. Put spending control in the hands of an institution that reviews all requests for expensive testing. Will they be exempt from liability?

Guest
MD as HELL
Apr 1, 2015

The only way to eliminate “waste” is to change who is classifying an expenditure as “waste”.

The patient needs to be holding the money…all the money.

Then when he/she spends it, it is discretionary and not “waste”.

In the present system “waste” is that which someone else wants to spend elsewhere.

Guest
Perry
Apr 2, 2015

I’m good with that.
What I’m not happy with is the #2 choice.

Guest
BAE
Mar 30, 2015

While this is thought-provoking, I’ve seen this before and understand the conundrums. What is the answer? Continue to spend more GDP on healthcare? There’s a snide remark about Canada’s system, but what are their outcomes? Aren’t they better than those in the U.S.?

Does one tort case mean “quality” patient-centered care is wrong, anymore than one bad outcome means the definition of “quality” is wrong?

The all-knowing doctor is a myth. Quality constructs are to help guide, but as with ANY profession, should be a guide not an end-all, be-all.

Still, I want to hear what the “right” answer is to reduce waste. We all agree it’s there. Is it insurance? Is it quality requirements? Is it torts? Is it our diet? What is the answer to finding and fixing the waste in healthcare?

In the meantime, U.S. care isn’t better than that in other countries. We just spend more for it.

Guest
Saurabh Jha
Mar 31, 2015

“Still, I want to hear what the “right” answer is to reduce waste.”

Doctors will just have to take it on the chin and accept that the practice of good clinical medicine carries risk.

Guest
Allan
Mar 31, 2015

“Doctors will just have to take it on the chin and accept that the practice of good clinical medicine carries risk.”

It is easy to say what you have said above, but what do you do when doctors refuse the risk by staying away from areas of medicine where the practice of good medicine puts them at higher risk than they can tolerate?

Guest
Saurabh Jha
Mar 31, 2015

” but what do you do when doctors refuse the risk by staying away from areas of medicine where the practice of good medicine puts them at higher risk than they can tolerate?”

Society pays the price.

Guest
Allan
Apr 11, 2015

“What you call “intemperance” Is simply your thin skin and penchant for self pity.”

If you do a word search you will note that I didn’t use the word ‘intemperance’. I think you are having a bit of trouble trying to make sense out of what you think so you are lashing out blindly..

“Look through your posts. Your tone has been insulting”

Look again and take note that I reacted to your “intemperance” and did so in kind rather mildly. This doesn’t get us anywhere so I will skip the rest of this useless rhetoric and go on to something of importance. (Just take note of the content of your previous post and mine.)

“What you call coercion is known as evidence based medicine. ”

You are totally mistaken. The tax or penalty, however one wishes to call it, has nothing to do with evidence based medicine. I won’t bother mentioning the rest of the things that involve coercion.

We now have the truth. You think coercive methods of making an individual purchase a specific insurance policy rather than permitting him to buy insurance that meets his need and the needs of the seller is not evidenced based medicine. That is ridiculous, but I can’t help what you believe.

I will reiterate our respective positions.I believe in free choice and you believe in coercion. You like government insurance with subsidies and I like a marketplace with subsidies.

Guest
Saurabh Jha
Apr 11, 2015

What you call “intemperance” Is simply your thin skin and penchant for self pity.

Look through your posts. Your tone has been insulting and you have name called repeatedly.

Rather than take offense like a crying ninny, I have reciprocated your tone, returning your tedium with humour.

You may not realize but you are exhibit 101 of Matt Walsh’s article. Self righteous, paranoid and brittle.

What you call coercion is known as evidence based medicine. I have tried to get you to think beyond stage 1.

Admittedly, I have failed in my efforts but in the process I have unearthed one of the twin pillars of ossified thought in your country. Worry not,the other pillar is just as tedious to deal with and I get accused of being a capitalistic pig.

When you are ready to shuffle the cerebral attic, get send me a post.

