OP-ED

Health Care Shibboleth

“We spend far more on health care than other peer countries yet have worse outcomes. Why is U.S. health care so expensive?” I’m sure you’ve encountered similar statements, maybe even expressed it yourself. It occurs often, including by knowledgeable people and health-related institutions. However, it’s a fallacy because it confuses health care with population health.

Health care is a proper subset of population health. For example, longevity is determined by more than just health care. Using a specific recent estimate (Appendix Exhibit A6 – gated), an average 20-year old U.S. white male who did not graduate high school will live 10.5 fewer years than a similar man with a college degree. That’s over ten years of life related to educational attainment. Sure, there are many reasons for the difference, and health care or the lack of it is only one of them.

An example of the health-care-is-health fallacy is from an essay in the Health Affairs blog written by Arthur Kellermann, a health policy insider. He writes:

In 1950, health care accounted for 4.5 percent of GDP. Today, it claims nearly 18 percent….

Over the past 20 years, the life expectancy of U.S. women has dropped from 22nd in the world to 36th….If we can’t do better than this, why is American health care so expensive?

Kellermann cites an Institute of Medicine (IOM) report and goes on to argue for an improved health-care market place. An implication is health outcomes are all about health care.

Another example is from Tom Daschle who writes, also in Health Affairs,

Recently, the Institute of Medicine and the National Research Council reported that Americans die earlier and live in poorer health [1] than people in other industrialized countries. This is the latest evidence of the urgent need for health reform, as embodied in the Affordable Care Act

and continues on about health care issues.

Before going further, I do not mean to single out Arthur Kellermann, Tom Daschle, or Health Affairs except as up-to-date examples of knowledgeable people and institutions repeating what I suspect is meant as a shibboleth to convey their seriousness about health care outcomes and costs. Nor am I an apologist for the U.S. health care “system”. Rather, what agitates me is the fallacious ambiguous thinking and, through its health-care specificity, that it detracts from a more holistic long-term ideal of improving U.S. social determinants of health.

The Kellermann quotes actually represent two separate fallacies. The first quote, where health care costs in 1950 are compared with costs today without taking into account value, commits the “All things are equal” fallacy (number 5). Health care in 1950, even 30-40 years ago, was pretty basic compared to 2013. Circa late ’70′s, if you had a heart attack and managed to get to the ER, they’d give you morphine and watch you have your heart attack. The medical team might run a few tests but otherwise there really wasn’t much they could do. If you were lucky enough to survive, chances are you’d be a cripple for the rest of your life: no climbing stairs, no sex. On the other hand, today, assuming you make it to the ER, chances are that within a few months you’ll be back playing tennis. There are many other examples of contemporary health care’s greater value: laparoscopic surgery, joint replacements, insulin pumps. In terms of value, health care in 1950 was not the same as health care in 2013.

The second quote uses health (measured by longevity) and health care ambiguously, resulting in an error in reasoning: the fallacy of equivocation (number 10). The subject, health, is used for population-health outcomes which stem from socioeconomic, environmental and personal factors as well as health care, and then in the context of costs, switches meaning to just health care. This is an equivocation on different meanings of health.

Given the United States’ dominant ideologies of the primacy of the market and extreme individualism, plus attendant short-term thinking, I can see why as a nation we might be predisposed to emphasize individual health care over reference to a model of long-term integrated population health.

A September 2011 paper in the American Journal of Public Health, “US Opinions on Health Determinants and Social Policy as Health Policy” by Stephanie A. Robert and Bridget C. Booske (gated) supports the notion that the U.S. public sees a greater health role for medical care and personal habits. From their abstract:

Respondents said that health behaviors and access to health care have very strong effects on health; they were less likely to report a very strong role for other social and economic factors.

Their survey supports the idea that the U.S. public perceives health care (along with behaviors) as more important for health than social, economic and environmental factors.

The Kellermann and Daschle essays both cite the IOM report. Here is the lead paragraph of its foreword:

The United States spends much more money on health care than any other country. Yet Americans die sooner and experience more illness than residents in many other countries.

