Most people regard health care reform in America as thoroughly bungled. The proverbial train left the station weak and wheezing, was pushed off the rails by hooligans and is about to crumple in an inglorious heap in the ditch. Only about 20% say the reform hits the sweet spot, with the rest convinced it went too far or didn’t go far enough.
To review the most recent pilings-on: in a time of huge Federal deficits, we get depressing predictions that the PPACA will do little or nothing to slow the growth of health care costs. Only a year after passage of what was supposed to be comprehensive reform, Democrats acknowledge that Medicare and Medicaid spending remain out of control and propose new cuts in the hundreds of billions. In the span of four months, Republicans switched from posing as aggrieved defenders of Medicare spending, to proposing to slash it and leave seniors to absorb the spillover. Medicaid funding is probably even more precarious, since fewer Medicaid recipients vote.
To add injury to injury, the Supreme court may rule to invalidate the entire law, or perhaps just the mandate to purchase insurance, thereby removing the most hated part of the law, but eliminating the “universal” part of universal coverage and inviting an actuarial death spiral. Oh, and the few reforms that look like they might bring costs down, like the IPAB board in Medicare and the minimum medical expense ratio for insurers, are under threat of being watered down. A year after legislation has been passed that will transform nearly a fifth of the American economy, to the casual observer it looks like nothing much has happened and nothing in the future is secure, especially anything that the big industry players don’t like.
In light of this and more, pessimism is understandable, but what we are witnessing in these turns of events is not mere politically-driven chaos. There is good reason to think that events are unfolding more or less in line with a staged strategy for deep reform that emerged out of the experience in Massachusetts. The strategy is essentially this: enact universal coverage first to precipitate a sense of crisis. This will lead to deep reform on the problem that exacerbates all other problems: the cost of health care. Readers of this blog need little reminding that these costs are twice as high as in any other nation.
So why precipitate a crisis, and what reason is there to think it will end well? Long time observers of health care policy know that sharp cost controls are a political third rail. Reducing costs means changing how millions of people do their jobs, paying many of them less, and laying off many more. It means less income for organizations that collectively have over 2 trillion dollars in annual revenue.
The power of the lobbies is hard to overstate. Aside from the lobbying money, nearly every House member has a hospital among the largest employers in their district. On top of that, physicians and hospitals are highly trusted and find it relatively easy to mobilize public opinion against cuts. Health care industry lobbies are even more formidable if they work with the Republicans’ sense of ideology and self-preservation to stoke fears about reform.
Stoking fears about health spending cuts is, of course, exactly what happened in the 2010 elections, and can be credited with bringing the Republicans back into sharing power in Congress. It isn’t hard to imagine the bloodbath if there actually were death panels or severe cuts in Medicare spending in the PPACA. As for the original legislation itself, Democrats could not have afforded to lose a single Senator, which would almost certainly have happened if the AMA, AHA, AHIP or PHRMA had turned against the bill.
Under these circumstances, the best the Democrats could hope for in the short term was to find a compromise with the health care industry and peel it away from the Republicans. It was an odd scene: Republicans, the friends of big business, were screaming at the top of their lungs that “Obamacare” was a socialist infiltration to destroy market-based health care, while the big industry lobbies were all on record as supporting the legislation and worked to promote it.
But for all the heat that the PPACA has gotten for being too corporatist and/or not serious enough about reforming what is driving the costs higher, it has in fact successfully triggered a major increase in concern on costs, unprecedented in recent years. This new seriousness about cutting costs is not an accident, or a reason to censure PPACA. It was foreseeable by those who learned the lessons of Massachusetts.
Reforms to how health care is paid for that were impossible before passage are becoming inevitable and even accelerated after. Instead of paying simply for the volume and complexity of care–encouraging more volume and more complexity, regardless of whether it is making us healthier, let alone whether it is the best way to make us healthier–the next 20-30 years will see a transformation to paying for the outcomes of health care, for keeping populations healthy, and for doing the care that is shown to be most effective. Some of this is vaguely present in the PPACA, and some of it will have to come from future reforms.
