Healthcare Efficiency

Why all the fuss about the uninsured?  We already have a government program that provides healthcare, let’s just expand it to cover everyone.  I’m thinking of Medicare, but you might also cite Medicaid, SCHIP, Community Health Centers, etc.  But if we expand Medicare to include everyone, we won’t need those other programs.  Jacob Hacker , writing in the Washington Post last Sunday, advocates this approach.  And he’s not the only one.  Sounds simple, and that should be a warning.  Congress has yet to face the fact that there is a date certain when Medicare as we know it will run out of money.  There are two approaches to this problem:  reduce benefits or raise taxes.  Guess which approach the government will select.  

So, we have Medicare, a program that’s scheduled to go bankrupt in the foreseeable future just taking care of the over 65 group.  And he wants to expand the coverage to everyone (or almost everyone--see details).  That will require a huge increase in funding (taxes).  He doesn’t address the unhappiness that most providers have with Medicare.  Haven’t seen any ads for “practice limited to Medicare patients.”  But I do see practices that don’t take Medicare, plus some that don’t accept any insurance.  And if Medicare is so good as a health insurance plan, why do we have “Medigap” insurance?  Ever try to call Medicare to contest a rejected claim?  It’s entertaining.

Remember when we used to have city hospitals?  A few persist, but most have disappeared because the city fathers couldn’t keep their hands out of the till and off the tiller.  The same could be said of Medicare where Congress can’t resist mucking with the money.   

For another example, look at the VA.  I’m a big fan of the VA.  They wrote the book on patient safety in hospitals and pioneered electronic healthcare records (in spite of themselves).  As a government funded, closed panel HMO, they generally do a fine job.  But they are chronically underfunded and struggle to provide excellent healthcare in a difficult environment.  A perfect example of what a government will do when it would rather start a war than pay for healthcare.  

As with all “reform” proposals, the missing detail is the money.  He cites “government’s ability to lower service prices, streamline administration and get a better deal on drugs.” Yeah, sure.  It is often said that Medicare has lower administration costs than private health insurance.  True, there are economies of scale in some things, but there are limits.  Government employees work hard and do a good job (I’m one of them), but let me assure you that they cannot run a health insurance program cheaper than private industry.  Just not in the cards.  Trust me on that one.

It will be interesting to see how this plays out.   Universal coverage of some sort is coming.  Not clear where the money will come from, but probably from multiple sources.   And government will play a larger role, but let’s hope not the only role.

Posted by Dr. Robert Burney at 10:11 PM | Permalink | Comments (0)

From today’s Washington Post:  The EPA ignored its scientific advisers and lowered the allowable concentration of ozone in the atmosphere to 75 ppb from the current standard of 84 ppb.  Their Clean Air Scientific Advisory Committee unanimously recommended a limit of 70 ppb, while the Children’s Health Protection Advisory Committee lobbied for 60 ppb.  Power companies, of course, wanted no change, and their interests triumphed.  The effect of any limits is to reduce the amount of nitrogen oxides etc. that can be released by power companies, and that costs money.  S. William Becker, executive director of the National Association of Clean Air Agencies (local governments) summed it up:  “It is disheartening that once again EPA has missed a critical opportunity to protect public health and welfare by ignoring the unanimous recommendations of its independent science advisers.”

The reason that this is of interest here is the point about health vs healthcare.  If you want to improve the health of the population, reduce the ozone concentration.  Nothing to do with healthcare.  The EPA estimated that reducing the level to 65 ppb could save up to 9,000 premature deaths per year.  But death is cheap.  Those who survive become ill and use the healthcare system.  And those costs go on for a lifetime.  

The point has been made before that the true cost of burning coal is not reflected in the price per ton.  We must include the cost of adverse health effects from air pollution.  We might also include the trashing of landscape by strip mining and the resultant sterilization of local streams by toxic runoff.  How do you account for the lowering of a child’s IQ from breathing heavy metals?  Coal is only cheap when you don’t account for all of the costs.

George was concerned about the near term costs of reducing pollution.  But the effects of air pollution on the population go on forever.  Anyone going to Beijing?

Posted by Dr. Robert Burney at 08:45 PM | Permalink | Comments (0)

Always interesting to see what people are reading or what they think is important.  Notice how the economy has risen to the top of the interest scale for voters and the Iraq war has subsided a bit.  Healthcare remains near the top, and it seems inevitable that any next administration will press for coverage for the uninsured.  Not clear, however, how they will pay for it.  Also today, a new bill to compel payment for mental health on the same basis as physical health problems.  This also will increase costs with no payment mechanism in sight.  

