Healthcare Efficiency

As the campaign rhetoric heats up, the issues become more sharply defined, at least on the Democratic side.  One key emerging issue seems to be whether or not to force everyone to purchase insurance.  A individual mandate, a la MA.   But even MA has exceptions, and some still prefer to pay fines.  Obama seems to recognize Wthat we’re talking about adding health insurance for a lot of people, and that’s going to cost a lot of money.  The Washington Post today refers to this as a defining question in the health debate.  

Common elements for both candidates include tax subsidized coverage for the poor, mandates for employers to provide insurance, and help for those in between--those who would see health insurance as a serious hit to their budgets, and, of course, the invincibles who don’t need it.  The actuarial fear is that if the young and healthy bow out, that will raise rates for the rest of us mortals.  The big unanswered question is how to pay for it, and no one yet is looking inside for the internal efficiencies that would probably generate enough savings to pay for everything.  


And speaking of costs, on NPR today was a story about people waiting for organ transplants.  Want to see how technology increases healthcare spending?  Look at the organ transplant business.


Lisa (see comment) is right--up to a point.  If everyone led healthy lives, the need for healthcare would diminish.  At least, that’s what health promotion is all about.  The missing link is motivation.  There’s plenty of information out there, just do it.  When I complained about my pants getting tight, a friend said, “So, who’s fault is that?”  The people I know  who have made dramatic changes in their lifestyle all have strong personal motivation, usually for a specific reason.   Perhaps a luxury tax on obesity would help.


And yes, I did simplify the healthcare cost equation to make a point.   “Healthcare” is conventionally defined as what health insurance pays for, well, at least pays some of.  There are other things.  I have three accounts  in my personal accounting system:  Health, Healthcare, and Health insurance.  The insurance bit is easy--premiums.  Health is what I spend to stay healthy, including prevention and surveillance: flu shots, teeth cleaning, gym membership, colonoscopy, etc.  Healthcare is what I spend when health fails: hernia repair, crown for a broken tooth, etc.  These distinctions are not important when considering the amount that Americans spend on healthcare annually or how to diminish that expenditure.  Be aware.  Healthcare expenses for the country will increase after the election.  The unanswered question is where the money will come from.

Posted by Dr. Robert Burney at 05:10 PM | Permalink | Comments (1)

A December 07 poll by the Kaiser Foundation  reported that healthcare is the number two (behind Iraq) key issue for voters.  (Interestingly, morality and terrorism are number 5 and 6 on the republican list but do not appear on lists for democrats or independents.)  As you drill down on healthcare, the primary concern is expanding coverage to the uninsured.  Other issues of interest include SCHIP and costs.  By “cost” most people think of the cost of their health insurance--not the cost of the healthcare they receive, because the main expense for them is insurance.  

We are beginning to hear some thoughts about “value” among the voices protesting the total expenditure for healthcare.  The Commonwealth Fund  published a report by Caitlin Webber  (Congressional Quarterly) on a forum on health spending.  (Actually, healthcare spending, but that’s quibbling.)  Katherine Baicker  is quoted as saying, “Emphasis on cost is misplaced, the emphasis should be on value . . . we should be getting more for what we spend.”  Since she’s an economist, we assume that by “cost” she means the amount spent by US employers.  Not clear, however, what she meant by “value.”  That depends on perspective.  Value is always relative to the purchaser.  Some people pay more for luxury or convenience features that are not valuable to others.  Let’s hope she’s smart enough to recognize that more healthcare doesn’t produce better health.  If you value longevity, recent research shows that exercise made telomeres larger and protected mitochondria from damage, thus leading to longer cell life.  Indeed, a very old study of longevity in populations stated that the populations in the world who lived the longest were the ones who consumed the most calories per kg of body weight.  Think carefully about that one.

On strategies to reduce costs, an older Rand study suggests that disease management programs may lead to better managed diseases but do not reduce costs for healthcare.   “Unfortunately, while there is evidence that disease management programs can indeed improve the quality of care, there is no conclusive evidence that they can actually save money.”  (Soeren Mattke, lead author)  This was actually a review of other studies, and they typically followed patients for only 12 months.  Disease management strategies are known to take several years to show any effect, so this may be an unfair condemnation.    (For full text of article, see the American Journal of Managed Care    If we improve “quality of care” but don’t save money, maybe we need to reassess our definition of quality.

Also on the Kaiser Foundation site is a survey of independent voters with stratification into six subgroups.  As respondents move more toward being democrats, they tend to focus more on providing for the uninsured and less toward reducing the cost of healthcare.  Republicans showed the opposite trend.  Assuming a Democratic victory in November, we’ll probably see coverage of the uninsured but no effort to contain costs.