The promise of universal coverage in PPACA changes the debate, and nowhere more starkly than in Republican attitudes. Instead of defending the status quo of American spending as an example of markets at work giving people what they want, or as justified by providing us with the highest quality health care system in the world (a false statement by most measures), Republicans are increasingly coming to identify health care spending with government spending. In doing so, they associate it with what nearly all social program spending is in their eyes: a wasteful effort to redistribute wealth to the undeserving. One can only imagine their zeal to cut overall health care spending once 2014 rolls in and federal subsidies go out to millions of Americans to pay for private insurance coverage. But there will be no way to cut government program spending without cutting private insurance spending, which will mean cutting health care spending overall.
The gambit of the Massachusetts approach is this: once you have universal health care, it is locked in. Just like with Medicare and Social Security, no one is going to take that entitlement away. The focus instead will be how to pay for it, as is happening now in Massachusetts. More Republicans will begin to turn their attention away from defending the bloated delivery system (we’re the best in the world! Government cost controls just make it worse!) to criticizing it (how wasteful!). More liberals will turn their attention away from universal health care (pretty much got it!) to reducing the revenues of massive corporations and making it easier for the non-wealthy citizens to afford care. Non-ideological tax payers will take a greater interest as well, once tax dollars are seen as propping up more of the system, especially in the first few years.
The basic strategy mirrors the Grover Norquist strategy on the Republican side. The Norquist approach is to cut taxes whenever politically possible (politically popular) and never raise them (politically popular), while taking a soft stance in the short term on government spending cuts (which are generally unpopular). The result is the massive deficits under Republican presidents since Reagan. The goal is to force a reckoning that brings the American public to choose lower taxes over higher government services to bring the books back into balance. The ultimate agenda, obviously, is small government, but accomplished by precipitating a crisis on national debt. The Massachusetts strategy employs a similar idea: take the easier step first (coverage expansion), which entrenches the political change, but also brings higher costs and (fear of) deficits, which in turn triggers a reckoning, but with a different calculation of the end result: serious reforms to the way that money is spent to reduce inefficiencies and overpayments. Time will tell whether the Norquist or Massachusetts strategies will achieve their ultimate goals, but at the very least one can be sure that they have both in their ways managed to precipitate a feeling of fiscal crisis, and something will soon have to give.
But isn’t this gambit irresponsible? For the Norquist approach, yes, because the trillions in the deficit are real and must be paid back. For the Massachusetts approach, no, or at least, not yet. The major costs of the PPACA don’t kick in until 2014, giving three years to plan on how to reduce the cost of the system before the subsidies take effect. And even then there are new revenues to cover most or all of the additional cost of care. The law has precipitated a psychological sense of fiscal crisis in the beltway without yet creating the crisis itself.
The great real fear is that what is coming next to lower costs is the wrong kind of reform. Paul Ryan has inadvertently indicated what that wrong kind of reform is: cuts in the level of benefits, without tackling the cost of care itself. The worst scenario is to still pay twice as much for a drug or a hospital visit as the rest of the world, but have employers or the government save money by cutting the benefits in half and forcing people to decide whether they can afford to pay for it, rationing by ability to pay. That is the biggest threat to the path we’re on now, from a public interest perspective.
The choice we face is to cut costs primarily by reducing benefits, or by keeping the benefits (the actuarial value of the plans) but reducing the effective fee paid per service and reducing care that is least likely to produce good outcomes. It is only with health care reform that we can seriously, once again, consider the second approach, having abandoned earlier attempts in the 1990s. Interestingly, it hasn’t taken long for Ryan himself to say that his proposal was misread, and that his plan all along was to get consumers to be the force that reduced the cost of care so that benefits could be maintained. This is increasingly the language that we will speak, though the methods to get there still differ.
