Controlling costs is the central problem in U.S. health care

The central problem in the U.S. health care system isn’t cost or insurance, per se, it’s the challenge of increasing health care value to the patient/consumer.

That means we must improve the poor quality and inefficiency of care, so that we all receive only the care we need, delivered in a timely and effective manner, without waste and over-treatment, and with a focus on integrating “well-care” (prevention and self-management) with sick-care.

It also means dealing with the knowledge void, an ironic situation in which our health care community is drowning in oceans of information, yet no one knows the best ways to prevent health problems and treat them cost-effectively, especially when you take individual differences into account. To address this problem, we need better health information technologies, as well as a collaborated effort to develop, disseminate, and deliver cost-effective evidence-based care.

If consumers were to receive high value health care in this manner, costs would be lower since poor care costs more and delivering only the minimal necessary care typically results in better outcomes! More appropriate care, delivered competently and cost-effectively through cost-conscious, patient-centered “medical homes,” for example, is the only way to control costs long-term.

This contradicts the opinions of Robert J Samuelson, who wrote recently in the Washington Post that health care for the poor in our country is actually quite good, and that, as a nation, we cannot afford to view health care as a “’right’ that demands universal insurance” for every American.

Here’s why I think he’s wrong.

Whereas some research shows that, on average, annual health spending per person is equal for the poorest and the richest Americans, this doesn’t mean the poor receive care as good as the rich. That’s because there are many ways to interpret these numbers; for example:

It quite likely that the wealthy are far more healthy than the poor, e.g., due to access to better food, cleaner and safer living and working environments, better education, greater availability of the most competent doctors, access to gyms for working out, etc. That would mean the poor should be receiving much more in the way of health care treatments than the rich because they lack those things, but they don’t according to the numbers.

It’s likely that the poor don’t go to the doctor as often because they can’t afford it, it’s unavailable, they don’t realize they should, or they have psychological blocks (e.g., hopelessness, denial, etc.). That means they become sicker before they go, which means spending on the poor should probably be greater than on the wealthy, but it’s not.

Because the poor receive less primary care, they tend to go to the emergency room, which is much more expensive than an office visit, thereby skewing the numbers.
I don’t know how many working poor are in those numbers, who don’t have any insurance (or have inadequate insurance), and who don’t qualify for government programs (Medicare & Medicaid).

What about the quality of care and preventive services? It’s quite likely that the wealthy receive better and more timely care, which is not reflected in the numbers.

Another study suggests that the uninsured have only minor disadvantages since they judge their care to be just as good and the insured judge their care to be. However, relying on patients to judge the value of care received—considering all the complexities, options, and nuances—is simply ludicrous. What we need is valid scientific outcomes research and clinical guidelines before accepting such claims!

It can be argued that casting medical care as a "right" ignores the fact that people’s health status is often due to a combination of personal habits, genetic makeup, and age. As such, no matter how lavishly health care is provided, it cannot totally compensate for these individual differences.

But what’s being implied here? If you have bad genes; if you live in poverty—in a crime-ridden, drug-infested—and can’t afford healthy food, a safe place to exercise, or become drug addicted; if you’re old and have chronic conditions … then what? You don’t deserve good health care? All prisoners do!

It can also be argued that Americans refuse to acknowledge that we all want access to unlimited care for ourselves and our families, which is paid for by someone else, and which would ruin our country. But I don’t think many people view universal healthcare as being unlimited care for which others pay. And it should not be about getting something for nothing. Instead, it should be about assuring that everyone gets what the quality care they need at an affordable price.

Unfortunately, private insurance companies don’t focus on improving care quality; they’re out to make profit for their shareholders by (a) minimizing payments to providers, pharmacies, and suppliers, and (b) by reducing the amount of care rendered in whatever way they can. They’d prefer to drop all members with serious (i.e., expensive to treat) illnesses because they are driven by the profit motive.

While I interpret the research differently than Mr. Samuelson, we actually agree, in part, about what has to be done. I offer a blueprint for comprehensive health care reform—the Wellness Plus Solution—available on our Wellness Wiki.

From a philosophical viewpoint, radical reform of our health care system in the ways I describes requires that we, the American people, take a good hard look in the mirror to examine our culture’s priorities and values. Why? Well, consider the following Commonwealth Fund report:

“The U.S. health system is the most expensive in the world, but comparative analyses consistently show the United States underperforms relative to other countries on most dimensions of performance…[It] fails to achieve better health outcomes than the other countries [and] is last on dimensions of access, patient safety, efficiency, and equity.”

In other words, our health care system in America is gravely ill and we should be looking at ourselves–our cultural values, priorities, and economic/political/business models–to understand why things have gotten so bad.

To cure our health care system, and to begin fixing many of our other domestic and foreign problems, the American people ought to be willing and eager to look far beyond ourselves and family and focus on giving much to others in a way that makes our country and world a better world for all.