The difference is the IOM authors then use this apparent conundrum, instead of segueing into a pitch for more market-oriented health care, to introduce other determinants of health. It’s not all about health care:

But health care systems and the health services they deliver are not the only influences on population health. Life-styles and behaviors, social and economic circumstances, environmental influences, and public policies can also play key roles in shaping individual and community health. And a number of these factors may be critical to understanding why some high income countries experience significantly better health outcomes than the United States. (from p14 of the IOM report)

The bulk of this thoughtful 400-page report is in fact about the influence of social determinants of health.

To save you the trouble of searching—I’ve already done that—there are no generally useful estimates of what percentage health care contributes to population health. That makes sense given the many causes and extrinsic factors leading to health outcomes. Additionally, health care today is vastly improved from just a few years ago, so assessing the efficacy of health care is a moving target. Thus it is impracticable to derive a general point estimate about the percentage of health care’s contribution to health. Nevertheless, estimates I’ve seen of health care’s effect range from less than 20% to near 50%. But these are either based on older data or related to specific morbidities. Regardless, health care is clearly only part of total health.

It’s time to put a hold on fallacious shibboleths like “We spend far more on health care than other countries yet have worse outcomes. Why is U.S. health care so expensive?” As a nation, our health care expenditures are undeniably out of line. And there are many areas where our population health could be much better. In either case, the path to policy solutions will surely benefit from clear and unambiguous expression, which will in turn require clear thinking.

Frank de Libero is an independent statistical consultant oriented toward policy and strategy. This post originally appeared on his blog, Letting the Data Speak.

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ขายหม้อเทียมDon SlomaBob HertzMargalit Gur-ArieLegacy Flyer Recent comment authors
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ขายหม้อเทียม
Guest

Very nice post. I simply stumbled upon your blog and wanted to mention that I’ve really loved surfing around your weblog posts.
After all I’ll be subscribing on your feed and I
hope you write again soon!

Barry Carol
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Barry Carol

Bob and Don, My training is in economics, finance and investment analysis and I’m keenly interested in the issue of efficient resource allocation because resources are finite, we have lots of unmet needs and it would be good to see our economy operate as efficiently as it can with the resulting prosperity, hopefully, widely shared. However, even I recognize and accept that there is more to life than money both in healthcare and more generally. With respect to end of life care specifically, I think the appropriate level of care can vary considerably not just based on individual values but… Read more »

bob hertz
Guest

Thanks Don. I sometimes wonder if there is any economic value at all in extending lives. (not emotional value, a separate and very important discussion.) What David Cutler and others have said, I believe, is that extending life for a year has a value of $100,000, and heart surgery costs $50,000 so we are ahead. You suggest that maybe heart surgery costs $50,000 and the indirect costs to family members is $50,000, so maybe we are even. My point is maybe the $100,000 is value is completely false, and we are actually $100,000 in the hole from live saving medical… Read more »

bob hertz
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Thanks Don, but I have had a problem with QALY for some time. My arguments are not grounded in any academic discipline, so I may be out of line. If so, I will not be offended if any reader tells me to bug off. Anyways — As I understand QALY, an extra year of life is valued at some number, say $100,000, and if a health care treatrment costs less than $100K then we as a sociaty are ahead. My problem with this is that I helped do counseling for Alzheimers caregivers. An extra year of life for their spouse… Read more »

Don Sloma
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Don Sloma

Bob, I don’t have time right now to find the references, but the Partnership for Prevention is one group that has published on QALYs. Their website http://www.prevent.org, as I recall, had a nice piece a few years ago about value. That’s where I remember reading of the Phillip Morris study. I am sorry to say I cannot recite the factors considered in the cost side of the equation and whether they included costs to family members, voluntary care givers, lost productivity etc. But I believe most health investment studies look simply at the direct costs of medical care. So you… Read more »