So yes, I’ve taken some artistic license in saying that it is “all going according to plan.” For one thing, there wasn’t just one plan, even among Democrats. Many did not see the need for further legislation to enact deeper cost reforms, and many bought into the myth of higher costs for higher quality care. And of course, the train could certainly still derail. I would even grant that the track is still being laid as we go. But as I’ve watched this reform unspool over the last three years, I’ve grown increasingly pleased by how far we’ve come and more confident in how well we are set up to fight the major unfinished battles ahead.
Jonathan Halvorson, PhD, has worked for the past six years in managed care for a regional non-profit insurer. His views are entirely his own and do not represent those of his employer or other known individuals, living or dead.
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This is an excellent analysis of the complicated politics of healthcare reform!
The truth is that true healthcare reform is so complicated and represents such a tremendous cutural change to American society, that the only way to truly accomplish reform is in stages.
The problem with the PPACA is that it is a standalone health-insurance only reform that seems so broad in scope but only represents a band-aid to our very broken healthcare system. Offering increased access to health insurance might increase the number of insured, but because the quality of insurance and the access to care that the insurance affords varies so much, the reforms coming out of the PPACA will not solve the basic problem of our healthcare system- it is not one system but multiple systems based on multiple interests. There are different types of hospitals (public, for profit, charity, VA, HMO, etc), different types of public insurance (Medicare, Medicaid, VA), different types of private insurance (PPO, HMO, fee-for service, etc) and different types of access to outpatient care (private office practices, Medicaid clinics, VA clinics, free clinics, etc).
Although there is a perception that all of these are regulated, they are not regulated in a way that helps the advancement of good medical care.
The answer is not further fixing of the PPACA or even its repeal, but rather a complete overhaul of the system: however it must be in a way that will fit the particularly American values and expectations that most single-payer reforms do not have. There needs to be a recognition that private insurance has to be part of the system- working alongside publicly financed insurance and not competing with it.
The EMBRACE healthcare reform plan is such a plan that offers a blueprint for the complete overhaul of the American healthcare system in a more integrated way. It offers to depoliticize healthcare by establishing an independent healthcare board (like the Federal Reserve) that is funded by Congress once a year. Details of the plan can be read on Wikipedia (http://en.wikipedia.org/wiki/The_EMBRACE_Healthcare_Reform_Plan) and on http://www.hpfhr.org, where there are details about all the advantages of the plan.
Unlike the PPACA, EMBRACE is designed to be implemented in stages so that each part can be established and refined before introducing the next stage. Each stage can stand alone- but is a part of a larger blueprint with a mission to advance the care of all Americans.
The AHRQ studies also say that seniors are responsible for 36% of costs, but since they are (or were at the time the study was done) only 13% of the population, as a group they consume almost three times as the rest.
http://www.ahrq.gov/research/ria19/expendria.htm
Margalit and rbaer –
I’ve seen the age breakdowns as it relates to healthcare costs several times in recent years, including in a Health Affairs article within the past year. I don’t have a link but a subscription would be required in any case.
I think even people with chronic disease can ask for services, tests and procedures that are not indicated. I’ve been guilty of it myself occasionally. For example, a bit over a year ago, I was having trouble with certain balance exercises that my personal trainer wants me to do so I asked my PCP to refer me to a neurologist so I could get a brain MRI to make sure there was no underlying problem. It was normal. On another occasion, during my annual physical, I commented that I never had an HbA1c test even though I don’t have diabetes. He said my company wouldn’t pay for it. I said to bill it separately away from the corporate physical and I’ll pay for it myself if I have to. It was normal as well but only cost $32 in any case. Meanwhile, my main conditions of heart disease and hypertension are closely managed with medication.
Margalit’s example of high costs incurred by CHF patients is a good one, I think. I recently attended a presentation by an eldercare advisor. She commented early in her presentation that her dad is now 95 and still fully cognitive. He has CHF and has deteriorated to the point where he is averaging one hospital visit per month, presumably, to reduce fluid buildup. Those costs add up quickly.
At the same time, there is a long term secular trend away from inpatient care as surgical techniques become less invasive thereby reducing recovery times. Many can now be done on an outpatient basis whereas an inpatient stay was required in earlier times. Also, new drugs can manage some conditions that might have needed surgery in the past. Increasing prices per service test or procedure is most acute for inpatient care, though, which is also contributing significantly to healthcare cost growth.
