The ACP Advocate Blog

by Bob Doherty

Tuesday, November 18, 2008

Health care reform is all about affordability

When the Kaiser Family Foundation asked voters to name the top health care issue that they wanted the candidates to discuss, affordability came out as number one in its October poll. By affordability, the voters meant how they are paying for health care and health insurance.

It shouldn't come as any surprise that voters are concerned about affordability. Victoria Knight, writing in the Wall Street Journal's blog, observes that the health insurance tab is creeping toward half of family income. Susan Block reports in USA Today that the average employee's health care costs, including premiums and out-of-pocket expenses, will increase 8.9% in 2009, far outstripping wage increases and overall inflation.

Making health care affordable to individuals and families should be a goal of health care reform. But health care also needs to be affordable to the country as a whole - that is, the nation has to be able to produce enough wealth to sustain a given level of health care spending, which is not the same thing as personal affordability.

On this score, the public is unconcerned. The same Kaiser tracking poll found that only 6% of voters identified "reducing the total amount the country spends on health care" and only 7% cited "reducing spending on government programs like Medicare/Medicaid" as issues that the candidates should address.

In my mind, reducing (or at least limiting the rate of increase) in health care spending is the central issue. One could envision reforms that on paper make health care affordable to individuals, such as by capping out-of-pockets costs or premiums, but bankrupt the country in the process. In reality, the only effective way to make health care affordable is to lower health care spending.

The problem is that controlling health care costs will require trade-offs that the public seems disinclined to consider, such as restrictions on access to tests or procedures of uncertain value.

Let's not blame the voters though. Politicians haven't been profiles in courage in explaining why the country needs to reduce health care spending, and how. Nor have stakeholders - hospitals, health plans, unions, drug companies, device manufacturers, and yes, organized medicine - been rushing to say what they're willing to give up to lower spending. (Each is pretty good though at pointing out how someone else should cut their spending.)

Today's questions: What do you think can be done to make health care affordable - not only to individuals, but the country as a whole? What should physicians be willing to give to help cut spending?

7 Comments :

Blogger Jay Larson MD said...

Efficiency of the system will be required to reduce healthcare spending. How many millions of hours are wasted each year for different providers entering patient data into their own data system? How many times does “Penicillin Allergy” have to be recorded for one person? How many tests are repeated by different providers? Information has to be available to multiple providers at multiple locations and this can only be accomplished by an electronic system.

Efficiency is also created when the paper work burden for physicians is reduced. “Prior authorizations” and “Letters of Medical Necessity” requests are getting out of hand.

Reduced healthcare spending should not solely fall onto the shoulders of physicians. Profit margins to parts of the healthcare system that are not providers of healthcare should be reduced (insurance companies and pharmaceutical companies in particular).

November 18, 2008 at 4:04 PM  
Blogger Cascadia - Consultant said...

There are many creative solutions to reduce administrative costs (using smart cards that contain your problem list, allergies, medications, demographics, etc) or even having all insurance companies use the same form as a start. So much energy is focusing on cost and who pays for it but very little on what value do we get? How often are patients receiving the standard of care? Who is managing those with complex chronic conditions? The average medicare patients sees up to 7 different doctors a year.

We already know from the Dartmouth Atlas studies that the amount of care you receive is often partly determined based on how many specialists live in the area. Are we willing to limit those? What about shifting reimbursement to Family Practice doctors vs procedures?

One solution that has legs is to increase the salaries and compensation of primary care (FP and Internists) so that they can spend the time needed to manage the complex patients (10% of which account for 70% of care) and open up simple visits to Nurse Practitioners and Physician Assistants.

Another interesting but highly controversial model would be to not use insurance for primary care at all. If you have employer sponsored health care you could care out $1,000 a year for primary care and avoid the insurance overhead for those services. Some practices in Seattle are opting out of insurance entirely, seeing less patients (1000 per panel) but only charging $30 to $65 a month for unlimited access to primary care.

People without health insurance (or high deductible plans) are able to get basic health care that way.

November 18, 2008 at 5:18 PM  
Blogger rcentor said...

Affordability is best created through investing in primary care. We know that comprehensive complex care saves money. The investment in cognitive services is the best way to decrease health care costs.

November 18, 2008 at 6:57 PM  
Blogger The Happy Hospitalist said...

I could double or triple the number of patients I see if my daily reality wasn't controlled by third party rules and regulations that require me to document thousands of words in thousands of key places thousands of times a day. The medical record has become nothing more than a giant defense exhibit and invoice for the Medicare National Bank.

That's just sad. The cost of of health care has exploded ever since Medicare came to be. When the government, controlled by special interests, determines price, the special interests will always win. Either the market or the government (aka special interests) control prices. And the taxpayer and premium payer will lose every time the government intervenes.


Also, we have turned health insurance into an uncontrolled printing press of currency. A currency that pays for everything. We focus only on improving the reactive part of the equation instead of focusing on the active part. All incentives to cost control are aimed at a reactive system of cutting hospital payments and physician payments.

