Healthcare Efficiency

An editorial in Tuesday’s Washington post  notes with regret that the share of uninsured “edged up” from 15.6% in 2004 to 15.9% in 2005.  Assuming this is a significant change (?), the real concern is that it is most dramatic among the working poor.  Health insurance is just too expensive.  The classic Republican solution is to reduce what insurance covers,  but that ignores the problem.  The Post proposes another band-aid--having the government insure the insurers.  Both ignore the fact that insurance is expensive, because healthcare is expensive.  If we had true price competition, the cost per unit of healthcare service would come down, and the cost of insurance would follow.  Then, more could afford it.  

In the same issue, Christopher Lee reports on a NEJM article that concludes Americans are getting good value for what they spend on healthcare--better longevity and reduced infant mortality.  Of course, neither of these has much, if anything to do with healthcare.  Longevity is more related to personal habits, clean air, and clean water.  Infant mortality relates to prenatal care (yes or no)  which is pretty cheap as healthcare goes.  Lee also notes that not everyone agrees with the article’s conclusions.

Who’s right?  The prize goes to Joseph Newhouse who says “both.”  We can benefit from large expenditures, “and yet also have a problem with wasteful spending.”  Those who estimate waste in US healthcare at 30 to 50% are talking only about the amount of healthcare.  They ignore the perhaps 30% waste within each healthcare process.  The potential savings are enormous but won’t happen without a fundamental shift in our payment system.

Posted by Dr. Robert Burney at 07:45 PM | Permalink | Comments (3)

Writing for the Commonwealth Fund, John Reichard quotes from both parties to espouse hope for rational thinking about healthcare costs.  Some Republicans admitting the best approach may not be simply reducing entitlements, and some Democrats talking about wasting money in the Medicaid program.  Douglas Holtz-Eakin is quoted as stating that ending health care programs “is not a solution.”  (Heresy!)  Everyone points to geographic variations in spending on healthcare, but unfortunately, they’re talking about the amount of healthcare--cost per beneficiary, not the cost per unit of healthcare.  People in Miami see more doctors and spend more at the end of life than patients in Minneapolis.  No one is asking what it costs to see a doctor or have an appendectomy in Miami.  Maybe a little price competition would wring some of the waste out of care systems and reduce costs.  For a simple example, think about waiting time--a classic joke about offices and hospitals (see recent entry here about GW).  Now, read about Lean techniques in healthcare--wait time is defined as waste.  Yes, a waste of patient time, but also detrimental to the institution:  some patients leave, some grumble but don’t come back, everyone tells friends & neighbors how terrible it was.  The facility needs a larger waiting room, etc.  I once worked in a military urgent care center (a.k.a. sick call) where we were ordered to keep the waiting room empty.  We did so overnite with “accessible scheduling.”  (Try Google)  The Institute of Medicine includes patient time in the efficiency equation and in the definition of “timely” healthcare.
Even the politicians are beginning to talk about health insurance that looks more like other insurance and about asking patients to take responsibility for their own health. Healthcare is what you need when health fails.   If you take good care of yourself, you will need less healthcare.   A win-win:  better health, less healthcare.  What’s not to like.

Posted by Dr. Robert Burney at 08:53 PM | Permalink | Comments (0)

A recent  article suggests that insurance drives up healthcare costs.  The basic tenet is that consumers adopt technology, because insurance companies pay for it.  As evidence, author Amy Finkelstein cites the rise in costs after Medicare began in 1966.  She’s obviously too young to remember that costs just became more visible then, without any real increase in the amount of healthcare.  Prior to Medicare, providers padded other patients’ bills to compensate for eldercare.  Also in that era, medical schools provided “free” care to the elderly and indigent with residents and students, but after Medicare, that was not allowed.  All agree insurance is a big factor.  The discussion is over how big.  
So, what are the competing theories RE increased use of healthcare?  

1. Ken Thorpe links two thirds of the rise to “treated disease prevalence and innovations.”  In other words, we’re sicker.  More chronic diseases.  An interesting 1960’s paper in the Milbank Memorial Fund Quarterly (“The Failure of Success” by O. Gruenwald) suggests that success in preserving life diminishes the health of the population.
2. Personal habits:  smoking, drinking, inactivity, obesity, loud music, etc.
3. Lack of price competition in individual services has been cited here before and supports the Finkelstein theory.  Why be more efficient when insurance pays and the patient doesn’t care.
4. Technology.  A. Milstein talks about Moore’s law for healthcare.  Many ask technology to be “effective”, but no one demands it be cost effective.
5. Aging population.  Older people spend more on healthcare.  A lot more.  Japan has the fastest rise in healthcare costs, and the cause there is clearly patient age.
6. The vital few.   “A tiny group--4 percent--account for almost half of the employer costs.”  
   

Any plan must address all of these.  Ideas?

Posted by Dr. Robert Burney at 07:15 PM | Permalink | Comments (0)

How far do you push patient choice?  What if patients make poor choices?  Suppose they  smoke 3 ppd and develop heart disease or lung cancer.  Do you want your tax dollars paying for treatment?  The situations run from suicide to “skillful neglect.”  It’s one thing to decide you don’t want your hip replaced just now, but it’s something else to decide you won’t take your blood pressure medicine.  The hip only impacts you personally.  If you have a heart attack or stroke, Medicare will pay a bill that is due entirely to your poor choice.  Is that OK? 

I have friends who ride motorcycles.  Is that OK?  Should we allow them to decide not to wear helmets?  The key difference in these scenarios is who bears the burden--the individual or society.  When the individual has a communicable disease, there is a strong tradition for imposing decisions.  (HIV is a notable exception, but Typhoid Mary was imprisoned.)  When the individual alone is affected, as in refusal of “needed” care, that decision should be respected.  I have watched Jehovah’s witnesses die from blood loss. 

