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POLICY: Can the real HSA fan, please stand, please stand up?

Greg Scandlen commented on the Grace-Marie Turner article, and as he’s a big player in the HSA wars, I thought I’d reply back in the main blog rather than in the comments. Greg and his ex-AMA buddies have their nice little "consumer" organization — you did realize that a consumer organization should be founded by ex-insurers and doctors, don’t you? After all they are the people with consumers’ best interests at heart! (Stop singgering in the back there…)

Greg seems to think that I believe that "every dollar currently spent on health benefits was necessary and efficient." Not quite sure that he’s been following this blog closely, such as some of my "criticisms" of physicians, that caused a minor fuss over my use of the term “waste motion” to describe 30% of the healthcare system’s behavior. I of course fervently believe that there’s huge waste in our system, but only a small small fraction of it is in the admin back and forth that happens between insurers and physician offices. That is the part of the “waste” that he thinks HDHPs and HSAs are going to drive out of the system. He is of course wrong, and if he had ever used a HDHP from a major insurer, he’d know.

Unfortunately for the physicians living in their HSA dreamworld, the way that high deductible plans actually work is simply to change who is paying the first few thousand dollars from being the insurer to being the consumer. The fact is that the PPO network and the pricing set up by the insurer is going to continue to be the main vehicle by which assessments against the consumer’s deductible are counted. So the hopes and aspirations of doctors to charge consumers directly without having to submit a claim to the insurer are going to be dashed, unless the consumer is dumb enough to pay up front, and try to get it back from the insurer later. Greg says that “Using an insurance mechanism to pay for routine care is hugely inefficient. It involves massive administrative costs from both the insurer and the provider” and he’s right (Hint: capitation or salaried physician systems don’t have that problem!) But HDHPs are just going to mean that the providers have to come after the consumers instead of the insurers for their money. Unless he really believes that a) consumers are happy to forgo the PPO deals the insurer has cut and pay larger amounts out of pocket, or b) insurers are going to happily count whatever charges providers can get away with against the insured consumer’s deductible, and then be happy to pay any amount above that.  No way that’s going to happen….insurers are not that dumb.  And if you look in Sunday’s Miami Herald, you see a great example of how this works in practice. And the provider in that case, believe it or not, has it somewhat right:

During the conversation, the billing person mentioned that if Stamm was uninsured and paid in cash at the time of her visit, she would have been charged $125. ”So why can’t you just give me the walk-in rate?” Stamm asked. That wasn’t possible, she was told, since they had to go to the trouble of billing her and attempting to collect.

So what are the consumer’s choices? Go out of network, and have the full amount counted against some mythical huge deductible that they’ll never reach. Go out of network and pre-negotiate the cash rate, which won’t be counted against a deductible at all. Or go in-network and take the pre-negotiated PPO rate which they learn from their EOB.  The provider will not know whether or not the deductible has been reached without filing a claim with the insurer, and they’ll go through the same bullshit they do now with the insurer deciding to allow the claim or not, and deciding what the patient should pay. Then eventually the provider will have to come after the consumer for their share. So essentially all this movement does for  providers is give them the added role of collection agents. Come to think of that, collections is probably a good business to get into!

The alternative is that the insurer will sell a high deductible policy, pay every dollar after the deductible, and just take it on faith that providers and consumers/patients will only send them the post-deductible bill, and that they’ll be scrupulously honest about the bill they’ve run up below the deductible at usual, customary and of course totally reasonable rates. Get real, people. The insurer has to count up to the deductible somehow! And that means administrative waste!

Meanwhile the rest of Greg’s comments are, I’m afraid, as equally muddled.

And first dollar coverage encourages needless spending. This needless spending can be curbed by rationing, or by demand-side behaviors. We tried rationing with managed care, and it works pretty well to hold down costs, but it was pretty unpopular. So now we’re trying to affect the demand side — getting people to make their own trade-offs.

Even his fellow travelers at Cato admit that most of the “needless spending” happens well past the deductible, (not that they have a solution for it). But apparently we’re only going to get at that with by impacting the demand on the first few thousand dollars of an individual’s spending, even though the literature and common sense show that there’s no market mechanism for that, that the reduction in services received is equally for necessary as well as unnecessary services, and that of course this disproportionately impacts those with lower incomes. But hey let’s do that anyway. It won’t make much difference overall. And while Greg thinks that we may have tried rationing via managed care, we didn’t try it properly (perhaps he missed Enthoven’s rants on the subject), and the insurance industry has shown in the last 5 years that it’s much better at risk-selection and raising prices than doing care management. (I’m in favor of rational versus irrational rationing, but that’s a different discussion).

Meanwhile, I’m still fascinated to discover what the HSA promoters really do believe, beyond those in their number who like making money off heavily underwritten, high-margin HDHPs. In her interview with me Grace Marie was going on about all kinds of non-HDHP related activities. Greg says:

HSAs are not the be-all-and-end-all of health care reform. But they are an enormous step in the right direction, and they will help bring about other changes like a demand for reliable information from consumers, greater accountability on the part of providers, and new more efficient ways of delivering care.

And he wants to promote HSAs in Medicare too! The first part of his plan, which is to convert Part B premiums and the deductible for Part A to one larger deductible, may not be too bad an idea, so long as there is continued help for those for whom the increase in deductible would be a real hardship (those with lower incomes but not dual eligible). After all that concerns private spending on Medicare recipients.

It’s the public spending on Medicare recipients that I’m concerned about. As far as I understand the plan, if a Medicare recipient who chooses to moves to a HDHP gets the difference between what they spend and the average, put as cash into their private account.Any savings to the Medicare program would be converted into a cash deposit to the beneficiaries’ HSA account.” It’s bad enough HDHPs destroying what’s left of the community-rated risk pool in the individual market, and giving employers an excuse to get out of providing health benefits. But that process was well underway anyway, so honestly it’s not that big a deal — not that I’m going to stop calling its advocates on it.

But now Greg wants to remove money from the Medicare risk pool to give it to healthier than average Medicare beneficiaries. 

The per capita premium and deposit would need to be risk-adjusted at least for age and geography, much as CMS currently does for Medicare Advantage plans.

Well here as a tax payer I must object. Every time Medicare has split its risk pool so far, it’s basically handed over more money than “sickness” to the private sector plans. And don’t take my word for it (although common sense and the retreat of private plans from the Medicare program when payments were cut in the late 1990s should be proof enough) because the GAO has said so twice. (Read down here for the details). And now Greg wants us to allow the healthy people to pull out actual cash, leaving proportionately more sick people, more demand, and less money in the traditional program for the taxpayer (or as the current Administration’s accounting would have it, the taxpayer’s children and grandchildren) to pay for. Thanks.

Funnily enough Greg’s being hanging out with Grover Norquist lately (Apr 4 entry here).  That whole notion about drowning the Federal Government in a bath tub must be catching. This goes to the whole notion of deliberately destroying a risk pool, except that unlike in the case of the private insurance market where the poor uninsurable sucker gets stuck with the problem of having to deal with the extra costs, this is one that the taxpayer will pick up. I thought these “conservatives” were in favor of lower taxpayer spending! (OK, I know in real life they just are in favor of lower taxes for the very, very wealthy…but that is their rhetoric).

I would still love Greg, Grace-Marie or anyone to take the challenge of explaining how I’ve got my math wrong (read down in this example) when I say that handing out cash into private accounts from a common insurance pool means that someone else has to pay in to the pool to provide care. It’s an explanation we commies have been waiting for, and we’re still waiting. Just because the private market doesn’t really have large community rated pools any more doesn’t make the theory wrong, and when they want to do this to Medicare, they are talking about a large community rated pool.

And if they don’t really believe that HSAs/HDHPs are the “the be-all-and-end-all of health care reform” what the hell do they believe? They don’t seem to talk about much else. Don’t they have an overall policy solution for the market. Their rivals in the single payer and the managed competition crowd do. At least those two groups are having a rational disagreement about how to cure the same problem, and have been saying the same thing since the 1980s. Of course, in our bizzarro world they never get any attention, and the pro-HSA crowd is ruling our political rhetoric.

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  1. “Anyway, this link to a discussion of HSAs lists seven problems presented by critics. I’d be interested in your response to each. Thanks.”
    Steve
    Steve,
    It’s been a busy couple of months. I’ll gladly respond to your 7 HSA “problems” that you have linked in your post.
    1) “Healthcare costs aren’t raising because people go to the doctor too often; it’s because of more expensive procedures still being driven by consumer driven health plans.”
    This is partly true. The fact is, everything goes up in price at some point. It’s called inflation and technology. However, the network’s negotiated rates for procedures, office visits, ER visits, UC visits, etc. are considerably lower for a person IN the network ( someone with health insurance and a supporting network of providers ) versus someone with NO health insurance who won’t GET that negotiated rate. The fact that you use HSA funds to pay for these things with PRE TAX dollars can only be a GOOD thing. You get more bang for you buck, and any money you don’t use in the HSA rolls over for next year.
    2) “It is doubtful that shifting to higher deductible plans will reduce healthcare inflation, and whether the government should encourage this trend with tax cuts.”
    Doubtful? If you go to a higher deductible plan, the insurance company is paying less for you up front. FACT: Most people don’t hit a 500 deductible in a years time. The less money the insurance company pays out, the better for them. They get less premium, but they also have less payout to the client. It’s a win/win, except for the broker above the agent who gets a lower bonus. The government should and IS backing HSA’s because it’s a great benefit, for ANYone, not just the middle class and higher. Why pay more than you have to for health care and health insurance?
    3) “It is unrealistic for the typical consumer to make complex decisions about what forms of care are worth the expense, which would result in people not receiving the care they need, including essential preventive medical care. Poorer workers and people with chronic illnesses will suffer the most.”
    What? So we’re all stupid? I hardly think so. The problem is that the vast majority of consumers and business owners have been duped into thinking that their current method of providing insurance for their employees is the best way, and it really isn’t. And poorer workers and people with chronic illnesses will suffer the most? The poor have other options. Those with chronic illnesses have other options. Why don’t most people hear about them? There’s no COMMISSION for these plans. What motive does a commission based agent have to tell someone about a plan that he gets no compensation for showing them? It’s all about the distribution model, and it is severly flawed, from top to bottom.
    4) “Current healthcare quality indicators used today do not strongly motivate consumer choice of providers{2} The type of information available to for selecting providers is sparse and suspect.{3} And transparency of cost and effectiveness is problematic.”
    What does this have to do with HSA’s? Choosing a provider has nothing to do with an HSA. Transparency of costs and effectiveness? Clearly, a politician somewhere who is against HSA’s for whatever reason, wrote this one.
    5) “The uninsured people will not be helped because they do not face high-enough marginal tax rates to gain much benefit from the tax deductions. And if many healthy workers to give up their employer-based coverage, it could undermine the entire structure of employer-based coverage in small firms.{4}”
    Again, what is the problem? If a person doesn’t make enough money to SAVE enough money… another politician line pandering to the poor. Any pre-tax savings is still pretax savings. IT also makes it easier at year end to do your taxes. Instead of itemizing your healthcare costs, just toss in the amount you put into your HSA on the appropriate line on your return. And undermining the employer based small firms? What in the workd do you think is happening RIGHT NOW? Group insurance plans are KILLING employers. It’s the worst buy in America, with fully funded DENTAL plans coming in a close second.
    6) “Families already struggling with high out-of-pocket healthcare expenses will likely have to devote an increasingly larger share of their budgets to healthcare. Even Medicaid beneficiaries, who have generally been protected against high costs, are at risk, and the most vulnerable families may face high debt, bankruptcy, or loss of insurance as consumer co-pays increase.{5} People are significantly greater chance of spending a large share of one’s income on out-of-pocket health care expenses than with comprehensive health plans. {6}”
    Ok, so someone high up on the ladder at one of the major carriers must have written this one. If you are an employer, I guarantee you that the majority of your people aren’t using their benefits completely. Why? They don’t need to; they aren’t sick. And I can show you how to keep the same copays for your employees, actually provide the same benefits all the way around, for less out of pocket expense TOTAL for the year, than you are paying now. It’s not rocket science; it’s knowing the rules, and knowing how to play the game. For those that are self employed and NOT part of a group, I’ve got good news. I can save you even MorE money. If you are using an HSA and are married, and are a business owner, I can show you how to REALLY save at tax time and on your bottom line for your healthcare costs.
    7) “* While they may benefit young and healthy workers without dependents, the wealthy, and employers who can shift costs to their employees, HSAs hurts others since they run counter to “the premise that the community has a responsibility to care for all members … HSAs are a sham substitute for comprehensive reform.”{6a}”
    What?! An HSA can ONLY be a good thing. It’s using pretax money to pay for things. And employers who are shifting more of the cost to their employees don’t have to do that… again, you just need to know all the rules. Obviously, if you think that setting up HSA’s and raising deductibles is putting more risk on your employees, you do NOt know the rules and how to play the game. Anyone here who wants to know how this is possible, needs to email me. I have some information that many CPA’s I meet with… the majority of them… even those who have been in the business for 30+ years…. are not aware exists. Most are shocked to learn what I can show them in terms of what is possible.
    In summary, HSA’s are a GREAT method for people to save money. They are best for a young single person. For others who are married, these is another option that is even better for them, especially if they own a business.
    Keep in mind, we are looking at two different points of view here. For an employer, HSA plans are good as long as he does not FUND them. Let the employees do that, tax free through their 125 plan. It’s portable, and it’s limited as to how much you can fund.
    For a person looking for their own best option, if they are single, an HSA is the best option. If married and own a business or self-employed, there is a much better option that is UNLIMITED and UNCAPPED and provides even more write-offs than an HSA.
    There IS no health insurance crisis; it’s all a bunch of hot air being bellowed out by big insurance companies to keep the vast majority of America from asking questions.
    “Why are my rates going up for now reason?” Must be the crisis.
    Tim Hare
    President, TH & Associates
    Mason, OH

  2. Great string. Will be adjusting some of my practice based on the points discussed. Take care.

  3. > California is the only state with a staffing law
    No, it isn’t. Of course, this won’t solve the problem of the absolute number of nurses.
    I wonder if this is the natural experiment to show whether increased staffing actually leads to reduced errors as has been asserted to justify these laws…
    t

  4. Tom:
    The California Nurses Association pushed through this legislation in 1999. They threatened to strike if it were not enacted.
    The California Nurses Association is hardly a group of policy makers, and they were opposed every step of the way by virtually everyone else including the governor. Indeed, in 2005 the California Supreme Court declared the the governor did not have the power to block implementation of the law as he had been doing.
    So, California is the only state with a staffing law and it was opposed by virtually every other player in the healthcare system. I don’t think that this demonstrates a concern on the part of policy makers for the well being of hospitalized patients.

  5. > The paper work IS her job, not the care of the
    > patient.
    > I don’t disagree that paperwork is a problem, but it
    > is administrative paper work, not paperwork that
    > contributes to the well-being of the patient.
    Who says paperwork, even administrative paperwork, does not contribute to the care of the patient? And who says non-administrative paperwork necessarily does?
    It is apparently true that nursing tore a page from the software engineering playbook in order to enhance its professional standing. Back around 1980, software engineering got very “documentation oriented” and the mark of the True Profssional became not how much solid, working code he produced, but rather how many reams of documentation concerning the code not (yet) written he’d produced. Only a True Professional would bother with being so very thorough, not like those cowboy code-slingers over there, no sir! I understand the same thing happened in nursing at about the same time, for approximately the same reason. We started getting nursing notes like “I entered Mrs. Smith’s room this morning at 7:23 a.m. to check her dressings and help her toilet. She sneezed once, and seemed sleepy. I said ‘God bless you’…”
    But the strategy bit both groups in approximately the same anatomical area. In software engineering, we got Extreme Programming, and in nursing we got Charting by Exception.
    > What states have laws about staffing ratios
    > and what are the laws? Are the staffing ratios
    > realistic?
    California, for one. My understanding is the nursing profession lobbied for the law, and I presume the staffing levels are realistic, but I don’t have the expertise to comment. California takes into account both census and acuity at least at a gross level. I know Missouri mandates staffing levels for nursing homes, but I think this was driven by the legislature following the nursing home horror stories of the 1970s rather than by professional groups. The legislation is probably modeled on what other states were doing, and on what the professional groups said ought to be done in their journals. Again, I presume its realistic, but haven’t the expertise to comment.
    In any case, your point was that “no one” in policymaking positions has been concerned for making sure there is adequate staff to take care of patients and my point is that this simply isn’t true.
    t

  6. Amy: “Are the staffing ratios realistic? Are nurses being floated to departments where they have no experience to meet the staffing requirements? If so, that’s virtually the same as understaffing. Are per diem nurses floating through the hospital from department to department to meet the staffing requirements? That’s also a recipe for disaster.”
    If the group is willing to mention additional kinds of troublesome practices and policies typically existing in facilities and doc’s offices, I will compile a list of clinical/patient-related things a transformed healthcare system should change.
    Here’s a few I’ve noticed in the mental healthcare field when I was practicing psychology:
    • A diagnostic system (DSM) that was largely useless in making treatment determinations
    • Insufficient integrated care (i.e., medical and non-medical collaboration; failure to focus on mind-body interaction in the medical field)
    • Difficulty determining when an emotional problem had an underlying physiological cause, and visa-versa
    • Wide variation in treatment methods/techniques/procedures and lack of a valid, clearcut way to determine the most cost-effective approach for any particular patient
    • Lack of an effective system for managing continuity of care
    • Lack of precision in prescribing psychotropic meds
    • Insufficient services for helping the chronically, severely mentally ill outpatient in the community
    • No widespread use computers for diagnostic and treatment decision support
    • Lack of clinician-practitioner collaboration and failure to do wide-spread outcome studies in the field
    • Use of assessment tools (questionnaires) that gave little insight into the nuances of a patient’s particular problems
    • Discharge from hospital often apparently tied to insurance coverage, not patient need.

  7. pgb:
    “My presumption that the Harvard data is biased will be hard to prove.”
    So, then, we will have to assume that it is true unless someone shows us a good reason why it isn’t.
    “I find it interesting that when I am in the OR the OR nurse dedicates nearly 50% of her time to record keeping rather than the care of the patient.”
    That’s quite disingenuous. You know as well as I do that it is not the job of the circulating nurse to take care of the patient. That is the job of the anesthesiologist. The job of the circulating nurse to throw out instruments and sponges, to count them and to make sure they are all present at the end of the case. She is supposed to be recording this at all times. The paper work IS her job, not the care of the patient.
    I don’t disagree that paperwork is a problem, but it is administrative paper work, not paperwork that contributes to the well-being of the patient.
    “But as a PRACTICING surgeon I do have a finger on the pulse of the US healthcare system and have seen the absurdities that have been forced down the throats of the doctors over the past few years.”
    That’s not what we’re talking about though. We are talking about whether are healthcare system is in great shape and it’s not. In fact, it is so broken, it boggles the mind. It may be that until you are a patient with a serious illness, you may not realize it.
    No one has argued louder than me against some of the administative regulations that are counterproductive and don’t save any money anyway. This hardly leads to the conclusion that doctors aren’t causing quite a few problems on their own. The level of arrogance among doctors can be absolutely horrifying. The bottom line for doctors is that the LAST thing any doctor worries about is the experience of the patient. We’re taught to make patients better and if they have to wait hours to see us, it’s their tough luck.
    Do you round at dawn? I’m sure that’s very convenient for you, but it is obnoxious to the patients who deserve to sleep and deserve to be wide awake when visited by those who are making decisions about their care. Do you routinely keep patients waiting hours at a time in your office or the ER? These delays are almost always avoidable if some thought is given to scheduling for patient convenience as opposed to scheduling for income. Do you make patients wait at home for hours before returning their phone calls?
    Why am I so sure you do those things? I’m sure because almost every doctor does these things, and I did them, too. There are a million things on the mind of a practicing doctor, but patient experience isn’t one of them.
    Tom:
    “False — in some places the concern is even enshrined in the civil law in the form of staffing ratios. Hospitals sometimes close floors for a lack of staff, and not necessarily a lack of demand.”
    Civil law? What states have laws about staffing ratios and what are the laws? Are the staffing ratios realistic? Are nurses being floated to departments where they have no experience to meet the staffing requirements? If so, that’s virtually the same as understaffing. Are per diem nurses floating through the hospital from department to department to meet the staffing requirements? That’s also a recipe for disaster.

  8. Tom: “we’re trying to do 21st century medicine with 19th century organizational designs and processes.”
    PGB: “Causes of the errors are multifacotorial…We now have a separate sheet for IV abx orders that probably is a significant improvement for patient safety.”
    So, changing organizations designs and processes — like having a separate sheet for IV abx orders — can reduce errors significantly.
    Having healthcare organizations designed to focus on identifying, studying, and learning from mistakes; to put new processes into place based on what they learned; ceaselessly striving to gain new knowledge and implement it in new evidence-based guidelines/standards and innovative (HIT) tools aimed at eliminating errors (improving outcomes) and increasing efficiencies — Now THAT’S what ALL facilities and clinicians ought to be doing!
    Learning organizations — continuously evolving, innovating, seeking to uncover problems and inefficiencies and changing the way they do things when improvements are possible — would go a long way in bringing the healthcare industry into the 21st century and solving the crisis we’re in. I just wish it wasn’t so tough for people to let go of the status quo, break inertia, and embrace new ideas and practices.
    Who would be the winners and loosers with such a paradigm shift? I know patients would be winners.

  9. Amy:
    My presumption that the Harvard data is biased will be hard to prove. But as a PRACTICING surgeon I do have a finger on the pulse of the US healthcare system and have seen the absurdities that have been forced down the throats of the doctors over the past few years. I still use the abbreviations cc and d/c and I am proud of it. I will admit though, the rate of medical errors in my hospital have declined nearly 50% in the past couple of years. So the system is improving.
    Steve:
    The autopsy study is a great study and probably free of bias due to its design unlike many of the others quoted. Looking at the autopsy study it is quite impressive that 80% of the time the doctors got the dignosis correct. Often times these very sick ICU patients have multiple problems going on so that may account for some of the 20% that were “incorrectly” diagnosed.
    Causes of the errors are multifacotorial. I know of one case in my department that occurred before I arrived that involved the misinterpretation of a gentamycin dose IV with the patient receiving 3000mg at once!! Patient survived but ended up with some hearing loss. Why did the pharmacist fill such an order?? Was the doctor’s handwriting that bad? Did the nurse know what a typical dose of gentamycin should be? Multifactorial like I said. We now have a separate sheet for IV abx orders that probably is a significant improvement for patient safety.
    Tom:
    I think it is already giving.
    PGB

  10. > What happened to my Dad is malpractice
    And your son!
    > There is a limit to the number of patients that
    > can be cared for by one person.
    True.
    > No one seems to be concerned about this.
    False — in some places the concern is even enshrined in the civil law in the form of staffing ratios. Hospitals sometimes close floors for a lack of staff, and not necessarily a lack of demand.
    > Have you seen any studies comparing
    > increased patient processing with safety data?
    No — that’s what I was asking about. I bet there was no data collected at all before the 1980’s, so we can’t know whether errors are increasing, staying the same, or decreasing over long spans of time. All we can say is in 1999, there were 100K avoidable deaths per year, and now there are apparently fewer even in the face of increasing complexity(!). But there’s a way to go, and the goal should be zero.
    I think we agree on this: we’re trying to do 21st century medicine with 19th century organizational designs and processes. Something’s got to give.
    t

  11. Barry: “The key question each group [of stakeholder] needs to ask itself before coming to the table is: what changes are we prepared to make that will cost our group money and/or power in the short run but will make the overall system better for most of us in the long term?”
    An excellent question to focus on! Honest answers to this question will surface hidden agendas, perceived needs (both rational and irrational), and help direct sensible solutions.
    Tom: “I am not sure incompetent doctors should be punished at all. Malicious doctors, sure. The merely incompetent? I am not so sure. I think a role should be found for them that takes advantage of their knowledge and training, and limits their ability to step beyond their capabilities…I think I am for Harm Reduction rather than punishment.”
    Without a doubt! If our goal is to improve care we need encourage accurate outcomes reporting without fear a reprisal and a focus on CQI through learning and objective feedback.
    PGB: “I have seen medical errors but not as many as the MSM or some librule think tank will lead you to believe. Bottom line the Harvard data is biased and any study coming from there has an agenda behind it.”
    Here’s other research on errors:
    • Study shows 44 errors in a 300-bed hospital per day, with 16% being an adverse event ending in death. (Medication Errors Observed in 36 Health Care Facilities, Barker et al. Arch Intern Med. 2002; 162: 1897-1903).
    • The number of deaths caused by medical treatment, usually due to physician mistakes and negative drug effects, are between 80,000 (NCQA (2004). NCQA Report Finds Major Gains In Health Care Quality, But Only For 1/4th of The System. Available at http://www.ncqa.org/Communications/News/sohc2004.htm) and 250,000 (Starfield B. (2000). Journal American Medical Association; 284(4):483-5). These deaths were caused by unnecessary surgeries, medication errors, infections, and negative effects of drugs.
    • One-third of patients with health problems reported experiencing medical mistakes, medication errors, or inaccurate or delayed lab results—the highest rate of any of the six nations surveyed. Consumer Affairs.Com (2005). U.S. Health Care Most Expensive & Most Error Prone. Available at http://www.consumeraffairs.com/news04/2005/medical_errors.html.
    • Studies of autopsies reveal that 20 percent of the time doctors seriously misdiagnose fatal illnesses, so millions of patients are treated for the wrong disease (Leonhardt, D. (February 22, 2006). Why Doctors So Often Get It Wrong. New York Times. Available at http://www.nytimes.com/2006/02/22/business/22leonhardt.html?_r=1&oref=slogin)
    PGB: “I find it interesting that when I am in the OR the OR nurse dedicates nearly 50% of her time to record keeping rather than the care of the patient. I believe this fixation with scribbling everything down onto paper in multiple forms with rampant repetition is one of the root causes for mistakes to happen. The eye is not on the ball (ie the patient) and instead is on a piece of paper!”
    Interesting point. What are the causes of the errors? Poor diagnostic decisions? Overworked clinicians & understaffed facilities? Assembly-line medicine? Too many distractions? Lack of HIT systems to speed and simplify record-keeping? Lack of clinician knowledge and/or skill? Limitations of the unaided human mind? Invalid practice guidelines? Failure to following valid guidelines? …

  12. “Bottom line the Harvard data is biased and any study coming from there has an agenda behind it.”
    Really? Prove it. That means offering actual data, not personal opinions.