I don’t know about the worried well. If they were the ones ratcheting up costs, you wouldn’t see the 80-20 concentration of expenditures. It seems that half of Americans use almost no care at all (3.1%) and 5% of Americans use almost half of all health care (47.5%). This does not look to me like a widespread, frivolous, consumer induced over-consumption.
http://facts.kff.org/chart.aspx?ch=1344
AHRQ has pretty good studies on where the money goes and it seems to be going to folks with multiple chronic conditions, with CHF patient leading the pack.
Can’t post more than one link on these comments so try searching for “Concentration of U.S. Health Care Expenditures”.
Barry,
you wrote
” So far, though, the older folks account for about one-third of healthcare costs, a number that hasn’t changed much in quite awhile.” – where are these estimations/numbers coming from?
“I’m not sure I understand why that is. Maybe all of these so-called worried well we hear about are asking for more and more expensive imaging for every little thing or they want the latest drug they saw advertised on TV whether their doctor thinks it will do them any good or not. If they don’t get this stuff, they complain that their doc isn’t thorough enough. Meanwhile, the standard of care evolves to emphasize avoiding litigation and giving patients what they want because, for the most part, insurance is paying anyway. Before we had all these medical options, patients didn’t ask for them and doctors didn’t offer them because they didn’t exist. I guess that’s the downside of advances in medical technology and innovation, at least in our society.”
Based on my limited anecdotal evidence as a specialist with 8 years experience (including some training experience), that seems to be exactly what’s going on, for exactly the reasons you describe … but you would have to postulate that a lot of the HC cost growth for the worried well is outpatient-, not inpatient spending (although there are some exceptions to this: cardiac caths for noncardiac chest pain, back surgery without good indication, exploratory abdominal surgeries with negative results)
Margalit –
You’re the technology expert here so I’ll defer to you on that. You could well be right about the price curve for the GE ultrasound scanner, but a lot of the cost impact depends on how much gets billed for each scan and how much gets paid. When I see my urologist for a checkup each year, he does two ultrasound scans (with a larger machine) and each takes about 30 seconds plus a little more time to calculate the results on his computer. He bills each test at $350 and insurance pays a bit more than one-third of that which I think is still too much.
If modern medicine can really do a better job of keeping us healthier longer, then a higher and higher percentage of healthcare costs should be accounted for by the 65 and over population. So far, though, the older folks account for about one-third of healthcare costs, a number that hasn’t changed much in quite awhile. I’m not sure I understand why that is. Maybe all of these so-called worried well we hear about are asking for more and more expensive imaging for every little thing or they want the latest drug they saw advertised on TV whether their doctor thinks it will do them any good or not. If they don’t get this stuff, they complain that their doc isn’t thorough enough. Meanwhile, the standard of care evolves to emphasize avoiding litigation and giving patients what they want because, for the most part, insurance is paying anyway. Before we had all these medical options, patients didn’t ask for them and doctors didn’t offer them because they didn’t exist. I guess that’s the downside of advances in medical technology and innovation, at least in our society.
Yes, that’s it! That little scanner is exactly what I want to see. It sells for $7,900 on the GE website. In a couple of years, a better one would probably sell for half the price and any PCP can use it. I want more of these things…..
I keep thinking that we just happen to be in a difficult place in the road right now, where technology is very expensive and it is make lifespans longer and therefore disease load larger and more expensive to deal with. But, here is a thought, is this just a temporary stage between a helpless past and a future where most everything is treatable at an ever decreasing price? If that’s the case shouldn’t we bite the financial bullet and push forward and through instead of retreating to more manual habits?
Margalit, I don’t know this part of the business well, but my assumption is that this is not willingly shared information. Every major insurer will have friends and spouses of employees, or even employees themselves, who have another insurance. And when they use services they get EOBs, and those EOBs can then be studied to understand the rates. No collusion required.