Health Affairs listed their top ten blog hits for 2007 and another list for ytd 2008.    
For 2008, lots of interest in spending--historical levels and predictions.  As a bonus, they also list the most read articles from the journal.  One interesting article in this latter list by Wm. Savedoff talks about what a country should spend on healthcare.  The complexity of the question makes interesting reading.  He makes the classic error, however of linking healthcare spending to population health, as if spending more on healthcare would somehow improve health.  (see previous postings here for more on that!)  He does point out the widely varying expenditures in countries with similar infant mortality and even states at one point, “it is extremely difficult to attribute changes in health status to healthcare spending.”  
An article on “disruptive innovation” (Clayton Christensen, see previous posting here) made the top ten.   His thesis is that innovations in healthcare service will further the faster-better-cheaper cause.  This is, of course, true, but unlikely to happen without some compelling reason.  There are, in fact, examples of “innovations” in healthcare today that perform faster-better-cheaper.  Surgery centers are familiar to me, but there are others.  Hospitals, however will not emulate these processes, primarily because they get paid not to.

For 2007, most articles on the list focused on healthcare reform, the au current topic of that era.  These fell into two broad categories:
    1. Central planning.  Advocates of a single payer system.  I seem to remember that the Russians tried central planning some years ago, and the results were not good.
    2. “The world would be better if I were in charge.”  This only works for the world of the person in charge--typically someone who’s never been in charge before.

Interesting that both lists have an article about the nursing shortage.  

As competitive politicians promise more and more in the coming months, questions will turn more and more to how to pay for more and more.

Posted by Dr. Robert Burney at 09:00 PM | Permalink | Comments (0)

Rep. Paul Ryan (R-WI) writes an interesting comment on some estimates from CMS on future health spending.  Much of what Ryan says is true, but the conclusions he reaches are not related to the facts presented.  Perhaps this is another page in the Goehring-Bush playbook (“If you want people to vote for your war, make them feel threatened.”):  Sprinkle your essay with enough facts, and people will believe all of it.  First, he reiterates Sean Keehan’s projection that healthcare spending will reach 20 % of GDP in 10 years.  OK.  Maybe.  Then, he blames “the tax code and entitlement spending” for this problem.   Hmmm.  That’s a stretch.  
He states that most Americans rely on their employers for their health insurance, as if that’s obviously a bad thing.  Ask yourself, who would be more interested in your health, your employer or the federal government?  True, my employer pays part of my health insurance premium.  True, I pay my Medicare premium (and yours too) thru payroll taxes.  Now, if the feds are so good at providing health insurance, and I have Medicare, why do I need another insurance plan?  (A rhetorical question.)
He alleges that the tax code causes employers to hide “the true cost of insurance” and  this, in turn, “increases demand for covered medical services.”  Here, he loses me.  My pay stub clearly states how much of the premium I pay and how much my employer pays.   And let me state here that I do not want any “covered medical services” this year.  I may have need of something in the future, but I don’t want it.  Have never seen a hospital offer frequent flyer miles.  Actually, it’s against the law to offer sales or other inducements to Medicare patients.  
Providers may be “induced” to suggest additional services if they know the patient has insurance that will pay, and this factor has been discussed here and elsewhere.  Covering more individuals with health insurance will increase overall expenditures.  True.  Whether you look at this as “increasing demand” or permitting needed services depends on your politics.  Probably some elements of both.  As with SCHIP, when you raise the income threshold and bring more families into the program, you will include some who don’t need it. But the alternative is to exclude some who do.  An arbitrary line.

Ryan offers three approaches to “controlling healthcare costs and expanding coverage:”
1. Personal Ownership.  Not clear what this means, except an argument for eliminating the tax deductible status of employee health insurance premiums.  I already feel like I “own” my health insurance.  Not clear what additional “ownership” would be created by making me pay for it with after tax dollars.
2. Transparency.  True, healthcare prices are opaque.  But this only matters when those making the purchase decision know the price.  So, why does Medicare pay widely different amounts to adjacent providers for the same procedure?  Why doesn’t CMS shop for the low cost provider in an area and send all their business there?  How would publishing prices affect my decision on where I go for healthcare that BC/BS pays for?  
3. Entitlement Reform.  He doesn’t say what this means, but one can assume (from the SCHIP debate) that he means reducing eligibility of individuals and services.   HMOs tried limiting access to healthcare and were drummed out of town.  Some have talked about means testing for Medicare and for SSA.  Neither plays well on the 5:00 news.  Another concept rears its head now and then--individual responsibility.  (We don’t pay for healthcare needs brought on by personal habits.)

In ending, he states that “there is broad agreement on the problem.”  Perhaps true.  And “there is no agreement on solutions.”  Definitely true.   Any solution will require leadership and courage.   That is, after we define what the problem is.  

Posted by Dr. Robert Burney at 09:24 PM | Permalink | Comments (0)