  13. Amy:
    “The country is currently being bankrupted by the right wing of the Republican party which holds a death grip on the Executive, the Senate, the House, the Supreme Court, etc. blah,blah,blah.”
    I did suspect, but now I know what side of the isle you fall on. I am sure you will be voting for Hillary in 2008 and hoping she revamps her failed bid to turn the entire US healthcare system into a big bloated beaurocracy.
    “I’m just trying to correct your misaprehension that because you, personally, have not seen many medical errors, you feel free to dismiss the statistics provided by the group at Harvard and by Berwick et al. calculating approximately 100,000 avoidable fatalities per year.”
    I have seen medical errors but not as many as the MSM or some librule think tank will lead you to believe. Bottom line the Harvard data is biased and any study coming from there has an agenda behind it.
    If you want to talk about “reality”, then the NCHS data speaks for itself and no amount of double talk will hide the results. A success!
    PGB

  14. Tom:
    “So your dad’s doc didn’t have time to read a damn report because of an evil manager? Two orthopods ignore two distinct episodes of clearly poor progress in your son because they “don’t have time”?”
    I am saying that if you increase the number of patients that a doctor must see per day, and if you increase the number of patients a nurse must care for on a shift, and if you increase the complexity of their illnesses, and if you increase the amount of new research data you must master and incorporate, errors are hardly unexpected.
    There is a limit to the number of patients that can be cared for by one person. No one seems to be concerned about this. Have you seen any studies comparing increased patient processing with safety data? I suspect that the insurance industry hasn’t even give it a thought.
    What happened to my Dad is malpractice pure and simple, and I never suggested otherwise. What happened to my son involves arrogance and impatience and doctors who can’t give each patient the proper amount of time he or she deserves. The current set up of the healthcare industry rewards quick decisions, not accurate ones.

  15. “I am sorry for what happened to your father and son and I do not mean to trivialize that, but you can not base conclusions for the US healthcare system on anecdotal experiences.”
    I’m not. I am responding to your statement: “I really turn a jaundiced eye toward all the bad “news” coming out about our healthcare system from the Left about medical errors, etc.” I’m just trying to correct your misaprehension that because you, personally, have not seen many medical errors, you feel free to dismiss the statistics provided by the group at Harvard and by Berwick et al. calculating approximately 100,000 avoidable fatalities per year.
    “It is interesting that CNN, ABCnews, and even the dreaded FOXnews do not have this story on their front pages of their websites. This is big news but will be swept under the rug b/c it does not support the MSM agenda that the US healthcare system is in shambles and harms patients!”
    Awww, c’mon, this is just too easy. Go to Google News and type in US death rate declines and you will get 343 separate stories on the subject carried in the last 24 hours. Every major newspaper, network and website is covering the story. Blaming everything on some vast left wing conspiracy that doesn’t even exist is not going to fix anything.
    The country is currently being bankrupted by the right wing of the Republican party which holds a death grip on the Executive, the Senate, the House, the Supreme Court, etc. Nonetheless, the right wing still has a faux persecution complex. There is simply not a shred of evidence that the fabulous news from the world of medicine is being supressed by the left wing media. I suppose it is part of the same faux conspiracy that is supressing all the “fabuous” new from the mega-disaster that is the Iraq war.
    Let’s get back to the topic at hand: the American medical system, costs more, covers fewer people and makes more errors as the years go by. That’s reality. We can argue about who is at fault, but it is infinitely more likely to be various structural issues than some faux conspiracy on the part of the left wing.

  16. On the apparent need for malpractice suit reform. Its short. It says half of malpractice suits are entirely baseless, and only about 4% of people who experience an adverse event or neglect actually sue. With increased transparency, we could eliminate junk lawsuits and have the total number increase ten or twenty-fold. Hmmmmm.
    On an apparent success of a wellness program. It is a big population study/intervention aimed at preventing cardiovascular disease. Claims to have reduced MI by 75% in a big population in Finland.
    Thanks to Health Wonk Review #5
    > My personal suspicion is that many of the medical
    > errors are the results of forcing medical
    > professionals to be more “efficient” by increasing
    > patient loads.
    So your dad’s doc didn’t have time to read a damn report because of an evil manager? Two orthopods ignore two distinct episodes of clearly poor progress in your son because they “don’t have time”? With a knowledgable advocate in all three cases? I do not buy it. A PCP missing something, ketosis maybe, during a visit for another problem (maybe a burned hand) because office visits are seven minutes? Maybe I’d buy that.
    I see the primary problem in hospitals as inefficient processes, extremely poor communication among completely isolated services, a ton of arrogant turf protection, and some ass-covering by means of obfuscation. There may be also some unprofessional behavior in the face of declining reimbursements: i.e. sacrifice quality experienced by patients in order to protect income levels experienced by docs.
    There is plenty of blame to go around for medical errors, and in hospitals I think it falls mainly on managers’ tolerating inefficient processes, extremely poor communication among completely isolated services, a ton of arrogant turf protection, and ass-covering by means of obfuscation. Individual clinicians are in the main doing the best they can in a completely dysfunctional environment, and human frailty being what it is, one cannot be astonished at income-protecting behavior. Those that aren’t should be helped out the door.
    I will admit to having a distorted view: nearly all of my experience with hospitals is from a big academic center, and only a little from a community hospital. I understand that smaller hospitals have fewer problems along these lines, but everything I have learned says it is a matter of degree only.
    I have not seen evidence that errors are increasing in frequency lately: it may simply be that we know about them now. Have we got any insights on this?
    t

  17. We’re living longer, BUT there’s a great disparity in access, our costs are much higher, and we make lots of errors:
    “For people with Medicaid or no coverage at all, access to basic care is worsening, as a result of stalled coverage expansions and service cutbacks. An improving economy could forestall further cuts and permit reversal of earlier ones, but progress in closing this rift does not appear imminent.” A Widening Rift In Access And Quality: Growing Evidence Of Economic Disparities. “Not only do Americans pay much more for medical treatment than anyone else in the world, they also bear the brunt of the most medical errors, according to a survey covering the USA, Australia, Canada, Germany, New Zealand and the United Kingdom. Almost 7,000 patients were consulted.” U.S. Health Care Most Expensive & Most Error Prone.
    How can this apparent discrepancy be explained?
    Well, let’s look at some of the data and conclusions of this mortality research:
    • 27% of the deaths are caused by heart disease (the #1 killer), which declined by 6%, largely by use of medications to prevent it. OK, we have better medications and are using them more effectively. I bet this is a direct consequence of evidence-based practice guidelines being followed more closely in this area than before. A plus for better well care practices and science. It makes me wonder if the benefits of well care would have been greater if there is a corresponding decrease in mortality rate of patients who die due to errors and omissions when receiving catastrophic care.
    • Life expectancy in the US is up a few months, yet people in many other countries are expected to live several years longer than Americans, despite paying substantially less on healthcare. And American blacks are expected to die several years before whites. Might it be that if we had universal coverage and access to top-notch care for everyone, that our mortality rates would actually exceed other countries?
    • There is no indication of quality of life (morbidity) improvement of those living longer. Might it be that we’re living longer, but more miserably? I don’t know.
    So, while this is certainly good news, I cannot say US healthcare system is a great success. What I can say is we have great potential to do great things, but many of our policies and practices are inhibiting/blocking realization of that potential.
    FYI – I’ve summarized key insights emerging from this excellent conversation at Key Insights from Deep Healthcare Blog Conversation
    Steve

  18. Amy:
    I am sorry for what happened to your father and son and I do not mean to trivialize that, but you can not base conclusions for the US healthcare system on anecdotal experiences. Just like the raging debate on whether or not to do routine PSA testing for prostate cancer screening, conclusions should be based on hard data. There is no harder data than the death rates for certain diseases. Prostate cancer death rates have fallen dramatically since the introduction of PSA screening so I conclude that PSA screening is good. The deathrates overall and broken down into various disease types have fallen dramatically according to the above data released by th NCHS thus I must conclude we are doing something right. Quite simple. The deathrate data does not lie.
    As for medical errors, I agree whole heartedly that things need to be improved, but it is not the extreme emergency that the MSM would like you to believe. I find it interesting that when I am in the OR the OR nurse dedicates nearly 50% of her time to record keeping rather than the care of the patient. I believe this fixation with scribbling everything down onto paper in multiple forms with rampant repetition is one of the root causes for mistakes to happen. The eye is not on the ball (ie the patient) and instead is on a piece of paper!
    “Whatever you do, don’t get sick. It’s a nightmare.”
    You should have said, “Whatever you do, don’t get sick IN ANOTHER COUNTRY. It’s a nightmare.”
    I have been in the hospitals in Europe, Japan and Canada and they ARE nightmares compared to the worst inner city hospital in this country.
    “First of all, since when is Fox not part of the mainstream media?”
    It is interesting that CNN, ABCnews, and even the dreaded FOXnews do not have this story on their front pages of their websites. This is big news but will be swept under the rug b/c it does not support the MSM agenda that the US healthcare system is in shambles and harms patients! Hopefully the truth will get out!
    PGB

  19. “The main stream media will down play this data b/c of their single payer/universal healthcare agenda… I think our healthcare system is in great shape and it appears from this data to be significantly extending patients lives. We really should be the model for all the broken socialized European and Canadian systems. I really turn a jaundiced eye toward all the bad “news” coming out about our healthcare system from the Left about medical errors, etc. From what I can surmise, the parts of our healthcare system that need fixing are those that are controlled by the government (Medicare/Medicade). The free market appears to be doing just fine.”
    I’m sorry to say so, but I beg to differ. Have you been a patient lately? The healthcare system is quite broken and it is private insurers who have brought us to this sorry state.
    The “main stream media” is running the debate? That’s absurd. The insurance companies, the drug companies, the device manufacturers, large employers who provide health insurance — these people are running the debate and it is a cop-out to blame this on something as completely ineffectual as the mainstream media.
    First of all, since when is Fox not part of the mainstream media? Second, although much of the mainstream media is to the left of the American public, they have not had much success in influencing anything. Most of the mainstream media clearly thinks that George W. Bush is a moron and they weren’t able to prevent his election on two separate occasions.
    Do not be so quick to blow off medical errors. My own father is dead because of one. In the very hospital where I trained and was an attending, he had a routine pre-op CXR that revealed early metastatic cancer. No one ever looked at the CXR report, and when he presented with symptoms 7 months later, he had massive amounts of adeno unknown primary throughout his chest. He died 8 weeks to the day from his presentation with symptoms, having failed to respond to any treatment.
    One of my sons fractured his humerus severely last year. I could barely leave his side because practically every time I looked away, someone (doctor or nurse) made a mistake. The nursing mistakes were trivial, but the physician mistakes were egregious. One orthopod refused to readmit him several days after his surgery even though he was febrile, had shaking chills and pus coming from his external K-wire tracts. The orthopod insisted that he had the flu (!) and that as an obestetrician, I could not possibly understand what an ortho infection looks like. He was readmitted the next day when he was even more ill. (I know, I know, I should have stood my ground and insisted on admission; I learned though.)
    After pulling the infected hardware, they fitted my son with a brace to immoblize his arm. He had a dramatic increase in pain after the brace was fitted and yet another orthopod and I argued about it over the course of a day. I insisted that a brace that was supposed to hold the arm in a neutral position should not be painful and ultimately demanded an X-ray. The film showed that the brace had knocked the healing ends of the bone apart and the distal humerus was displaced laterally and upward so that it rode a centimeter above the proximal portion. My son’s arm is now almost a centimeter shorter than it was originally.
    I could go on and on and on, but I will spare you. My personal suspicion is that many of the medical errors are the results of forcing medical professionals to be more “efficient” by increasing patient loads.
    I am a big partisan of the American physician, but the system as a whole is falling apart. Whatever you do, don’t get sick. It’s a nightmare.
    I wouldn’t be so quick to criticize the British and Canadian systems, either. They are attempting to do something we would never dare, using less money then we have in our system. They are attempting to provide coverage for all. We conveniently ignore 40+ million people. We have no business chortling about our shorter wait times when a good portion of the population can’t even get through the front door.

  20. Barry:
    The main stream media will down play this data b/c of their single payer/universal healthcare agenda. Ends data is always the true data and cuts through all the politically driven BS. I think our healthcare system is in great shape and it appears from this data to be significantly extending patients lives. We really should be the model for all the broken socialized European and Canadian systems. I really turn a jaundiced eye toward all the bad “news” coming out about our healthcare system from the Left about medical errors, etc. From what I can surmise, the parts of our healthcare system that need fixing are those that are controlled by the government (Medicare/Medicade). The free market appears to be doing just fine. 🙂
    PGB

  21. I guess the US healthcare system is a great success!!!
    I read this story earlier — very good news indeed.
    The story also got me thinking about some of the negative publicity our healthcare system gets for spending a higher percentage of GDP but achieving lower overall life expectancies and higher infant mortality rates as compared to Japan, Canada, and most of the Western European countries. Is the analysis unfair and misleading? Since most of the other countries to which we are compared are far more homogeneous socieities as compared to our diverse society with large numbers of poor, recent immigrants, inner city and rural poor, many of whom may not take very good care of themselves even when adequate medical services are available to them.
    I wonder what these statistics would look like if we compared, say, Canadians in the U.S. vs Canadians in Canada; Japanese here vs Japanese in Japan; Germans here vs Germans in Germany, etc. Perhaps Tom could speak to this, but I get the sense that the U.S. may be getting a bit of a bum rap on these metrics.

  22. I guess the US healthcare system is a great success!!!
    Officials: U.S. Deaths See Largest Drop in 60 Years
    Wednesday, April 19, 2006
    ATLANTA — In what appears to be an amazing success for American medicine, preliminary government figures released Wednesday showed that the annual number of deaths in the U.S. dropped by nearly 50,000 in 2004 — the biggest decline in nearly 70 years.
    Link to the whole story:
    http://www.foxnews.com/story/0,2933,192289,00.html

  23. “Personally, I’d like to see no-fault compensation for all victims of adverse events. That would eliminate the very expensive legal wrangling, and preserve the bulk of each settlement for the actual patient. Furthermore, it would not reward victims for being victimized by doctors as opposed to being victimized by chance.”
    Amy, just to clarify, I assume you are talking about medical events only here. If I, for example, were to seriously injure myself as a result of my own stupidity or negligence, I think I would have a hard time arguing that anyone should compensate me except to the extent that my health insurance will cover most of the medical bills, and disability insurance may cover some of the lost wages if I can’t work for an extended period.
    Even within medical events, if I go in for a surgical procedure and am told up front that it only has a 40% chance of working and it doesn’t work, is that an adverse event? I know a couple of women who have tried invitro fertilization several times at high cost, and it didn’t work. Is that an adverse event?
    Perhaps you could give a couple of examples of adverse events that you believe should be compensated beyond what we might all widely view as probable or at least potential malpractice. If the number of potential cases is dozens of times higher than what is in the current malpractice pipeline, is a no-fault approach affordable even with lawyers fees squeezed out of the system?

  24. I agree most MedMal cases are caused by bad lawyers, but I suppose I am thinking about MedMal awards. Most cases are decided in favor of the docs. But haven’t I read someplace that 50% of MedMal awards are made against (an identifiable) 5% of docs? Something like this? Or maybe I am being misled somehow. Entirely possible.
    In any case, I think it is the basis of judgements that make for “jackpot justice”, not the amounts. And there are means other than limiting awards for limiting junk suits — in some places a judge can slap the plaintiff with some fraction of the respondant’s defense costs if he judges the suit frivolous. It will remain the case that the only tool an arbitration panel or the civil courts have to “make a harmed patient whole” is money damages.
    > I’d like to see no-fault compensation for all
    > victims of adverse events.
    Yes. State laws could require arbitration. This might be done contractually if the state won’t help at all. I’m not sure what might be done for emergency medicine where contracting is not an option. No state will remove entirely the right to sue.
    > Incompetent doctors should be punished
    I’m a softie: I am not sure incompetent doctors should be punished at all. Malicious doctors, sure. The merely incompetent? I am not so sure. I think a role should be found for them that takes advantage of their knowledge and training, and limits their ability to step beyond their capabilities. This role may not include formally the practice of medicine. It might not pay so well as he had hoped, but he can still earn a good living, contribute to society, and earn a good reputation in whatever role he lands in. I think I am for Harm Reduction rather than punishment. What do you think?
    t

  25. Tom:
    Most medmal cases are brought secondary to bad outcomes not secondary to bad doctors. I agree the policing of bad doctors and medmal reform are not directly related. You’re premise that all medmal cases are caused by bad doctors is dead wrong. Most patients explore/file medmal cases secondary to bad outcomes which the vast majority of the time could not be avoided in the first place. Jackpot justice. Get rid of the unmeasurable pain and suffering awards and the frivalous suits will go away.
    Amy:
    I agree a no-fault compensation is the way to go but good luck getting that thru congress.

  26. Malpractice reform is definitely needed, but I’m not sure that caps to pain and suffering are the answer.
    There are several fundamental problems with the current malpractice system.
    1. It is an extremely blunt instrument for identifying bad doctors. Most doctors who are sued are not bad doctors, and most bad doctors are not sued because their patients do not always understand what happened. Furthermore, while it is true that doctors who are sued many times are more likely to be bad doctors, their colleagues have been aware of their deficiencies for many years and they have been allowed to continue to hurt people.
    2. It is like the lottery. The people who are compensated are not necessarily those who have been most grievously injured, and the compensation often bears no resemblence to the severity of the actual injury. Meanwhile, the majority of people who have been harmed get nothing.
    3. It is ethically rather dubious. Do we really believe that if you lose a limb to malpractice, you are more entitled to be paid for it than if you lose a limb to cancer? The malpractice system by its very nature rewards only people who are harmed at the hands of a medical professional. It does nothing to help the many millions who are harmed by disease and accident.
    4. Getting compensated requires tremendous up front costs. The key to winning is legal action and legal action requires paying lawyers extraordinary amounts of money. Do we really believe that the lawyer who represents a brain damaged baby deserves to get a third of the baby’s multi-million dollar settlement?
    Personally, I’d like to see no-fault compensation for all victims of adverse events. That would eliminate the very expensive legal wrangling, and preserve the bulk of each settlement for the actual patient. Furthermore, it would not reward victims for being victimized by doctors as opposed to being victimized by chance.
    Incompetent doctors should be punished by their employers, by Boards of Registration in Medicine and by peer review. In order for that to happen, the legal hurdles to disciplining a doctor must be reduced. Very few doctors are going to aggressively discipline other doctors if they think they will be sued in retaliation.

  27. > I agree with much tougher enforcement for bad doctors,
    > but this must be coupled with real malpractice reform
    Why? On what ground?
    This seems a little Chicken-and-Egg to me. As best I can tell, MedMal premiums (the full and complete pricing of risk) runs between 3 & 9% of the top line for most physicians: at the higher end for the surgical specialties and highest of all for beleagured OB/Gyns.
    But aren’t the bad actors (docs, nurses, other allied, and managers) the cause of the high premiums? Seems to me there is no justice and little pecuniary advantage to be had in capping jury awards. Move people into jobs they can do, develop a real culture of patient safety in hospitals, and the alleged problem of MedMal premiums starts to look just like any other business expense.
    Practice expenses as a fraction of the top line run in a pretty tight range across specialties. I think there was something along these lines in Medical Economics magazine a year or two ago.
    Although I wish it were harder, it is already difficult to bring a truly bad suit. I understand a lawsuit is a huge distraction for a doc, but I think the best cure for this distraction is a more plesant distraction: leadership among peers.
    t

  28. I agree with much tougher enforcement for bad doctors, but this must be coupled with real malpractice reform nationally, including aggressive caps for pain and suffering awards.
    PGB

  29. I’d love to keep this discussion going, if possible. How about addressing the issue raised in the post above (currently about halfway down the main page):
    POLICY/THE INDUSTRY: Ethics 101, we’ve failed. It raises very important questions. Is there such a thing as health administration ethics? What does health administration ethics look like?

  30. Steve,
    I really appreciate your efforts to not only contribute your considerable expertise to this discussion but also to provide summaries of what’s been said by others and to stimulate further discussion.
    I have a couple of things to say on the questions raised in your most recent post. First, while thee are plenty of frustrations in the healthcare system and throughout the economy, the American system has proven to be amazingly resilient. I’m reminded of a comment often made by the legendary former mutual fund manager, Peter Lynch, of Fidelity in Boston. In talking about buying stocks in individual companies, he said that you want to buy into companies that are “so good, even an idiot could run it because sooner or later, one will.” I feel the same way about the country. Also, Warren Buffett has said that in over 200 years of economic history, anyone who has sold America short has been wrong.
    With respect to the healthcare system, I think all of the key constituencies need to get together with the goal of taking non-value added cost out of the system and at worst, doing no harm with respect to quality but, hopefully, to improve quality as well. The key question each group needs to ask itself before coming to the table is: what changes are we prepared to make that will cost our group money and/or power in the short run but will make the overall system better for most of us in the long term? Some examples follow:
    Consumers — Accept policies with higher deductibles as the norm. Give up some or all of the preferential tax treatment currently afforded employer provided health benefits, which are an accident of history related to a way to get around World War II era wage controls. Be willing to pay higher premiums for irresponsible lifestyle choices like smoking, being overweight, etc.
    Doctors — Get real about getting rid of bad doctors. Establish some workable criteria that will communicate information regarding doctor competence or incompetence to the public in a user friendly, easily accessible way. Embrace pricing transparency.
    State Governments — Minimize mandates regarding specific treatments that must be covered like invitro fertilization, drug rehab, etc. Community rating mandates are fine, but put yourself in the position of an insurer that wants to do business in your state, and make it as easy as you can for them to do so.
    Insurers — Make information available to policyholders regarding what you pay specific providers for specific services, tests, procedures before the fact. As part of your contract terms, make it clear to doctors and other providers exactly what you will pay them for covered services before you tell them: take it or leave it. Streamline your offerings. If you offer 10 different plans that all cover a given procedure, all 10 plans should pay a given provider the same amount for it. Differentiate your offerings by size of deducibles, co-pays, out of pocket maximum, and scope of coverage. Accept competition from AHP’s so small businesses have a better chance of buying affordable insurance for their employees.
    Hospitals — Embrace electronic medical records to reduce both costs (after the initial IT investment) and medical errors. Provide pricing transparency and treat self-payers fairly. Do a better job in cost accounting. Move more aggressively to get rid of bad doctors. From a hospital CEO perspective, a bad doctor that loses reputation for the hospital did something worse than stealing, in my opinion.
    Lawyers — Agree to health courts as a superior and more objective method of judging the merit of malpractice claims.
    Federal Government — Unfortunately, only the federal government can move (via Medicare and Medicaid coverage and reimbursement rules) toward explicit rationing with QUALY metrics. If other constituencies can show that they have gone out of their way to do “their share,” it could move this political football forward.

