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Health Policy – A laughing matter By Michael Millenson

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Michael L. Millenson, president of Health Quality Advisors in Highland Park, IL and author of the book Demanding Medical Excellence, has previously contributed to The Health Care Blog and been featured in a THCB podcast

Those who pore over The New York Times and Wall Street Journal for their news miss a chance to feel the real pulse of health care public opinion – the comics. Dilbertisms2This past Sunday, Dilbert, compulsory reading in cubicle world, neatly skewered the idea that “empowering” consumers is a sure-fire route to better care.   

Catbert, “evil director of human resources,” announces, “The new company health plan is Google. From now on, employees must use Google to diagnose their own illnesses.” After a quick search on his BlackBerry, Catbert diagnoses an employee’s hitherto unnoticed growth on the neck as caused by the actions of a “pregnant termite” and hints menacingly at treatment involving “an arc welder and a barrel of kerosene.”

Interestingly, Dilbert author Scott Adams felt compelled to counter the impression left by his own long post a year ago about the way in which Google helped him correctly identify a rare and serious condition that his doctors failed to diagnose. The key difference, of course, is the context: Web searching as a supplement to top-notch doctors or Web access as a cheap substitute for actual medical advice. Those who soothingly promote cut-rate “consumer-driven” care should note that actual consumers will be less credulous than the consultants’ current Catbert-like customers at big corporations.

Providers are also becoming targets for satirical barbs. The sardonic Sylvia, which comments on the trials and tribulations of modern life, devoted two consecutive daily strips last summer to drug errors. The first, noting that 1.5 million Americans are harmed by medication mistakes, features pickets holding warning signs in front of the local hospital (e.g., “Danger! Do Not Enter”). The second strip , searching for a solution, muses whether we all should have an RN accompanying us to the doctor’s office. 

Meanwhile, the satirical weekly The Onion ran a fictional news item in which an Iraqi hospital begs for a new supply of bilingual “Employees Must Wash Hands” signs. The hospital’s director notes that the importance of hand-washing “could not, unlike doctors and nurses, be overstressed.”

We are still a long way from the time when the 45 percent failure rate in the practice of evidence-based medicine unleashes a barrage of biting commentary on Leno, Letterman and The Daily Show, the accepted articulators of American angst. But Time has recently noticed the importance of EBM – and that’s a start.

HEALTH PLANS: Shernoff files suit against Blue Shield

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Los Angeles health care attorney William Shernoff filed a lawsuit on Friday seeking to block Blue Shield of California from retroactively canceling member policies after claims have been approved, a practice that critics allege is far more common in the insurance industry than has been reported. The Los Angeles Times reports that the suit may have broad implications for insurers across the country: 

"What makes the latest suit unusual is that it seeks to stop the practice, rather than demand compensation for a policy holder who lost coverage. It could have a wide effect if it succeeds, because Blue Shield alone has  acknowledged canceling about 300 policies in the last two years.  The outcome also could influence other insurers that collectively have revoked thousands of policies in recent years.

PHYSICIANS: CYA Healthcare By Eric Novack

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Dr. Eric Novack, THCB’s resident orthopedic surgeon and spokesphysician is an angry   man today. He is angry about people who go around blaming physicians for high healthcare costs. And he’s got something to say about it. What’s the real problem? Eric thinks its CYA healthcare. If you want to hear more from Eric, fire up your PC speakers and go have a listen to an archived webcast of one of his interviews on KKNT 960 AM radio in Phoenix.      

Thanks to all who participated in the ‘debunking’ of the “3% Myth” about Medicare’s efficiency. In other earlier posts, I have tried to address other great myths and misperceptions about the US healthcare system—see “an outcomes primer” and “association v. causation.” Another source of confusion and misperception is the statement that “doctors perform unnecessary tests and procedures simply for financial gain.”  Implied in this statement—and the basis for the ‘Stark Laws’ as well as single-payer proponents of government micromanagement of healthcare delivery—is that MOST physicians engage in this behavior MOST of the time, bilking patients and insurers, and substantially driving up healthcare costs.

