Wednesday, August 26, 2009

Reconcile yourself to these truths about healthcare

(part two of two about the healthcare debate)

A great deal of the heat in the healthcare debate could be avoided if both sides would accept some simple truths, and talk about how to deal with them instead of denying them.

1. Some sort of healthcare reform bill will pass. Too many political egos and reputations are at stake, and too many voters feel it has been promised to them for it to fail. Opponents see themselves as Gandalf, saying "You shall not pass!"- but a more realistic image is that of King Canute. Spend your energies trying to get a compromise on an acceptable bill instead.

2. Stop railing against "public option" or government healthcare; we already have it- and no, I don't mean Medicaid, Medicare, etc. As was mentioned in part one , indigents receive free care from hospitals that accept government money (which is virtually all of them), and the hospitals add the cost to everybody else's bill. I suppose in some semantic sense you can claim this isn't government healthcare because your check didn't go to the IRS; but still, he got the care by government fiat, and you paid for it. In any real sense, the only difference between that and the British NHS is that they are more intellectually honest about it.

3. Stop claiming that real healthcare reform can be budget-neutral. There's not enough slop in the system that any real, improve-quality-of-life type improvements can be made by just tweaking here and there. Real programs will have to be created, real checks cut, and it will cost real money. Everybody on both sides knows this, you're not fooling anyone. Oh, you're going to claim it can be done with savings? Well...

4. Preventative care does not save money; it costs money. Preventative care is all about increasing both lifespan and quality of life for the individual, but it costs society more than merely reactive care. This is counterintuitive- we can see that it's much cheaper to catch a disease before it develops than to treat it afterwards... but what you're not seeing is that for it to work, you have to test/treat everybody- most of whom would never have caught the disease in the first place. From an article by Charles Krauthammer "Think of it this way. Assume that a screening test for disease X costs $500 and finding it early averts $10,000 of costly treatment at a later stage. Are you saving money? Well, if one in 10 of those who are screened tests positive, society is saving $5,000. But if only one in 100 would get that disease, society is shelling out $40,000 more than it would without the preventive care.
That's a hypothetical case. What's the real-life actuality in the United States today? A study in the journal Circulation found that for cardiovascular diseases and diabetes, "if all the recommended prevention activities were applied with 100 percent success," the prevention would cost almost 10 times as much as the savings, increasing the country's total medical bill by 162 percent. Elmendorf additionally cites a definitive assessment in the New England Journal of Medicine that reviewed hundreds of studies on preventive care and found that more than 80 percent of preventive measures added to medical costs."

5. We're not going to see significant savings through reduced overhead by government offices over private ones. If you're thinking of eliminating profits, you should realize that the profit margins are quite low- sure, a few CEO become gazillionaires off it, but compared to the total costs of doing business with 300,000,000 Americans it's insignificant. Those costs of business include tons of paperwork, which must be filled out no matter who is paying for it... and have you ever known the government to reduce the amount of paperwork required?

6. Tort reform must be part of the final package. Malpractice insurance is a big part of the cost of medicine today- for some disciplines, the cost is so high that doctors are leaving those specialties in droves. This would be of benefit to all of society, not merely medicine. We all have our favorite gawdawful lawsuit story; mine is a local one, a local manufacturer of riding mowers that was sued by a man who lost his foot to one. The facts were not in dispute; the mower did have built in interlocks that stopped the mower when the rider left the seat, but this guy bypassed the safety by carrying a cinderblock in his lap- when he saw a can or bottle in the grass, he would stand up, putting the cinderblock in the seat to fool the mower, and jump off to kick the can out of the way, jumping back on with no time lost to stopping. One day he slipped while kicking. His claim was that the manufacturer was liable, because that was a foreseeable event, and they should have figured out a more sophisticated safety he couldn't bypass. In any rational society, the judge wouldn't even use the gavel as he dismissed the case; he'd lean over and bitch-slap him.


UUpdater said...

In regards to #3 - I do think there are improvements that could be made to the system which would provide an overall lower cost. The change would have to be reimbursement based on outcome, and not units of treatment. Basically changing the health care system to financially reward good care. Overall if people are healthier then their medical costs are less, so it's a win for the patients as well. There are also road blocks in the current model to effectively using technology to improve medical care. The CEO of the company I work for talked about it at ATA.

In regards to #6, that's a pretty bad example. Granted it has been a while since I did actuarial work, but I sincerely doubt that a lawsuit against a manufacturer is going to raise the cost of medical malpractice insurance.

Joel Monka said...

Yes, there some savings to be had- there's nothing that cannot be improved. But those improvements are just nowhere near enough to pay for what needs to be done.

That particular example wouldn't have any effect, no- I was just showing how foolish a lawsuit can be, and still cost millions to fight. But obstetricians have been sued in equally questionable suits by people people thirty and forty years later. I actually read of cases where the person filing was not the doctor's patient, but the child of that patient,(claiming that something the doctor did while delivering the mother as a baby affected the reproductive system, causing harm to the child the baby would grow up and bear), so when insurance companies try to figure what their exposure is, they have to presume the exposure is multigenerational- and charge accordingly. There are other speciaties with huge insurance premiums, too, but OBs have probably been hit the hardest. But the amount of money spent on insurance, and the amount of procedures done less for medical necessity than for CYA lawsuit preemption is in the billions.