Guest
Allan
Apr 11, 2015

“I don’t have a rigid philosophy, allan. I don’t belong to the “you’re with me or a collectivist” camp or “you’re with poor or the capitalist” camp.” “…Believers have rigid philosophies.”

Then you must not be explaining yourself very well. I don’t know that you belong in any camp, but your responses and language makes you sound quite inflexible, far more so than one that has adopted a set of principles to live by. In fact you have proven yourself to be rigid. You have a coercive temperament and even believe that undo coercion should be used in the most personal healthcare sector. That is not as nuanced as you seem to believe.

Education is another discussion. Likely we agree.

Guest
Saurabh Jha
Apr 11, 2015

I don’t have a rigid philosophy, allan. I don’t belong to the “you’re with me or a collectivist” camp or “you’re with poor or the capitalist” camp.. This seems impossible for you to grasp.

Believers have rigid philosophies.

I do not come from a culture where the good vs. evil dichotomy is constantly played. Reality is more nuanced, messier than the binary.

That may indeed be the source of the impasse. You must know where I stand. For me, where you stand is immaterial.

Read this article if you have a moment. I’m sure you’ll agree with the author’s diagnosis, with which I agree with as well. The greatest failing of modern education is creating individuals who are dialectically-challenged. You see this in every walk of life – my way or the highway. This is a bipartisan problem.

http://www.zerohedge.com/news/2015-04-07/most-whiney-thin-skinned-easily-offended-society-history-world

Guest
Allan
Apr 10, 2015

Saurabh, of course it’s no offense or any of those things especially with your comments followed by “I’m not getting that from you.” I wonder what that means? Forget it. I know what that means.

You play games, many games, seldom answering questions while playing Socrates and promising the ultimate answer that ends in a Houdini disappearing act.

So far I have provided you with my philosophy, but you have been unable to state why your philosophy is better. Neither have you been able to ask questions that help advance your point of view. That inability frustrates you and makes you act in a way that later you think is deplorable. It appears that your opinion is faith based and we all know what happens when one questions another’s faith.

Guest
Saurabh Jha
Apr 10, 2015

No offence or insult intended here.

I’m seeking a nuanced discussion of markets in healthcare. I assume a baseline knowledge and premise: how markets work and that markets have yielded net good.

This means doubling down on the detail, considering alternative eventualities, with historical perspectives, and analyzing the short run and long run.

I’m not getting that from you.

A lot of times discussions collapse because the discussants neither know nor agree on what they agree.

I think that our discussion of markets in healthcare has collapsed and future discussion regarding this topic will collapse because we do not know what we agree on.

Guest
Allan
Apr 6, 2015

“Allan, you remind me of 911 Truthers.
So consumed are they with paranoia”

You mimic the actions of the collectivist. If you don’t agree with someone else they have to be paranoid. You have substituted insult for intellect.

Now back to the real discussion between the ACA and the McCain Plan which is more collectivist and coercive? Which is more innovative?

Guest
Saurabh Jha
Apr 6, 2015

Allan, you remind me of 911 Truthers.

So consumed are they with paranoia that any attempt to make them rethink their premise & they lash out name calling.

You can do better? Or maybe not

Guest
Allan
Apr 6, 2015

“Such as “collectivism”, “socialism…”

I have never accused you of being a socialist though I did say that some of your ideas were collectivist. How can one even deny that about your ideas considering what you have stated over and over again. The ACA which you appear to strongly support in lieu of a marketplace solution (that is not entirely free) is an example of one group trying to impose their will upon others and if you think the tax/ penalty isn’t coercion then look up the definition in a dictionary.

“Allan, your paranoia of government take over is so extreme…”

Really? All I have done is supported a mostly voluntary healthcare system (that includes subsidies) and the willing buyer/ willing seller scenario. When collectivists don’t have the facts they try to demean their opposition. Isn’t that what you are doing? Yes, that is exactly what you are doing and have done all along.

The easy solution to this dilemma is for you to give up on personal attacks and compare two programs suggested at about the same time, the ACA and the McCain Plan. See which one is more collectivist and coercive. See which one is more innovative. That is what you should be talking about instead of leveling charges of paranoia that is beneath the dignity of an educated individual.