I disagree. Before I get a wave of comments about how lab utilization decreased 25 years ago after Stark was introduced, read on. Did the introduction of Stark regulations (laws against self-referral for certain healthcare services) work?  Answer—NO.  If they did, why are we having the robust discussion here at THCB and throughout the country about healthcare?  Healthcare costs have continued, with few reprieves, to increase at faster than inflation rates for years.  The solution for the single-payer crowd—more regulation of providers and price fixing for service delivery.  It has not worked until now, and will not work into the future.

A much greater driver of costs today are patient-demanded healthcare and CYA healthcare.  It is difficult to quantify these costs, but the costs are huge.  Patients often come in ‘demanding’ an MRI or other test.  Accompanied with the demand is almost always the statement ‘well, I have insurance’, and ‘it is covered and will not cost me anything’.  These demanded test and procedures dovetail with CYA costs—fear of not getting a certain test and then discovering later a condition or problem needs treatment.  That ‘delay in diagnosis’ is one of the leading causes of medical liability claims.

The real culprit here, of course, is the 3rd party payer system that divorces patients from costs and risks—and places those risks squarely on the shoulders of healthcare providers.  Even for many of the chronically ill, the knowledge that someone else is picking up the tab alters behavior.

Changing the system so that 3rd party (insurance, government) payment is minimized will provide real market forces to reduce excessive healthcare costs.  Blaming doctors for the problem of ‘unnecessary’ healthcare, while failing to recognize the role of patients in driving costs is another area of distortion and misconception that clouds and confuses an intelligent discussion about healthcare.

HEALTH PLANS: Kaiser transplantation scandal-Will we ever know the truth?

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Meanwhile, despite the fuss about the HealthConnect project–elsewhere the real Kaiser scandal may be whimpering out as the man behind it, Kaiser whistleblower David Merlin settled his lawsuit for unfair dismissal .

I had a very frank conversation about the kidney transplant issue with outgoing KP N.Cal President Mary Ann Thode during and after her keynote at UC Berkeley Haas health care conference on Feb 3. She essentially said, well it’s in litigation and the lawyers won’t let us talk about what happened, but if we could we would tell you the other side of the story…

She also had the chutzpah to say that once they took the “hard decision” to shut down the new kidney transplant unit they did that part (the transferring patients back to the UCSF and UC Davis lists) very well. The rest of her talk was all about how only a non-profit organization had the correct mission for health care. I wasn’t exactly impressed—particularly as most of the issue is about the relationship with the decidedly for-profit Permanente Federation from which nothing has been heard about the kidney fiasco.

Letting the lawyers tell them what to do is rank stupidity. KP needs to prove that a) it does the right thing, and b) if it has screwed up that it’s going to transparently find out why and get it right the next time. At the time I called for a full public inquiry in which KP put a reputable outsider in charge of the investigation and promised to do what s/he recommended. Of course that never happened.

Buying off Merlin doesn’t exactly given a great assurance that next time they’re going to do better. And if they don’t state their case, their haters will do it for them.

CONSUMERS/QUALITY: LASIK–not as user friendly as it’s supposed to be

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There’s been lots of BS about how the price reductions in those ads for LASIK "prove" that cash based consumer payment works in health care. I always thought they were like the teaser prices in travel  adverts in the Sunday papers–only good if you were leaving Tuesday at midnight, staying 4 months, taking no luggage, and having to fly the plane yourself while the pilot takes a nap.

And now HSC shows that it’s not as advertised.