UUpdater said...

Again, in regards to #3, there are changes that can be made to the system that would be cost savers. Reforms that would be budget neutral. As the current plan falters and other start to come to the front I don't think reforms should be dismissed based on a claim of being budget neutral or cost savings. Such reforms are possible.

And I guess I am looking at it from a Medical/Technology perspective. I know the cost savings are there to be had. Of course this doesn't mean congress will catch a clue...

Bill Baar said...

Overall if people are healthier then their medical costs are less, so it's a win for the patients as well.

Primary Care generates referrals to specialists than episodic care. It's better health care but far from cheaper.

The other issue with implementing Primary Care in America is the mobility of the population. Anyone with a snowbird in the family knows they can be getting care in multiple locations, sometimes with multiple PC docs. There is plenty of overlap here.

I favor much more the kind of patient education that lets a big chunk of the population comanage their care along with the PC, to the extent the PC can be downgraded from a doc to a Physician Asst, or Nurse Practionar, and eventually... a PC hooked to some cyber doc.

One of my issues with HR3200 is it institionalizes primary care model because the general population mistakenly thinks it's cheaper.

No one involved with the economics of health care believes that, and while the outcomes are better, there is no reason to think they're aren't better delivery models --not necessarrily out there at the moment-- but models tomorrow's technology can deliver.

UUpdater said...

@Bill - in terms of it being cheaper think of it like car insurance being cheaper for good drivers. If a patient is healthier then they will have a greater chance of avoiding the high cost medical interventions like urgent care, hospitalization, etc. Anyone who has worked with the mathematics of health care should get this.

Joel Monka said...

@UUpdater- good analogy- I also use car insurance as an analogy, but for Obama's demand that insurance companies accept pre-existing conditions; how much would car insurance cost if people were allowed to buy and use the insurance after they've had the accident? Yes, people should get the healthcare, but at that point it's a charity program, not an insurance program.

Bill Baar said...

Well, I have worked with the mathematics of Health Care and prepared budget requests for primary care.

Believe me, it's not cheaper.

Bill Baar said...

Footnote: Primary Care increases the number of referrals to Specialists, than episodic care.

Primary Care increases Pharmacy Costs (a lot). It's the key to the better outcomes.

If you implement contracts for Primary Care without a lot of thought, you end up with Primary Care Docs turfing patients over to Specialists on a grand scale. You need very clearly thought out service agreements in your contract to make sure the PC does what there supposed to do and just doesn't move the patient off to the specialist.

It may be better health care (and I wonder about that sometimes after having built these programs since 1996 --when a Doc first told me this wasn't going to be cheap when I was making the efficiency case myself).

Educated patients making their on referrals to specialists may be the ultimate goal. HR3200 building a Healt Care deliver system using ideas from 1996, not 2016.

UUpdater said...

Just because I point out issues with what you are saying does not mean I am defending HR3200. I am not.

@Bill - you have nice little straw man argument going. You are arguing against the PC model, which is not what I advocated. I work for a telehealth company that is creating new models for health care. They are working with folks in DC to try and change things. Note I even said "as the current plan falters" above. If you care to argue against outcome based reimbursements feel free, otherwise having fun beating up the straw man.

@Joel - Health insurance companies currently do have waivers for pre-existing conditions. For example when my company switched providers anyone that already had a condition was allowed onto the plan with no restrictions, as long as they already were a member of the existing plan. If you were not a member of the current plan, then pre-existing condition rules applied. If you want to wave all pre-existing conditions, then you must mandate coverage for everyone. Similar to how states mandate car insurance for drivers. This eliminates the "I will only buy it when I need it" gaming of the system which would throw off the underlying actuarial assumptions. If coverage is mandatory there is no accident or illness occurring outside of a coverage period. As above I am not defending Obama's plan, not familiar enough with it. If the plan mandates everyone paying into a plan, then pre-existing conditions essentially become a non issue. If the plan doesn't mandate coverage then it is an issue. If you let people only buy in when needed the underlying assumption would change to the understanding that people would only buy in as necessary and costs would rise.

Bill Baar said...

If you care to argue against outcome based reimbursements feel free, otherwise having fun beating up the straw man.

@UUpdater: The First reference to outcomes based reimbursements I'm aware off. Give us some links to what your advocating and I'll gladly comment.

I thought you were a defender of HR3200 and if you're not, then welcome aboard. Glad to have you with us.

My gripe with HR3200 (and the Recovery Act) is not the many specifics in it... the readmissions, or EHR, or a good many other things.

It's the power HR3200 vests in a single Agency and its plethora of appointment committees and geeks who will implement this thing.

It's fundamentally a question of power and whether the goal should be a single point of power, or power driven down into the hands of individuals.

Technology is really the key here, and as you seem to know, Technology has can really empower individuals.

In fact, I think Technology makes much of HR3200 unworkable because the Government simply can't keep up with it or manage it well.

A will thought out reform of our Health Care breaks the tie between individual and employer and empowers individuals to make choices. It gives a voucher to low income people. It frees Insurers to work across State Lines and create risk pools and products suitable to a much more mobile and changing population.