Wednesday, June 17, 2009

Fixing a Hole

All of us who care about health care have been thinking hard about how to control costs. Reform won't work unless we spend less money on health care. Medicare and Medicaid are bankrupting the country, and private health care costs are bankrupting families across America. There's talk about raising tax revenue to finance health care for the uninsured, and there's starting to be some talk about moving from fee-for-service to -- what? Managed care????? (The President's new word -- "bundling" -- doesn't make me feel warm and fuzzy, either.)

The President seems to feel a need to convince us that we will be able to hang onto the status quo if we're happy with our doctors and our insurance. Of course, he can't guarantee that insurers will continue to offer us our current plans -- but I digress.

The talk about cost control has focused a lot on patients -- getting them to be compliant with medication regimens, getting them to engage in prevention and healthy lifestyles. Indeed, last week, the Partnership to Fight Chronic Disease here in Connecticut asked its "members" to write letters to the editors about how important it is to make patients -- you know, those irresponsible patients who ignore their doctors simply because they're irresponsible and not because they're broke -- follow doctors' orders. (I suspect they have removed me from their email distribution list after I led a revolt!!!). And then there are people who think that patients overuse health care. Really, what patient wants more interaction with the health care system than he or she needs? Nobody I know. There's nothing fun about being a consumer of health care. I don't buy the claim that we can fix the system by controlling the consumption side of the equation.

But here's what I do think -- and what nobody will say out loud because it's not politically possible to do so. In order to control the cost of health care -- the black hole, as it were -- people in the health care industry have to earn less money. Period. Doctors, hospitals, labs, pharmaceutical companies, insurance companies -- with the exception of doctors who work at clinics for lousy money -- have to dial it back. Tighten those belts. Hold your conferences in Indianapolis rather than Hawaii. Give up the vacation home. Drive a car that costs less than the average annual income in the United States. Send your kids to public school. Deal with reality like the rest of us.

It's really very simple. The reason we spend more on health care in the United States is because the health care industry in the United States is very rich and very powerful. They easily can make the difference between a member of Congress getting elected or not. They killed health care reform under Clinton using scare tactics, and the American Medical Association and other industry insiders are enabling the Republicans to try to do the same now. And truly, if President Obama came out and said that the only way to fix health care is to pay doctors a reasonable salary, allow drug manufacturers a reasonable profit, and force hospitals and insurers to return to being non-profits, that would be the end of health care reform.

Still, someone has to say it because really, it's the only way this is going to work. The Congressional Budget Office (CBO) has come out with scary estimates of what the Obama plan will cost even before the Obama plan is on paper. $1.6 trillion or so. And it won't cover everybody. And that's before we factor in the cost of a public option (assuming we will have a public option, and assuming the public option costs money before it saves money down the road by fostering competition, which theoretically will drive insurance costs down). There seems to be the expectation that President Obama has to figure out where all that money is going to come from WITHOUT TOUCHING THE COST OF HEALTH CARE. That simply can't happen.

Atul Gawande's now-seminal New Yorker article laid it out very well. Where health care costs arethrough the roof, the one thing that drives those costs is over-use of medical care. Doctors ordering more tests than are necessary, more medication, more doctor visits, more, more, more. Not because patients want it. Trust me -- if I could get through a year without seeing a doctor or taking medication, I would be overjoyed. It's not patients driving this; it's the medical establishment -- doctors, hospitals, labs, radiology factories, pharmaceutical and device manufacturers, and insurance companies. Even during a serious recession, have you heard about hospitals going out of business? Or health insurers? I wonder what the rate of foreclosures is among doctors and health care executives.

You can't control cost without controlling cost. DUH. If you told me to control the costs of my food consumption, I'd spend less money at the grocery store by buying what's on sale. If you told me to control the costs of travel, I'd compare prices at gas stations and go to the least expensive one since the gas I get is the same no matter where I buy it. So if you want me to control the costs of health care, I need to spend less money on health care. That means I only get the care I need -- in my case, I'm quite certain that's already the case -- and the care I need has to be purchased at a reasonable price.

It's time for the health care establishment to get with the program. They can't keep getting rich at the expense of the entire United States. Either they get with the program and find a way to live on $200,000 per year rather than $1 million (with bonuses, of course), or we can't fix this -- period. Too much money is being taken out of the system, and that money goes to salaries and bonuses. It has to stop. Now.

The black hole of medicine.

A doctor goes to work for a pharmaceutical company and part of his deal is stock options. He works for 10 years and retires at age 45 with $15 million.

A hospital collects funds from the federal government to cover the cost of charity care, but instead of using that money to finance charity care, the hospital chases its poor patients through collection lawyers (who get a percentage of what they collect), which drives the family to bankruptcy -- all while the hospital is sitting on the millions it got from the government.

How much is the insurance industry, the AMA, the American Hospital Association -- the health care establishment -- spending on opposing universal health care? TV commercials, lobbyists -- what do you suppose that costs?

You and I are paying for this, folks. And it's not going to change until costs are cut. If you focus your cost cutting on what patients can do without, you will have patients who are under-treated and who get sicker as a result. Without treatment, chronic illness spins out of control and it costs much more to treat at that point. We know this. We can't control the cost of health care on the consumer end of things. That's not where the waste is. No consumer decides how much health care he or she needs. Doctors decide that. And doctors need to be re-trained to think differently. The "system" needs reform. The practice of medicine needs reform.