Bob Hertz
Guest

Everyone who has posted so far seems to be wrestling with a troubling thought………. namely, if health care can save lives (which it does in e.r.’s every day), and can make life better in terms of pain relief (which it does with joint replacements et al), then why are we having such trouble affording it? Our minds naturally drift to the idea that if something makes life better, it ought to make our society more prosperous. I am not a historian of science by any means, but I suspect that the history of technology is not so one-sided. In the… Read more »

Don Sloma
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Don Sloma

Interesting that this thread has gone on this long about cost with little discussion of value. Phillip Morris famously analyzed health care costs for one eastern European country years ago and demonstrated smoking lowered health care costs by killing people off at earlier ages. That coupled with less heroic end of life care in that country made encouraging smoking a great policy option. That is ridiculous of course because encouraging smoking misses the point of all this spending and technology and concern. The useful debate is about quality adjusted life years (QALY) per dollar. That’s why I think the author’s… Read more »

Peter1
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Peter1

“We need to reframe the health care cost debate to focus on health improvement per dollar: value.” Don, insurance companies are great at doing that calculation. However every time an insurance company refuses to pay for a procedure the patient and their family screams to the media about “heartless” insurance companies. For patients (or their families) who aren’t paying the bills this is about emotion. I have found though that most people don’t want their own lives extended by “heroic” means when the outcome does not improve their quality of life or when they will deplete their family’s fortune. I’m… Read more »

Don Sloma
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Don Sloma

Peter1, You point to a main component of the engine of health care cost escalation. Another is the profit motive that drives the relentless development and marketing of medical treatments for the already ‘pretty well healed’, ie those with means, whether that be good third party coverage or just bucket loads of cash. Who knows where the upper limit of spending may be of other people’s money to try a cure we have been taught to believe may save us or our loved ones? This is why it is so important that those of us who know better reframe the… Read more »

Barry Carol
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Barry Carol

Peter1 – I’m not sure what you mean by a “healthy” nursing home patient / resident. People are in nursing homes because they can no longer perform most of the normal activities of daily living (ADL) to live independently. Skilled nursing facilities are extremely labor intensive operations which is why they are so expensive to operate even though wages are comparatively low for most employees. Most spending for nursing home care comes from the Medicaid program. Many residents start out as private payers but most spend down their savings within a couple of years or so and then look to… Read more »

Peter1
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Peter1

Not sure about your low estimates of non-medical costs (transportation).
http://www.reuters.com/article/2012/04/30/us-obesity-idUSBRE83T0C820120430.

I guess I meant senior care facility not necessarily nursing home. If nursing home then the obese would, due to ill health, get there first where as a healthy person would be in assisted living, not requiring nursing care.

I guess I’ll wait til all the numbers are as obesity just gets worse and medicine finds ways to keep the fat ones consuming care.

Margalit Gur-Arie
Guest

“Then why do insurance companies rate obese and smokers higher if they will cost less? Why is CVS wanting to know the BMI?” Because a dollar is a dollar, no matter where it comes from. When it was acceptable to penalize people with preexisting conditions, or women with small children, they got their money there. Now that it’s becoming acceptable to penalize “lifestyles”, they get their money this way. Same old MO with different packaging. And also, the “savings” from the obese and smokers dying sooner do not accrue to CVS; they accrue to taxpayers, so CVS has no dog… Read more »

Barry Carol
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Barry Carol

Steve Schroeder, in his 2007 Shattuck Lecture, told us that an individual’s health status is determined 40% by personal behavior (diet, exercise, smoking, drinking, etc.), 30% by genetics, 20% by socioeconomic status and environmental factors, and only 10% by the quality of healthcare that one has access to. Healthcare costs are higher in the U.S. than in other developed countries mainly because prices, especially for hospital based care, brand name prescription drugs, and medical devices, are much higher than elsewhere. Also, practice patterns are more aggressive in much of the country which probably relates to a combination of the fee… Read more »

legacyflyer
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legacyflyer

Peter1,

You are confusing yearly cost (which is higher for smokers and obese) with lifetime cost.

