Healthcare Efficiency

“Health insurance” isn’t really insurance at all, but maybe the world would be a better place if it were.  Most Americans view health insurance as the vehicle that pays for their health care.  The uninsured are that way partly because health insurance is expensive, and that’s because healthcare is expensive, and that’s because the insurance industry pays for healthcare.  Where’s the incentive to make it more efficient?  If it were more efficient, healthcare costs would drop, health insurance rates would fall, insurance industry revenue would decrease, and executive pay would diminish.  Now who would want to do that?

With respect to the uninsured, Mark Smith writes, “... there are all these people out there who aren’t part of our system, and we need to find a way to buy them into our system at more or less our system’s price, at more or less our system’s configuration, and more or less maintain the incomes of everybody in our system — that is a very different question from how can we make the underlying asset more affordable.”   And it can be cheaper.  There are wide variations in the cost of a given healthcare service, by geography, and by setting within a given location.  As a corollary, there is no relation between the quality of care and the cost of care.  All we lack is the will to direct care to the high quality low cost providers, and as long as insurance pays the bills, patients are not going to lead themselves down that path.

Some years ago, an employee balked at our $5,000 deductible healthcare plan.  He and his wife were planning to have a baby, and they wanted health insurance to pay for it.  Last time I check, having a baby was an elective and predictable event.  Plan ahead.  And if you think OB is expensive, wait ‘till the kid goes to college.

We need incentives to drive efficiency in individual healthcare services in order to reduce costs for everyone. 

Posted by Dr. Robert Burney at 09:32 PM | Permalink | Comments (0)

The concept of high deductible health insurance and health savings accounts is now being referred to as “Consumer-directed Health Care” (CDHC).  Not that this makes sense.  Seems that consumers ought to be participating more in their healthcare decisions, regardless of the payment mechanism.  Oh well.

 
Study out of Rand Corp. confirms similar findings by others that consumers in CDHC plans spend less on  health care by reducing both “necessary” and “unnecessary” healthcare.  And this without any ill effect on their health.  There is concern that patients would forgo preventive care, and some plans are offering incentives to avoid this problem.  One outcome is that the burden for marketing preventive care and surveillance studies will fall to the family practitioner.  It will be their job to convince patients that they really do need to have that flu shot or colonoscopy, even tho payment comes out of their pockets.

 
One key problem with this approach is that patients lack sufficient information to make good healthcare decisions and choices--decisions about what healthcare to have, and choices about where to have it.  That’s improving, but maybe not fast enough.  The study’s author, Melinda Buntin, said, “Now we’re asking patients to become good consumers . . . . They need more information to do that properly.”  

The questions to be answered are whether patients would make good decisions when provided with information, whether that would make a difference in their health, and whether the whole system would save money.  Of course, people only have to make “good” decisions when it affects other people.  Otherwise, they’re free to screw up their lives.  We all make bad decisions in our lives but probably make worse ones when we make them for others.  Now, who wants to define what “good healthcare decisions” are?

Posted by Dr. Robert Burney at 08:26 PM | Permalink | Comments (0)

A recent letter to the Washington Post pointed to faults with high deductible health insurance plans.  Obviously, as you push first dollar healthcare costs into consumers’ laps, they look for ways to economize.  That’s the idea.  However, one undesirable consequence might be to forego preventive care and screening tests.  To some extent, that’s OK.  Their choice.  But, to some extent, it’s not.  Society has an interest in seeing that children are immunized and that colon cancer and Tb are discovered early in adults.  

Any high deductible plan must be designed with those considerations in mind.  One idea would be to turn responsibility for the public’s health back to public health departments.  I got my childhood immunizations at the county health department, and, in that era, the state health department did chest xrays on anyone who would stand still.  My kids had a choice--the health department (free) or the pediatrician (convenient).  Such a plan today would require restructuring of health departments and taxpayer financing.

Another suggestion is to make the deductible point movable--it’s higher if you have preventive care, but you start paying sooner if you skip the shots.  Unfortunately, there would still be some who would take that chance, and both individuals and society at large would suffer.

Some suggest the answer is to exempt preventive care from this plan.  “Insurance” would pay for it all.  This, of course, would raise premiums and defeat the purpose of high deductible insurance.

 
As with most things, perhaps a compromise combination would work--taxpayer financed immunizations for kids and a movable deductible for breast and colon cancer.  

One thing is certain:  there are no easy answers that everyone would endorse.  From an efficiency standpoint, some combination would probably provide the biggest bang.  Elections tomorrow may bring a Congress more willing to think about these things (or think at all) but less inclined to put responsibility on patients. Have you voted yet?

Posted by Dr. Robert Burney at 08:09 PM | Permalink | Comments (0)