Tim, that’s not sharing. It’s sharing when I show you my cards. It’s peaking when i go to the bathroom and look over my shoulder to see what your cards are, and its something else (sleuthing, market intelligence) when I try to infer your cards based on your patterns of behavior.
John, the way you phrased the point about lobbyists the second time, I have no objection to it.
As for managed care controlling costs, don’t forget that managed care (by definition) is more than just insurance. Insurance in the traditional indemnity form actually has a modestly inflationary impact on the thing being insured, and I would wager that the impact is greater the more likely people are to have reason to use their benefits. Thus, traditional health insurance is more inflationary than traditional car insurance, which is more inflationary than traditional fire insurance for a home. So the first point is whether it increases or decreases costs, don’t expect it to be cost neutral.
It is no accident that car insurers have started to act more like managed care, in that they have preferred repair shops and contracted rates. I haven’t looked into it, but I wouldn’t be surprised if some have tried capitation or the equivalent of DRGs. Those measures can work to change the cost trend, though clearly other factors can mitigate the success.
There is nothing in Hayek which says I must itemize every expense and pay for it independently. If I want I can bundle (and often, I do want). If I want, I can pre-pay (and sometimes, I do want). Managed care is pre-paid health care with (in the best case) incentives to do care better and more efficiently.
A free market permits those options, and often when the component costs are complex, or there are benefits from bundling, or there are potential catastrophic costs which we want to be protected against, insurance which negotiates rates for me will be the preferred option.
Margalit –
In most other parts of the economy, improving technology reduces costs – better, faster, cheaper. In healthcare, new devices, surgical procedures and specialty drugs often extend lives which also gives people more time to continue to incur healthcare costs, Fifty or sixty years ago, if someone had a heart attack, they usually died either right then or soon thereafter. Now we have stents, ICD’s, LVAD’s, CABG, etc. and the number of age adjusted heart disease related deaths declined sharply since then.
In an area like imaging, the images sometimes replaced the need for exploratory surgery. However, we didn’t do the surgery nearly as often as we produce the images because imaging is non-invasive and usually painless. On top of that, the fear of litigation, the evolving standard of care in most places, patient expectations and the opportunity to make money all contribute to doing more imaging rather than less. We often find things that probably would never have caused any harm and that leads to additional workup and treatment. Even if what rbaer calls the yield is low, we do lots of images anyway, in part because patients want them and don’t think the doctor was thorough if he didn’t order one. In France, as he noted, there is a different thought process and a different culture. As I said in a prior comment, we do 4 to 5 times more imaging per thousand people than the French do. Just because we can do something doesn’t necessarily mean that we should.
Finally, GE has been running commercials recently touting their new handheld ultrasound scanners that don’t look much bigger than an I-Phone. I have no idea what they cost to buy vs. what was used before or how much is charged for each scan.
Yeah, but I am still waiting for the flying cars and hoverboard. No offense, you are a smart and thoughtful commenter, but this is wishful thinking, like saying: why don’t we just build cars getting by without any gas/energy whatsoever, that would solve our dependency on fossile fuels and drastically reduce carbon emissions … and that one is probably more realistic looking at solar car prototypes.
“Nate…””even cuter…”
At least we all agree on that.
” I want a $100 plastic scanner that will cost 50 cents per scan and give better information than those room size machines. Is anybody working on this?”
Better information yes.
Smaller then a room yes.
Plastic and cheaper nope. Would you go to a imaging center that used a cheaper model then what the hospital or someone else has? Computers aren’t cheaper becuase they are new its because they are selling 1970 technology
…and conservatives are even cuter when they try to look for the most extreme and unlikely case to make obvious exceptions look like the rule.
I don’t want a diamond studded cell phone (which drops calls just the same) and I don’t want an emerald decorated MRI. I want a $100 plastic scanner that will cost 50 cents per scan and give better information than those room size machines. Is anybody working on this? rbaer thinks this is naive Star Trek thinking. So was the flip cell phone in the sixties.