Posted by Dr. Robert Burney at 12:08 PM | Permalink | Comments (0)

A day too late for the last entry, the Johns Hopkins Magazine arrived containing an interview with Ruth Levy Guyer RE her new book, “Baby at Risk: The Uncertain Legacies of Medical Miracles for Babies, Families, and Society.”  Basic theme of the book is that everything in the NICU isn’t wonderful.  A triumph of technology over reason.  “The doctors salvaged my son, they didn’t save him.  My heart is broken every day.”  

To paraphrase our last entry, we have been so successful at “saving” ever more premature babies that we have failed to add value to their lives or the lives of their families.  

JHM tries to paint this as a right to die issue, but Guyer talks about compassion.  “That is not a life that most adults would want for themselves.  Why are we asking babies to endure that?”

Not addressed in the JHM article (and I haven’t read the book) is the added cost of lifelong healthcare needs for many NICU graduates.  As prematurity increases, the probability of seizures, cerebral palsy, blindness, etc. increases.  Haven’t seen anyone put dollar figures on that calendar, but it shouldn’t be too tough.  The hard part is deciding where to draw the line.  Sometimes you get a tiger by the tail and wish you’d kept your hands in your pocket.  


We have the technical ability to preserve life by heroic means, but we lack the wisdom to know when to use that ability--or more precisely, when not to.  It’s the technological imperative--I can, ergo I will.  NICUs come with ethical blinders, and this is another technology factor that drives up the cost of healthcare.

Posted by Dr. Robert Burney at 10:04 PM | Permalink | Comments (1)

Mohit Ghose was quoted in a recent Washington Post story about insurance cost limits--the limit you hit when you have a very expensive problem.  “We need to be addressing those costs very directly” he said.  “...why are those costs so high?”  This article talks about specialty drugs that provide sometimes lifesaving therapy for rare conditions.  But how much is it worth?  What’s the value of a human life?  When I was in school, kids with sclerosing cholangiitis died.  Now, they get liver transplants for $500,000.  At that time also, there were three dialysis centers in the country.  Now, it’s impossible to die of renal failure.  Where do we draw the line?  How about $300,000 per year to treat a muscle disease?  Every year.  And this is maintenance, not a cure. If you’re the patient, of course, there is no limit.  Hard to turn down a poster child or a famous baseball player.  But if you’re an insurance company, it doesn’t make sense.  Should the feds get into the reinsurance business?  How many taxpayers want their money to go for preserving patients with rare diseases?  Beats starting a war, but there are other priorities.  It’s an extension of the Failure of Success (see 1960 era Milbank Memorial Fund Quarterly).  We are so successful at preserving life that we have failed to improve the health of the population--more sick people are living longer.   Ghose makes a subtle point, though in asking why these treatments cost so much.  One reason, of course, is lack of competition.  If there are only three patients with this disease, there’s not a lot of competition for treatment.  But organ transplants have gotten pretty routine these days.  Why hasn’t the price come down?  The obvious answer is that there is no price competition.  No one selects a renal transplant center because of how much they charge.  Even insurance companies don’t shop for price.  So why should a transplant center reduce its charges.   Doesn’t make business sense.   This subject doesn’t make the charts on healthcare costs, but it’s one example of how technology is driving costs.  If we ever hope to reduce the amount we spend on healthcare, we must control the healthcare-technology complex. was quoted in a recent Washington Post story about insurance cost limits--the limit you hit when you have a very expensive problem.  “We need to be addressing those costs very directly” he said.  “...why are those costs so high?”  This article talks about specialty drugs that provide sometimes lifesaving therapy for rare conditions.  But how much is it worth?  What’s the value of a human life?  When I was in school, kids with sclerosing cholangiitis died.  Now, they get liver transplants for $500,000.  At that time also, there were three dialysis centers in the country.  Now, it’s impossible to die of renal failure.  Where do we draw the line?  How about $300,000 per year to treat a muscle disease?  Every year.  And this is maintenance, not a cure.

If you’re the patient, of course, there is no limit.  Also hard to turn down a poster child or a famous baseball player.  But if you’re an insurance company, it doesn’t make sense.  Should the feds get into the reinsurance business?  How many taxpayers want their money to go for preserving patients with rare diseases?  Beats starting a war, but there are other priorities.  It’s an extension of the Failure of Success (see 1960 era Milbank Memorial Fund Quarterly).  We are so successful at preserving life that we have failed to improve the health of the population--more sick people are living longer.  

Ghose makes a subtle point, though in asking why these treatments cost so much.  One reason, of course, is lack of competition.  If there are only three patients with this disease, there’s not a lot of competition for treatment.  But organ transplants have gotten pretty routine these days.  Why hasn’t the price come down?  The obvious answer is that there is no price competition.  No one selects a renal transplant center because of how much they charge.  Even insurance companies don’t shop for price.  So why should a transplant center reduce its charges.   Doesn’t make business sense.  

This subject doesn’t make the charts on healthcare costs, but it’s one example of how technology is driving costs.  If we ever hope to reduce the amount we spend on healthcare, we must control the healthcare-technology complex.

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