Guest
Saurabh Jha
Apr 6, 2015

“You are so paranoid you have to make personal accusations against everyone else that might have a different opinion.”

Such as “collectivism”, “socialism”, “imposing your will”, “coercion”!

Allan, your paranoia of government take over is so extreme that you even think evidence-based medicine is “imposing will.” I think your fear is beyond rational reasoning and there is no redemption.

Easy with the paranoia! There is nothing that will happen to your country that the majority, with the support of SCOTUS, doesn’t want.

Dwell on my last sentence…

Guest
Allan
Apr 6, 2015

Who should be accused of binary thinking here? Without a doubt it is Saurabh Jha. I have already explained that even the process of eating is not totally voluntary. I explained how markets required some type of government to enforce contracts and keep the marketplace free. I discussed regulation and how regulation was not totally voluntary but there was a degree of regulation that permitted the free market to function, a willing buyer and a willing seller. If that wasn’t enough I gave a further definition “When regulation decends to the depths of ‘Who Plans’ where central authority is doing the planning we descend into a coercive environment.”

To you it is your way or the highway where there is no room to discuss the issues above. That is typical of the collectivist mindset and every day becoming more typical of you for instead of discussing the issues you devolve an intellectual discussion into an insult.

If you wish to reincarnate yourself in a positive fashion deal with the above issues or let us discuss something a bit more concrete.

“I leave it up to you to demonstrate why the more coercive legislation, the ACA, is better than the less coercive legislation, the McCain Plan.”

“Allan – your paranoia…”

Paranoia can be expressed in many ways. Your paranoia is seen in your responses to a simple difference of opinion. You are so paranoid you have to make personal accusations against everyone else that might have a different opinion.

Saurabh, take a Valium, get some rest and start responding to the essence of the discussion. Alternatively take one to two ounces of Scotch every hour until you are able to laugh at yourself. When you wake up you will feel much better.

Guest
Saurabh Jha
Apr 6, 2015

“That is something I don’t think you will do unless you suddenly decide to place principle instead of whim at the head of your arguments.”

Says the man who is so paranoid that he thinks evidence-based medicine is government take over of healthcare.

Allan – your paranoia is amusing and tiring.

Guest
Saurabh Jha
Apr 6, 2015

“Perhaps this indicates that you recognize the benefits of the free market in healthcare affairs.”

allan, the discussion is whether healthcare is a different beast for free markets.

If HC is different this doesn’t mean markets have zero role, it simply means a more nuanced look at markets and regulations.

Your binary approach (you are either with me or a socialist, sorry collectivist) is frustrating.

I’m trying my best to give your insight the benefit of the doubt, but you continue to disappoint me.

The discussion has come to the point where exiting now would be significant sunk costs for me. But you add zero insight by explaining how markets work and by not answering my questions.

Tell us how healthcare can be a regulated marketplace without coercion.

Be specific. Tell me what’s coercion in ACA and what’s regulation.

Guest
Allan
Apr 5, 2015

Saurabh, your arguments have dwindled from the sophisticated non starters to two practical concerns, 1) what is the difference between regulation and coercion and 2) the pain that might occur when a coercive market moves towards less coercion and more freedom in healthcare. Perhaps this indicates that you recognize the benefits of the free market in healthcare affairs. Both are important concerns.

First regulation vs coercion. There is an illusory free market relieved of all government processes. That, however, IMO cannot exist in the real world. Free markets depend upon contracts that are upheld and that requires contract law and enforcement. One can gauge the freeness of a marketplace by observing the ability of the willing buyer and the willing seller to conduct their affairs based upon the amount of friction caused by government involvement.

Regulation can lead to coercion, so one has to be careful with any regulatory law. IMO and in general a regulation is used to level the playing field and make sure the rule of law exists. It hinders society if stretched too far in either direction. (Again IMO sometimes government can enter as a small player to carve out areas of imperfection while permitting the market place to function.) When regulation decends to the depths of ‘Who Plans’ where central authority is doing the planning we descend into a coercive environment.