Margalit,
I believe the answer is: technology advances (but star trek handheld scanners don’t seem feasible – and how do you want to scan? xray? ultrasound? MRI? – all this cannot be shrunk into a pocket sized device), and US providers charge a lot whereever they can (like any commercial/semicommercial entity). I don’t have a good idea how most prices with private insurance are negotiated, but medicare has a huge influence and I believe they have panels setting the rates – and these rates are f..cked up and favor procedures, surgery and technology, the more complex, the better paid. That’s one of the main reasons why we are in the specialist/technology/overutilization mess.
I have to agree with Nate (if that’s what he thinks) that there are certain services where we should let his cherished invisible hand play and giving either the patient or the 3rd party payor some skin in the game – standardizable and large volume elective OP services such as CT, MRI and maybe a few standardizable elective procedures such as cataract surgery. Maybe you could have hospitals compete not only by quality and comfort, but also by price – again works only if patients are interested in low prices.
One problem with almost all technology also is that you need minimum standards (otherwise you end up with cheap but worthless tests), and who is going to set/supervise/enforce them? If you ask the medical specialty societies, you may end up not doing much in terms of cost, as those will fight to preserve income for their members.
I believe the differences between Europe and here are: 1) more pressure to bring down prices (similarly to drug pricing) 2) individual cultures may vary. Apparently, Germany and Japan do more MRIs (at lower cost and quality, esp. in Japan), while the medical culture in France (I thought their acdemicians were as well trained, and more selected, as their US counteparts) seems driven by high yield: do ONLY the exams that have a reaonable yield – imaging everything as done and considered thorough here in the US is considered bad medicine.
aw liberals are so cute when they try to be smart.
” Are today’s cell phones more expensive than the Motorola bricks from 20 years ago?”
It cost $3,995.
Ulysse Nardin’s The Chairman – up to $49,500
Nokia 8800 Arte with pink diamonds
$134,000
Peter Aloisson’s iPhone Princess Plus
$176,400 My personal fav
if you want to move away from the artsy you can still spend more for a more advanced phone. You could drop 4K easy on a sat phone.
“Are computers more expensive than the huge desktops with huge monitors from the same era?”
? Yes they are. Throw in some solid state drives or quantum processing and you could blow away the old cost.
Yahoo has this…..sounds an offul like the first silicon computer, see the more things change the more they stay the same
D-Wave[1], a company from silicon valley, claims to have the lead in terms of a commercial product. But they only built one, which barely works (solves sudoku…) and people are questioning if it is indeed a quantum computer[2]. You can always call them to see how much would it cost you to buy one… Rumor has it that their simple first quantum computer is humongous (read: the size of building), but don,t quote me on that.
Really, Nate? Are today’s cell phones more expensive than the Motorola bricks from 20 years ago? Are computers more expensive than the huge desktops with huge monitors from the same era? They are better, more powerful, smaller and a lot cheaper now. That’s how technology works. So why doesn’t this happen in medical technology? Who wants to keep prices higher than they should be, or at least who has no interest in driving prices down?
“I want R&D and I want medical technology to get cheaper and smaller and better”
Thats a contradiction. If a 600dpi MRI is sufficent, doubt that is the measure used but makes the point, why spend R&D to develope a 1200 dpi? In Japan they use existing technology that is sufficient, that is why it is cheaper. If you want better and smaller MRI machines you want to drive up cost. Bad Margalit bad.
“They know what their competitors are paying me, and they use it.”
That has been my anecdotal experience as well. Why is that not an anti-trust violation, while physicians sharing the same details is not allowed?
And why is it that all these people are cutting deals with prepaid customers’ funds without having to disclose the prices to same customers? At least with Medicare everybody knows what is being paid out.
Perhaps if people knew that a particular insurer is paying tons of money to providers and then turns around and charges customers higher premiums for the same services as a more frugal payer that is a better negotiator, people would prefer to buy from the latter.