On the other hand, Medicare paid for my friend to have both knees replaced, even tho he is 100 pounds overweight.  I think that is wrong.  We have patients in our system who refuse to have a colonoscopy and then develop colon cancer.  Who should pay for their care?  Before you answer, consider this:  in one physician practice, 90% of eligible patients have colonscopy.  In another only  20% do so.  Now who should pay?  Who’s responsibility is it to convince patients that preventive care is worth the money?   One of our physicians objected to my monitoring his success with indicated mammograms.  “We put a sign on the bulletin board.  Isn’t that good enough!”

 
Today, much of healthcare is driven by personal habits--smoking, drinking, inactivity, obesity.  Patients are free to choose to do those things, but they also must choose to pay for the consequences.

 
The real question is preventive care.  As costs shift to patients, the first casualty will be preventive care.  Perhaps we should shift responsibility for the public’s health (not healthcare) back to the public health departments.  I got my immunizations at the county health department.  Maybe it’s time to go back.

Posted by Dr. Robert Burney at 08:28 PM | Permalink | Comments (1)

Think healthcare is expensive?  Stay tuned.  Arnold Milstein  spoke for the ASQ on Moore’s law  in healthcare.  Will we double the complexity of healthcare every two years?  Does anyone want that degree of sophistication (and expense)?  Couple this with the trend to make consumers responsible for a larger proportion of healthcare expenses.  Holman Jenkins (WSJ 2 Aug 06 ) suggests we may eventually be responsible for 30% of our healthcare costs (up from 1.5%).    He briefly mentions a world where patients would shop for “price and value of healthcare services.”  The basic theory is that this will eventually lower prices and improve value.  Jenkins cites some evidence that this is true--even when little information is available to consumers. 

Hendrik Hertzberg, commenting in The New Yorker  of 17 April 2006 laments the passage of health insurance that shields patients from healthcare costs and rails against HSAs.  He trots out familiar arguments that are mostly true but irrelevant.  Yes, HSAs etc. will profoundly alter today’s healthcare payment scheme.  Something should!  Irrational is too kind a word for a system where there is no connection between prescription, patient, and payment.  Improvement is impossible without change--fundamental change in the financing of healthcare.  

Patients will not always make good choices when given opportunity to choose, and physicians are unaccustomed to convincing patients that a given service is worth paying for.  Preventive care is particularly vulnerable and may require added inducements or separate mechanisms.  This will be a difficult transition.  Nevertheless, without effective price competition, there is no restraint on the growth of healthcare costs.

Posted by Dr. Robert Burney at 09:02 PM | Permalink | Comments (2)

Two years ago, my wife had a mammogram at George Washington University Hospital, and it was wonderful.  She arrived early.  They were ready.  In and out in about an hour.  The next year proved that the prior experience was an aberration--nothing good to say.  This year, she arrived at 0945 for a 1000 appointment.  After passing thru three waiting rooms (don’t ask!), she saw the technician at 1100.  At 1200, the radiologist asked for additional films.  At 1230, my wife left.  “You have my phone number; call me with the results.”  Of course, they never did.  Not only was the service poor, the clerks were rude and the facility was dirty.  "The handle where she put my was so grimy, I didn't want to touch it."  She was not alone.  At least eight other women today had the same experience at GW.  One said she always took a whole day off work, because she knows GW can’t do a 20 minute procedure in less than eight hours.  Even GW would have to admit that is terrible service.   My wife will go once more--to pick up her films to take to the  site where here next mammogram will be done.  The real question is, how do they survive!  The answer is complex:  Some patients don’t have a choice, or don’t know they do.  Some think this is just how healthcare is done everywhere.  (They may be right.)  University hospitals in general probably provide the worst healthcare service in the industry, but they get paid more than anyone else.  Come the revolution, when patients are paying the bills, guess where they won’t go.  That helps explain why academicians are opposed to HSAs and other forms of patient empowerment.  Remember the basic equation for efficiency:  Dollars and time spent per unit of healthcare service provided.  And the patient’s time counts in that equation.

Posted by Dr. Robert Burney at 08:08 PM | Permalink | Comments (2)

Health Savings Accounts are not selling well.  Such a good idea, how could anyone refuse?  
1. Wrong population surveyed.  HSAs appeal to young, healthy employees--especially those who are well paid.  A $5K deductible will never appeal to someone who plans to spend $10K every year or doesn’t have $5K to spend.
2. Price info is all but impossible to acquire.  They’re not secretive.  Hospitals just don’t know what a given service costs.  An accounting problem.  So how can you bargain?
3. If you pay cash, you’ll pay more.  Lots more.  Read, twice as much as BC/BS pays for the same service.  
4. Culture.  We don’t expect to pay for healthcare.  Strange.  You can add “tradition” to this same category--”We’ve never done this before.”
I once had a $10K deductible policy.  Another employee objected, because she was planning to have a baby and wanted her health insurance to pay for it.  Anyone else have a problem with that?  Kids Kost.  Get used to it.  (It gets worse.)
The idea behind high deductible policies is to give purchasing power to the people, but that comes with a price.   The price is the first $5K of your healthcare expenditures.   Talked about this with a young woman who has type 1 diabetes.  We put pencil to paper and figured she would be about even when you added in her current co-pays and deductibles.  The lower premiums alone would pay for her meds.   She also noted that this policy would provide an incentive for her to take good care of herself.
It will require more info and greater empowerment for this concept to reach its potential. Eventually, if enough people shop for price, costs will come down.  “Not today.  Maybe not tomorrow.  But someday, and for the rest of your life.”

Posted by Dr. Robert Burney at 08:55 PM | Permalink | Comments (3)