Three juicy lemons came through my inbox this week. The NY Times published an expose of why hip replacement surgery costs 5-10 times as much in the US as in Belgium even though it’s the same implant. JAMA published research and a superb editorial on the Views of US Physicians About Controlling Health Care Costs and CMS put out a request for public comment on whether physicians’ Medicare pay should be made public. Bear with me while I try to make lemonade, locally, from these three sour economic perspectives.
Here’s a super-concentrated summary of the three articles: The hip surgery is more expensive because, in the US, as many as 10 intermediaries mark-up the price of that same hip prosthesis. Then, Tilburt et al said in JAMA that “physicians report that almost everyone but physicians bears responsibility for controlling health care costs.” The physicians reported that lawyers (60%), insurance companies (59%), drug and device manufacturers (56%), even hospitals (56%) and patients (52%) bear a major responsibility to control health care costs. Finally, CMS is trying to balance the privacy interests of physicians with the market failure that my other two lemons illustrate.
Can we apply local movement principles to health reform? How much of our money can we keep with our neighbors? What policies and technologies would enable the health care locavore? The locavore health system couldn’t possibly be more expensive than what we have now and, as with food and crafts, more of the money we spend would benefit our neighbors and improve our community.
Let’s start with the least local aspect of our health care system – insurance. If a reasonable risk pool is 50,000 people, then that’s about the size of my town. The major non-regulatory impediment to small insurance cooperatives seems to be the cost of negotiating provider contracts. That negotiation cost will drop to zero when our local doctors, labs, imaging facilities and hospitals post their services and charges like all my other merchant neighbors. (So, yes CMS, please help get this going by posting the physician and hospital payments.) If the technology was available, the ACA’s Consumer Operated and Oriented Plan Program with distribution through my state health insurance exchange could be just the ticket to remove the far-away insurance company from the picture.
Before we turn to the hospital, let’s do more in the home. More aging-in-place, more community-based supports, more telemonitoring and mobile lab and imaging services. Digital X-rays, hand-held ultrasounds, networked infusion pumps and reliable monitoring communications are getting easier and more accessible and they eliminate a lot of overhead. Extended doctor’s office hours and the 24-hour pharmacy a few blocks away can also reduce overhead. That leaves the local hospital for pretty much everything else other than the hip replacements and such. The local hospital would be easy to deal with because it would have mostly the local co-op insurance plan to work with and would benefit from proximity to the local in-home services. As with local farms, the service areas of local hospitals would overlap and provide some diversity and backup capacity.
Then we have the local doctor and the patient. Care in the home and pharmacy-based services would be coordinated through personal health open source software technology. Instead of big cloud personal health records, each patient’s home server will be an “HIE of One” based on open source software customized and supported by our local geeks. My doctors, my hospitals and the local pharmacies and home health providers would all log into my personal server and could contribute apps to the open source system without proprietary barriers or overbearing technology regulation. As with the insurance co-op, software infrastructure investments would stay within the community instead of leaving in the form of license fees. Localized technology diversity would parallel cultural diversity and make all of us stronger.
This leaves drugs, devices and tertiary care. These costs will not be easily shifted to local, but technology helps here too because drugs and devices are truly global and benefit from Internet distribution, price transparency, and support communities. Some changes might be required to allow us to purchase our drugs and devices through Amazon, but once the local health and price transparency bandwagon gets rolling, the regulatory barriers will yield.
So let’s review the money flows. Locally operated non-profit co-op insurance plans, locally owned hospitals, locally owned clinics, pharmacies, labs and imaging facilities, all using locally supported open source software would conspire to keep us at home through reliable local social and technical networks. The only money flowing out of the community as either investment or commerce would be for drugs and devices which can be sourced and supported on the global market along with tertiary care that would go to centers of excellence in a global market as well.
We can do this.
Adrian Gropper, MD is Chief Technical Officer of Patient Privacy Rights and participates in Blue Button+, Direct secure messaging governance efforts and the evolution of patient-directed health information exchange.