  31. I refuse to feel hopeless! When I look around and see how so much of our society is built on a weak foundation of insincerity/duplicity, self-centeredness, racial/ethnic/religious prejudice, materialism, greed, irrationality, ignorance, close/narrow-mindedness, fear (vs. courage), fanaticism/extremism, self-deception, inertia, ego, etc. — it’s easy to lose hope. But when I communicate with the kind of people engaged in conversation here, and sense their sincerity, compassion, openness, intelligence, balance, quest for knowledge, respect for minority views, rational minds, courage, motivation, etc. – I’m feel encouraged. It’s just good old human nature in all its glory – both the negatives & positives of what we are.
    Our government is a reflection of human nature. Unfortunately, the negative side of our nature appears to have far outweighed the positive side in politics/governance and in the processes of American Democratic Capitalism.
    Carrying this premise to healthcare, I see the problem stemming from the rules/policies government and industry leaders have created that dictate how different groups of people can make money. E.g., to make a decent income (and not lose it in law-suits), PCPs must practice defensive, assembly line medicine while working in low-fidelity system — the consequence of which is lower effectiveness, higher costs, less accessibility, greater dissatisfaction and frustration, etc. The system is just nuts! You’d be hard-pressed to devise a worse system if you tried!
    Is it that the “system” needs radical overhaul, from the top down, so that the positives of human nature start to outweigh the negatives in the rules/policies under which we’re all expected to operate? Would bringing Democrats into power accomplish this? Are Democrats really that much different than Republicans when everyone must operate in the same crazy economic system? Will a change in political leadership transcend and transform the system upon which it exists? Is American Democratic Capitalism a failed experiment, not only in healthcare, but in other industries and in the eyes of the world? Is it possible to transform our economic-political system to be more “socially responsible” — see portions of HSAs, what are they really? and Wennberg found wearing concrete boots at bottom of Lake Michigan. Who/what can lead our country in this radical transformation? Should it be done at a grass-roots level through advocacy groups of consumers and doctors/providers? What about including purchasers and payers? Can it be done in a balanced way that brings win-win benefits to all stakeholders willing to change accordingly? What are the moral/ethical considerations and how can they be resolved?
    I’d love to hear people’s thoughts about these questions (and/or others).
    One suggestion about process: Since no one can have all the answers, a solution to the healthcare crisis, imo, requires ongoing dialogue about all these issues from diverse groups of people, which evolve into a position paper (we already have 50+ pages of conversation in this thread alone). Presenting this paper to consumer advocacy groups, industry associations/consortiums, and governmental policy-makers may be the way to break inertia and get people talking and things moving in a more positive direction. It would create a new paradigm – a new context – within which to seek creative solutions.
    Toward this end, I offer our evolving Wellness-Plus Wiki as a vehicle for constructing the position paper. I will (continue to) incorporate the things we’ve been discussing — outlining the strategies, tactics, problems, barriers, drivers for solving the healthcare crisis. I will invite the different stakeholder groups to participate as contributors in the position paper’s development. THCB (and other blogs & wikis) can feed information into the wiki and carry on in-depth discussions, as we have been doing. The position paper and wiki would become a focal point for constructing a new and better healthcare system, and will offer a model for changing the direction of our society in the process.
    What do you all think about this?
    My motivation in all this is two-fold: 1) To help make our world better place for all now and for the children of future generations, and 2) To provide a blueprint for a new breed of HIT able to support wide-spread, evidence-based CQI, as well as population protection. Note that this blueprint has “disruptive technology” components, which are intellectual property of my company (NHDS, Inc.) and partners (the PHIN Consortium).
    Steve

  32. Tom:
    >> You still have a network, you still get the
    >> discount rate. Who started THAT line of crap?
    >
    > I think it was Dimitry and Hippocrates: The
    > Transparency Troupe. Dimitry sells information.
    > Hippocrates is a student. But you might have a
    > network or you might not, depending.
    A few corrections.
    Dmitriy is my first name. Hippocrates is pen/blog name. The Medical Blog Network (TMBN) is the first service my company launched. I am merely a humble “web page masher-upper”.
    Transparency is what this is all about. This is the right, compassionate and moral thing to do, whether you are (R) or (D). It will shift the market power to individual consumers and physicians. Why and How? Read my recent article: “Consumers at the Gates: Resistance Is Futile” and follow what TMBN does in near future.
    Call me a naive idiot, but I do not believe in “selling information”. We are going to gather and give it away for free to anyone to make smarter healthcare choices. Like people pass their opinions over a water cooler. This will shine some bright light into the dark musty corners of our “healthcare system” and will make the world (America at least) a better place.
    If you support this mission, come over and join our Transparency Squad !
    Barry: A strong grassroots action will really help light the fire under our esteemed Congressmen and Senators.

  33. “Barry, they all know all this — few of them would learn anything from this thread. Individually, our congressmen and senators are smart, impressive people. But when they all get together, something really wierd happens. I can’t explain it. I think it proves that the whole can be much less that the sum of its parts. This is probably the normal case. The reason nothing is done is that anything “big” will be a political non-starter.”
    Tom, you’re right, of course. I think I was probably just getting my frustration out of my system. I met many of these Congressman and Senators, Cabinet people, etc. over the years at investment conferences, and they are, indeed, bright impressive people for the most part.
    Things always need to seem to reach a genuine crisis point, like Social Security looking like it was about to go broke in 1983, before politicians feel that they have no choice but to do something meaningful in a bi-partisan way so everyone’s fingerprints are on the ultimate legislation, especially the more painful parts of it.
    With respect to healthcare, my own sense is that money, unfortunately, is the constraining resource. Governors have been screaming for awhile now about how Medicaid costs are squeezing their budgets and crowding out other priorities while the approaching baby boomer retirement wave will sharply increase spending for Medicare and Social Security in the not too distant future. If I had to guess, probably after the next Presidential election cycle, a bi-partisan commission will be appointed and recommend a mix of higher taxes, explicit rationing (with QUALY metrics), and some lesser refinements like health courts and better price and quality transparency. If there is a sense of urgency, driven in part by a growing federal debt burden and a continuing feeling of unease and insecurity among the middle class, something “big” may well be able to pass through Congress and become law in the 2009-2010 timeframe.

  34. > Personally, I think the entire Congress and Executive
    > branch (including President Bush) should be taken to
    > the woodshed, given a copy of this thread, and forced
    > to read it.
    Barry, they all know all this — few of them would learn anything from this thread. Individually, our congressmen and senators are smart, impressive people. But when they all get together, something really wierd happens. I can’t explain it. I think it proves that the whole can be much less that the sum of its parts. This is probably the normal case. The reason nothing is done is that anything “big” will be a political non-starter. I think John put it very well. Well, almost:
    > Thus have administrators prevailed – by default.
    They have not “prevailed” — they are as trapped and frustrated as everyone else.
    There is a saying in healthcare management circles, maybe too trite by now but here goes: culture eats strategy for lunch. What we might want or find “rational” or “ethical” does not matter very much.
    > That’s true, but I believe that the primary
    > motivation for employing the word provider
    > is to de-professionalize medicine
    I’d like to think the term is a linguistic shorthand for “anyone licensed by the state to work in the medical services industry”. Losing control of the licensing process is one thing that de-professionalizes medicine.
    t

  35. Steve, your latest summation brings into focus for me at least why there has been no meaningful progress on this matter in 40 years. Apparently no one who can lead will, and no one who will lead, can.
    Thus have administrators prevailed – by default.

  36. After reading a lot about health care reform over the last couple of years and following it more casually for many years before that, I have to say that this is the best discussion I’ve ever seen by far. The diversity of opinion, the nuances and complexities, the sensible (and sometimes not so sensible) ideas are refreshing and stimulating to read. I only wish that the policy types and legislative staff in the government most involved in healthcare issues were reading this and then bring their bosses up to speed.
    By contrast, the following is my take on what passes for healthcare debate in Washington:
    Republicans: The market will solve the problem with some help from pricing transparency and some more tax breaks, especially for people who don’t need them plus, maybe some tort reform. Build savings in your HSA to cover your healthcare needs in the future. If you’re already sick or coping with chronic disease, expect to pay a very high price for health insurance if you have to buy it in the individual insurance market, because that’s the way markets work, isn’t it?
    Democrats: Government knows best. One size fits all. Impose price controls on prescription drugs to supplement the controls we already have through Medicare and Medicaid. Healthcare is a right, and everyone should have access to all that he or she needs regardless of ability to pay and with minimal or no co-pays or deductibles. We’ll pay for coverage for the currently uninsured by squeezing out the insurance sector’s administrative costs and profits. If that proves insufficent, we’ll increase taxes on the top 1% confident that it won’t affect their economic behavior. If that still proves insufficent, we won’t admit failure but will call for “more resources” possibly by imposing a value added tax or national sales tax.
    Neither side expresses much interest in putting limits on end of life care or new $100,000 cancer drug regimens that are coming to market and believe the word, rationing, should never be used in polite company.
    Personally, I think the entire Congress and Executive branch (including President Bush) should be taken to the woodshed, given a copy of this thread, and forced to read it.

  37. Tom:
    “The Bush administration (and the consumerists in general) are trying to break at least one assumption in the current system: that medical services are or ought to be free, or that insuracne by contract is like social insurance. They have a strongly individualistic bias …”
    Obviously, I don’t make decisions in reference to what the Bush administration wants, but I keep in mind their priorities. I disagree with your quote about their intentions. The Bush administration has been explicit in its actions (while saying precisely the opposite). Bush feels that there is no role for government in healthcare. They are systematically trying to destroy Medicare, and Medicaid. They went after Social Security, for heavens sake, but they were stopped.
    The current administration reminds me of medival theories of governance. Goverment is inherited without regard to ability. The Federal budget exists purely to reward supporters. The government itself is merely a patronage system to reward supporters. Since “goverment is the problem”, it makes no difference who holds the various positions. Hence it seems perfectly reasonable to fill important positions with political hacks in payment for support.
    The Bush administration has demonstrated that:
    It does not support public health initiatives.
    It does not care about the health and welfare of average citizens (think Katrina).
    It does not believe in regulating the pharmaceutical industry.
    I could go on and on, but I’m sure you get the idea.
    My point is that knowing the motivation of the administration (to completely dismantle any goverment protections of average citizens), any HSA proposal on their part should be non-starter. It be designed to destroy the system we agree that we are trying to improve.
    Steve:
    “While calling an individual physician a doctor is certainly appropriate, the only problem using it in generic sense is that there are many healthcare practitioners delivering who are not MDs.”
    That’s true, but I believe that the primary motivation for employing the word provider is to de-professionalize medicine or to replace physicians with other medical professionals who are not as well trained. After all, if everyone is a “provider”, we don’t necessarily need to pay a doctor. NPs, midwives, etc. are ancillary medical professionals. They can do some of the things that doctors but they are not a substitute for doctors and cannot even operate safely without doctors.
    I love midwives, and have worked with them extensively. The fact remains, though, that I can do everything they can do and they CAN’T do most of what I can do. I’m not sure that they even save money because they can’t, and do not want to, care for women in the same way that obstetricians do (not that I blame them). In theory and practice, midwives spend extensive amounts of time with patients. Obstetricians can manage many more patients and more complicated patients in the same shift. So on a cost per day basis, you could employ and obstetrician AND a midwife, or simply an obstetrician.

  38. pgbMD: “call me doctor and NOT provider. I hate the term provider.”
    While calling an individual physician a doctor is certainly appropriate, the only problem using it in generic sense is that there are many healthcare practitioners delivering who are not MDs or PhDs (and some physicians don’t want to be lumped together with PhDs). And what about including hospitals, clinics and nursing homes as care delivery entities? Healthcare “provider” fits as a catch-all phrase for these groups in discussions, but we ought to be open to alternative generic terms, if anyone has (e.g., “care-givers”?). So, until this is resolved, I’ll use providers, clinicians, practitioners, doctors and physicians as deemed appropriate.
    Switching focus — As I see it, we’ve thus far discussed models in three domains: economic/payment models, practice/clinical/performance models, and leadership models. Following are the main issue about which there appears to be consensus.
    A) Best Economic Model
    Assuming our objectives are:
    • Controlling/reducing costs (greater efficiencies, lower overhead/expenses, render less expensive interventions where outcomes are equivalent, reduced frequency/duration/severity of illness, etc.)
    • Improving effectiveness (fewer errors and omissions, better outcomes, increased satisfaction)
    • Increasing access for all (regardless of income/wealth) …
    Then, we should transform our current healthcare system using an economic model consisting of strategies and tactics (establishing policies and practices), which enables the implementation of these three processes:
    1) Redirect (manage) competition in a way that increases efficiency and effectiveness of care across the board. This means that competition would be focused on the ability to;
    • Prevent, diagnose and treat healthcare (while competition today is among health plans, hospitals, and networks)
    • Improve healthcare value — the level of care quality per dollar spent over time (while competition today focuses on cost reduction by transferring costs to someone else without reducing total costs)
    • Create value at the level of health problems by developing expertise, reducing errors, increasing efficiency, and improving outcomes (while competition today focuses on signing up healthy consumers, discounting prices to large payers and groups, consolidating for increased bargaining power, and cost shifting)
    • Compete at the regional and national level (while competition today is local)
    • Offer distinctive services and products creating unique value (while competition today focuses on building full-line services, forming closed networks, reducing rivalry by consolidating with others, and matching competitors)
    • Obtain and share information about providers and treatment alternatives for specific conditions (while most information shared today is about health plans and consumer satisfaction surveys)
    • Help consumers find the best care value for specific conditions, simplify billing and administrative processes, pay bills promptly (while payers today attempt to attract healthy subscribers, raise rate for people with health problems, restrict treatments and out-of-network services, and shift costs to providers and patients)
    • Develop areas of excellence and expertise by engaging in quality improvement programs and use evidence-based practice guidelines to enhance care effectiveness and efficiency, and to eradicate mistakes (while providers today tend to offer every service, often below prevailing medical standards, refer patients with their own network if at all, spend less time with patients and discharge them quickly, and practice defensive medicine).
    2) Ration Care Rationally using QUALY or some related metric to help make explicit decisions about what healthcare interventions are “worth” covering using cost-effectiveness/utility analyses that estimate the cost needed to obtain a unit of health benefit. Or as Tom recently put it: “under a social insurance point of view the effect of what we’re discussing here is to take better care of more sick people, and let dying people die. Or alternatively under a private financing point of view to devise a method by which one may create an enforceable contract for coverage without specifying a list of what will and won’t be paid for at a stupidly-detailed level.”
    3) Provider transparency of cost and performance. This is difficult, but possible. Cost transparency is easier, but without valid data on performance (effectiveness/outcomes), which is difficult to measure — e.g., see Full disclosure, well not really, as well as below.
    4) And there’s the idea that providers should “cut the cord” to payers, offer care on a cash payment for service basis, and render charity care to those who cannot afford it.
    B. Implementing the Economic Model. As with any complex model, the devil is in the details. Following are key issues:
    1) Using Clinical Guidelines, Standards, and Well Care.
    It seems part of the debate has to do with terminology (semantics).
    Guidelines & Standards
    If practice guidelines are defined as generalized process standards imposing inflexible constraints on practitioner judgment in order to minimize costs (and little else), then they can do more harm than good. This is, unfortunately, the situation today with our current “legacy” healthcare system.
    In contrast, the “wellness-plus” healthcare model I’m proposing would utilize evolving evidence-based practice guidelines within a high-fidelity system that includes an evolving health information technology tools providing computerized diagnostic and treatment decision support, personalized plan-of-care execution and coordination management, and knowledge-based feedback loops supporting a practitioner’s clinical judgment and memory. This not only helps with decision making, it also allows a clinician to vary from the standards, and analyzes the consequences and reasons/justifications for the variance to improve the standards continually. This is very different than the legacy system of today, and I don’t hear any rejecting to the wellness-plus model. Please tell me if you do, and why.
    Well Care
    Let’s define “well care” as programs/processes focused on the prevention of health problems, treatment of relatively minor ailments (e.g., can be treated effectively via a PCP office visit), and management of chronic illness. If (a) we do adequate research on how to educate and motivate patients to comply with valid evidence-based guidelines for prevention (e.g., diet, exercise and other lifestyle changes) and disease management (e.g., following the doctor’s orders, utilize case management, etc.), and if (b) we support the comprehensive wellness-plus model including a continuous quality improvement process to find and use the most efficient and effective interventions, then (c) few would argue cost-savings are likely through the implementation of cost-effective methods for prevention of illness and improved recovery/maintenance.
    Of course, having people get sick young and die quickly would save more money than well care could save, but I don’t think any of us wants this. Instead, it makes sense to keep people as healthy as possible for as long as possible, and help them recover as quickly as possible and remain well as long as possible.
    2) Measuring Performance
    This is another thorny issue. Most people do not want their performance judged, especially in a punitive culture in which blame and adversarial litigation are so common. CYA, “pass the buck,” defensive medicine, soaring malpractice rates are cases in point.
    As in every profession, healthcare providers vary in knowledge and skill — ranging from great to average to incompetent. This we all acknowledge.
    I think we all also agree that transparency of cost and performance (i.e., effectiveness) is crucial. And that requires risk-adjusted outcomes data (not just process data).
    So, how can we measure the performance of clinicians, hospitals, etc. in a fair manner that serves to improve care quality on a continuous basis without being unnecessarily punitive? I suggest that we focus on continuous research and learning. That is, comparative performance measures should be used to provide informative feedback to providers and be tied to learning opportunities (e.g., distance learning, virtual collaborative forums, classroom instruction, etc.). And prior to releasing to the public any performance data of individual practitioners, there should be a period of time in which clinicians can improve their areas of weakness. The latter part of the Full disclosure, well not really thread discusses such issues concerning outcome measures.
    Other suggestions include:
    Barry: “a simple scoring system using aspects of a doctor’s qualifications … the most important aspect of quality to me as a patient is the doctor’s diagnostic skills, ability to provide the appropriate treatment (while keeping defensive medicine within reason), and explaining clearly what I need to do and why. A peer assessment of these skills would be extremely valuable.Secondary issues include like lead time to get an appointment and how long one typically has to wait in the waiting room past the appointment time could be assessed but with a lower weight in the scoring scheme.
    Amy: “I’d rather have the raw data [such as]: years in practice, board certification, specific training, malpractice claims and results, [malpractice] insurance information, hospital affiliation, professional reputation … As a general matter, patient opinion is useless. Patients judge doctors on the three A’s: affability, availability and last (and least) ability. … no doctor wants to have bad doctors practicing. In fact, it is generally peers who report doctors who are lousy or impaired. The legal maneuvers available to bad physicians are appalling … good doctors are afraid that they will be sued for reporting bad doctors. I’m not sure what physicians as a group can do about that. That’s the primary reason why there should be transparency. Give patients the information and let them judge.
    So, there a multiple ways to measure performance. A key difference between using risk-adjusted outcome measures and clinician qualifications/affiliations/malpractice/reputation is that comprehensive outcomes data have the added advantage of building clinical knowledge and driving CQI. This means, imo, that failure to measure and use clinical outcomes = failure to improve care. And since improving care quality is paramount, we simply must learn how to collect and use outcomes data sensibly and effectively.
    3) Improving Performance
    There seems to be agreement that performance gains should come from a CQI process in which providers and researchers collaborate in an evolving system whose policies and practices enforce high fidelity, enable knowledge building and sharing, encourage evidence-based medicine and innovation, foster personalized patient-centered care, and utilize advanced HIT support. A motto: Knowledge hungry, highly trained, never satisfied.
    And there is one area in which we cannot agree:
    Who the Leaders Should Be
    We’ve rejected the government because Congress doesn’t have the will and is focused on the theory of “predestination” in which one needs to help anyone else because the rich are entitled to be rich and everyone else deserves to do without.
    We’ve rejected the “body politic” because they are too easily swayed to political manipulation or people “just want it all” with consideration of the consequences.
    Some have rejected administrators because they have not been able to control costs in the past, play underhanded games to withhold care, and will only add to expense.
    And while many call for practitioners to take the lead, clinicians don’t want to because it takes time away they could be working with their patients.
    Steve

  39. > The legal maneuvers available to
    > bad physicians are appalling.
    Yes, I know, and have heard of absolutely everything you mentioned. I can’t think of a particularly good way around this problem. The best I think can be done by physicians as a group can do is say more or less to their state medical boards “please regulate us thusly”. This is a little bit dangerous: you won’t get quite what you ask for. But if we can have state laws that protect even false reporting of child abuse, we ought to be able to protect true reporting of medical incomptence. It’ll take some bravery and I think it would be best if it came from the physicians’ groups rather than waiting for the lawyers to set it all up. And they will do it eventually if physicians don’t beat them to it.
    The result of all this will probably be some kind of “transparency of quality” at the individual practitioner level, but every criticism of this is true. I think everyone’s interests would be best protected if the analysis methodology and ratings were made public, but the raw data were not. If any sort of consumerism or patient-centrism is going to work then the information asymmetry that exists must be satisfactorily overcome.
    > All you really need to know about HSAs is
    > that they are favored by the Bush administration.
    Hmmmmm. When I don’t have the time to analyze an issue, I look at how the local newspaper (St. Louis Post Dispatch) tells me I should vote, and do the opposite. I figure this works out OK 75% of the time.
    The Bush administration (and the consumerists in general) are trying to break at least one assumption in the current system: that medical services are or ought to be free, or that insuracne by contract is like social insurance. They have a strongly individualistic bias, and and this I think is a stepwise approach to remake health insurance along the lines of car insurance: you buy it, it has a deductible, it does not matter where you work or for whom, you have a way to find out which “body shop” does good work, and so-forth. So yes: he’s trying to “destroy the system”. But then, so is the single payer crowd, whether they mean “social financing only” or “government managed delivery”.
    The HSA idea helps to solidify the cultural bias towards individualism and insurance as a financial service rather than as a social service. This is a very traditionally American way to see things, and very Republican. The vehemently anti-HSA crowd wants to see healthcare (including its financing) as a social good not knowing state boundaries, and this is a very European and Democratic way of looking at things. The individualist might say that individuals have a moral obligation to do charity, but this does not create or imply a civil right on the part a particular poor person to anything in particular. The collectivist (in whatever degree) wants to create a civil right on the part of each poor person — a positive claim on the actions or property of the non-poor, even individually. This is the divide.
    The political question is “How do we want to be?” After we answer this question we can do something rational. Absent that, I think we shall see more Brownian Motion.
    t

  40. Tom and Amy:
    I agree that the bad doctors need to be barred from the practice of medicine. They only discredit the good ones and harm patients. I wish the state medical boards were more proactive in this respect. Unfortunately they have gone at it the wrong way by requiring too much redtape and CME oversight for all doctors when in fact they could just zero in on the bad ones and strip them of their licence. Most of the regulatory requirements now being espoused by the boards is just window dressing in my opinion.
    I go from being tossed into the vast indescript pool of Provider to now Herr? Tom let’s just stick with Doctor please. 🙂
    PGB

  41. “From everything I have read and heard, the main problem seems to be legal maneuvers undertaken by the physicians in question, but I have no first hand experience with this particular problem. Executives seem to be able to get rid of them, but are constrained from telling anyone about why. I think if people understood the mechanisms of this protection, they would be outraged: there are certain parallels with the sex abuse scandals lately in the Catholic Church.”
    Tom:
    Doctors, as a group, have not covered themselves with glory on this issue, but that is not the fundamental problem at the moment. Furthermore, while doctors are afraid of whether patients will “understand” the information at the margins between good care and bad (I know, lousy excuse), no doctor wants to have bad doctors practicing. In fact, it is generally peers who report doctors who are lousy or impaired.
    The legal maneuvers available to bad physicians are appalling. One example sticks in my mind. I was acquainted with a physician who suffered from mental illness. Over time, her decisions became more and more bizarre, and patients were definitely suffering. The hospital began collecting information to take away her privileges and ultimately they did so.
    The doctor sued the hospital for libel, and during the proceedings, it came to light that 6 of the malpractice suits she was facing stemmed from incidents that occured while the hospital was investigating her. Her lawyers threatened to reveal this information to the plaintiffs in the malpractice suits so that they would include sue the hospital as well. The hospital, on the advice of its lawyers, settled with her; she agreed to give up her privileges voluntarily and she accepted $1 million dollars in exchange for silence about the malpractice cases.
    The good doctors know who the bad doctors are and would like to get rid of them. In some states reporting doctors are shielded by peer review, but this is far from a settled issue. Therefore, good doctors are afraid that they will be sued for reporting bad doctors. I’m not sure what physicians as a group can do about that. That’s the primary reason why there should be transparency. Give patients the information and let them judge.