I leave it up to you to demonstrate why the more coercive legislation, the ACA, is better than the less coercive legislation the McCain Plan. That is something I don’t think you will do unless you suddenly decide to place principle instead of whim at the head of your arguments. Both plans have utilized subsidies to lessen any pain, but because of its greater use of the free market system the McCain Plan will ultimately be less expensive and more efficient.

Guest
Saurabh Jha
Apr 4, 2015

“Overall spending will fall with a move towards a real marketplace. Add to that the subsidies we see in the ACA and total out of pocket expenses will fall as well.”

Allan, even if this happens it will not happen overnight. This means that someone who wasn’t paying out of pocket at T=zero (present) will pay more out of pocket at T1 (market hasn’t corrected), even if at T2 (utopia) it will cost less.

It seems the concept you seem to struggle to grasp isn’t really a concept but a time horizon – the time between the status quo and market correction. I’ve seen this phenomenon in fundamentalist theists who seem unable to grasp that the long road between imperfection and perfection may be rockier than the starting point.

“One can’t prove a negative. Did you know that?”

I didn’t ask you to prove I asked you to respond to my critique and critique of others that healthcare is different. I know you’re no Pythagoras but was giving you an opportunity to show off your inner Hayek and Hazlitt.

Instead of proving, you keep repeating “market, market.” Is that your definition of intellectual rigour? Then at least go and read Milton Friedman and use his arguments verbatim.

“In many ways the McCain Plan was fairer and did not use the type of coercion seen in the ACA. It also permitted the marketplace to function better.”

Define coercion. Tell us how healthcare can be a regulated marketplace without coercion. What’s the difference between regulation and coercion?

Or are you suggesting that HC should be completely unregulated?

Guest
Allan
Apr 4, 2015

Allan: ““What makes you think “out of pocket pay” would rise? What are the economic principles behind your belief?”

Saurabh: Are you seriously asking me this question?”

Maybe I shouldn’t have. To date your comments have been based upon personal whims rather than principle.

I’ll change the question. What are your whims behind your beliefs? I’ll guess one. You are more interested in process than results.

“When you have to pay out of pocket, the out of pocket contribution rises.”

Overall spending will fall with a move towards a real marketplace. Add to that the subsidies we see in the ACA and total out of pocket expenses will fall as well.

“why do you think HC is not atypical case for markets?”

One can’t prove a negative. Did you know that?

But, one can prove a positive and prove that HC is different enough from other different sectors of the market that it has to be treated differently. So far you have tried and failed to make your case following which you played your magicians trick and disappeared.

There was no applause upon your disappearance. Can you prove that?

The real question is are there certain features in the healthcare sector that make it impossible to treat like the other sectors of the economy? The answer to that is no despite your protestations based upon whim instead of principle. I exclude public health because that is different.

You required something concrete to bash so I provided the McCain Plan, a major alternative to the ACA. Apparently you can’t bash it so all you say is “Nebulous fluff”. That’s a typical answer for one that lacks the ability to do so. Though I am not promoting the McCain plan it was innovative. Innovation is something the ACA is generally oblivious to. In many ways the McCain Plan was fairer and did not use the type of coercion seen in the ACA. It also permitted the marketplace to function better.

Now you can retort with a bunch of insults.

Guest
Saurabh Jha
Apr 3, 2015

“What makes you think “out of pocket pay” would rise? What are the economic principles behind your belief?”

Are you seriously asking me this question?

When you have to pay out of pocket, the out of pocket contribution rises.

“Over 300 million Americans together have more knowledge of what they need than one bureaucrat.”

This is asserting, repeating oneself. “God is true. God is real. God is indisputable.”

My question is:

why do you think HC is not atypical case for markets?

You haven’t answered it.

“The McCain Plan permits industry and individuals to negotiate their common needs. That leads in the direction of marginal costs and a quality desired by the public.”