HSC president Paul Ginsburg, Ph.D., points out that current efforts to increase price transparency for health care services often downplay “the complexity of decisions about medical care, patients’ dependence on physicians for guidance about appropriate services, and the need for information on quality.”
Ginsburg cautions that simply giving consumers a price list of “a la carte” services does little to help them make informed choices about which providers will cost less for an episode of care, let alone which providers offer the best value — or the optimal combination of the lowest cost and highest quality.
The article also points out that insured people have different needs for price information than uninsured people. Insured people need to know what their costs will be under their insurance and benefit structure. And policymakers should be careful not to overlook the role of health plans in negotiating better prices and translating complex price and quality data into usable consumer information that can potentially help steer patients to lower-cost, higher-quality providers, the article notes. Researchers chose the LASIK market for in-depth analysis largely because the vision correction surgery is widely regarded as the self-pay market with the most favorable conditions for consumer shopping. LASIK is an elective, nonurgent, simple procedure, giving consumers time and ability to shop; screening exams are not required to obtain initial price quotes, keeping the dollar and time costs of shopping reasonable; and easy entry of providers (ophthalmologists) into the market has stimulated competition and kept prices down.
However, LASIK patients still face significant hurdles when shopping from inconsistent bundling of what’s included in the procedure price to misleading advertising to quality concerns.
— Inconsistent Bundling. The package of services included in LASIK procedure fees varies across providers. For example, one critical factor is whether the cost of enhancement surgery is included in the fee. A price quote that appears to be the best deal but does not include follow-up operations if needed might end up being the highest-price option.
— Misleading Advertising. Misleading offers for free consultations or for LASIK for $299 and promises that LASIK would eliminate the need for glasses and contacts for life have all come under scrutiny by state and federal regulators, resulting in enforcement actions and settlements to halt the misleading practices.
— Quality Issues. Many industry observers expressed concern that LASIK is regarded as a commodity by some consumers, leading them to shop only on price, when provider quality may vary considerably. Even when consumers are interested in obtaining quality information, the study finds that it is not easy; those wishing to compare provider quality must gather information on success and complication rates from each LASIK surgeon’s practice.

Which of course means that if we’re going to get to real consumer purchasing, we need to figure out a rational way to price for rational bundles of service–and we have to make sure that providers are showing apples to apples comparisons.

TECH/HEALTH PLANS: LA Times, day late and dollar short on Health Connect

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Today’s LA Times has a long story about Kaiser’s Health Connect project. As far as I can tell it has no new information at all other than a quote from one pissed off employee who quit last week right at the end saying it was the worst project he’d ever seen, etc.

Otherwise it was a complete rehash of all the stuff that was in the blogs and in Computer World 3 months ago. And it missed the key issue—was KP’s Citrix-based strategy a fatal flaw, or is it just having teething problems. In other words, will HealthConnect work when it’s fully deployed, or is it doomed from the start? That’s what KP members and the rest of us should really be caring about.

Given the leading role the LA Times has played in breaking myriad issues concerning KP (the kidney transplant fiasco) and other California health plans (cancellations) in the last year, I’m confused as to how this shoddy summary—about something that the rest of us wrote about last year—got written so late in the day.

POLICY: Centrist democratic policy wonks talk shop

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The Century Foundation has a discussion from a bunch of health care policy experts/pundits about the latest developments in the health reform “debate”. Given the large cast of characters (inc Aaron, Hacker, Relman and younger punks Cohn, Klein et al), it’s interesting stuff, but not exactly as diverse as say Cato’s recent back and forth! Yup, it’s a bunch of DimmyCrats talking to each other, but smart ones. Here’s the document. (rather annoyingly it’s a PDF).

PHARMA: The Future of Non-Profit Drug Development By Merrill Goozner

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Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect and The Washington Post. His most recent book, "The $800 Million Dollar Pill – The Truth Behind the Cost of New Drugs " (University of California Press, 2004) has won acclaim from critics for its treatment of the issues facing the health care system and the pharmaceutical industry in particular. Today he has something to say about a familiar topic : the relationship between public sector R&D investment and innovation in the pharmaceutical and biotech industries. You can read more pieces by Merrill at  Gooznews.com

The United States is the world leader in investing in biomedical
research and development. In the public sector, the National Institutes
of Health spent $28.6 billion in 2005, largely for basic science
research. The pharmaceutical industry spent an estimated $39 billion in
2004. This includes investment in the U.S. by U.S.-based firms,
investment overseas by U.S. firms, and foreign companies’ R&D
expenditures in the U.S. Indeed, over the past quarter century, the
private sector’s investment in the search for new medicines has grown
eight percent per year on average, faster than the industry’s growth in
sales and profits.

Despite this massive public and private effort, output, as measured
by the number of new drugs, biologics, vaccines and devices approved
for use by regulatory bodies like the U.S. Food and Drug
Administration, has slowed in recent years. Last year, the FDA approved
just 21 new drugs and biologics, the second lowest total since 1993.
Moreover, about half of these new drugs were not given priority status
by the FDA, which meant they were not considered a significant new
advance in medicine. This significance ratio has held steady for over a
decade. Clearly, the steady increase in private and public R&D
spending is generating diminishing returns, whether measured by return
on investment or public health.

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