  42. All you really need to know about HSAs is that they are favored by the Bush administration. Their only goal, time after time, is to enrich the wealthy and punish everyone else. When they tell you something is the solution to the problem, you KNOW it is designed to destroy the system. I am hard pressed to think of a single time Bush has told the truth about anything. He’s not about to start now.

  43. Dr. Tuetur:
    > I am curious how, in your capacity as CEO
    Oh!! I know where this came from. The shadow of a CEO will fall on me once in awhile, but never from me. I had borrowed a hat for a few minutes to talk about economics.
    From everything I have read and heard, the main problem seems to be legal maneuvers undertaken by the physicians in question, but I have no first hand experience with this particular problem. Executives seem to be able to get rid of them, but are constrained from telling anyone about why. I think if people understood the mechanisms of this protection, they would be outraged: there are certain parallels with the sex abuse scandals lately in the Catholic Church. I would love to see The Guild tackle this issue because it would go a very long way towards recapturing professionalism in medicine.
    Dr. Borboroglu:
    > I will call you a manager/CEO if you call me
    > doctor and NOT provider. I hate the term provider.
    So do I, Herr Doctor Borboroglu! We have permitted too much of the language of legislation to encroach upon our working relationships.
    David Locke:
    > As it is most of the discussion here is to take care
    > of healthly people, and let the sick die. Why are we
    > suddenly living in the jungle again? Throwaway people
    > is what the rise in HR has gotten us.
    This is a misinterpretation — under a social insurance point of view the effect of whe we’re discussing here is to take better care of more sick people, and let dying people die.
    Or alternatively under a private financing point of view to devise a method by which one may create an enforcable contract for coverage without specifying a list of what will and won’t be paid for at a stupidly-detailed level i.e. “We will pay for a pacemaker if you are 74 years old but not if you are 75.” A way to say “A new drug must provide expected benefits in excess of its price” before saying something like “We will pay for Prilosec but not Nexium”. Or whatever. We also need a way to talk about the Definition of Disease, which might have an impact (say) on the sales and price of Viagra.
    Your comment about Humans as Resources is spot-on. Humans are not resources. But!!! We seem to want them to be Free Agents; to be able to come and go as they please with a fair (and necessarily portable) exchange of value among them. This implies little responsibility at least in the “employment” sphere for long-term thinking. Under a cultural bias towards Rugged Individualism there is little social responsibility at all. Under a more Communitarian cultural bias, we will invent some kind of social financing scheme. Under a more Socialist bias, we will have government-managed delivery of servcices.
    I am puzzled by something: on the one hand you seem to want to bring back the diseases of the jungle “to save ourselves from this coersion of enforced longevity” but on the other hand you decry as death this brings. Very strange.
    Tim:
    > You still have a network, you still get the
    > discount rate. Who started THAT line of crap?
    I think it was Dimitry and Hippocrates: The Transparency Troupe. Dimitry sells information. Hippocrates is a student. But you might have a network or you might not, depending.
    If we want a social insurance scheme for those under 65, then the benefit levels will be level, and the need for benefit consultants and health plan marketing will disappear. So let us condider also what you sell.
    If we want to continue the system we have now, private financing with rationing by ability to pay, then some regulations should be relaxed considerably (balance billing for docs unless they contract otherwise, no more manadated coverages or geographic constraints for insurance companies, for example). And then the legislatures should not interfere. This may lead to increasing opportunities for benefit design consultants. Do not get the idea I am necessarily against this.
    I have some half-baked ideas, but I do not know which I want to see.
    t

  44. “There IS no health insurance crisis. What there IS… corruption, collusion, antitrust… this goes all the way from your state’s department of insurance, to the evil, lying, conniving brokers and agents … The strategies that I utilize for employers and the self-employed allows the employees to have the same benefits, and the employer can spend at LEAST 20% less on their total out of pocket.”
    Tim — Saving employers insurance expense is certainly important. And I don’t think you’d get an argument from many here that “less than virtuous” business practices run rampant in our society.
    Anyway, this link to a discussion of HSAs lists seven problems presented by critics. I’d be interested in your response to each. Thanks.
    Steve

  45. EDIT
    I’d also like to know where this baloney started about HSA’s and being “uninsured”, or getting gouged if you have an HSA. You still have a network, you still get the discount rate. Who started THAT line of crap? Let me guess… someone who isn’t selling HSA compatible HDHP’s?

  46. I’ve been reading from this site off and on for the past few months, and I must say, it’s been a sometimes useful source for information. Most often though, I read some of the same rhetoric that I run into on a weekly basis face to face.
    There IS no health insurance crisis. What there IS… corruption, collusion, antitrust… this goes all the way from your state’s department of insurance, to the evil, lying, conniving brokers and agents I go up against routinely.
    We have ALL been led to believe that… if there was a better way somebody would have done it by now. Well, guess what? There is a better way to buy your health insurance. Do you think your broker’s going to tell you about it? Do you think your current agent is going to show you how? Why should they? They have most of their clients so brainwashed and ignorant, they’ll believe whatever they tell them, regardless of the truth.
    Here’s a brief summary of the most common things I hear week in and week out, after meeting with a potential client who has gone back to their current broker with a question…
    “It’s illegal for the employer to pay for individual insurance!” BUZZZZZ! Wrong. There are three ways to do it. Which one do you want to use?
    “It’s unethical to sell individual plans. It’s not credible coverage!” BUZZZZ! Wrong again. Lots of people have them. I have one. If I ever wanted to go into a group plan ( though I don’t know why I would ) I have the same options as anyone else.
    “Individual plans get rated up faster than group because you aren’t spreading the risk! That’s bad!” BUZZZZ! This one always makes me laugh. Ever heard of the county wide health pools or regional health pools for your area? Might wanna check it out.
    “HSA’s are bad.” Why in the world is this? For some people they work great. As an employer, yes… you don’t want to be funding something that is portable, and also capped. However, guess what… yes, there is a way to do it unfunded. But for a single guy who is self employed, it’s a great way to go. Pre tax money for health care costs. And now they roll over. You can’t lose.
    “Employers have to offer group plans!” What planet are you from? Your employer isn’t obligated to offer you squat. Their only obligation is that if they offer it to one, they must offer it to all.
    “I can’t get rid of my group plan! Some people won’t be covered!” Yet another mislead individual. There are several alternatives, some more pricey, some less pricey, but you can’t be turned down coverage if your group was cancelled.
    “Raise deductibles? That sounds dangerous! That’s unethical!” What’s all this ethics crap anyway? Most of the people I hear this from are about as ethical as an 18 year old on prom night at the lake cottage. The public has been brainwashed into thinking that they NEED as low a deductible as they can possibly afford. If you’re an agent who pushed this crap onto your clients, I got some bad news for you. They are soon going to be MY clients.
    And this is just a brief list. The strategies that I utilize for employers and the self-employed allows the employees to have the same benefits, and the employer can spend at LEAST 20% less on their total out of pocket. The AVERAGE savings I generate for about 90% of my client base is 35% less than what they have been paying. The high end has been 70% less, on several occasions. I’m not talking chump change either. One of my most recent additions was paying over $800,000 a year in premium. Now they are going to have to pay a total of less than $350,000 for the year, even with my fees. It’s all about buying the right plan and setting up yourself to win the game. It’s all just a game really, but most agents and brokers have the cards so stacked in their favor, and they’re laughing all the way to the bank… with YOUR money.
    Health insurance isn’t too expensive, most people just aren’t being shown what to buy, and how to set up their plans. And if you think the department of insurance or your broker is going to help you with these alternatives, I’ve got some real estate in Florida that you might be interested in buying.

  47. I wonder what made medical insurance a good business? When the insurance companies made the decision to go into this business, they had to have a model. Apparently, that model hasn’t worked out.
    The way to save the medical insurance industry is to kill it, and malpractice insurance, and the structured settlements business.
    I wonder what made investment in public health infrastructure a good thing? We can live forever, but without an income and without meaningful work.
    The way to save ourselves from this coersion of enforced longevity is to stop investing in public health infrastucture and medical research, so people can die. As it is most of the discussion here is to take care of healthly people, and let the sick die. Why are we suddenly living in the jungle again? Throwaway people is what the rise in HR has gotten us. Cheap labor as the valued people and the end of life just north of 40, while we are still healthy is what is coming.

  48. Thanks Amy. Your answer is very thorough and helpful. I’ve been printing out this entire thread every few days for future reference. I’m sorry, I am fond of scoring systems. I guess, as a finance guy, I can’t help it.

  49. Barry:
    You appear to be very fond of scoring systems! As for me, I’d rather have the raw data. Here are some of the things I’d like to know:
    years in practice – being older is not better. In fact, the worst doctors usually are older and they have not kept up with what is going on in the field. They are treating people with the old medications, old tests and old procedures and denying patients the benefits of up to date research.
    board certification – useful to know, but not as helpful as one might think.
    specific training – anyone can claim to be a specialist, but if you have not done the requisite fellowship, it is unlikely that you have the proper knowledge base and experience to do the job. For example, if you have cancer, you must go to someone who has done an oncology fellowship. There is considerable data to show you will live significantly longer.
    malpractice claims and results – virtually everyone in a high risk specialty like obstetrics will be sued. However, in most cases, bad doctors will be sued a lot, and they will have judgments go against them for large sums and they will be responsible for large settlements.
    insurance information – if the medical malpractice carrier has increased a doctor’s insurance payment compared to his peers, run in the opposite direction.
    hospital affiliation – teaching hospitals provide a larger buffer of safety because there are other doctors involved in your care. In a community hospital, your doctor is unsupervised. If she’s good, that’s not a problem; if she’s incompetent, there’s no one to correct her mistakes.
    professional reputation – difficult information to get. Where do the doctors in the community get their care? You want to go wherever they go. A bad doctor will have no physicians or nurses as patients.
    There is a way to access this information if you are new to a community. For example, if you are looking for a good obstetrician, you should call labor and delivery at the nearest teaching hospital and ask to speak to a nurse who has worked there for awhile. Ask her who the nurses think are the best obstetricians and who the female doctors use. That’s where you want to go.
    As you point out, you just need to find one good doctor, they will refer you only to other good doctors. The bad doctors refer to each other so they can hide their incompetence.
    As a general matter, patient opinion is useless. Patients judge doctors on the three A’s: affability, availability and last (and least) ability. Of course, you don’t want your doctor to be a jerk if you can avoid it. Unfortunately, sometimes the jerks are the most knowledgeable and if you have an unusual disease or symptoms that no one can diagnose, you have to put up with their arrogance. I have been forced to do so myself on more than one occasion.

  50. “When it comes to physician skill, the patients are entitled to the same information that doctors in the community have. If I know someone is a lousy doctor, potential patients should know that, too.”
    Amy, I’m very pleased to hear you say this. I wonder how many other doctors share your position on the issue. Conversely, if you (and other doctors) know someone is a good doctor, I would love to have access to those expert opinions as well.
    In thinking about the healthcare quality issue, especially in the well care segment, I wonder if it would be possible to establish a fairly simple scoring system, similar to what many selective universities use to determine who will be admitted or not.
    Some aspects of a doctor’s qualifications are easily determinable like how many years he or she has been practicing and whether he or she went to medical school and completed intern and resident training at top tier institutions or second tier facilities and whether Board certification has been earned or not.
    However, the most important aspect of quality to me as a patient is the doctor’s diagnostic skills, ability to provide the appropriate treatment (while keeping defensive medicine within reason), and explaining clearly what I need to do and why. A peer assessment of these skills would be extremely valuable.
    Secondary issues include like lead time to get an appointment and how long one typically has to wait in the waiting room past the appointment time could be assessed but with a lower weight in the scoring scheme.
    I have found from experience that good general practitioners also usually seem to know who in the area are the good doctors in each of the major specialties if the patient requires a referral.
    Obviously, doctors just starting out would get a lower score for experience that someone who has been practicing for 15-20 years, while issues like malpractice and disciplinary matters, if any, could be factored into the equation.
    I know that some of the sophisticated metrics issues that Steve talks about, along with CQI, are important and worthwhile goals, especially to establish P4P systems and control costs.
    However, as a patient, especially if I have just relocated to a new area to start a new job, retire, or whatever, what I really want to know is: is this person a good doctor, and would you go to him or her yourself or recommend that a friend or family member do so? It would certainly inspire confidence to find that a given doctor ranks 8.5 or 9.0 or 9.5 on a 10 point scale developed and scored by professionals as opposed to finding someone in the Yellow Pages or even calling the local hospital’s physician referral service and getting a few names and phone numbers of doctors near where I live with no recommendations.

  51. This is a great string of information!
    I chuckle though that Tom does not like the term administrator. I will call you a manager/CEO if you call me doctor and NOT provider. I hate the term provider.

  52. Tom:
    I am sorry about your relatives who are sick. I did not mean to suggest that they are not getting good medical care. I am referring to the experience of being at the mercy of the medical system. Do they wait for hours in doctors’ offices or hospital emergency rooms? Do their doctors have time to explain things to them? Would they (or you) be aware if they have been a victim of a medical mistake? (Probably not, most mistakes are passed off as part of the normal process of medicine.)
    Are your relatives being cared for at a hospital where you are on staff (CEO, I think you said)? That might make a difference in their care, although probably not much. My own father was a victim of egregious malpractice at the hospital where I trained and was an attending at the time. He had a routine pre-op chest X-ray for a minor surgical procedure. The chest X-ray revealed metastatic cancer in the mediastinum. The radiologist knew and wrote it in the report, but the attending physician never looked at the chart.When my father presented 7 months later with advanced disease, the doctors involved insisted that the cancer had not been on the original film. Of course, I had access to the film and read it myself. Imagine my surprise to find the cancer there. Had I not had access to the X-ray I never would have known.
    I definitely agree with you about nursing. Older nurses (in general) are people who could have been doctors. Younger nurses (in general) were often the worst in their high school class. Despite the fact that nursing is becoming more complicated not less, nursing pay, respect and staffing has dropped. It’s not very surprising that poor care is often the result.
    The Medical Blog Network:
    “Sounds like you are in favor of transparency? On everything, including pricing and physician track records?”
    Absolutely, I can’t imagine how you could possibly attempt reform of the system if there is not pricing transparency. Furthermore, I can’t imagine what could possibly be wrong with healthcare administrators being forced to “get its ducks in a row”, like everyone else?
    Either healthcare is a free market or it is not. There is no possibility of market forces working properly if patients never know what a particular intervention costs or if doctors never know what, if anything, they will be paid for that intervention.
    When it comes to physician skill, the patients are entitled to the same information that doctors in the community have. If I know someone is a lousy doctor, potential patients should know that, too.
    Tom:
    I am curious how, in your capacity as CEO, you handle incompetent or drug impaired physicians at your hospital? Do you find that resistance to discipline is more likely to come at the hand of doctors or from the legal maneuvers undertaken by the physicians you attempt to discipline?

  53. Tom, I think we are on the same page.
    Transparency would squeeze the non-sensical part of what “administratoring” is today, those special joys that make doctors and patients love the management so much.
    Too many people make a career out of playing shell games, coming up with more ways to defend the indefensible. Amounts and eligibility for cross-subsidies; Denial management; Collection & write-off of unreasonable charges. The list goes on.
    Cutting through this mess would force healthcare to “get its ducks in a row, like every other industry” and behave like a real market at the price list level. But navigating this new environment would require a new breed of healthcare administrator.
    Administrators will have to become real business people. No offense to those who try to be this way today.

  54. Dimitry said:
    > [price transparency] would reduce the need for
    > administrating 🙂
    No it won’t: it will increase the need for administrating because what remains of cross-subsidization will disappear and the whole industry will have to get its ducks in a row, like every other industry. I think medicine is under-administrated right now. (sorry Amy).
    (I actually hate the term and concept “administration” as if these enterprises are somehow on auto-pilot and require people only to write the checks and do a little cheerleading. Health Services need professional management, not “administration”.)
    > we’ve met the enemy
    Walt Kelly got it right, didn’t he?
    t

  55. “Congressmen get reelected by pandering, not by leading.”
    I agree.
    In other words, voters, in their collective wisdom, choose to reward pandering (and often demogoguery). As long as voters continue to do that, this is the government we will get (and deserve).
    I’m afraid we’ve met the enemy and it’s us!

  56. > Patient care has been compromised. […] Do you know
    > anyone who has a serious, chronic disease?
    You say. I am not so sure. And yes I do.
    1) dear friend: cancer — treated apparently successfully.
    2) Sister in law: cancer — too early to tell.
    3) Brother in law: cancer — in hospice.
    4) Brother in law: diabetes — fairly well controlled with no serious complications even though he is less than compliant.
    5) Mother in law: she’s just 88 and afraid of dying so she’s an overutilizer.
    6) Mother: rhumetoid arthritis — not much to be done about it 30 years ago. A number of other things lately. Now that she’s Medicare eligible, her access problems are about gone.
    7) Father: last hospitalized with a big DVT — he has a history. Treated successfully. Currently non-compliant with meds. Ditto the comment about Medicare.
    This is what I can think of. Mostly I have found they are afraid of what their expericnces are going to be because of the horror stories in the press all the time. Then they find that things work out pretty well. Yes, they’re confused by the (dis)organization of the financing and delivery systems. They don’t understand their bills/EOBs. I try to help cut through that where I can. SOmetimes I am called upon to translate med-speak into English because they are for whatever reason unwilling to ask their docs. Some have access problems, but they do manage to navigate through it. Could it be better? Sure. Is it horrible? No. Unless you are under 65 and can’t pay for it. We agree coimpletely on this, I am sure.
    The reason we don’t have more of a genuine indemnity insurance model with co-insurance and deductibles is that patients do not want them.
    As for the error rates in hospitals: my personal feeling/belief/whatever is that we have a mismatch between the workforce and the work. According to the EVP of HR for a big system headquaretered here in St. Louis, 30 years ago the average nurse graduated high school at the 75th percentile of her class. Due in large measure to the increasing opportunities for women in other fields, today the average nurse is in this respect just that: average. And don’t get me started on academic standards nowdays. During this time the technical complexity of the job “nurse” soared. Between the two circumstances, we have got a mismatch. And so long “nursing” is called “nursing” and not “Biomedical Technology Delivery Technician” or something equally masculine-sounding, it will continue to be the case that about half the qualified people will not consider the field. What kills me is that the only thing this EVP wanted to talk about was “diversity” when the underlying problem is much deeper than that (IMNSHO). But with a little truth-serum, it became clear he understands the workforce-readiness issue. With the boomers aging, we have a Perfect Storm coming in.
    t

  57. Amy,
    Sounds like you are in favor of transparency? On everything, including pricing and physician track records?
    Isn’t this the most viable answer? I know Tom would disagree; it would reduce the need for administrating 🙂
    Looks like we have come the full circle. We need total healthcare sunshine.

  58. Steve:
    Bravo! Thanks for taking the time to summarize.
    Tom:
    “It is equally plausible to conclude that doctors have been historically overcompensated and healthcare delivery undermanaged, and with individual and aggregate expenditures finally moving to the limits of what anyone is willing to pay, the market (un-free as it is) is correcting itself. Or more neutrally: the market is being reorganized with different players gaining pricing power at the expense of clinical practitioners, and we are observing a completely natural sociological phenomenon, notwithstanding the great regulation of the market.”
    Well, it might be except for one important thing. Patient care has been compromised. I go back to what I said up above: Have you been a patient lately? It is an absolute nightmare. Do you know anyone who has a serious, chronic disease? In addition to the hell of the actual disease, such a person has to deal with the hell of medical care. It’s very hard to accept that any system can add value if it hurts patients.
    Moreover, however you want to categorize our system, it is definitely NOT a free market. Let doctors, hospitals, etc. balance bill and then we’ll have a free market. You don’t even have to go that far. I’ve always wondered why co-pays are not a percentage of the cost of the appointment, test or procedure. Once patients had to pay based on actual price, there would be a lot more shopping around.
    The bottom line for me is this (and I freely admit that it is hardly scientific): We are all getting older and ultimately sicker, and I cannot think of much that I fear more than being a patient. That’s in spite of the fact that I get top notch care, since I know what top notch care looks like and I know how to demand it and get it. Even so, it takes an incredible amount of physical and psychic energy to get what the healthcare system ought to be offering to everybody.
    Efforts at cost containment are not the only reason for the degradation of the healthcare system, but they certainly have not helped. I wonder (I cannot find any data on this either way) whether the push for “efficiency” has contributed to the the appalling amount of errors that occur. If you have less time per patient, or if you are a hospital based nurse with more patients per shift, doesn’t that increase the risk that you will make a mistake?
    The most important question we should be asking is this: how are we doing in our stated aim of taking care of people? I’m afraid we’re not doing very well at all.