Let's pay everybody in the system a very nice, reasonable wage -- $150,000-$200,000 per year for doctors, maybe a little more for executives (maybe). But let's stop the multi-million dollar bonuses, the fancy cars, vacation homes, private schools -- it's obscene to allow that on the backs of patients who are in bankruptcy. If we're going to stop the costs of providing health care from spiraling even further out of control, we need to stop spending so much on health care. If you're like me, and you know that the problem isn't that patients demand more care than they need -- again, they can't get what they "demand" without a doctor facilitating it -- then the only other place to go is to control price. And the only way to lower the price of health care is to pay those who work in health care less.

Somebody more important than I had better start saying this or reform will not really mean change. It will fail, as it is failing in Massachusetts. You can't just insure everyone and make no other changes and call it reform. It won't work.

It really comes down to this. The places that Atul Gawande and others tout as examples of cost control are places like Geisinger and Mayo and Kaiser -- places where doctors are paid a salary, and gain nothing from ordering more tests or providing more care. Use in-house labs, in-house radiology, in-house pharmacies, so none of it is about earning as much money as possible. Maybe this is what President Obama has in mind when he talks about moving away from fee-for-service to "bundling." Pay doctors a salary that has no relation to volume. Pay other health care providers -- labs, radiology facilities, home health agencies -- cost plus 25% (or whatever percentage is right after careful analysis). Same with pharmaceuticals -- pay cost plus a flat percentage mark-up, and make it easier to develop and market generics.

The current system is fraught with inflated prices that go to paying big bonuses for care people didn't need in the first place, while others can't get care because they can't pay.

I'm not saying that there aren't other problems. I see insurance companies denying coverage for a surgery despite the fact that the surgery would cost less than the alternatives. So there's also a degree of irrationality in the system that has to go.

But I know that, if the health care establishment were focused on providing care rather than making many millions of dollars every year, THAT would be real reform, and THAT would shrink health care costs dramatically.

Sadly, through expensive advertising and lobbyists, the health care establishment can stop that from happening. Indeed, they already are doing so. Jennifer


  1. Fair points. Though some doctors definitely do order more tests due to fears of malpractice suits. Others order more tests because state governments have fixed their budget problems with massive tuition increases over the past 10 years. So med school graduates are carrying $300,000 10 year mortgages of student loans upon graduation. i think this would be the best, most cost effective, and fairest health insurance reform we can hope for:

    1. Non-profit co-ops that operate on a PPO model. Additionally, a doctor who takes one co-op plan would have to take other co-op plans of patients who were from out of the area.

    2. A ban on for-profit insurance companies and hospitals compensating their employees with stock options. If employees get stock options, they have an incentive to increase the company's overall profit. For insurance companies, that means denials of needed procedures. For hospitals (see McAllen), it means ordering unnecessary procedures.

    3. Having the federal government negotiate drug prices and service fees. Medicare plus 10 percent isn't a bad idea.

    4. Sweeten what is inevitably a pay cut for good doctors by providing loan forgiveness to doctors who accept a co-op plan.

    5. An individual mandate, but the mandate lets you keep your insurance with no premiums when you're laid off.

    6. The elimination of unneeded life-prolonging, but medically dubious, procedures. I'm talking about feeding tubes in Alzheimer's patients and the practice of warehousing the ill, spending hundreds of thousands of dollars to keep them alive in their last year of life, and turning them into drugged vegetables. Instead of sending them to the hospice to enjoy, as much as possible, their last moments on this great planet with their family and friends.

    7. Pay for this by the elimination of the tax deduction companies get to insure their employees. And by a 2% Capital Gains tax increase and a 2% flat income tax.

    Such a reform would pay for itself, insure nearly every American, give good access to care. And allow doctors to do their jobs again. It's also the German system, basically. The German system is ranked 8th in the world for outcomes, even though they spend a fraction of what the US spends (in GDP terms) health care. The US, despite spending far more both in actual dollars and in percentage of GDP, is ranked 37th, right ahead of that economic powerhouse called Cuba.

  2. For real...number six?? How many people who read this blog have been that close to a number six to feel comfortable with that idea? On your "?" blood transfusion they say ummm, no we are low on blood and you've been here several times already and you'll be here again soooo...we'll just put you up somewhere and let you pass on? That's actually not so far from the truth already...


  3. I understand your point. But that's not really what I'm referring to.

    I, and I believe the basic reforms I outlined, are all for delivering treatments to patients when there is expected recovery and a good quality of life after a certain procedure.

    A relative of mine has severe late stage Alzheimer's disease. She hasn't spoken a word in years, formed a complete sentence in nearly a decade, but every time she gets an infection, the nursing home gives her antibiotics. And she stays in the nursing home at a tune of $50,000+ a year.

    Somewhere along the line we have to say, "We wish things weren't this way, but this is inevitable," and cease life-prolonging treatments that keep people with no quality of life alive at great expense to everyone. It isn't just my Grandmother either. Basically the entire nursing home is filled by such patients.

    End of life care in American is ridiculous. We spend so much propping the old and barely alive patients up that we frequently, as you rightly point out, make the young and very sick wait at great risk to their continuing health.

    The European models are better than the US model (US is rated 37th in the world to 1st for France, 2nd for Italy, etc). They all provide universal access up front for preventative care, but limit life prolonging procedures in geriatric patients. If we're going to reduce health care costs, we have to reduce the 30% of all costs which are created in the last year of life. We need to favor hospices over nursing homes.

    That doesn't deny patients dignity, which is what the current system of unneeded treatments does in my view.