Smoke but no Fire
When I was a resident, conventional wisdom said the more written about a subject, the less actually known. Today, everyone is has a plan to fix healthcare. So, probably they’re all wrong. To maintain sanity, pretend the plan is the center of a dodecahedron, and look through each facet. Facets include: who benefits?, who pays?, why did they write this--what problem are they addressing?, who has fleas--who’s in bed with them on this? And on and on. Look for common elements, and look for off-the-wall thinking. One common element today is insurance for the uninsured. Lots of constituencies are scratching on this--hospitals, physicians, insurance companies, etc. Why? They all stand to gain. More insured patients means more revenue. Not that it’s a bad idea, we just have to recognize why most are cheering. And recognize that if you shift money into the healthcare system, it has to come from somewhere.
It is possible, of course, to make the system more efficient and use those savings to pay for the uninsured. We’ve written a lot about micro-efficiency and the cost reduction that would come from price competition at the individual service level. But there are other possibilities.
Ken Thorpe advocates for better treatment of chronic diseases as a means of controlling healthcare costs. He argues convincingly that most of the growth in healthcare spending resulted from the “rise in treated disease prevalence.” Simply stated, we have more chronic disease now, and we’re paying to treat it. Where did these sick people come from? Before you say it, illegal immigrants use proportionately less healthcare than citizens. Partly, we are so good at taking care of the sick that they don’t die. They stay around to make our statistics look bad. Partly, we did it to ourselves. By making ourselves fat, we generated more diabetes, heart disease, joint problems, etc. And partly, we changed the rules. Remember when a cholesterol of 250 was OK? And a blood pressure of 140/85 was normal? The bottom line is that any initiative to better manage chronic diseases should have a profound effect on healthcare costs.
Wellness programs work. We have had modest success in reducing the prevalence of smoking. Since smoking is liked to education level, it is tempting to say we should spend our anti-smoking money on sending more people to college. But wellness, like prevention, takes time. We may have to wait five to ten years for a return on our investment.
It may sound trite to say that 90% of healthcare spending goes to the sick. However, this truism has implications for healthcare policy. Programs that chiefly benefit the not-very-sick will have minimal impact on overall spending. Reduced spending is, of course, not everyone’s goal. For a list of those who want more spending on healthcare, look at those who advocate insurance for the uninsured--those who sell healthcare products and services.
It is possible, of course, to make the system more efficient and use those savings to pay for the uninsured. We’ve written a lot about micro-efficiency and the cost reduction that would come from price competition at the individual service level. But there are other possibilities.
Ken Thorpe advocates for better treatment of chronic diseases as a means of controlling healthcare costs. He argues convincingly that most of the growth in healthcare spending resulted from the “rise in treated disease prevalence.” Simply stated, we have more chronic disease now, and we’re paying to treat it. Where did these sick people come from? Before you say it, illegal immigrants use proportionately less healthcare than citizens. Partly, we are so good at taking care of the sick that they don’t die. They stay around to make our statistics look bad. Partly, we did it to ourselves. By making ourselves fat, we generated more diabetes, heart disease, joint problems, etc. And partly, we changed the rules. Remember when a cholesterol of 250 was OK? And a blood pressure of 140/85 was normal? The bottom line is that any initiative to better manage chronic diseases should have a profound effect on healthcare costs.
Wellness programs work. We have had modest success in reducing the prevalence of smoking. Since smoking is liked to education level, it is tempting to say we should spend our anti-smoking money on sending more people to college. But wellness, like prevention, takes time. We may have to wait five to ten years for a return on our investment.
It may sound trite to say that 90% of healthcare spending goes to the sick. However, this truism has implications for healthcare policy. Programs that chiefly benefit the not-very-sick will have minimal impact on overall spending. Reduced spending is, of course, not everyone’s goal. For a list of those who want more spending on healthcare, look at those who advocate insurance for the uninsured--those who sell healthcare products and services.