  59. > There seems to be consensus that our government lacks
    > the ability, integrity and will to manage a single
    > payer system in a way [that respects social
    > solidarity]
    Primarily “the will” I think. Congressmen get reelected by pandering, not by leading.
    The big example I can point to is the creation of the Federal Reserve Bank and its board when congress finally realized after a series of depressions and panics in the 19th and early 20th century that continued poor control of the currency was not an option. So they created this quasi-governmental “thing” and now say to their constituents whenever wages are not growing at an unsustainable pace: “We shall write a very strongly-worded letter to the Fed’s Chairman and subpoena him to explain himself!” Then they say “Well, it is out of our hands.” And it is, except Congress could un-create the Fed. Not that I think it should.
    The political sideshow seems to ameliorate the public’s desire to “do something about it”. Congress will try to avoid responsibility for the details, and appeal to democratic proceduralism to give the appearance of fairness. I am less than sanguine about the whole prospect, and point to every other developed nation as an example. Except France: I just don’t know enough about the French system.
    t

  60. > I conclude from this that administering the living
    > daylights out of doctors has not controlled
    > healthcare costs.
    Your statistics do not prove this, Amy — they do not even strongly suggest it. It is equally plausible to conclude that doctors have been historically overcompensated and healthcare delivery undermanaged, and with individual and aggregate expenditures finally moving to the limits of what anyone is willing to pay, the market (un-free as it is) is correcting itself. Or more neutrally: the market is being reorganized with different players gaining pricing power at the expense of clinical practitioners, and we are observing a completely natural sociological phenomenon, notwithstanding the great regulation of the market. Computer programmers were paid a lot more seven or eight years ago than they are now. Markets change, and while there are things that must not be sold or bought, there is no ontologically correct price for anything that may be, including labor.
    Aggregate costs might well have grown even faster than they did under the last 20 years of active management, and there is evidence to support the idea that “big” market interventions by the government and other payers did indeed slow the overall pace of medical inflation. You can’t look at the last 20 years and conclude that management has failed because it has not overcome a century’s inertia in that time. I think Thomas Kuhn is largely right, and that the ideas presented in The Structure of Scientific Revolutions apply perhaps with greater fidelity to preferences and politics than they do to science.
    > My point has simply been that the behavior
    > of doctors is not the source of the problem
    Any mine has been that the behavior of doctors is a source of the problem, and a major one. I think your list of scandals proves it.
    > Republican theory of “predestination” holds sway
    Ah! “Republican” is a synonym for “Calvinist”! I knew it!
    t

  61. With all the give & take, this thread is really evolving. Nice work, all! If I may summarize and comment on what seems to be the main issues recently being discussed.
    1. Who’s gaining & losing from the healthcare crisis?
    > Amy: That suggests to me that hospitals, drugs and administration are taking up a greater percentage of healthcare dollars while doctors are not.
    It’s tough to argue with those numbers, but even without them, I agree that the current system continues to screw practitioners, as well as their patients. I have trouble, however, reconciling the increased hospital revenues in light of all the hospital closures and other economic problems suffered by so many; are the numbers excluding non-profits?
    2. Are clinical guidelines, standards, and wellness useful?
    > Amy: Medicine is, in essence, pattern recognition. All the years of study, observation and experience give good doctors “clinical judgment”. Unfortunately, no amount of guidelines can substitute for judgment.
    > Amy: The standards already exist …The problem is that there are bad physicians and no amount of standards is going to ameliorate that problem.
    > Amy: …the supposed savings from … wellness are illusory.
    I’d phrase it differently: Standards, in and of themselves, are not necessarily beneficial. Great benefit can be gained, however, when computerized diagnostic and treatment-prescription information, evidence-based practice guidelines, personalized plan-of-care execution and coordination tools, and knowledge-based feedback loops come together to support a practitioner’s clinical judgment and memory. See Evidence-based Healthcare Decision Support System. On the other hand, arbitrary generalized guidelines/standards imposing inflexible constraints on practitioner judgment in order to contain costs can do much more harm than good.
    Likewise, wellness programs/processes for the prevention of health problems and management of chronic illness will not, by themselves, solve the healthcare crisis. Well care is only one part of the solution, and we have to devout more resources and do much more research on how to increase the cost-effectiveness of current day wellness programs. But wellness is an essential part of a comprehensive, knowledge-based, CQI system with sensible economic constraints, which includes learning ever-better ways to manage catastrophic illness and more affordable way to deal with end of life (e.g., rational rationing as necessary)
    3. Should providers “cut the cord”?
    > Eric: While complaining about declining remibursement from private payers and medicare, few of us have been actually willing to ‘cut the cord’.
    > G. Hinson: …expecting fair payment for services as rendered…spending an amount of time necessary to provide best-of-my-ability care…and then charging an amount necessary to ultimately make what I think I am worth…Focus on patients. And expect payment for services rendered.
    > pgbMD: Great idea! Cut the cord. Payment up front then let the patients do the dance with the insurers and administrators. That will lead to the insurers fighting with the patients and the insurers will lose….It was a grand mistake on the part of the physicians to let it get to this point. …With all that extra time we save fighting with the insurers we could then perform charity work for those that cant pay
    Hmmm. The docs agree that refusing to accept insurance would result in better care for patients and happier providers! Question: What would be the downside, e.g., how would patients unable to pay (much) get care? Would providers be willing to do that charity work on a regular basis? What would happen to income/profits if some providers continued to accept insurance and other didn’t? Where would the provider leadership come from to make it happen?
    4. An example of rules that worsen care.
    pgbMD: Another idea to increase access would be to get rid of the crazy 80hr work week limit for residents and allow residents more autonomy. …The chief residents would do the case and the attending surgeon would come in for the critical parts of the dissection. …That would allow for better resident training and more access for patients….such a scenerio is illegal now thanks to the rule makers.
    Question: Why is this illegal and how can it be changed?
    5. The problems with single payer, lack of confidence in our government, need for leadership.
    > Eric: Single payer would …render your desire to provide some care based upon your ‘gut-feeling’ and intuition progressively more impossible [and] …might increase some kinds of access for some while limiting access for many others.
    > Tom: [A single payer system] won’t do anything for doctors in the aggregate. The pie will probably get sliced differently, but it will not grow as a fraction of expenditures.
    > Tom: What the “body politic” wants is a blank check to spend however it please. Actually, a whole series of blank checks. … I think some actual leadership will be required, and not from Congress. Congress couldn’t even do monetary policy right.
    > Barry: what types of experts or skill sets would be most helpful to the Congress and the Executive as they try to develop a consensus on the broad issues and translate them to legislative language? Presumably, setting the appropriate level of GDP for overall health spending and QUALY limits might require different skills from how to change the legal construct to protect doctors who deny care (appropriately).
    > Amy: [Consensus] is not going to be happening in the current political environment where a Republican theory of “predestination” holds sway: Wealth is a sign of divine favor. No one needs to help anyone else because the rich are entitled to be rich and everyone else deserves to do without.
    > Amy: administrators have not been able to [control costs], and all the while they have been taking an ever increasing piece of the pie. It’s difficult to see why more administration (at greater cost) is going to accomplish anything.
    Question — There seems to be consensus that our government lacks the ability, integrity and will to manage a single payer system in a way that gives access to high-quality care for all patients and controls costs, without lining the pockets of “administrators” at the expense of patients and providers. What has to happen to change to make single payer is viable? Who’s needed in government to enable it to enable positive change? Are we talking a radical overhaul of our political and economic systems, a change of leadership, a shift of focus, a re-examination of social values? Do we need a bottom-up grass-roots consumer movement led by enlightened individuals with vision, compassion and wisdom? … What?
    6. Decision making re: Practical use of QUALY and how to divide the pie
    > Barry: …suppose, due to differences in cost structure, maybe some could provide the appropriate treatment regimen within the QUALY limit but some couldn’t. Shouldn’t there be a mechanism to make sure this knowledge is available to key decision makers involved in the case? Finally, if our overall healthcare costs could be carved up into Amy’s three segments — well care, catastrophic, and end of life, how would the pie break down currently, and how do we compare by segment vs the percent of GDP spent in other countries where national health insurance models are used (with explicit rationing)?
    I contend that knowledge is essential to good decision making, including information on cost structure for QUALY computations. I hope some of you economists can answer Barry’s questions.
    One last thing — Decision makers should be having the kind of dialogue we’re having here, i.e., encourage and cherish open debate, innovative ideas, minority opinions, creative abrasion, etc. I say this because community and conversation is essential in emerging new knowledge (see Conversation & Knowledge. Closed networks of people with similar mindsets who yes each other is the worst way to make decisions about healthcare, business, war … you name it. Yet, unfortunately, that’s often the case with our policy makers and it must change!
    Steve

  62. Tom:
    I was not clear in the way I presented the statistics. What I was trying to say was this:
    Between 1990-2004 healthcare spending more than doubled ($700 billion to $1.8 trillion). During that time period, spending on clinical services remained at 22% of total expenditures and real physician income stayed flat (or declined or increased a few percent depending on whom you believe, but in any event did not keep pace with income increases in other knowledge based industries). Spending on drugs, hospitals and administration became larger parts of total healthcare expenditures. Spending on administration rose from 6% to 8% of total spending. Put another way, administrative costs increased from $160/person to $420 per person.
    I conclude from this that administering the living daylights out of doctors has not controlled healthcare costs. Certainly, the data does not support any claims that physicians are driving the increasing cost of healthcare or that “administering” doctor behavior is likely to have a significant impact on rising expenditures in the future.
    “Amy Tuteur had said she wants the “body politic” to decide what gets paid for and what doesn’t.”
    Yes, I do. Will it be easy? Of course not. Reaching consensus on difficult political issues is never easy(witness immigration, campaign finance reform, etc.). It need not happen all at once, however, and it is hardly likely that it could. Of course people want everything and insist on paying nothing. That’s the garbage that Republicans have been feeding Americans for a generation. That’s not possible though, and as we hurtle toward unimaginable federal debt, there will be a reevaluation.
    I suppose that if you assume that the people (through their elected representatives) and doctors (because of their venal motivation) are incapable of controlling healthcare costs, then it seems obvious that only administrators can do it. However, administrators have not been able to do it, and all the while they have been taking an ever increasing piece of the pie. It’s difficult to see why more administration (at greater cost) is going to accomplish anything.
    Eric (on quality standards):
    The standards already exist. Pick up a major textbook (like Williams’ Obstetrics) and it will tell you exactly what the standard of care is for virtually any situation. There’s no need to codify it in any additional way. The problem is that there are bad physicians and no amount of standards is going to ameliorate that problem.
    It is a scandal that medical Boards of Registration do not do more to put bad physicians out of business. It is a scandal that physician groups are working to keep information from patients that would help them make informed decisions about providers (outcomes, disciplinary actions, malpractice awards, etc.). It is also a scandal that legal maneuvering can protect doctors from discipline by hospitals, peer review boards and Boards of Registration. None of this will be helped by standards.
    I’m sure you know who are the lousy orthopods in your community, just as I am aware of the skills of the obstetricians in my community. Standards will not improve their skills, since there are already plenty of standards that they ignore.
    Barry:
    You raise many important issues and I am not sure how a new consensus would develop. However, it is not going to be happening in the current political environment where a Republican theory of “predestination” holds sway: Wealth is a sign of divine favor. No one needs to help anyone else because the rich are entitled to be rich and everyone else deserves to do without.
    I would say, though, that I have not been arguing here primarily for a specific vision of healthcare reform. My point has simply been that the behavior of doctors is not the source of the problem and the supposed savings from managing physicians or from promoting wellness are illusory.

  63. In reading all of the comments posted by Amy, Tom, and Steve, my first reaction is that all three of you are brilliant and have probably forgotten more knowledge on your coffee breaks than I will ever learn on this subject. However, I would like to offer a couple of thoughts and pose a few questions.
    First, with respect to Tom’s most recent post about the “body politic” making some of these tough decisions, it reminds me of the early tax reform debate in the 1980’s when the initial input from the body politic amoounted to: “don’t tax you, don’t tax me, tax that fella behind the tree.” Eventually, as the debate got rolling and comments were requested from interested parties including individual taxpayers, lobbyists and trade associations, nine thick volumes of input came in including several ideas from me that would cost me money but would contriubte to a result that I believed would leave the economy net better off. The ultimate product that passed in 1986, while not perfect, I thought was pretty darn good and a significant improvement over what we had before.
    So, if the body politic is really the Congress and the Executive branch, which I would also like see tackle this issue, it would probably receive plenty of excellent advice from experts like the three of you and probably a goodly amount from non-experts like me as well.
    Let’s say a consensus starts to evolve along the following lines: (1) we want to cap healthcare spending at its current level of 16% of GDP, (2) to do that and cover the uninsured, we need to reduce utilization, especially of expensive care provided to people at the end of life with no hope of recovery, (3) we want to use QUALY metrics to help us make rational and consistent decisions across the system, (4) we want to make necessary changes to the tort system to protect doctors who make proper decisions to deny care within the new paradigm, (5) we want to incorporate, at least in a general way, some of Amy’s social justice ideas like favoring children over the elderly, and (6) we want to respect individuals’ decisions as expressed in living wills to refuse treatments including feeding tubes when there is no reasonable prospect of recovery and quality of life is poor even when the cost of those treatments still falls below the QUALY limits.
    My question, then, is what types of experts or skill sets would be most helpful to the Congress and the Executive as they try to develop a consensus on the broad issues and translate them to legislative language? Presumably, setting the appropriate level of GDP for overall health spending and QUALY limits might require different skills from how to change the legal construct to protect doctors who deny care (appropriately).
    One micro level question on QUALY. Suppose your patient is in a large market like New York City with numerous hospitals that can treat advanced cancer, for example. And suppose, due to differences in cost structure, maybe some could provide the appropriate treatment regimen within the QUALY limit but some couldn’t. Shouldn’t there be a mechanism to make sure this knowledge is available to key decision makers involved in the case?
    Finally, if our overall healthcare costs could be carved up into Amy’s three segments — well care, catastrophic, and end of life, how would the pie break down currently, and how do we compare by segment vs the percent of GDP spent in other countries where national health insurance models are used (with explicit rationing)?

  64. Amy Tuteur had said she wants the “body politic” to decide what gets paid for and what doesn’t.
    Over in the Wennburg thread, I had posted the following comment about the “body politic”:
    The only thing I really hear coming from the general public goes something like:
    – I want to get whatever I want from whomever I want.
    – I don’t want to pay for it.
    – I don’t even want to think about it, but
    – I want to sue somebody when I am dissatisfied with it.
    – I want Congress to make it happen, but
    – I don’t want Socialized Medicine, whatever it means.
    – I am therefore discontented with the current state
    … and with anything else I have heard about so far.
    What the “body politic” wants is a blank check to spend however it please. Actually, a whole series of blank checks. This is the same “body politic” that thinks signing up for Medicare Part D is too complicated, and does not bother to sign up for Medicaid even when eligible. I don’t understand why we should look to this body to decide on healthcare policy for everyone.
    The “body politic” will not decide what gets paid for. And no set of rules that does not include an unlimited supply of blank checks will be seen as ‘fair’. I think some actual leadership will be required, and not from Congress. Congress couldn’t even do monetary policy right.
    t

  65. Another idea to increase access would be to get rid of the crazy 80hr work week limit for residents and allow residents more autonomy. Back in the 80s attending surgeons could be doing 2-3cases simultaneously in different hospitals. How was that possible may the administrators and rule makers ask? Even without those crazy robots lurking in the dark corners of the OR nowadays! The chief residents would do the case and the attending surgeon would come in for the critical parts of the dissection. What a novel idea. That would allow for better resident training and more access for patients.

  66. Amy- I believe you missed my point… Your example (and I can give you many orthopedics-oriented ones) proves my point. Doctors generally CAN agree on the “DON’T DO’s” for some major conditions. By doing so, the playing field of quality will be established and can be raised.
    For example: NSAIDs with renal insufficiency; tylenol for hepatic insufficiency; no antibiotics after open fractures; failure to follow HgA1C in diabetics, etc…
    Single payer would only provide the top-down bureaucratic controls that would render your desire to provide some care based upon your ‘gut-feeling’ and intuition progressively more impossible.
    We, also, do not know if ‘single payer’ would increase access. It, more likely, might increase some kinds of access for some while limiting access for many others.

  67. pgbMD: I do not think you will be able to escape blogs even if the changes you suggest are adopted :))
    Where do you think the patients will turn to “become better consumers”? That is right, blogs, but the ones focused on their needs and not the wonkery. Good docs will meet their patients there. Take a look at what we are building over at The Medical Blog Network.
    One thing I agree with totally is how broken the insurance model really is and that these are the guys with most to lose.

  68. Great idea! Cut the cord. Payment up front then let the patients do the dance with the insurers and administrators. That will lead to the insurers fighting with the patients and the insurers will lose. Patients would be forced to become more aware of the “cost of medicine” and become better consumers. We could then forget about all this statistical/cost analysis BS and get back to taking care of patients. Leave blogs like this for the statisticians and wonks.
    It was a grand mistake on the part of the physicians to let it get to this point. Name me one profession other than doctors that dont get fee-for-service.
    With all that extra time we save fighting with the insurers we could then perform charity work for those that cant pay. Back to the good old days. Just wishful thinking?
    Great string!

  69. Amy Tuteur said:
    > the cost of healthcare rose from $700 billion
    > to $1.8 trillion
    What you had said was: “Nothing in our experience shows that changing the behavior of doctors saves substantial amounts of money”. I provided counter examples. You changed the subject.
    > There is no way (legally or ethically)
    > to deny services.
    I shall research this. If it is really true, then the laws should be changed because it is not ethical to make a slave of the doctor. A law having this effect is in my view entirely unjust.
    > At a minimum, single payer will increase access.
    Probably. But it won’t do anything for doctors in the aggregate. The pie will probably get sliced differently, but it will not grow as a fraction of expenditures.
    t

  70. Tom:
    “So you are saying there is no such thing as physician-induced demand …There is some good evidence to the contrary. You are saying that moving to PPS and making physicians for the first time conscious about cost expectations did not save a substantial amount of money? The falsity of this proposition is even easier to prove. I think you are simply wrong about this.”
    Here’s what I am saying (statistics from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group):
    This is what happened to various components of healthcare expenditures as the cost of healthcare rose from $700 billion to $1.8 trillion
    hospitals 17% to 32% delta of 188%
    physicians 22% to 22% delta of 0%
    drugs 6% to 10% delta of 170%
    admin. 6% to 8% delta of 133%
    That suggests to me that hospitals, drugs and administration are taking up a greater percentage of healthcare dollars while doctors are not.
    “It is ironic that you complain on the one hand about managers having done it [denying care] yesterday, but advocate their doing it tomorrow.”
    Indeed, I am complaining that managers who have a stake in denying care should not be responsible for these decisions, and I am advocated that the body politic should make these decisions.
    “As far as I can tell, legally and morally a physician is free to decline to provide any service she chooses so long as she is above board about it.”
    A physician is free to decline to provide a service, but must arrange for another physician to provide it. There is no way (legally or ethically) to deny services.
    Eric:
    “doctors … have been systemically unable to establish ‘unacceptable’ care guidelines for common conditions. You know as well as I do that while there is usually more than one right way to address a problem, there are definitely wrong ways.”
    That is because of the nature of medicine. People are not cars; we don’t know everything about the way the body works so we cannot write algorithms that will reliably apply to 100% of the patients.
    I’ll give you an example. Shortly before I left the HMO where I worked, a patient who was 25 weeks pregnant came to the hospital with pain along the inside of her left leg. The most important thing to rule out in this setting is a DVT (blood clot in her leg) because it is potentially fatal.
    There are 5 main criteria for diagnosing a DVT and the patient had none of them. Nonetheless, something about the situation did not “feel right” to me. I called the radiologist and asked for her leg to be scanned. The radiologist declined to do it saying that because she did not meet the diagnostic criteria, he might not be reimbursed for the procedure.
    After much yelling back and forth I told him I was going to write in the chart that he personally was denying her the scan. Afraid of the potential liability. he backed down. The patient had a blood clot extending from her left ankle into her pelvis. Had she left the hospital without treatment, she almost certainly would have died.
    Medicine is, in essence, pattern recognition. All the years of study, observation and experience give good doctors “clinical judgment”. Unfortunately, no amount of guidelines can substitute for judgment.
    “While complaining about declining remibursement from private payers and medicare, few of us have been actually willing to ‘cut the cord’. Remember that medicare reimbursement is about 10% less (not accounting for inflation) than in 2001, and still nearly all docs participate (myself included).”
    Well, you know what they call doctors who cut the cord? They say they practice “concierge medicine” and they are reviled on this website and elsewhere.
    “doctors, by saying that THEY are victims, do not endear themselves to the public. Competing for more significant ‘victimhood’ in healthcare is a losing proposition pr-wise, politically, and long-term for doctors.”
    Absolutely! Doctors are not the victims; the patients are the victims.
    “by supporting a single-payer system, you wish to formally (and forever) cede control over the healthcare system to bureaucrats.”
    Doctors have already lost control of healthcare and the patients are suffering for it. At a minimum, single payer will increase access.

  71. I feel sick.
    I feel like divorcing myself from every aspect of a system that has led to this debate. I feel like closing down for a month, trying to recover what it was that made me want to do this in the first place. Then opening back up and expecting fair payment for services as rendered. If someone comes to see me, spending an amount of time necessary to provide best-of-my-ability care–irregardless of whether they’re wellness, catastrophic or in need of compassionate end-of-life care–and then charging an amount necessary to ultimately make what I think I am worth.
    If no one comes to see me, then I will try something else. Maybe I will become a professional blogger or a 9-to-5 utilization reviewer for BCBS (if you can’t beat ’em…)
    I wonder if this is not the way to reform the healthcare system. Have all physicians simply go back to their roots. Shut everyone else out of the exam room. Focus on patients. And expect payment for services rendered.
    Someone else–government, employers, hospital CEOs, insurance companies, health policy types, internet gurus–can figure out all of the rest. If I am happy enough doing it, I would be more than willing to take on my part of the charity care that is necessary to take care of our citizens and volunteer a significant amount of time in the free clinic as well.
    Seems like a means of reform that might actually be doable. The “who cares who the payer is” reform.
    (You have no idea how close I am to making such a decision. This is not meant to be a joke.)

  72. Starting with the most recent comment, I do disagree with you, Tom, about the legal (specifically liability) implications of not offering a treatment. There is no legal precedent that says (and the current state of medical liability makes it impossible to do so) that a doctor has protection from liability by listing all possible treatments for a condition and then refusing to offer any of them. Surgeons can say that they are not qualified to perform a certain operation, but I do not think this holds true in quite the same way for the range of medical specialties like endocrinology (eg. diabetes), pulmonology (eg. chronic lung disease due to smoking), cardiology (eg. heart disease).
    To that extent, I believe that Amy as a point with regard to control over the system.
    Beyond that, however, I find myself constantly baffled by people who share Amy’s point of view of blaming the system on the administrators.
    Amy, this is not so much a digression rather than a ‘meandering’, but please offer your opinions about my next few statements:
    1. doctors (and using generalities allow this whole blog to exist) have been systemically unable to establish ‘unacceptable’ care guidelines for common conditions. You know as well as I do that while there is usually more than one right way to address a problem, there are definitely wrong ways.
    2. doctors are ‘penny wise and pound foolish’. While complaining about declining remibursement from private payers and medicare, few of us have been actually willing to ‘cut the cord’. Remember that medicare reimbursement is about 10% less (not accounting for inflation) than in 2001, and still nearly all docs participate (myself included).
    3. doctors, by saying that THEY are victims, do not endear themselves to the public. Competing for more significant ‘victimhood’ in healthcare is a losing proposition pr-wise, politically, and long-term for doctors.
    4. by supporting a single-payer system, you wish to formally (and forever) cede control over the healthcare system to bureaucrats.
    5. Medical care, as delivered by doctors, nurses, and the many other hard working members of the healthcare community on all levels, does not occur in a vacuum outside of the realm of local, state, and national policy. Put another way, are the doctors in third world countries, Russia, Cuba, less caring than the doctors in the US? Of course not. But the system in which we provide healthcare matters. And if you believe, as I do, that doctors are one of the most important pieces of the system, then it is imperative that doctors take an active role in every facet of healthcare delivery, including policy.

  73. > I challenge you to make any sort of ethical argument
    > that patients deserve LESS time with a physician
    I can make a perfectly sound ethical argument that people do not “deserve” any time with a physician.
    > Did [managed care] work when it was legal?
    > No, it didn’t.
    Kaiser and Mayo are the counter examples. Except in a few instances, managed care was fought every step of the way by physicians and their patients. I say that in the main, it wan’t really tried. I do agree with you that after the actual management of care was outlawed, the concept was corrupted into the management of “cost” only.
    > Until you are willing to take legal responsibility
    > for your decisions, you are not taking care of anyone.
    I am willing absolutely to take legal responsibility for my decisions. I note it is the physician controlled state medical boards that decide what is legal when they set the standards of professional practice and that the way they do this shows a strong tendency to protect their autonomy and incomes. That they have been less successful lately does not change this.
    > I have been pounding at this point over and over
    > again. Nothing in our experience shows that changing
    > the behavior of doctors saves substantial amounts of
    > money
    So you are saying there is no such thing as physician-induced demand, and that therefore the CON laws were useless? There is some good evidence to the contrary. You are saying that moving to PPS and making physicians for the first time conscious about cost expectations did not save a substantial amount of money? The falsity of this proposition is even easier to prove. I think you are simply wrong about this.
    > a lot of efforts to change doctors’
    > behavior has simply wasted money.
    While this is not evidence that every attempt to change doctors’ behavior is an evil waste of time, it is absolutely true.
    > Mandating what physicians can and cannot do is not
    > taking care of people; over the last 20 years these
    > mandates have been DENYING care to people.
    It is ironic that you complain on the one hand about managers having done it yesterday, but advocate their doing it tomorrow.
    > The fact is that society (through its political,
    > legal and moral decisions) MANDATES such care.
    Are you saying that doctors are not professionals after all; that they are rather highly trained slaves to their patients, and must do whatsoever their patients demand? This is precicely where the “healthcare is a right” argument leads.
    You say the body politic needs to face up to these issues, and with respect to the financing side, I quite agree. But! As far as I can tell, legally and morally a physician is free to decline to provide any service she chooses so long as she is above board about it. In what ways (specifically) is this not true?
    t

  74. I wrote:
    • IF we knew the most cost-effective ways to prevent and manage illness and to treat every patient,
    • AND if we used that knowledge to implement top-quality care very efficiently,
    • THEN patients would remain well longer, recover faster, manage chronic illness with fewer complications, have fewer problems from errors and omissions, receive fewer unnecessary and ineffective or overly expensive tests and procedures, etc.