Nebulous fluff.

I see, btw, you have substituted “socialist” with “collectivist.”

You cheeky swine!

Guest
Allan
Apr 3, 2015

“See my post about revolt of Harvard Professors.”

What a cop out. You already wrote it so it should be easy to provide your basic argument here and the citation along with the paragraph number. I already spent too much time on one of your other articles which I found to be inadequate and superficial.

What makes you think “out of pocket pay” would rise? What are the economic principles behind your belief?

““The warranties discussed were on cars.”

I had hoped you would have transported some of those principles to health insurance.”

The answer was provided in my response so I will quote that answer: “The point was not in the use of warranties rather that the marketplace finds solutions. It is innovative.”

It is not faith. Over 300 million Americans together have more knowledge of what they need than one bureaucrat. The over 300 million people are the marketplace. But I recognize collectivists don’t understand the marketplace and need a leader to do their thinking for them.

You seem to need something more concrete to bash upon than principle (economic or otherwise) because principle seems not important to you in this discussion.

A concrete example is the McCain Plan. Compare that plan to the PPACA. Take note how the McCain Plan, which I present not as a solution rather as a comparison, is innovative while the PPACA is old hat utilizing old methods even some that have failed before. The McCain Plan permits industry and individuals to negotiate their common needs. That leads in the direction of marginal costs and a quality desired by the public. Not perfect, but certainly a much better way to manage healthcare than the PPACA. It can be considered more equitable even by collectivists since higher bracket individuals get no more benefit than those in lower brackets.

Guest
Saurabh Jha
Apr 3, 2015

“What makes you think “out of pocket pay” would rise?”

See my post about revolt of Harvard Professors.

“The warranties discussed were on cars.”

I had hoped you would have transported some of those principles to health insurance.

“The point was not in the use of warranties rather that the marketplace finds solutions.”

In other words you have no clue, just faith. That’s fine but you should have said so.

Anytime I ask: how will the market solve this problem in healthcare?

You reply: it will solve it.

This is why we have an impasse. You offer no specific counter reasoning to my specific case that healthcare is not a typical market; just faith.

And if I want to deal with believers I’d much rather visit a Hindu temple. We have too many gods already. I can’t add another.

Guest
Allan
Apr 2, 2015

1) “(which means more out of pocket pay”

What makes you think “out of pocket pay” would rise? The level of payment today is very high and we are noting that many do not believe the price is worth the insurance. I believe they are right. The insurance being offered by the ACA is inefficient and over priced.

Total healthcare costs will fall dramatically with an improved marketplace.

2) You made a point as to why the marketplace would not work in healthcare. You utilized Akerlof for that argument, asymmetric information, bad drives out good in the used car industry pointing to lemons. Akerlof’s thesis was right, but the market place had a solution, the warranty.

The warranties discussed were on cars, because cars was the example used. The point was not in the use of warranties rather that the marketplace finds solutions. It is innovative.

3) I debate what was written in the present blog and the responses. I don’t debate distant arguments where I was not a part. I am sure a person with your literary skills can summarize the argument and present it here.

Guest
Saurabh Jha
Apr 2, 2015

1. “How” asks how are you going to persuade the voters to vote for market-centric healthcare reform (which means more out of pocket pay)?

2. I asked “warranties on what?” It was unanswered.

3. http://thehealthcareblog.com/blog/2013/12/31/how-can-patients-on-medicaid-possibly-be-worse-off-than-those-who-dont-have-insurance/

See my discussion with RadsDoc64. Ambulances and market segmentation.

Devil is in the detail.

Guest
Allan
Apr 2, 2015

“The question is how?”

The question of ‘how’ has been discussed, but your default position has been why in the healthcare sector the marketplace doesn’t work so that the collectivist mentality must rule. You went as far as not rejecting the idea that as a physician one should be a servant of the state rather than a servant to one’s patient.