We keep talking about competition, and having customers pressure providers to lower prices directly, but why not give customers the tools to make insurers more competitive? I find it very hard to believe that even the largest health system can afford to turn away the largest payers in any given state, and if the numbers become public, consumers will start to align with the payers in instances of egregious demands from those provider systems, and the media will do the rest.
Do you read the whole thing, or just the first sentence?
I want R&D and I want medical technology to get cheaper and smaller and better, all at the same time, just like every other technology out there. Aren’t we supposed to be the most creative and innovative nation on earth?
“Why would a large insurer with better rates share that with a smaller competitor?”
They wouldn’t but as a matter of public benefit maybe they should be required, I would say more from the hospital side then the insurer.
For example years ago we owned a PPO in NV. We were small but had a nice block of stable business. One day the county owned hospital hired a “super inteligent” business manager that determined they could make more money by giving the 3-4 largest players in town better deals and giving everyone else a 5% prompt pay discount. Our deal wasn’t as good as the big boys, 5-10% more but it was close enough that we could make it up with better service and claims paying. When this super smart governemnt worker decided to make the difference 40% our clients had no choice. Instead of making more money we were forced to move our business to one of the 3-4 large players where the hospital made substantially less.
I don’t think this hospital has been profitable since, their loses are regualar news. Now think if this public hospital supported by tax payors had to disclose its contracted rates? They never would have been able to justify the deal they gave to the favored players while driving most of the competition out of business. Instead of having one carrier with 70%+ of the market there migth still be some competition in the State.
Any hospital that is publically owned should be required by law to charge all tax payors the same regardless of their insurer. If a private business wants to cut deals so be it but my tax dollars shouldn’t be used against me.
Until insurance companies stop paying ridiculous invoices for medical services, and get some input from the insureds regarding the services provided, the health insurance industry is not going to change. Doctors are the only profession where fees and charges are every discussed with the patient, unless, of course, the patient is without any type of insurance.
PHOs made sense in the 1990 early 2000s until people actually had to deal with the consiquences. As soon as those organizartions deny anything they will be accused of doing it for profit just like the HMOs where. I haven’t seen any changes from the HMO concept of 1973 to the ACO model of 2010 that makes me beleive anything is going to turn out different.
Broad based screening of low risk populations increases the risk of detecting a false positive. The classic example is the preop chest xray (which is now largely abandoned). A “spot” is found on the xray. A consult is generated. A needle CT directed biopsy is performed and the patient suffers a pneumothorax (lung injury). The biopsy is negative. SO far, increased cost, patient complication and still no surgery performed. A similar argument can be made for routine preop EKGs.
” but in time you should be able to interpret these correctly. ”
So you want Japennese pricing now without any of the sacrafice? That pretty much sums up the problem with reform. We want NHC pricing but access to all the cancer drugs. We want European pricing without the tax burden. The reason they spend less then we do is they get less then we do, unless we are willing to sacrafice you can’t expect lower cost. A couple degrees of resolution is not that great of a sacrafice but I guarantee you a doctor that used one of those machines and missed something would lose in court faster then he could say but you wanted to pay less.
Review be whom? What do you do about a patient who presents to the ER with abdominal pain, treated with narcotics and diagnosed with cholelithiasis but not acute cholecystitis or choledocholithiasis? An emergency cholecystectomy is not necessarily indicated but is often done as the patient is already in the hospital and will most likely need their gallbladder out. Can they receive “informed fiscal consent” while on pain medicine? How long will it take to gather the price quote? Will it just be the surgeons’ fee or include anesthesia and the hospital? What if there is a complication: what happens to the price? Will we have higher quotes for diabetic, elderly heart failure patients like the patient I saw last night?
Pardon the fragment.
What remains to be seen is if such a centrally planned sector can function in a culture where aggrieved citizens reserve the right to litigate, with contingent fee arrangements, all slights. Have your cake and eat it? No, and there is also no such thing as cold fusion. Sorry.
I agree with the writer that “health reform” is going as planned; precipitate a fiscal crisis, then “fix” it with rationing. Not too hard to crystal ball that one. The deeper question is what comes after, in a consumer culture which was born out of American individualism. There seems to be bright-eyed wager that cultural genies can be pushed back into their bottles by legislation. I think Hayek is thrilled in his grave to have such a thesis proposed and tested.