    And Amy responded: I respectfully disagree. Your prescriptions are predicated on assumptions that are unproven.
    Of course these assumptions are unproven, Amy … The problem is that they have not been proven NOR disproven. Testing these assumptions requires a major change in the healthcare system, one that has never taken place. It requires replacing assembly-line care with personalized care including enabling providers to spend adequate time with their patients and having the tools they need to help make decisions about delivering the most cost-effective care for each patient resulting in the best possible outcomes at the least possible cost, as well as the things presented below.
    Amy wrote:
    1. You are assuming that there are more cost effective ways to prevent and manage illness. I really doubt it and I have certainly seen no evidence to demonstrate it. This is the faulty paradigm that has harmed healthcare without improving it. It is possible that we are currently managing and preventing illness in the most cost effective way possible considering are state of knowledge.
    2. You are assuming that there are more “efficient” ways to deliver healthcare. No, no, no! It HAS been tried and it does not work. Moreover, I have seen no evidence that it would work.

    I actually agree with the bold sentence: Based on our current level of knowledge, providers are doing the best they can. The problem is that the medical literature is fraught with examples of how there is a very serious knowledge void that prevents us from knowing the most cost-effective way to treatment each patient. Here’s a small sampling from the three pages examples:
    • An estimated half of all surgical operations and other medical procedures lack strict scientific evidence of their effectiveness and safety and common procedures are prescribed that are not proven effective — up to 85 percent lack adequate scientific validation. In other words, healthcare providers often don’t know what treatments work best for a particular patient.
    • Stakeholders do not have enough information about the quality of care — outcomes data about what works and what doesn’t — to enable them to make appropriate decisions. They are concerned that their decisions are based on limited or poor quality information.
    • Even when good information is available to support healthcare decisions, it often isn’t being used to improve care quality because the unaided human mind, no matter how competent, simply cannot focus on all the necessary details nor possess all the knowledge needed for continually making the best clinical decisions. Specialization and traditional information technology do not solve this problem.
    I can also give examples from my own experiences as a patient and as a healthcare practitioner.
    Please realize that nothing I’m saying is in any way meant to diminish healthcare professionals who, like you, have always wanted what’s best for their patients. But being humans, with human limitations and fallibilities who are operating in broken system, it makes their jobs that much more difficult; and the same goes for administrators.
    Anyway, I do believe that as providers gain new knowledge, they will use it to improve care efficiency and effectiveness. This can best be accomplished by linking practitioners with researchers who collaborate and use HIT to perform lab and field outcome studies; establish and evolve evidence based practice guidelines; disseminate and implement the guidelines; and get computerized assistance in making diagnostic and treatment prescription decisions personalized to the particular needs of each patient, as well as managing and coordinating plans of care. It also means putting the policies and processes in place to ensure providers have the time and money they need for continuous quality improvement.
    The problem is it has NEVER been attempted. So, I disagree with your second statement that based on the past 20 years, we have tried to increase cost-effectiveness and failed. No, no … What the system tried to do is control costs through failed economic strategies the worsened care quality because they focus on finding ways to deny care without much regard to a patient’s quality of life (and I assume we agree about this).
    Amy wrote:
    3. You are assuming that patients will remain well longer, etc. etc. No, no, no, no, no, no! There is absolutely no evidence that this is the case and there is plenty of reason to believe that it is not. Every person that lives longer ends up costing more. Everyone dies eventually and very few people drop dead.
    I agree in part: The sooner people die and the fewer resources spent on keeping them alive, the lower their lifetime medical costs. But I think you’re talking about end of life care, not wellness/prevention, maintenance of non-end-of-life chronic illness, nor catastrophic care. In that case, a total price of treatment within the $/QUALY threshold model, like Tom mentioned, makes good sense to me.
    As far as the effectiveness of comprehensive wellness/prevention and maintenance approaches keeping people well longer, there needs to be adequate investment in and research of such wellness programs before we can validly claim how cost-effective they are. I know it’s been working for me; I’ve been able to control Type 2 diabetes for the past 16 years with exercise and diet alone. Why can’t it work for others? We just have to learn better ways to teach and motivate consumers.
    Amy wrote:
    Nothing in our experience shows that changing the behavior of doctors saves substantial amounts of money and a lot of efforts to change doctors’ behavior has simply wasted money. Remember pre-approval?…No one was ever denied (obviously), yet I wasted time every day talking to insurance functionaries….My patients gained nothing, absolutely nothing and money was spent needlessly.
    What you’re actually saying is ineffective pre-approval is ineffective and costly. True. But this thread is discussing alternative, innovative strategies to the managed care methods of the past. And there’s good reason to conclude that wellness/prevention + CQI (including HIT support, collaboration, and evidence-based knowledge) + rational rationing (with QUALY) + redirected (managed) competition + incentives (e.g., P4P and patient-compliance rewards) + a high-fidelity system are key components of a viable solution for sustainable decreases in costs and improvements in outcomes. All I’m saying is we should try, for the first time, this rational, compassionate, patient-centered approach. And provider leadership is important.
    Steve

  75. “you left the practice of medicine years ago when the clash between what you “felt” your patients “deserved” was more than they were evidently willing to pay for (either outright or through an insurance premium) finally became apparent.”
    What my patients “deserved”, hmmm. I did not intend that to mean a personal decision on my part. I mean an ethical decision on everyone’s part. I challenge you to make any sort of ethical argument that patients deserve LESS time with a physician, that they deserve FEWER nurses in the hospital, that they deserve to have MEDICAL decisions made by people who have a financial stake in denying care and who carry no legal responsibility for their decisions. That is what has happened in the past 20 years. The money that provided these services has been diverted to pay administrators and the cost of healthcare has not gone down and access has not gone up. Where is the value?
    “So, who exactly is it that prescribes $200K treatments for Stage IV cancers, kidney dialysis, antibiotics in the face of viral infections, transplants, and the rest?”
    Well, that’s nerve! Are you suggesting that current moral and legal guidelines offer a choice? The fact is that society (through its political, legal and moral decisions) MANDATES such care. Haven’t I been arguing for days that body politic needs to face up to these issues and stop mandating that doctors provide every possible service in the face of death?
    “I will point out again that Managed Care is mostly illegal now.”
    Did it work when it was legal? No, it didn’t.
    “Health services managers do indeed take care of sick people: and not only the sick people who can afford to come and see us, but also those who can’t. We also take care of well people by helping them finance the risk of sickness.”
    Until you are willing to take legal responsibility for your decisions, you are not taking care of anyone. If you are so sure that what you do is necessary and important (and works), step up to the plate and take responsibility for it. Mandating what physicians can and cannot do is not taking care of people; over the last 20 years these mandates have been DENYING care to people.
    I find it ironic, to say the least, that administrators whose central paradigm is that doctors must be given financial incentives and punishments to make the system more “efficient” earn their salaries by taking money that would have been used for patient care. Administrators have financial incentives to deny care and none to provide it. Why are you so quick to believe that doctors prescribe care in order to make money and administrators are above such ugly and self-serving practices? Certainly not on the basis of any evidence.
    “I do not mean to come across as hostile towards doctors: mainly I want them to step-up and behave again as a Guild. I want them hip-deep in establishing the frameworks, but I insist they actually do it.”
    Really? Right now doctors and nurses are giving less care to each patient, and millions of people are not getting any care at all, and you think that doctors should be diverting ANY of their time away from patients? Over the last 20 years, the amount of time spent on dealing with insurance companies, hospital committees, hospital administrators, etc. has skyrocketed. This has been at the expense of patients and has NOT saved money and has not improved access.
    I have been pounding at this point over and over again. Nothing in our experience shows that changing the behavior of doctors saves substantial amounts of money and a lot of efforts to change doctors’ behavior has simply wasted money. Remember pre-approval? I used to be required to get “pre-approval” for my patients to deliver their babies. No one was ever denied (obviously), yet I wasted time every day talking to insurance functionaries. Those functionaries got paid for chatting on the phone with me. My patients gained nothing, absolutely nothing and money was spent needlessly.
    The savings are simply not there and all the wishing and hoping does not make it so. Why should doctors get “hip-deep” in creating a system that has not improved patient care and has not saved money and has not improved access?

  76. Dimitry says:
    > Get a grip of your cost structures and learn to price.
    (Donning Hospital CEO hat) I don’t have to get a grip on my cost structures because I am an oligopolist, and I have learned very well to price as any self-respecting oligopolist prices: I set my list prices just a tad higher than I think anybody might possibly pay, and then negotiate down from there with anybody who can make sense of the price list. In the absence of government interference, this is the way pricing works in this kind of market, and it gives me great freedom to pursue the kinds of projects I find worthwhile. Don’t like it? Go buy and operate your own hospital. Its a free country.
    Amy Tuteur says:
    > On what basis do you say that?
    Mostly on the basis of your saying that you left the practice of medicine years ago when the clash between what you “felt” your patients “deserved” was more than they were evidently willing to pay for (either outright or through an insurance premium) finally became apparent.
    > You’ve been given free hand to do everything you
    > wanted
    This is flatly false — I do not know where to start with it. I will point out again that Managed Care is mostly illegal now.
    > It is NOT the job of doctors to administer the
    > financial side of the system.
    What does it mean to “administer the financial side of the system”? You have already said it does not mean “get me all the resources I and my patient want”. So what does it mean? If I am doing my job, will it have any impact on yours at all? You have said you favor a single-payer approach — what should this single payer do besides pay? Anything? Act as a monopsonist with respect to drugs and materials, but not labor?
    > [doctors] are not responsible for the disaster that
    > is healthcare today, and nothing you compel the
    > doctors to do is going to substantially change the
    > problem.
    So, who exactly is it that prescribes $200K treatments for Stage IV cancers, kidney dialysis, antibiotics in the face of viral infections, transplants, and the rest? Who determines what exactly is The Standard of Care? And how do they do it? Who sees to it that these standards are adhered to? (hint: it has fallen to the courts because…) Who sets the RVUs on ambulatory care? Madam Doctor, it is doctors who do all these things, and control the state medical boards. But what do the state medical boards do? What I and Eric Novak call for is Physician Leadership instead of Physician Whining about how it isn’t our fault and we can’t fix it. Nobody is in a better position to fix it. I think you are trying to have things both ways when you say “doctors are the system” and “doctors are helpless” in the next breath. Perhaps “a doctor” is helpless, but “doctors” certainly are not. And I notice that many, many of the people advancing health services management whose work I most admire are doctors. But their work is not well-received by other doctors.
    > Administrative efforts in “controlling costs” have
    > been an utter failure. Perhaps less money should be
    > spent on adminstrators and more on actually taking
    > care of sick people.
    You make two assumptions here:
    1) That things wouldn’t be even worse but for the efforts of health services managers. We do not have PPS, Stark laws, CON laws, Correct Coding Initiatives, UR, and the rest because of a merely theoretical possibility that doctors might be tempted towards profiteering off of or pandering to price-insensitive patients at the expense of others.
    2) That health services managers do not take care of sick people. But for the efforts of health services managers, we would not have any idea about practice variations, patient safety failures, how to grade risk, and so-forth. Health services managers do indeed take care of sick people: and not only the sick people who can afford to come and see us, but also those who can’t. We also take care of well people by helping them finance the risk of sickness. As you say, doctors don’t have time to do these things. And it seems to me few are inclined: it doesn’t pay very well and everybody is mad at you all the time.
    > It is possible that we are currently managing and
    > preventing illness in the most cost effective way
    > possible considering are state of knowlege.
    The research on practice variation proves that “we” certainly are not managing and preventing illness in the most cost effective way possible considering are state of knowlege. Ditto your comment #2.
    Your point about multiple hundreds of thousands spent to treat Stage IV cancers is well-taken. If care could be managed (and it is mostly illegal to do so now) we could use something like QUALY to decide, depending on whether we’re a payer or a pharma either:
    1) Whether a treatment will be paid-for at all, or
    2) How to price a course of treatment so that it
    will be paid for.
    i.e. — If drugs are driving the cost of treating the Stage IV cancers (I do not know) then the drug manufacturers could price so as to bring the total price of treatment within the $/QUALY threshold.
    Something kind of like this was tried in the 1980’s and now it is illegal in most places. Patients (and their doctors) hated it, and can easily out-vote healthcare managers, reducing their roles to that of administrators. Which is where we are right now.
    In the current system, an individual oncologist would be forced to say: “Gee, if I give you another couple of years, it means aggregate medical spending grows too fast, and because of community rating this means fewer people will be able to have access at all, which will cost many lives and much suffering. I’m sorry, but for the sake of somebody I have never met and cannot name, I decline to treat you.”
    This is the world of a health services manager and policymaker: they make the decisions when they establish frameworks. Most understand very well the moral consequences and the best face them quite squarely. Unfortunately, patients and legislators tend not to.
    I do not mean to come across as hostile towards doctors: mainly I want them to step-up and behave again as a Guild. I want them hip-deep in establishing the frameworks, but I insist they actually do it. If not, then non-physicians will do it for them: and that is a fact.
    One thing about my point of view is that I haven’t got a particular axe to grind. I will work with docs, hospitals, governments, benefit managers, or “insurance companies” equally, and I work hard to understand the economics of each segment. I have so far not worked in the drugs & devices end of the industry, and don’t have a particular desire. I have aspirations to work in the policy arena. If I am successful, it means I will be making life and death decisions — many more of them than the typical physician ever will, but all in the abstract. If you think I am not nervous about this, you are wrong.
    t

  77. The financial link between insurer and provider needs broken and HDHPs can do that. Physicians should treat patients and insurers should insure them, except for the exchange of information there is no reason for the two to have anything to do with each other. Insurers should scrap PPOs and go back to paying a percent of RBRVS published for the patients to see. Patient can see any doctor they want and pay any price they want for medically necessary care. Patient pays the doctor then submits the bill to their insurance to get reimbursed at the specified RBRVS %. This would also drastically reduce utilization and force patients to think more about their care. Patients would question treatment plans, generic availabilty, and pricing again if they paid for it initially.

  78. Steve:
    “• IF we knew the most cost-effective ways to prevent and manage illness and to treat every patient,
    • AND if we used that knowledge to implement top-quality care very efficiently,
    • THEN patients would remain well longer, recover faster, manage chronic illness with fewer complications, have fewer problems from errors and omissions, receive fewer unnecessary and ineffective or overly expensive tests and procedures, etc.”
    I respectfully disagree. Your prescriptions are predicated on assumptions that are unproven.
    1. You are assuming that there are more cost effective ways to prevent and manage illness. I really doubt it and I have certainly seen no evidence to demonstrate it. This is the faulty paradigm that has harmed healthcare without improving it. It is possible that we are currently managing and preventing illness in the most cost effective way possible considering are state of knowlege.
    2. You are assuming that there are more “efficient” ways to deliver healthcare. No, no, no! It HAS been tried and it does not work. Moreover, I have seen no evidence that it would work.
    3. You are assuming that patients will remain well longer, etc. etc. No, no, no, no, no, no! There is absolutely no evidence that this is the case and there is plenty of reason to believe that it is not. Every person that lives longer ends up costing more. Everyone dies eventually and very few people drop dead.
    Why do you think we have this crisis anyway? It’s because we can have turned certain death into chronic illness. Diabetes used to be a death sentence. Now we have insulin, and insulin pumps and dialysis and kidney transplants: absolutely enormous expenditures. Kidney disease itself used to be certain death, but now we can maintain people indefinitely on dialysis at ever increasing expense. Cancer is turning into a chronic disease right before our very eyes. I currently have two dear friends who have stage IV cancer (one ovarian, the other breast) who have lived more than a year since their diseases recurred. Stage IV disease used to be certain death and relatively quickly, too. Both of my friends have been on multiple medications in the last year (when one medication fails, they switch to a new one), have had multiple PET scans, hospital admissions and complications. I am thrilled beyond words that they are still here, but each of them has accounted for 100’s of thousands of dollars of care in one year alone.
    The savings are simply not there, and 20 years of insisting on it without results should have made it painfully clear. What will it take to convince people that we need to look elsewhere for savings?

  79. Amy:
    I thank you for hammering away with your points of view. They are becoming clearer each time.
    You say: At this point, it is wishful thinking to suggest that the problem of rationing technology and services is going to be avoided by the money saved from changing doctor behavior or increasing “wellness”.
    I agree. But since the wellness-plus approach of which I speak has never been attempted, there’s no way to say for certain how much rationing would be needed, or if such wishes can come true. And yes, we should be discussing rationing, as we have been.
    But I think it’s a big mistake for us to conclude that rationing is THE ANSWER, although it may be part of a comprehensive solution. I say this because, should we fail to increase the effectiveness and efficiency of our healthcare system in a major way, then costs will continue to rise, resulting in ever more stringent rationing. This is because rationing doesn’t address a fundamental problem see, the the Knowledge Void. That is:
    • IF we knew the most cost-effective ways to prevent and manage illness and to treat every patient,
    • AND if we used that knowledge to implement top-quality care very efficiently,
    • THEN patients would remain well longer, recover faster, manage chronic illness with fewer complications, have fewer problems from errors and omissions, receive fewer unnecessary and ineffective or overly expensive tests and procedures, etc.
    Now, THAT would have a tremendous positive affect on costs, not to mention people’s well-being! Could it delay or eliminate the need for rationing? I don’t know, but it would certainly control costs.
    That’s what I mean by the need to focus on wellness-plus: prevention/maintenance + continuous quality improvement. We “quality improvement” as using evidence-based interventions and advanced HIT to generate sustainable increases healthcare safety, effectiveness, efficiency, affordability, timeliness, and availability. This is what our society should be trying to achieve, along with developing better economic models and redirecting competition. Anything less is unconscionable.
    This is one place that physician leadership, discussed by John, is so important. While I can’t point fingers at any one group for the healthcare crisis — since the problem is a broken economic and political system, not bad people — the lack of leadership by providers is a major stumbling block since providers have both the power and ethical responsibility to influence the kind of change necessary, but haven’t for a number of reasons. It seems that our current healthcare system prevents many providers from having the time they need to do a top quality job with their patients, but things are unlikely to change unless they somehow find the time to lead the charge for change and embrace that change.
    Anyway, consider these answers to your excellent questions:
    Are we going to continue funding the development of expensive new technologies and then make them standard of care? Answer: Technologies that improve outcomes and lower costs, or have a “reasonable” positive affect on life quality as determined by QUALY (or some other useful metric), should be funded and become standards. A good example would be affordable, evidence-based, decision-support tools, but not expensive technologies yielding minimal value.
    Are we going to continue to allow drug companies to charge whatever they want, without regard to their costs and under the government protection of extended patents? Answer: As we have discussed in other threads, there needs to be policy changes. I suspect that QUALY could also be applicable here, i.e., calculate a reasonable price to pay for a medication based on its benefits to life quality and the cost of the med’s development, and have that price be related to each person’s ability to pay.
    Are we going to continue to allow unlimited, complex and expensive medical care at the end of life? Answer: We addressed this earlier, i.e., use QUALY and lower cost alternatives such as home care, rather than open-ended heroic measures. Where wellness comes in is that the system would keep people healthier longer and get them better faster for less cost using the most efficient and effective interventions and processes, thereby reducing expenses during their lifetimes. This seems to be consistent with elliottg’s compression of morbidity.
    So, the solution to the healthcare crisis should include a wellness-plus approach and should address the thorny issues of spending our limited resources on expensive technologies, drugs, end of life care, etc. It’s not an either-or matter.
    BTW – I wish there were more innovative economic ideas like the one Barry presented: Enabling Medicare to coverage at a very competitive price to the under 65 population based on community rating. WOW! Is that really possible?
    Steve

  80. “No, I’m not missing the point” “It is NOT the job of doctors to administer the financial side of the system. It is YOUR job to do that.” “nothing you compel the doctors to do is going to substantially change the problem”
    Whew. One of us is having a bad day. I’m not talking about “compelling” doctors to do anything. I simply pointed out the vacuum of physician leadership in health care policy. I am surprised that your reaction is so bitter. And so devoid of willingness to cooperate to find better ways.
    One does not have to manage a hospital or health plan or HHS to provide significant leadership. George Marshall once said “If you get the strategy right, a major can write the battle plan”. That is what I am talking about.
    So, Doc, it’s up to you. The nation needs physicians who will help lead us out of this wilderness. If you prefer to take care of your patients and not be involved with policy leadership, so be it. You have a lot of company. That was my point, after all.

  81. John:
    “Doctor, I’m sorry, but you miss the point. You complain about “administrators, consultants, etc.” and then refuse to participate in any constructive manner to change or influence what is going on. You “don’t have time.””
    No, I’m not missing the point, I am vehemently disagreeing with the point. It is NOT the job of doctors to administer the financial side of the system. It is YOUR job to do that. Doctors are taking care of the patients, and the last thing that they should be doing is taking time away from treating patients (which only they can do) and work on something that you can do.
    Your claim is simply another version of “blame the doctors”. You are not blaming them for not being more efficient; you are blaming them for not be more involved in administration. Either way, it is an abrogation of YOUR responsibility to manage the system, which is ostensibly what administrators are paid to do.
    The problem is not the doctors. I don’t mean that doctors are perfect; I mean that they are not responsible for the disaster that is healthcare today, and nothing you compel the doctors to do is going to substantially change the problem. I know that it is an article of faith among administrators that if only doctors could be managed or motivated in some way, there would be substantial cost savings. You’ve tried that. It hasn’t worked. It’s time to get a new paradigm.
    To Steve and others:
    The wellness issue is just another attempt to punt. The cost savings of “wellness” are outrageously overrated, not to mention that there is little medical evidence that “wellness” could be improved all that much.
    At this point, it is wishful thinking to suggest that the problem of rationing technology and services is going to be avoided by the money saved from changing doctor behavior or increasing “wellness”. There will be no solution to this mess unless we as a society (and those who are administrators) confront issues like these:
    Are we going to continue funding the development of expensive new technologies and then make them standard of care?
    Are we going to continue to allow drug companies to charge whatever they want, without regard to their costs and under the government protection of extended patents?
    Are we going to continue to allow unlimited, complex and expensive medical care at the end of life?
    Increasing “efficiency” or increasing “wellness” just side steps these issues.

  82. Edited to add:
    Obviously, any vouchers to help the uninsured buy coverage would have to be subject to an income based means test using a sliding scale with strong disincentives to prevent employers from canceling coverage that they now offer.

  83. Forgot to mention the only reason that tradeoff has to be made at all is that productivity improvements have been woefully lacking in healthcare. Soon those productivity improvements will be forced upon the industry. It will be interesting to see who takes/gets credit for the inevitable improvement that will follow.

  84. “No, I don’t think so. Physicians are not the source of soaring health care costs, and therefore, modifying their behavior is not the solution.”
    Doctor, I’m sorry, but you miss the point. You complain about “administrators, consultants, etc.” and then refuse to participate in any constructive manner to change or influence what is going on. You “don’t have time.”
    Thus you illustrate my point.
    One of the signal failures of our health care system is the failure of physicians to exert real leadership–coupled with a determination to blame only others. You “don’t have time”. And because nature always abhors a vacuum people of whom you disapprove have taken the leadership – yet you decline to lift a finger from your keyboard to do anything about it. You “don’t have time”.
    Sadly, you are not alone.
    Sorry, that’s how I see it.

  85. The assertion that wellness is not economically beneficial seems intuitive, but basically incorrect. There is “compression of morbidity” even though its exact magnitude and effect is debated. Compression of morbidity means that we don’t necessarily live longer, but die more quickly after more healthy years so that time spent disabled is reduced. From an economic perspective the point at which people switch from accumulating wealth to decreasing it (retirement for many, but not all) is arbitrarily defined by social constraints in today’s economy while in previous years, it was dictated by physical constraints (health issues). This means a wellness model might mean people have to work more years to pay for their increased years of health, but that’s a trade-off most would make.