Despite man’s experience with insurance over the centuries and longer you rejected the idea that insurance could function in a voluntary market. Your poor use of Akerlof’s theory, bad driving out good in the used car industry (lemons) led to your disappearance from the scene when the idea of a warranty was presented.

Once again you are obfuscating instead of discussing. It’s a bad habit.

Guest
Saurabh Jha
Apr 1, 2015

“When you think you can control yourself we can discuss the merits of the marketplace as opposed to socialism.”

That was never the contention.

The question is how?

Guest
Allan
Apr 1, 2015

“Will you oblige, old chum?”

Of course. I am used to dealing with children even those with $2 words that need assistance with topical ideas. Are you that gentleman’s charge? I give you high marx for your language skills but it is time for you to improve your critical thinking ability.

When you think you can control yourself we can discuss the merits of the marketplace as opposed to socialism.

Guest
Saurabh Jha
Apr 1, 2015

Allan,

I have a friend who is looking for a genuine parrot as a pet for his little toddler. I recommended you.

I told him you’re harmless and can be quite a charming perroquet.

I warned him that several times a day you might say “Marr Ket” and “Nobama.”

He is fine with that and promises not to ruffle your feathers by asking questions.

Will you oblige, old chum?

Guest
Allan
Apr 1, 2015

“Allan, how are you going to get more marketplace, less socialism? Intrigue me with your prescription don’t bore me with your witless banality.”

You are like a kid using $2 words, but going nowhere. We’ve gone through this over and over again from blog to blog. Your counterarguments to any of the many marketplace solutions failed every time and then poof you are gone. You can pick up what you are looking for on any of the many blogs previously under discussion.

When you are more interested in true discussion and less with $2 words used to insult let me know.

Guest
Saurabh Jha
Apr 1, 2015

“The answer is simple, more marketplace, less socialism.”

Allan, how are you going to get more marketplace, less socialism?

Intrigue me with your prescription don’t bore me with your witless banality.

Guest
Allan
Apr 1, 2015

“allan, how do we solve it old chap?”

Saurabh old chap, a tiny suggestion… get your ears cleaned. We have gone this route over and over again and you ask the same question just like so many of those seniors with short term memory loss. You are awfully young to suffer the same.

The answer is simple, more marketplace, less socialism.

Guest
Saurabh Jha
Apr 1, 2015

“Saurabh, did it ever occur to you that there is too much top down control?”

allan, how do we solve it old chap? Solution. Enlighten us.

Guest
Allan
Apr 1, 2015

“how we can solve the “but for poor decision making at the top.””

Saurabh, did it ever occur to you that there is too much top down control?

Guest
Saurabh Jha
Apr 1, 2015

“Dreamers frequently require that type of help.”

As you are in such a helpful mood can you tell us how we can solve the “but for poor decision making at the top.”? That is get the people at the top to make better decisions.

Guest
Allan
Mar 31, 2015

“Why has no one thought of this before?”

Your answer didn’t demonstrate recognition of this so I was just helping you get up to speed. Dreamers frequently require that type of help.

Guest
Saurabh Jha
Mar 31, 2015

“There is no need for all this to happen in the first place but for poor decision making at the top.”

Genius.

Why has no one thought of this before?

Guest
Allan
Mar 31, 2015

“Society pays the price.”

That is what happens when you dream and say “Doctors will just have to take it on the chin…”

There is no need for all this to happen in the first place but for poor decision making at the top.

Guest
Granpappy Yokum
Mar 30, 2015

CONCORD study is only 5-year survival rates, not the most important number.

Guest
Allan
Mar 30, 2015

It would be nice to have longer studies, but we both know the problems involved and the costs. Many times a longer study would show even greater divergence, but I am satisfied with this one. Those that died during the study period won’t suddenly become alive.

Guest
Allan
Mar 30, 2015

If we averaged the rankings of the CONCORD study (one of the few good international studies) comparing a few cancers in 29 (leaving Cuba out) different countries we would find Canada does quite well (from memory). Ratings from 1-29.