Non-smoking, normal weight people (like my mother) live longer than smokers and the obese. The live long enough to develop macular degeneration, dementia, etc. They live long enough to require nursing home care, etc. etc. And, they keep getting Social Security.

Peter1
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Peter1

I’m not ready yet to blindly accept what you say or accept the results of one study. Social Security is not medical care, nursing homes do not necessarily provide more care to healthy residents – like your mother. I assume your mother is paying for her own nursing home accommodation. Both healthy and un-healthy have end of life care with the unnecessary costly heroics. I’m reading about obesity speeding up onset dementia and macular degeneration. Diabetes causes blindness. Hospitals are now having to provide larger beds and washrooms with larger more robust toilets, not to mention the physical effects on… Read more »

Patrick PIne
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Patrick PIne

The best concise statement about how we spend money on health care in the US I have heard is: “The average American will spend over half of all their health care spending in the first 3 weeks and last 3 weeks of life.” And within those two brief spans we spend far more on the last three weeks. We spend enormous amounts on health care at the very end of life. Having administered corporate benefits it became clear that one reason the Canadiens spend less than Americans is that Canada just does not provide the infrastructure on heroic end stage… Read more »

legacyflyer
Guest
legacyflyer

Patrick,

Amen

The lowest hanging fruit in any attempt to reduce Health Care Costs is the last months of life. Not only does the HUGE amount of money we spend not extend life much, but frequently it INCREASES (rather than reduces) suffering.

We need “Death Panels”. We need to take a rational look at what we are doing and why.

Unfortunately, I don’t expect that politicians (Democratic or Republican) have the guts to act.

Peter1
Guest
Peter1

“there are no generally useful estimates of what percentage health care contributes to population health. That makes sense given the many causes and extrinsic factors leading to health outcomes.”

Salt, sugar, fat, TV. Less of those and less health care expenditures and better outcomes. Duh.

legacyflyer
Guest
legacyflyer

Peter1,

A very common misconception.

Lifetime healthcare costs are greatest for THE HEALTHY (non-obese, nonsmokers), THE OBESE are LESS expensive over the course of their SHORTER lifespan and SMOKERS are the LEAST expensive over the course of their EVEN SHORTER lifespans.

“Smoke ’em if you got ’em”

Peter1
Guest
Peter1

“A very common misconception. ”

Really?

The lifetime costs were in Euros:

Healthy: 281,000

Obese: 250,000

Smokers: 220,000

Obese + Smokers = 470,000 euros
Healthy = 281,000 euros

http://www.forbes.com/sites/rickungar/2012/04/30/obesity-now-costs-americans-more-in-healthcare-costs-than-smoking/

While we’re all alive the unhealthy are costing us money. If we’re dead, who cares.

Legacy Flyer
Guest
Legacy Flyer

Peter1, ??????? – I don’t think you understand what you are talking about. An obese smoker does not cost the same to take care of as an obese person, plus a smoker. An obese smoker likely cost LESS to take care of over their (shorter) than either an obese person or a smoker. My mother, who is 91 is neither obese nor did she smoke. She is in a nursing home which charges quite a bit every month to take care of her. If she had been obese or a smoker she likely wouldn’t have made it to 91, old… Read more »

Peter1
Guest
Peter1

Then why do insurance companies rate obese and smokers higher if they will cost less? Why is CVS wanting to know the BMI?

legacyflyer
Guest
legacyflyer

I think the author made an excellent point, which often gets overlooked – that various measures of health such as longevity, infant mortality, etc. often have more to do with social issues than with health care per se. It is often stated that the US spends more on health care than other comparable countries, but our longevity is worse. That ignores the contribution of auto accidents, homicide, etc in our statistics. Our infant mortality rates are also compared to other countries (despite the fact that the statistics are not kept in the same way). Yet much of the infant mortality… Read more »

Aurthur
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Aurthur

Wondering what date Mr. Kleinke and Mr. Goodman will dismiss this troll.