  86. I noticed that Kate Steadman, on her Healthy Policy blog, referred to the comments section of this thread as a “great conversation” which it absolutely is.
    It appears, at least to me, that there is a fair amount of common ground around the need for explict rationing of end of life care and the use of QUALY metrics or something like it to make rational, systematic, and, hopefully, consistent decisions across the system.
    Single payer advocates have focused mainly on eliminating the administrative cost and profit of insurance companies to free up money to cover the uninsured but never talk about the need for rationing in trying to make the sale. However, there could be a significantly larger opportunity in tackling the end of life care issue.
    Let’s say a stringent rationing approach to end of life care using QUALY metrics could survive our political process and were applied to Medicare and Medicaid which are effectively single payer systems for the large populations that they serve, though I know lots of people buy Medigap policies or still have previous employer coverage to supplement Medicare.
    Assume further that enough money were ultimately saved to provide vouchers to the uninsured sufficient to buy coverage comparable to Medicare. Since insurance company overhead and profits are currently being paid for by employers buying (or self-insuring) coverage for their employees and indivduals buying policies in the private market and not by Medicare or Medicaid, Medicare should be able to offer coverage to the under 65 population using 0-64 age bracket community rating at a very competitive price based on expected average cost per person insured. To make sure the government does not unfairly and deliberately underprice the product, they could be required to live under the same break even rules as the Post Office and raise rates as required. If they are as efficient as many claim and fraud is not a big problem, they should be able to undersell the private insurers and maybe even put them out of business. Private insurers, for their part, could be required to operate within the same 0-64 community rating scheme and would have to provide end of life care on terms at least comparable to Medicare and Medicaid but would be free to offer higher QUALY limits for a higher premium if they think they can sell them at a price that makes sense as well as high deductible plans if they think they can make that work without draining the risk pool of funds required to pay for the high cost cases.
    Separately, one point on QUALY: due to significant differences in costs (mainly related to wages and real estate costs) around the country, QUALY limits would have to differ somewhat by region to reflect that just as Medicare payment rates do now.

  87. I sincerely appreciate your challenge to the wellness concept, Amy.
    > It sounds heartless, but dead patients cost a lot less than living patients, so extending life is not likely to save money.
    True. The fewer resources spent to extend end-of-life of the terminally ill, the more money is saved. The wellness model we propose is consistent with this, and includes recommendations for lower cost alternatives such as home care And it is where something like QUALY could come into play. You see, in some cases, “wellness” may mean the most reasonable thing to do is treating a patient compassionately and with dignity to improve end of life quality, rather than just focusing only on extending the length of life at all costs. This is one of those tough political and moral decisions we must confront, i.e., when does increasing quality of life supersede increasing length of life. QUALY forces us to surface the underlying assumptions and make them explicit, thereby bringing the issue of cost-effectiveness into the moral/political debate.
    There are different ways to define a focus on wellness. Pumping huge sums of money into screening programs that offer little benefit is not a feature of our Wellness-Plus Solution. Instead, it focuses on sustained improvements in healthcare safety, effectiveness, efficiency, affordability, timeliness, and availability achieved by:
    • Knowing each person’s health risks and needs thoroughly
    • Knowing the most efficient and effective ways to prevent, treat and manage each person’s health problems
    • Consistently used this knowledge to promote each person’s health and well-being.
    It aims to promote a high performing healthcare system that achieves better access, improved efficacy, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults.
    While I’m not in a position to debate the relative value of PSA, mammography, and HIV screenings, I can say that consumer education, prevention, and compliance programs have shown very promising results. Nevertheless, there’s a lot more we have to learn and do before the typical patients have the knowledge, skills, and motivation to keep themselves healthy.
    And, if you’re interested in the results of a simulation model comparing the wellness model we propose to the non-wellness model currently implemented in our healthcare system, we found that only the wellness model results in continuously improving care quality resulting in fewer deaths from errors and omissions and lower costs!
    So, I’m not sure we’re defining “wellness” the same way. I certainly do not want to operate under any illusions nor delay meaningful change in our current healthcare system, and am I firm believer in basing decisions on knowledge supported by valid evidence. In any case, I would be most appreciative of any further comments since they help make sure we’re focused on the right things!
    Steve

  88. To John,
    “What I would suggest is that the “administrators, consultants, etc.” are not in place solely because they walked in one day and said hello. They are there in large measure because of a vacuum of physician leadership on these issues over the past 40+ years. In fact, a too-typical response by physicians to businesses that complain about rising costs is still a shrug and a bill in the mail.”
    No, I don’t think so. Physicians are not the source of soaring health care costs, and therefore, modifying their behavior is not the solution. That is the point I have been trying make over and over again. There are a number of factors responsible for soaring healthcare costs and they require political and moral decisions. For example: Should we subsidize research into expensive technology and then pay for it when it comes into use? Should we allow drug companies to charge anything they want for medication without any regard to their actual costs? Should we undertake the staggeringly expensive care of those in persistent vegetative states or victims of senile dementia?
    The healthcare system is currently absurd in the extreme. Those at the end of life are sucking up billions of dollars in unrestricted care and healthcare administrators are trying to figure out how they can force doctors to process increasing numbers of cognitively able people faster, taking less time on each and being reimbursed less.
    That’s why I am emphatic in my insistence that administrators have a moral obligation to consider the effects of their decisions, not the effects on doctors, but the effects on patients. I am not saying that we don’t need administrators, since doctors do not have the time to be administrators. What I am saying, bluntly, is that administrators have done a terrible job of it so far. They haven’t controlled costs; they haven’t improved access; and they’ve made the patient experience substantially worse. It’s time for a paradigm shift.
    To Steve:
    Thank you for taking the time to summarize so many positions. I disagree with you on one major point.
    “No solution is sustainable unless a very strong wellness … component is in place…”
    This is also part of the received wisdom and it is also wrong. Wellness is vastly overrated as a cost saving measure. It sounds heartless, but dead patients cost a lot less than living patients, so extending life is not likely to save money. Extensive screening programs that identify early diseases (think mammography for breast cancer or PSA testing for prostate cancer) cost a lot of money, require multiple additional tests and surgical interventions and have, at best, an equivocal effect on morbidity and mortality. In other words, lots of money is spent for very little benefit.
    The situation is even worse for HIV screening. HIV drugs cost a fortune each and every month. Each asymptomatic patient identified early is responsible for hundreds of thousand of dollars of expenditures, and in the end likely will require all the expensive care that they would have required if they hadn’t been diagnosed early. There are moral imperatives for screening diagnostics, but there are no economic benefits.
    The supposed cost saving from “wellness” are illusory, also. With the exception of cigarette smoking and excessive alcohol consumption, it is far from clear that efforts at wellness will change disease patterns or reduce costs. This is wishful thinking; we want to believe that we have the power to keep ourselves healthy, but there is no evidence that we do.
    The bottom line is that if we want to control healthcare costs, we have to confront tough political and moral decisions. Claiming that substantial amounts of money can be save by increasing “efficiency” or promoting “wellness” just delays the day of reckoning and erodes the current healthcare system in the process.

  89. Following is my attempt to summarize this thread using snips and drawing conclusions.
    The thread focuses on comparing 4 economic models for providing healthcare coverage and controlling costs:
    1. HSA/HDHP
    PRO
    •Greg Scandlan: HSAs …are an enormous step in the right direction, and they will help bring about other changes like a demand for reliable information from consumers, greater accountability on the part of providers, and new more efficient ways of delivering care.
    • Eric: a move toward transparency … reduction in ‘administrative waste’ alone would cover ‘the uninsured’… HSA increasing at 2.1%, while all other plan types are increasing premiums by over 7%.
    CON
    • They are certainly no panacea
    • Matt: It’s bad enough HDHPs destroying what’s left of the community-rated risk pool in the individual market, and giving employers an excuse to get out of providing health benefits … Just because the private market doesn’t really have large community rated pools any more doesn’t make the theory wrong
    • elliottg: how do you take money out of a large pool of money and then claim that the difference won’t have to be made up somehow.
    Matt: They shift the first few thousand dollars from being the insurer to being the consumer … The insurer has to count up to the deductible somehow! And that means administrative waste! … And first dollar coverage [in HAS/HDHP] encourages needless spending.
    Anonymous: there is one big fallacy the proponents of HSAs have not yet realized: a lack of real pricing transparency … hospitals continue to gouge the uninsured.
    • Lin: The entire argument i.e. transparency is a sham … Consumers for Health Care Choices… knows about this rip off from the get go.
    Transparency of cost and efficacy are problematic
    2. Managed Competition. IMO, a better concept, which is related to managed competition, is how to redirect competition . It boils down to whether competition should be redirected by (a) eliminating provider networks and encouraging informed, financially responsible consumers to choose the best provider for each condition; (b) encouraging integrated delivery systems with incentives for teams of professionals to provide coordinated, efficient, evidence-based care, supported by state-of-the-art information technology; or (c) basing selection of particular healthcare services on local population needs and core competencies of the providers.
    PRO: A common objective, as Matt pointed out, is to reduce the amount of unnecessary care and muda (inefficiency), as well as using risk-pooling and reducing underwriting, etc.
    3. Single payer (promoted by PNHP – Physicians for a National Health Plan)
    PRO: Matt: Maybe PNHP doesn’t tell the whole truth, but they’re way closer to doing that than the HSA crowd, and their admin savings argument might well be enough to cover the uninsured in our current system.
    CON: Eric: It fails to state specifically how it will reduce utilization… It will devolve, almost immediately into a match between competing special interests for dollars for treatment dollars
    4. Rationing
    PRO – Rational/Explicit Rationing
    • Matt: And first dollar coverage [in HAS/HDHP] encourages needless spending. This needless spending can be curbed by rationing, or by demand-side behaviors. We tried rationing with managed care, and it works pretty well to hold down costs, but it was pretty unpopular. So now we’re trying to affect the demand side — getting people to make their own trade-offs.
    • Barrie: I strongly support explicit rationing….how much could be saved on care currently performed that would not be performed under the explicit rationing models used in other countries.
    • Matt: in a genuine universal care system we won’t be sticking it to people based on ability to pay … we’ll ration care based on need, and have a more efficent system that can deliver relatively more care for relatively fewer dollars
    • Amy: I strongly believe that treatments that complex and expensive medical care at the end of life must be stringently rationed.
    CON – Irrational/Artificial Rationing: Barrie: On the other hand, I don’t support what I would call artificial rationing like limiting the number of hospitals or imaging centers than can buy MRI machines.
    QUALY (QALY)
    And then we have QUALY, the quality-adjusted life-year measure that is used in the UK to make explicit decisions about what healthcare interventions are “worth” covering using cost-effectiveness analyses that estimate the cost needed to obtain a unit of health benefit. Though far from a perfect metric, QUALY does offer a mathematical method useful in many situations for determining whether a particular procedure/intervention will result in enough benefit (physical and psychological) to the patient to justify paying for it. Although it can be used with any of the 4 models above (as can P4P), it seems to be especially pertinent to rationing, i.e., pay only for the services whose QUALY justifies it.
    PRO
    • Barry: It is long past time that we tried to establish some rational construct for allocating scarce, finite resources. … I know many people are extremely uncomfortable trying to assign numerical economic values to human life. However, if the objective is to provide as much useful healthcare to as many people as possible at a cost that the society can afford and sustain, I think something like the QALY approach offers the best hope of approaching that goal.
    • Tom: Hospice should never be subject to the QUALY calculation. Everyone, no matter how bad off should be kept warm, clean, hydrated, and fed so long as the body is capable of absorbing the nutrients. …Can you describe a system other than “trust each doctor to make the Utilitarian Calculus correctly for each and every act available to her at each moment”?
    CONCLUSIONS:
    So, where do we stand? What economic models would control healthcare costs in a sustainable way?
    Well, in order to answer this, we still have to address one more thing, i.e., what are the implicit objectives? Following are some apparent to me; is our society truly willing to:
    • Do whatever it takes to provide universal coverage and high-quality care for everyone?
    • Control spending, i.e., no increase in the percentage of GDP spent on healthcare?
    • Evaluate the clinical outcomes of every provider and make effectiveness and cost transparent?
    • Invest in wellness/prevention programs
    • Invest in evidence-based medicine and decision-support tools that improve care by reducing errors, omissions, unnecessary procedures and tests, overly expensive procedures for which there is more cost-effective interventions?
    • Hold consumers at least somewhat accountable for their behaviors, by, for example, charging more or withholding care if purposeful self-destructive actions causes them physical that need treatment?
    If so, then any conclusion must benefit the working poor, elderly, chronically ill, and other who are currently suffering the most from our current healthcare system. As such, here’s what I conclude from our current thread:
    • Of the 4 economic models discussed, sustainable improvements in healthcare, which are consistent with the implicit objectives above, can best be achieved by redirecting competition in a way that increases efficiency and effectiveness across the board, and rationally rations care using QUALY or some related metric. HSA/HDHP currently suffers too many negatives for the working poor, even if transparency were resolved. And concerns about the bureaucracy, waste, and integrity cast doubt on U.S. government run single payer system, although if these issues could be resolved, it might be work.
    • No solution is sustainable unless a very strong wellness and continuous quality improvement component is in place and strongly enforced, through incentives (e.g., P4P for providers and rate reduction for consumers who live healthy lifestyles and comply with care regimens), and may even punitive actions. This would require widespread use of evidence-based practice guidelines, along with ongoing study of outcome measures (not just process metrics), and new breeds of decision-support HIT. Failure to do this will result in the continuing decline of care effectiveness and the continued inefficiencies and mistakes that increase costs. This is consistent with our Wellness-Plus model and simulations.

  90. John- I agree. I say on my show regularly (and to my patients in the office) that one of the most pernicious things doctors can say is “I just want to be a doctor”.
    Being an active player in policy matters.
    Pretending you do not care about the finances of the system until you expect to be paid for your services, does not, and will not work.
    Excellent Moses reference so close to Passover!!

  91. “Finally, I am struck by the hostility toward physicians. It’s surprising and disconcerting because doctors ARE the system. Everything else is ancillary. I don’t mean that doctors are better than everyone else, just that the healthcare system cannot exist without them. I would think that the last 20 years of healthcare administration would have made administrators, consultants, etc. a lot more humble. You’ve been given free hand to do everything you wanted and you have not accomplished any of your central goals; healthcare is more expensive, access is less available and dissatifaction with the system has increased.”
    That’s a loooong quote from your post, and I quote it because I think it is worth reading and rereading.
    I agree with you 100%.
    What I would suggest is that the “administrators, consultants, etc.” are not in place solely because they walked in one day and said hello. They are there in large measure because of a vacuum of physician leadership on these issues over the past 40+ years. In fact, a too-typical response by physicians to businesses that complain about rising costs is still a shrug and a bill in the mail. (I’m a benefits manager for a company that spends in excess of $200 million annually on health care. This year, anyway.)
    It only took Moses 40 years to get out of the wilderness (*). OK, so health care costs are more difficult. But it would be nice to have more constructive help from physicians. We should be allies because our employees are your patients.
    (*) Yeah, I know, Moses never actually made it out of the wilderness.

  92. Bravo, Amy.
    Administrators and wonks of all shapes need to be reminded daily how their decisions affect individual patients/consumers and physicians, and how lucky they are to not be legally liable for what they do every minute.
    To Tom:
    “Packages of benefits” are not mutually exclusive with fair line item pricing.
    Transparency of a package means being clear on what is/is not covered before it is purchased. The problem with packages is that devil is always in details (this drug but not that one) and insurers always look for ways to back out of their commitments based on some fuzzy contract language. Which is precisely why they are so tightly regulated. But they should have a duty to explain to consumers what they are selling, what is in and what is out.
    Maybe the right approach for packages / insurers is transparency of decision-making / policy-setting. But this could be even harder than line-item transparency. Price is a number. Policy is something that can be mis-understood and mis-construed.

  93. I did not say justice requires single payer. What I said is that I see precious little discussion about justice when it comes to healthcare financing, and much more talk about maximizing utility.
    What upsets and frightens me is that I see precious little discussion about PATIENTS and how the administrative decisions affect them.
    The fact is that heathcare “administration” has made healthcare worse for patients. I’m not talking about the administrative nightmare that is healthcare, although that is extremely burdensome. I’m talking about the fact that you can’t get a nurse to help you in a hospital unless you are having a cardiac arrest. I’m talking about the fact that seeing patients more “efficiently” means spending less time with them, time that would be spent answering questions, consoling, etc. The patient experience is demonstrably worse, and we haven’t controlled the cost of healthcare or increased access.
    I submit that the current paradigm of healthcare reform needs change. Ask anyone who has experienced a serious illness recently, and they will tell you that the healthcare system is failing in its basic mission. The paradigm must shift to rationing care and away from increasing “efficiency”. Patients are suffering and that should be everyone’s first priority.

  94. Thank you for settling the centutries old quest to define justice by simply announcing that justice demands the type of health care system you desire.

  95. Regarding Tom’s question abut whether consumers could be educated to understand the benefits package they bought if structured in QUALY terms, I think they could be. It would probably require some hypothetical but real world examples that relate age to required treatment to cost including a couple of examples under which care would likely be denied. Also, examples of how the QUALY value is adjusted depending how many ADL’s the person cannot perform without help, if any, and whatever other factors may be relevant.
    For price transparency at the procedure level, if Medicare is setting price expectations in the market now and insurers are bargaining up from Medicare rather than down from chargemaster, it seems reasonable for hospitals to lower the chargemaster rate to something like 10%-20% above the private insurance level and then be prepared to offer a courtesy 10%-20% discount to self-payers who pay promptly or quietly and unofficially inform self-payers that they are only expected to pay at the same rate as the insurers if that’s what they need to do to avoid upsetting the insurers yet treat self-payers fairly.

  96. “It seems to me Dr. Tuteur that the only system you are willing to work in is the one that gives you total autonomy and requires of me an open-ended committment to pay for (in an oligopolistic market!) whatever services and supplies you say will benefit your patient.”
    On what basis do you say that? As it happens, my personal preference in single payer.
    Apparently this is also part of the “received wisdom” that animates healthcare administrators. This wisdom is wrong on almost every count:
    Doctors do not want total automony. They only want autonomy in decisions for which they are legally liable. So, for example, if you want to limit access to a specific trial or treatment, you must put your money where your mouth is and take legal responsibility for it. I notice that precisely zero administrators, consultants, etc. are willing to take legal responsibility for their healthcare financing plans.
    I certainly don’t advocate unlimited spending on healthcare or unlimited payment on your part. My comments above make that explicit. I strongly believe that treatments that complex and expensive medical care at the end of life must be stringently rationed.
    I’m a physician and not an expert on Rawls. However, I invoke the “original position” to mean that the people who make decisions about healthcare should act as if they are the people who might have the worst access in the system and plan accordingly. They ought not to be people who have access to terrific healthcare and are simply planning a system for the “less fortunate.”
    “Who says “justice” and “distribute limited resources” are in any way related?”
    Not me. What I said is that limited resources must be distributed in a just way, not in a way that maximizes utility. There are many ways to maximize utility, only a few of them are just.
    Finally, I am struck by the hostility toward physicians. It’s surprising and disconcerting because doctors ARE the system. Everything else is ancillary. I don’t mean that doctors are better than everyone else, just that the healthcare system cannot exist without them. I would think that the last 20 years of healthcare administration would have made administrators, consultants, etc. a lot more humble. You’ve been given free hand to do everything you wanted and you have not accomplished any of your central goals; healthcare is more expensive, access is less available and dissatifaction with the system has increased.
    Healthcare administrators should give serious thought to the possibility that their central premise is completely wrong; there is not “waste” in the system that can be pruned. They’ve tried and failed; it’s time to move on.

  97. > I think up to $125K per QALY for $500 per month
    > premium sounds fine and reasonable to me.
    It may or may not be reasonable — I’d have to do more research.
    I was asking about whether it looks transparent. If an Enthoven/Holt “standard package of benefits” were presented in these terms, do you think healthcare consumers could be educated to understand what they have bought? I realize this is orthogonal to the question of price transparency at the case or procedure level, but Dimity already knows how to solve that if he’s really interested doing something besides throwing bombs.
    > A just distribution of healthcare dollars
    This has to do with whose dollars they are
    > means that we must give everyone a chance to reach
    > the age of 80 before we give 80 year olds the chance
    > to reach 90.
    This has to do with the allocation decision, and the amount to be allocated. QUALY drives strongly in the direction you want. Pre-natal care and immunizations are cheap and their effects are felt for “80 years”. They would get funded first so to speak. Liver transplants for 80-year olds are expensive and their effects are not likely to be felt for five years. They would get funded last, if at all — there might not be this many “healthcare dollars” to distribute.
    > The issue is not how we can derive the most benefit
    > from the money we spend on healthcare; the issue is
    > how can we distribute limited resources with the most
    > JUSTICE.
    > Justice also dictates that we must consider the
    > problem as if we (administrators, doctors) are
    > in a Rawlsian “original position” in regard to
    > healthcare insurance.
    Who says “justice” and “distribute limited resources” are in any way related? Rawls doesn’t — he wants to set up a system of laws that do not a priori preclude anyone from acquiring resources. And Rawls very much insists on a view of man as Homo Economicus. For him, altruism is but one of many values to be considered, and might not be the most important. I would have expected you to bring up Cohen or Dworkin or Sandel since they are more likely to see healthcare as a sort of “social good” and rather less like a service for sale strictly.
    > Maybe a life year for a patient with advanced
    > alzheimers or dementia should be valued at 0.1 QALY
    > or even zero.
    Hospice should never be subject to the QUALY calculation. Everyone, no matter how bad off should be kept warm, clean, hydrated, and fed so long as the body is capable of absorbing the nutrients. This is the great moral question of our day — whether there is anybody who should not have nursing home care. A liver transplant is another question. Even a ventilator, in my view. I used nursing homes as a quick data-point to figure a minimum, that’s all. If “we” are going to pay for nursing home care (and I think our society must, but not on Rawlsian grounds) then that seems a useful datum.
    > How tenable would your ideas about healthcare
    > financing, QALYs, etc. be if you knew that you
    > would actually have to live under that system?
    I am living today under a much worse system, and millions of people live under a system much like the one I have very briefly and crudely sketched. Apparently they like it pretty well.
    Can you describe a system other than “trust each doctor to make the Utilitarian Calculus correctly for each and every act available to her at each moment”? Under what circumstances will you “deny care”? If people have a “right to healthcare” how will you avoid being sued when you do deny care? Can you reduce your methodology to the language of a contract or statement of policy so that we may have this Practically Perfect judgment everywhere and always, be able to predict the required revenues, and be able to spot the occasional self-interested doctor?
    It seems to me Dr. Tuteur that the only system you are willing to work in is the one that gives you total autonomy and requires of me an open-ended committment to pay for (in an oligopolistic market!) whatever services and supplies you say will benefit your patient. These days are over. We had a system like this until 1984 when, after two or three decades of abuse, we partially fixed the price term in the equation. Now we must work on the quantity term, and we must be able to answer the questions I have asked above. Finally, it must be sufficiently understandable (whether done publicly or privately) to survive our political process.
    t

  98. Dr. Tuteur, I’m in general agreement with most of your QALY post, though I suppose reasonable people could have some disagreement about how to define social justice. I, for one, would feel comfortable living under a QALY system as long as the cost part of the equation were calculated at Medicare or insurance company contract rates and not chargemaster rates (comment meant to be serious, not humorous).
    I completely agree with putting children ahead of the elderly and giving people a chance to live to 80 before 90. I think that issue could be handled by valuing even a healthy year beyond age 80 and something less than 1.0 QALY and a year beyond 90 at a steeper discount to 1.0. With respect to the cognition issue, the same answer applies. Maybe a life year for a patient with advanced alzheimers or dementia should be valued at 0.1 QALY or even zero.
    I know many people are extremely uncomfortable trying to assign numerical economic values to human life. However, if the objective is to provide as much useful healthcare to as many people as possible at a cost that the society can afford and sustain, I think something like the QALY approach offers the best hope of approaching that goal.