The US would rank ~1.4 #1
Australia ~ 3.4
France ~ 3.6
Canada ~4.0

Guest
Perry
Mar 30, 2015

An excellent, thoughtful review of the major conundrums facing modern healthcare.
“High quality doctors don’t order MRI for back pain immediately, reflexively and incontinently.” Nice pun by the way.

I am reading “America’s Bitter Pill” a very insightful and balanced review of how the ACA came into being. Thanks to Senator Harry Reid, there is no provision for tort reform in the ACA. This is just one example of the complexity of “reforming” health care in this country with numerous groups having much at stake, this one being the Trial Lawyers.
So, doctors now have to take the position for “population health” and how do we reduce spending not just for our single patient, but the whole country.
And, by the way, spending and costs are different. Spending relates to how much money we are putting out for medical care, treatments, scans, etc. Costs refer to how much we are actually paying for those services. So while institutions like Kaiser and other ACOs may be attempting to curb spending by not ordering unnecessary tests, are the costs for those tests really going down?
Several things to consider:
1. Should physicians be responsible for lowering health care spending for the whole population, or should they concern themselves with spending/cost issues for each patient individually?
2. With no provision for tort reform, how do we expect some sort of protection for following EBM and guidelines? I do understand that ultimately the physician is and should be responsible to order the test if he or she feels that symptoms or physical findings so warrant it.
3. If the cost of an MRI was significantly less, those that we really think need the testing should be able to get it. How much do MRIs cost in Japan?
How much in Sweden or Germany? How much in Canada?
4. We need to address patient expectations. I bet there are significantly less MRI machines in most of the rest of the industrial world, not one on practically every corner as here. We also have the issue of overuse of pain medications and antibiotics, some because some physicians are too lazy or do not want to challenge patients, others because patients receiving medical care expect and want some type of script for their troubles.

Think of this,
The legal profession looks at the client as the ultimate and sole receiver of the attorney’s services. So the attorney is “client centered”. Whatever is done or needed must be aligned with the client’s wishes and his/her ability to pay.
This was the way with medical care many years ago before the infusion of third parties. Now the whole focus of medical care is supposed to be patient-centered but not the individual patient, the whole potential population of patients. As one of the “dinosaurs” I am not sure I am ready for this transition, and, is this what we really want of our system?

I am sure there are many nuances to this case, and to be really instructive, should be reviewed before making any rash judgment as to the physician’s
guilt or innocence.
However, I don’t think this will be the last of such cases.

Guest
Saurabh Jha
Mar 31, 2015

“Nice pun by the way.”

😉

BTW, I’m also reading Brill’s book. I’m third of the way through. I think he is nailing it.

Guest
Perry
Apr 1, 2015

I like the book because it’s not a typical “Fox News” diatribe on how horrible Obamacare is (for the record, I didn’t like it to begin with anyway).
I’m not sure I agree with Brill’s final conclusions about major hospitals becoming insurers, but maybe he has a point about putting the foxes in charge of the hen-house. I would be concerned about irrational rationing of care as in the case above.

Guest
Allan
Mar 30, 2015

“are the costs for those tests really going down?”

Perry, that is the real issue. for costs to really come down (as opposed to rationing and cost control potentially reducing quality) we need innovation, something that is inhibited in a top down system especially where the decisions are political. That is why our costs keep growing to amazingly high levels. Government either through entitlements, subsidies, tax benefits and legislation controls too much of the healthcare sector and thus the needed innovation doesn’t occur. Look at our entitlements, Very little has changed despite the tremendous change in technology we have seen over the decades.

Guest
Perry
Mar 30, 2015

Well according to Brill ( whose book is not Tea Party propaganda) he doesn’t see care becoming more affordable for most Americans with the way the ACA was put together.

Guest
Jimboramameister
Mar 30, 2015

To summarize the health care debate in America: “Right care” is the tests and treatments I and my family need. “Waste” is all that stuff doctors and hospitals are doing to everyone else.

Guest
Saurabh Jha
Mar 31, 2015

“Waste” is all that stuff doctors and hospitals are doing to everyone else.

Pithy.