After all, nothing has characterized the professional Left so much as simplistic confidences about aggregates of self-interested actors: that the “health” of a population is a simple result of the “health care” of that population (instead of the other way around, or both being dependent on other causes); that American culture is plastic enough to accept a European bureaucratic superstructure simply plopped down on top; that there is a stratum of rationality underneath the waste, fraud and abuse and legislation will dig down and find it; and so on.
These are all, at bottom, cheery assumptions about how States function of the sort one finds in a Mahar essay: ‘we” just need to do this, “we” just need to do that. Ah. We. How charming. In almost every such sentence, you can just substitute “we” with “other people’s money”, and you’ve about have it.
I’d argue that the Norquist strategy is ALSO working as planned. Both strategies share the same opening gambit, then fork into adversarial end games. The fork is when the general population must decide whether to personally pay for the benefits they’ve voted themselves. That actually does not happen until the projections of insolvency dates are within the lifetimes of the center of the voting power bloc. Not. Quite. Yet.
But soon.
What remains to be seen is if such a centrally planned sector can function in a culture where aggrieved citizens reserve the right
“I’m pretty sure that the insurers don’t share their reimbursement rates per service, test or procedure. ”
They get them from EOB’s. All commercial payers have a database of what their competitors are paying providers. I manage a physician practice, and negotiate contracts with payers. They know what their competitors are paying me, and they use it.
Insurance companies would rather face comprehensive reform and new regulations than lose their anti-trust exemption. Look no further than Sen. Nelson’s behavior as the 60th vote when PPACA passed the Senate. He was an HMO CEO prior to becoming a Senator and he held out as the 60th and final vote until that anti-trust exemption repeal was removed from the bill. Nothing is more valuable financially to the insurance carriers than that exemption and they have no desire to actually compete.
Ugh. Smartphone commenting is error-prone. I meant to also say that everyone can benefit from risk data sharing but that is not the case with fee schedule sharing. Why would a large insurer with better rates share that with a smaller competitor?
Barry, while I’m not an expert either on this practice I think you are right. It makes a lot of sense forcompetitors to share data on risk that makes them all able to price risk more accurately thus improving stability of pricing and reducing theunderwriting cycle
rbaer, there is something extremely confusing to me about recommending that doctors and patients use less technology. I understand that MRI and echo and all sorts of new things can reveal little things that may raise unnecessary concern, but in time you should be able to interpret these correctly. I assume that every increased visibility into the human body carries the same initial risks. Bet you they diagnosed all sorts of new and perhaps unnecessary stuff after they started using stethoscopes and x-rays.
On one hand, we tell doctors to get on computers and toss the old paper charts out, and that is mighty expensive too, and on the other hand we tell them to stay away from other high tech.
Instead of those funky little innovation prizes for just some calorie counting app, that are all the rage now, why don’t they have some prizes for a hand held scanner that any PCP can use in the office, or I can buy at Walgreens for 9.99? And why are we still using x-rays?
Instead all the big boys are building ever more expensive things like smart rooms in hospitals and huge surgery robots. It almost looks like nobody has any interest in driving technology prices down in health care. Why?
I was including OOP costs.
Steve
Barry,
“How does the standard of care evolve? Do the medical specialty societies play a significant role? Or, do doctors in each locality or region respond to their perception of litigation risk, patient expectations and the ability to make money?”
IMHO the latter, although a medical association has some influence if there is real agreement on something (and this agreement is either due to overwhelming science – X is dangerous and should not be done) or due strong consensus of almost all thought leaders and/or members (i.e. the society is only and amplifier/accelerator of a change in the standard of care that is already underway).
“Perhaps this is one area where consolidation into a much smaller number of large multi-specialty group practices receiving capitated payments could bring about change. ”
Isn’t that the thought behind ACOs? Give them money and let them compete that they use it wisely, i.e. promoting/improving the hea