  99. One of the things I find most distressing about some of these discussions is how much they focus on “economic man” and how little they focus on actual people. The issue of QALYs at the end of life is a case in point.
    The decisions about rationing care at the end of life are moral decisions, not economic decisions. The issue is not how we can derive the most benefit from the money we spend on healthcare; the issue is how can we distribute limited resources with the most JUSTICE.
    A just distribution of healthcare dollars means that we must give everyone a chance to reach the age of 80 before we give 80 year olds the chance to reach 90. Justice dictates that our limited healthcare dollars must be spent on child health before elderly health. It means that our limited healthcare dollars must be spent on those who have the power of cognition before it can be spent on those of have lost such power.
    Justice also dictates that we must consider the problem as if we (administrators, doctors) are in a Rawlsian “original position” in regard to healthcare insurance. All too often we operate with the knowledge that we have great health insurance, the $5 co-pay for your brain surgery insurance. How tenable would your ideas about healthcare financing, QALYs, etc. be if you knew that you would actually have to live under that system?

  100. Tom, I think up to $125K per QALY for $500 per month premium sounds fine and reasonable to me. It is long past time that we tried to establish some rational construct for allocating scarce, finite resources. I might add the caveat that wealthy people should probably be allowed to spend their own resources on whatever they like (which could have some research value in areas like experiemental treatments) as long as they don’t crowd out the ability to provide more cost-effective treatments to people of average means.
    Keep those posts coming. It is obvious that, unlike me, you are an expert in this field, and I’m learning a lot quickly from you and numerous other posters on THCB.

  101. Transparency crowd thinks that it is a grave, immoral and abominable depravity to charge vulnerable individuals x3, x10 or x100 of what insurers pay. I do not want to hear anyone who opposes transparency say “our hearts are in the right place”.
    Get a grip of your cost structures and learn to price.

  102. I am glad to see someone’s read a bit of the literature on healthcare management and policy. Steve Beller thought I should talk a little about this topic, but Barry has beaten me to it. But I am glad it was he.
    I think $50K/QUALY had been the threshold in the UK.
    A year in a nursing home costs $150/day X 365 days/year = $55K/year here in the USA and might provide .5 QUALY. I think our society’s judgement on this will run in the neighborhood of $110K/QUALY. Maybe a bit more or less, but about this.
    How about a “transparent” contract that says “We will provide medical treatments up to $125K/QUALY” for $500/month premium”? This has the advantage of being able to keep up with technology — as new treatments get cheaper, they get covered “automatically”. It has the disadvantage that no treatment that hasn’t got at least decent data on it will be provided. Or might not be. You will be “denied care” when it comes to experimental treatments. But it seems to me better than making a list of what will and what won’t be covered.
    What does the transparency crowd think of this?
    t

  103. Bravo Dr. Tuteur! It sounds like what you call end of life care is even more costly than I thought.
    If the Social Security Administration can very efficiently send us a statement every year telling us how much we have paid in taxes so far and what our projected benefits might be, why can’t Medicare make executing a living will or advance directive part of the process of signing up for Medicare at age 65? Why can’t it be a requirement upon entering a nursing home or shortly thereafter?
    Failing that, as I have suggested in the past, doctors should have wider latitude to apply common sense depending on circumstances without having to worry about being sued.
    I also think it is sensible, as they do in the UK, to do a better job of quantifying how much a procedure or drug therapy is likely to cost per what health economists call a quality adjusted life year or QALY. In a world of limited resources, should we really be giving advanced alzheimers or dementia patients kidney dialysis or $50,000 biotech cancer drug regimens?
    With healthcare already consuming 16% of GDP, the highest in the world, it may not be much longer before taxpayers say ENOUGH and demand, not a single payer system, but a thorough reexamination of our strategy and approach toward end of life care.

  104. “What’s your solution to the problem of rapidly escalating healthcare costs?”
    It seems to me, as a physician, that there are really three different healthcare systems, each with different economic imperatives and that any attempted solution is doomed to fail if it does not take these three different systems into account. The three systems are:
    1. well care involving regular office visits, screening tests, preventive care, etc.
    2 catastrophic care: auto accidents, inherited diseases, cancer
    3. end of life care: care for people who have no hope of recovering. For example, senile dementia never gets better; it only gets worse. Providing complex medical care to these patients is extraordinarily expensive.
    In the well care health system, needs are predictable and limited. A variety of financing systems would work and markets can operate as envisioned.
    The catastrophic health care system has predictable needs (how many will have accidents, how many will get cancer), but the costs are astronomical and rising all the time. This is where health insurance really operates like insurance, however. Anyone could be struck by these problems, virtually no one could pay out of pocket and all of us want to be protected. The problem here is that new technology is extremely expensive, and there is essentially no limit as to what the costs might be. Even so, parameters could be developed to control costs. We could make a decision as a society that there is a limit to how much money we are willing to spend to save one person.
    In the third healthcare system, though, all bets are off. The cost of this system is staggering and growing by leaps and bounds. No one gets better, extraordinary amounts of healthcare resources are diverted and essentially no value is provided. Billions of dollars are spent simply making hearts beat and lungs function.
    It is this third healthcare system that is bankrupting us and fixing it will require rationing care. In other words, we have to draw the line beyond which we will not continue to spend money. It isn’t “end of life” care per se; it is “prolongation of life” care beyond the point where there is any hope of recovery.
    Each system will require a different method of cost control. The well care system can operate like a free market and most people can pay out of pocket.
    The catastrophic system should cover everyone. Virtually no one can afford the costs of cancer of a serious accident.
    The “prolongation of life” system can only be managed with rationing
    I note that none of these systems can be ameliorated by the received wisdom of healthcare administrators — that there is waste that can be pruned from the system.

  105. Response to theorajones:
    I am not going to engage in name calling, but I do want to make the following comments:
    First, I said up front that I do not know what the actual numbers are as to the percentage of the Medicare population that would need financial help in satisfying a $2,500 annual deductible. I have also said in previous comments that I am not a practictioner in the healthcare field. That said, any comments I post are offered in good faith with a genuine interest in learning more about this important issue that I am keenly interested in.
    Even if the actual percentage of the Medicare population that would require financial aid is closer to 60%-70% vs 10%-20%, I still think it could be beneficial to the system overall in making people more sensitive to the fact that resources are finite. Furthermore, if I did not make it clear previously, the $2,500 deductible is also the out of pocket maximum as I would have Medicare pay 100% of covered costs above $2,500. Therefore, the sickest 10% of the population that accounts for 70% of the cost in a typical year would actually be better off financially than under the current system. Of the 90% of the elderly that account for only 30% of program costs, millions of even low income people are medically healthy and will not consume much in medical resources.
    Second, the income statistics cited by theorajones do not give anywhere near a complete and accurate picture of the economic well being of the elderly, especially compared to other segments of society.
    Take, for example, a reasonably healthy elderly couple that owns its home free and clear. Approximately 75% of the elderly are homeowners and most of those own their home debt free. Assume their children are fully grown and on their on, and they are retired so they no longer have job related expenses like commutation, lunch and dry cleaning, etc. Freed of all these expenses means they can support a middle class lifestyle on a far lower income than a young family with a large mortgage, children to feed and educate, and job related expenses. They also are not paying the 7.65% (employee share) payroll tax on their social security, pension or investment income. If they so choose, if retired, they have the option of moving to a retirement community where there may be few job opportunities but plenty of very low cost housing options.
    While the statistics cited indicate that about one-third of the elderly rely almost solely on social security for their income, 67% have other resources from pensions to investments to jobs. With respect to investment income, in today’s low interest rate and low dividend yield environment, One could have a balanced portfolio of 50% stocks and 50% Treasury bonds or savings certificates of $250,000 but throwing off only $7,500 annually in investment income. Add in homes which, especially on the east and west coast could easily be worth $300-$500 thousand. Thus, it is quite possible (and probably not uncommon) to have substantial assets but modest cash income. This is why I don’t think it is unreasonable to make any subsidies to help pay the deductible an eventual claim against the estate. If the estate is non-existent or even modest (say, <$100K), no repayment would be required.
    If you want to suggest that my approach is unworkable or even idiotic, fine. What's your solution to the problem of rapidly escalating healthcare costs?

  106. Theora- I’d offer you a valium, except that the government decided that all benzodiazepines should not be covered under medicare part D, since they are dangerous for the elderly.
    I think you were combining my post and Barry’s, so I am not sure which one (or both) of us is a horrible human being or an out of touch idiot. Please specify.
    Perhaps you want to tackle my earlier post questions? Since I presume you do not consider yourself in the aforementioned category of human beings, what would you cut? And please do not say that there is more than enough money to give everything to everybody forever (that’s what they’re doing in France, where there is a 22% unemployment rate for those under 26 years old).

  107. Eric.
    I am very very dubious that the huge bureacracy you’re so scared off can take anything like the amount of money out of the system that private insurance currently does. The reason that PNHP uses the tag line that Blues of Mass has more admin staff than the whole of the Canadian health system depite having one sixth the population is because it’s true! And with your views on insurers you cannot possibly believe that they are run for the sake of the overall systems efficiency.
    But you’ve got to stop on this “who makes the decisions”
    As you know, every society makes the decisions that you are talking about in its health care system every day. Even this one! Medicare covers some things, doesn’t cover others. The UK pays for some stuff, not for others. All of these decisions are made in some political way by some combination of private/public entities….
    and while some of the proponents of various causes won’t use the rationing word, I will. We need to cut prices and services, and rationally ration the care we give (and I know that we both agree that excessive end of life care is a place to start)
    However the difference between us is that I want to either devolve this decision to the medical profession under a global budget OR have a national IOM type body do it, as happens with the NICE in the UK.
    The good news is that there is so much bad care process in the US that we can still provide equally good or better outcomes for less money without having to restrict diabetics, snowboarders or paragliders from getting access to health care. But that of course depends on driving out the inefficent care, a la Wennberg’s work.

  108. “While I don’t know what the real numbers are, suppose 60%-70% of the Medicare population could handle a deductible of [2,500] because they either have the resources to cover it or are healthy enough to not need it in the first place.”
    La, la, la, all my friends have money, so I will suppose that everyone has money. Healthcare policy is easy when you make up your own facts!
    The median income for a woman over 65 is $12,080. For men, it’s just over $21k. Most old people are far from the “$2500 in disposable income” end of the distribution and much closer to the “eating cat food” side. They’re poor.
    And they’re not automatically eligible for Medicaid just because they’re pathetically poor. I know it makes you feel better to believe they are, but the fact of the matter is that they are not. Elibigility requirements vary from state to state and from condition to condition–74% of federal poverty is the magic number in most states. You know what 74% of poverty is? $6900-9200. And before you get into “but that can’t be true! My well-off friends have plenty of parents on Medicaid,” I’d like to point out that genuinely low-income people don’t have money to pay eldercare lawyers to make them eligible for Medicaid. Your friends are lucky they’re wealthy enough to hire experts who can make them look poor.
    For some reason, in spite of all evidence to the contrary, spoiled rich people persist in believing that when poor people get sick, they should have to pay outrageous sums of money in order to stop being in pain. In spite of all evidence to the contrary, spoiled and ignorant people persist in believing that it’s somehow the mark of responsible policymaking to take a hard line on sick people, and make sure they’re bankrupt as well as in physical pain.
    I am being very hard on you. This is because the policy you are advocating is unworkable and cruel, and I want you to be ashamed of it. People with an inkling of knowledge about the medical system and the world that most Americans live in will think you are either a horrible human being or an out-of-touch idiot if you advocate this policy. If you have any human decency, you should be very upset with the people who are telling you that this policy is the least bit responsible or reasonable.
    These high-deductible plans destabilize our healthcare system and, more importantly, inflict incredible human suffering in order to solve an utterly insignificant problem–the problem of poor healthy people who go to the doctor too often.
    “Risk-segmentation,” “personal responsibility,” “underwriters help[ing] set prices in a way to perhaps guide people toward certain types of plans,” are all ways of saying we need an inefficient healthcare system whose primary benefit is that it works really well for the well-off by screwing over the sick and anyone who may at some point in their life miss a single insurance payment. They are spouting a pack of lies that the way to fix our healthcare system is to keep poor people paying premiums, but out of doctor’s offices. It’s vile and it’s a lie.

  109. Now you’re talking Matthew!
    PNHP (I’ll put Rashi Fein’s proposal in The Health Care Mess into this category- read final chapter) creates a new bureaucracy that will easily outstrip any savings from the admin side.
    And ‘need’ is very interesting, as those in favor of single payer or managed competition are just as unwilling as the other side to broach even a single disease or condition that will no longer be covered or have firm limits.
    So- where will you cut back? obesity? smoking? sky divers? alzheimers? diabetes?
    As they say in ‘Monsters Inc.’ – “your silence is very revealing’.
    Propose a global budget. Tell me what you will do with the capital purchases for equipment that hospitals and therapists and doctors have made? Tell me how you will handle ‘alternative therapies’– from acupuncture to chiropractic? dental care is also important when it comes to health– will that be included? Will you change the medical liability system? How will you fund medical education?
    I will make a case that many CDHC promoters, in admitting that it is a piece of the puzzle, are being MORE honest than some in the single payer crowd.
    I know of Kaiser’s success in California and some other markets. If it were really a no-brainer, then it would have expanded further over the past 40-50 years.
    I remain steadfast in my belief that big government bureaucracy is not the answer to healthcare. Do you want the decisions for funding for diseases put in the hands of senate and house subcommittees controlled by members of either, or any party?

  110. OK, time for Eric rebuttal
    1)>>”both the managed competition and the single payer crowd fail to state specifically how they will reduce utilization.”
    Maybe PNHP doesnt tell the whole truth, but they’re way closer to doing that than the HSA crowd, and their admin savings argument might well be enough to cover the unisured in our current system. But here’s how single payer works in reality. The government sets a total budget for health care, after the various political fights between the factions supporting more money for defence, education etc, etc and/or lower taxes. That amount is translated either into a global budget (UK), or a fee schedule which is either capped (Canada) or proportinally reduced as more servies are provided (Germany). note that in tough times the total amount provided to the healthcare sector CAN be reduced in this scenario (as in both Japan and canada did in the 1990s).
    Managed competition hasnt been tried anywhere in a global sense, but the theory says that individuals will buy annual care from a choice of HMO-like insurance plans/provider alliances (think Kaiser) that all provide the same mandated benefits. (No underwriting, all using community rating, risk adjust ment between plans, etc, etc) If you want a better class of waiting room from your plan, you pay more for your annual premium. But once the money is paid into the plans, that’s all they’ve got to work with, and they will align their incentives with their providers. The plans that provide the most cost-efficient care within the Federally mandated benefits will see their market share increase compared to the others, giving every plan/provider organization the incentive to provide the most cost-effective care (usually by improving clinical processes). Now of course this will need regulation and oversight to make sure that plans aren’t scrimping, but it’s no conicidence that Kaiser is one of the few provider organizations that cares about the cost-effectiveness of new technologies and new services.
    So managed competition doesn’t say how much money should be spent on health care per se, but it creates the incentives that make plans/providers both respond to consumer demands (the criticism of single payer) and reduce the amount of unneccessary care and muda (the criticim of FFS and HDHPs).
    >> 2.Medicare does not count the admin costs shifted to providers (docs, hospitals) in its overhead calculation.
    This is true, but NEITHER DO PRIVATE PLANS. Eric knows full well that the adminstrative BS of dealing with private plans is just as great as that of dealing with Medicare, and with the private plans 20% of the dollars have already got stuck at the insurer as opposed to Medicares 3% (or 9% if you want to count each medicare “life” as 3 commercial “lives”). And it’s not just Eric that knows this. This Health Affairs article last year said that “Overall,billing and insurance-related functions represent 20–22 percent of privately insured spending in California acute care settings.”
    So not only are the costs of administration much greater at the insurer level, they are at least equally bad at the provider level.
    Now OF COURSE Eric and even (believe it or not) Sally Pipes are right that if it’s to be a successful universal system the currently written Mass law will devolve into some type of government underwritten system. That’s because someone needs to do the cross-subsidization required for universal insurance, and asking employers to pay $300 a year isn’t anywhere near enough, and ony a small fraction of the uninsured (maybe 20%) can genuinely afford the $5,000 a year it costs.
    And of course whatever system we have there will be continued political war over what we pay for what to whom. But in a genuine universal care system we won’t be sticking it to people based on ability to pay, but as Elliot points out, we’ll ration care based on need, and have a more efficent system that can deliver relatively more care for relatively fewer dollars–after all that’s what happens everywhere else–as Anderson and Reinhardt showed in that famous Health Affairs article called It’s the Prices, Stupid”

  111. Matthew, I’m much more preoccupied with the practical ramifications of HDHP than the policy argument; not because I don’t think it’s important, but because unless you, the consumer, are willing to invest a current CPT (Professional Edition) and bone up on the National Correct Coding Initiative, you’re going to over pay. The claims that have come across my desk are rife with errors, another patient choice, perhaps: either pay the overcharge, fight it, or have it pop up on your credit report. The entire argument i.e. transparency is a sham, and there is little doubt in my mind that, Consumers for Health Care Choices, “the voice of the consumer,” knows about this rip off from the get go. They’re just hoping the consumer won’t catch on.
    I’ve responded more fully over at http://www.signalhealth.com/node/640

  112. Eric, you are wrong about the budget limiting process of single payer and Managed competition…as I’ve explained here before. I’ll be back to explain AGAIN later (after I finihsed my newsletter and walked the dog!)

  113. transparency is a problem… but will not be solved by legislation. People and employers will begin demanding better cost information as time goes on with HDHP. I am not sure what the magic number is in terms of market penetration, but it will occur.
    As a practicioner, once all of the insurers post prices online, I no longer need to participate, and I can reduce my overhead expenses by setting prices at levels I deem reasonable. If that idea became widespread, then costs would decrease for most Americans.
    Elliot- perhaps a THCB reader who is an insurance underwriter will help me with the answer. But here is a component– insurance companies are diversified with regards to their lines of business and sources of income (just look at the new UHC and Blues banks). Underwriting is done across product lines. In some years, payouts will be greater than others and costs go up for everyone. Insurers make money in the end by taking income (premiums, other sources of income, investment income) and subtracting payouts and other costs.
    By looking at payouts, the underwriters help set prices in a way to perhaps guide people toward certain types of plans.
    The market will help determine what those costs are. HDHP are one tool. I do not think that a one size fits all system is the answer.
    National single payer will devolve, alomst immediately into a match between competing special interests for dollars for treatment dollars (as apparently is already happening in Massachusetts).
    But I would like some more input from industry experts. And a way to prevent the problem I just mentioned in the case of ‘single payer’.

  114. HSAs could be a more viable option if they eliminated the following problem: the huge out of pocket exposure that so many of these plans contain. Many HSA’s come with a deductible of $2700 and an out of pocket maximum of $5000, and this is simply too high. Now the Bush administration is proposing to raise the amount that can be contributed to HSAs as much as $10,500 per year.
    An option would be to make a $1100, $1500, or $2000 decutible, and then 100 percent coverage. Many HMO policies have a maximum out of pocket of $2000.
    However, there is one big fallacy the proponents of HSAs have not yet realized: a lack of real pricing transparency. Try calling up a hospital and get a quote for procedures, and most will not release the information. Despite all the bad publicity about their pricing practices, hospitals continue to gouge the uninsured.
    To avoid this, one has to find those doctors who are willing to help their patients that pay cash and give them discounts.
    In fact, the best thing any HSA or high decutible PPO plan consumer can do is to pay their doctor’s bill upfront, and then submit a copy of the bill and office notes to the insurance company. In most cases you will be paying a lot less. Unfortunately, few hospitals will do this, but there are some good doctors that still care about the health of their patients.

  115. I think HSA’s are unnecessary and serve to muddy the debate, but high deductible plans are sensible. With respect to Medicare, I think it makes sense to combine Part A and Part B and have one large deductible of, say, $2,500 per person with no refunds or deposits into HSA accounts. While I don’t know what the real numbers are, suppose 60%-70% of the Medicare population could handle a deductible of that size because they either have the resources to cover it or are healthy enough to not need it in the first place. Another 20% is Medicaid eligible and would be covered by that program. That leaves 10% – 20% who might need some help. As I suggested in a prior comment, if we had an income based means test, taxpayers could pay the deductible for this group on a sliding scale. The subsidy would be tracked by CMS and would become a claim against the beneficiary’s estate after the death of both the beneficiary and his or her spouse, if any.
    Separately, I strongly support explicit rationing. I wonder if any of the experts on the blog can offer an estimate of how much could be saved on care currently performed that would not be performed under the explicit rationing models used in other countries. On the other hand, I don’t support what I would call artificial rationing like limiting the number of hospitals or imaging centers than can buy MRI machines.
    Finally, for the high cost cases of say, over $100K, I support case management to provide coordination and, perhaps, push back against care that may be unnecessary or inappropriate but rewards the provider with additional revenue, at least in non-Medicare cases.

  116. Great comments Eric (I mean that), but the question is how do you take money out of a large pool of money and then claim that the difference won’t have to be made up somehow. This kind of talk from the HDHP true believers suggest more than just a point of debate, but an active campaign to mislead.

  117. It is also time, I believe, for the monthly addressing of Medicare’s ‘low overhead’.
    1. PNHP calculates medicare overhead as total cost/ admin cost. The Kaiser Foundation report correctly points out that, because, in general the Medicare population is much sicker than the commercial insurance population, you cannot directly compare overhead in this way. Rather, if you calculate overhead as ‘overhead per enrollee’, medicare overhead comes much closer to commercial overhead.
    2. Medicare does not count the admin costs shifted to providers (docs, hospitals) in its overhead calculation.
    3. Medicare-related fraud is a problem (just like the states know how to ‘game’ the feds out of medicaid money using the rules the feds devised, hospitals and providers do the same thing. Medicare overhead would go up if they devoted much greater resources (like commercial insurers) to reducing inappropriate spending.
    But I think Matthew just likes getting me going on a Monday morning…

  118. Matthew- both the managed competition and the single payer crowd fail to state specifically how they will reduce utilization. PNHP feel that the ‘administrative waste’ alone would cover ‘the uninsured’. But, as we have talked about here before, the problem is reducing healthcare utilization by the ‘high users’ of healthcare services.
    The goal of CHDP/ HSA should be a move toward transparency… and perhaps the time when (like your homeowners and car insurance) you leave insurance ‘out of it’ for small expenses. Where is your outrage at the folks who pay cash for small repairs or a new windshield, instead of putting in a claim toward their deductible?
    There is a new report (from Deloitte health solutions center) that has HSA increasing at 2.1%, while all other plan types are increasing premiums by over 7%. Time will tell if this is sustainable, but you cannot argue with this fact.
    HSAs, like technology, are a tool that can be used to help address the health care system problems. I am copying below, more ‘consumer’-friendly concepts from my earlier post.
    1. change law so that providers can choose to set prices at, below, or above Medicare rate for medicare services. Make that information available to the public. Competition and human nature would make it that perhaps some very good docs might set their prices higher and some bad ones lower. Also, new docs might start out lower to get more patients when starting up.
    that would be real consumerism
    2. for the very low income people, healthcare services should be paid for in a tax credit for services provided. Documentation and processing as required for the current tax processor, the IRS. To incentivize, make the benefit indexed to care provided in certain neighborhoods (poor, inner city, rural) to increase competition for caring for people in certain areas.
    3. Pass broad AHP legislation and break the oligarchy of the few big insurers that currently exist.
    4. Pass the healthcare choice act which would make insurance much more portable.
    5. For the top 5 diseases in terms of cost to system, establish baseline care that ought never be given and baseline patient behavior that ought not be tolerated. For example, doctors should not give certain drugs to people with kidney dysfunction and patients with diabetes should never smoke. Benefits (to both docs and patients) should be in part dependent upon making good decisions for care.
    doc information should be made public
    6. encourage point of care payment for nonurgent medical care which would promote cost disclosure.
    7. The VA system ought not be the model for US healthcare. Just ask most veterans. Usually good care, but hardly responsive in most cases.
    8. Health courts to increase access of care for those with certain conditions.

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