This sentiment was reflected in link above (about medical homes), which points out that the teams of doctors who hit “medical home runs” for the patients have an exceptionally compassionate nature that drives them to go that “extra mile” for their patients. I quote:

“While the specific clinical innovations to prevent unplanned hospitalizations vary somewhat across the four practices, they converge in two ways. At least one primary care team member demonstrates saliently to each chronically ill patient that they care deeply and personally about them and protection of their health. This includes mobilizing family members, social services, and other resources required for successful patient self-management. In addition, as soon as a chronically ill patient senses impending health crisis, a member of the health care team familiar with their history is readily reachable and prepared “to go the extra mile” to prevent hospitalization, including actively coordinating with ER physicians and hospitalists in exploring alternatives to hospitalization.

An attitude of ‘protection of your health matters to me personally’ and ‘I’m prepared to invest special effort to spare you a health crisis’ was memorably captured in Atul Gawande’s 2004 New Yorker magazine portrait of Dr. Warren Warwick in The Bell Curve. It is the exception rather than the rule in American health care delivery. Because it reflects a personality characteristic of clinical team members rather than a readily teachable behavior or a structural enhancement of a primary care practice, assuring this expression of patient-centeredness requires new selection criteria for medical home team members serving the chronically ill. Given the prolonged time frames required to correct failure to integrate robust patient-centeredness into medical student selection and into graduate and postgraduate physician training, near-term improvement implies selecting for this attitude among non-physician team members. Other organizations, such as the retail giant Nordstrom’s, have shown that selecting employees for high natural service orientation is feasible.”

This observation is consistent with something I posted last week: We Ought To be willingness and eagerness to give (sacrifice) much in ways that makes this a better world for all. Unfortunately, this runs counter to the ideals of the “Me Generation” and the American consumerist way of life, which are destroying our society by rewarding and encouraging short-term self-centered hedonism (my pleasure now!), ego-based materialism (e.g., judging human worth in terms of one’s bank account), and Machiavelli’s “the end justifies the means” philosophy to business (“buyer beware!”). The good news is that compassionate people with awareness and understanding are bucking this tendency! THEY are the ones who Ought To be gaining financially by, for example, paying primary care physicians for taking the time to know their patients deeply and for going the extra mile to prevent illness and deliver high-value care, as well as investing in more and better clinical outcomes research.

The good news is that compassionate people with awareness and understanding are bucking this tendency! THEY are the ones who Ought To be gaining financially by, for example, paying primary care physicians for taking the time to know their patients deeply and for going the extra mile to prevent illness and deliver high-value care, as well as investing in more and better clinical outcomes research.

While the only sane way to proceed, there are many tough challenges to enabling and rewarding health care providers who go the extra mile and offer high-value services. See, for example, a recent post by Josh Siedman titled Perils of Pay for Performance (P4P), which discusses the difficulty establishing fair and valid performance measures, and the consequential perverse incentives of today’s P4P programs. One commenter added that we don’t have the detailed information needed to understand the unique needs of each patient and thus cannot know if an individual is getting the right personalized care, even if it’s right for other patients with the same diagnosis.

Stephen Beller is the president of National Health Data Systems, Inc. He blogs regularly at Curing Health Care.

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10 replies »

  1. Value and cost are critical components. We also need to look at processes. How many clerks does it take to check out at the grocery line compared to how we administer health services and bill for them??….15-20 % overhead for insurance companies??? Pete Stark is always championing that medicare only has a 2-4% overhead..Yah, sure…that’s because a lof of their administration does not show up on their ‘cooked books’ because much of it is farmed out and subcontracted for ‘review, p4p, IT, etc.

  2. Interesting post. More and more companies are appreciating the value they can get from paying for quality health benefits and services. This is something I just wrote about on my blog concerning Pitney Bowes – see http://www.healthpolcom.com/blog/2008/09/18/value-of-employer-provided-health-benefits/
    You also mention the profit motive of insurance companies and how this conflicts with seeking overall value in health services, etc…. This is a reason to maintain employer based insurance since most companies self-insure as ERISA exempt plans. (I wrote about this a week or so on my blog too.)
    Overall I think more and more companies, patients and providers will be seeking better quality data on overall value from treatments and health insurance/benefit plan structures and options. It will be interesting to see how the market and decision makers respond to this trend

  3. My response to Barbara is similar to rbar’s. Two possible solutions are:
    1. Use “health courts,” which I included as a way to help increase “healthcare fidelity” (see, also, the Common Good web site.)
    2. Help bridge the knowledge void by: (a) getting serious about collecting voluminous health details on each patient and using them to support the kinds of outcomes research that can establish personalized evidence-based guidelines that would give everyone a good idea of what constitutes the “right” care and enables us to determine when there is over- or under-testing and treatment, and (b) developing and using advanced, validated decision tools to help determine diagnoses and select proper treatments. Unfortunately, we’re nowhere close to gaining this knowledge (there’s a serious) since, in part, our country hasn’t focused on bringing value to the consumer/patient. Nevertheless, as we move in this direction, we should realize that there will always be people for whom the prevailing guidelines will not be adequate, so providers must have the freedom to justify reasonable alternative treatment regimens, but at least there would be standards of care to which they can refer.

  4. I agree with Barbara that defensive medicine is a serious contributor to the problem, despite the current PH trend of belittling its impact.
    The other contributor to medical cost explosion are counterproductive patient attitudes. I do think that medical costs may need to rise further before (some) people learn that: no, more scans are not always better, and a test to rule out a 0.5 % chance of a barely treatable disease may not be worth the effort. And no, “aggressive” end of life care doesn’t help anyone.
    Too many patients are expecting efforts made on behalf of their health, not only the effort of a highly trained doctor listening to them and thinking about (and explaining) their complaints; no, the effort has to include tests (the more high tech, the better) and some form of treatment, usually a pill that is easy to swallow. I experience these attitudes in patients of all socioeconomic backgraounds incl. medicaid patients; I also saw it – but much less of that – in Europe where I trained a decade ago.
    Proposed solution:
    1) tort reform – physicians who make a reasonable effort for a symptom/condition they are educated to take care of will not be sued. However, physicians will remain liable for poor effort/negligence and repeated obvious incompetence.
    2) Educate the public about the costs and risks of overtreatment/overtesting. The academic elite should be leading this effort, together with the AMAand the NIH. Of course, the pharmaceutical industry is going to fight this.

  5. The reality today is that physicians are afraid to deliver only the “minimal necessary care.” They are afraid of missing something and subsequently being sued. Until this reality is addressed, we are forced to focus on cost and efficiency.

  6. Peter wrote: Do you really expect Americans to just wake up one day and, “take a good hard look in the mirror”?
    As a psychologist who has studied human attitudes, emotions, and behaviors for almost three decades, I’d be foolish to think we’re all ready for that kind of deep introspection. I don’t have that same opinion of cultures in which there’s a “community spirit” (i.e., “We’re all in this together). One reason I think this way is that our “pathologically mutated form of capitalism” breeds a destructive cultural mind-set focused on fierce independence (me and mine is all that counts), survival of the fittest (all that matters is increasing profits), and personal wealth trumps compassion. This is why many argue that greed is good, why money has become such a corrupting force in politics, why we tend to judge human value in terms of one’s finances (i.e., big egos of the rich and shame of the poor), why “do-gooders” (including community organizers) get little respect by “the establishment,” etc.
    In other words, it’s a matter of our actions being driven by our maladaptive emotional beliefs, which are formed by our misdirected and self-defeating economic/political model.
    I’m not hopeless, however! One the one hand, I believe there are many people in our country who truly care about others and who are willing to give of themselves in a big way for the common good. These are likely to be the kinds of folks focused on spiritual enlightenment who are committed to making our world a better place for future generations (not just on getting as much as one can for oneself).
    On the other hand, it is often necessary, unfortunately, that humans must face a disaster before they are ready for deep introspection and to push for radical positive change/reform. Well, our country seems to be in a disastrous economic situation at present, so people are likely to be more open to contrarian points of view, and there is an opportunity for greater community spirit and compassion. Fear and pain can be powerful motivators, which have the capacity, if focused in the right direction, to break through self-deception, ignorance, and ego. Hopefully, things don’t have to become much worse before enough of us are ready to look at ourselves and our society in the mirror to gain the awareness we need. And hopefully we’ll have the wisdom to make difficult decisions that will change our nation’s path in a positive direction.

  7. Well OK, I revise my comment above to first 3 1/2 paragraphs. I’m not sure the medical home thing is “implementable”.

  8. The best part of your essay was the first two paragraphs, and the title is therefore misleading. Controlling COSTS is not the central problem, high cost is only a consequence of poor VALUE (defined as patient outcome per dollar spent.) You grasped that in the first two paragraphs and then got real fuzzy after that. If one concentrates on improving value, then cost takes care of itself and the problem of universal care becomes smaller. I wish people could consistently see this point – then we would all agree on what to work toward. Neither presidential candidate gets it yet.

  9. A lot of nice loving fuzzy hugs and feel good statements, but where’s the beef? Do you really expect Americans to just wake up one day and, “take a good hard look in the mirror”? Americans mostly think of themselves, NOT community, but they want other people, in other communities, to provide taxes for their needs, their mistakes, and their poor judgement. Why do you think earmarks are so popular, why do you think there is little opposition to the flood of government bailouts – “Help me government, I was just too greddy, dishonest and stupid to do the right thing”.
    If this country wants to get serious about cost control, then it will have to be forced by government action establishing health bugets through some sort of non-insurance industry, all-in, single-pay system. Forcing budgets will make everything else possible. But you can kiss any health reform goodbye now as the taxpayer bails out a dishonest financial system that lobbied for NO regulation and oversight, as well as reduced taxes, with disgusting CEO compensation. These were the smart guys – right? Wrong, these were the guys who(are) spent millions of tax deductible lobby money and campaign donations to “convince” politicians to look the other way. And now the same politcians, advised by the same lobbyists, supported by the same corporations, financed by the same rich guys who brought us this mess, are saying they will reform Washington. Alice in Wonderland is starting to make sense.