We have ignored the patient part of the equation because that would be political suicide. What about cutting patient benefits? You cut the benefits and you create an incentive to avoid failure. The more you spend the more you tax. How about giving incentives to the patient portion of the equation?

Big premium breaks for confirmed healthy lifestyles. Reaching target BMI, reaching target central waist circumference, passing cotinine/nicotine testing. Passing drug testing. Passing an age appropriate metabolic equivalent excercise tolerance test.

We know healthy lifestyles can significantly reduce disease burden and actually prevent and even cure many diseases such as cancer, heart disease, diabetes stroke and hypertension. Some of the top causes of morbidity and mortality in this country.

The vast majority of patients I see in the hospital are obese and have diabetes and or smoke. What does that say about the power of lifestyle choices in health care utilization? It says everything.

As a patient, you should be required to pass national goals with clearly defined interventions in health and you get to reap the benefits. Turn an entitlement program into a benefit program. Put some skin in the game. Base insurance premiums on reductions in controllable risk factors and not preexisting conditions and watch the nation take control of their health care dollar.

You will notice the improved health trickle through the work force in many intended and unintended ways including increased productivity, decreased injury and sick days and improved moral.

Being poor is not an excuse to sit on the couch and smoke cigarettes or drink beer after your eight hour shift while you collect a welfare check. That is an excuse for shifting responsibility for ones own actions. Welfare is an excuse for trying. When you have no risk of failure, you have no risk of success.

If we want to have any significant impact on the health of this country, we have to shift the entire cost curve downward with decreased utilization and increased work productivity, which ultimately will decrease the tax load and make America more competitive.

November 19, 2008 at 12:18 AM  
Blogger Matthew Fero said...

There are numerous areas where efficiencies can be increased in medicine. I work at a tertiary referral center and most of our information from referring physicians comes in the form of reams of faxed clinic notes. We have a staff person whose full time job is to collect, collate and file the faxed forms in a referral chart. It is hard to believe that we are stuck with 1970s technology when it is clearly inefficient.

Our individual institutions do a pretty good job of developing their own electronic systems but inter-institutional data transfer is impossible due to the babel of incompatible proprietary systems. The computer industry figured out awhile ago that the solution to compatibility issues is to develop a standards based core language to which individual developers can apply their own applications. (Just think about what HTML and XML have done for the internet). In fact Japanese researchers tried to develop a form of medical XML 10 years ago but it would really take U.S. leadership to create a viable standard.

Health care costs in the U.S. are high not just because of our increased administrative overhead. Compared to european nations we also spend more on technology and costly treatments with marginal benefits. In fact a major expenditure is not just equipment but the increased labor costs associated with high tech medicine. Compounding matters is that patients are insulated from costs by insurance companies and hospitals may insulate providers from costs issues if tests and interventions are a major source of revenue. I would be willing to adhere to guideline-based testing and treatment plans as long as expert physicians are the ones who develop the guidelines. There should also be a clear and straightforward means of granting exceptions.

Ultimately guidelines should be based on evidence of utility. In the absence of adequate data we should be willing to participate in clinical studies of unproven technologies rather than chasing the latest fads. As the provider of medicare the U.S. government is already in a position to organize and facilitate such studies. Rather than requiring specialized approval, participation in outcome studies should be pre-approved and in fact be required.

A uniform method of electronic medical communication would make enrollment and data collection relatively painless and a small price to pay for the luxury of being on the 'bleeding edge' of technology.

November 19, 2008 at 3:21 AM  
Blogger Cascadia - Consultant said...

@Jay Larson, you hit it on the head. If we could just send the patients problem list, meds and allergies with them (swipe it off a debit medical card) that alone would save millions.

We have lost sight of who the customer is. the patient and our systems are set up to feed the beast of insurance. We need to restore the balance of power back to providers. What do you think about the medical home model? Just the latest trend or real potential?

@Happy Hospitalist - Great comment about P4P being with the patient in mind but the research is less clear about having patients bear more of the cost in terms of behavior change. If that were true then people without health insurnace should be the healthiest?

People with high deductible plans often put off care whereas companies that have no deductible plans for diabetes care are able to drive down their costs.

@Matthew - I was actually the consumer rep to the recent AHIC Successor process so I am a strong advocate of interoperability (even with the same vendor in the same city - Stanford - you can't exhange CCR yet) but don't necessarily believe that it should be standards driven.

HTML evolved sort of organically in the market versus from a standards body for example. I don't think the lack of technology is what accounts for the difference in costs between Europe and here though I do believe it will cut them i the future.

November 19, 2008 at 11:04 PM  
Blogger anuj said...

Clearly health care reform should be about affordability and in addition, should include universal access, improved care quality, and replacement of personal injury liability law as the means of compensating and addressing medical errors by some other rational and equitable system.
As far as affordability goes, I think clearly there is a lot of waste in the medical system. Too many doctors are getting involved in each patient's care and where the medical issue is simple, the presence of specialists is making things complicated and uncoordinated. I see this in the hospital so much. A hepatologist to comment on elevated liver enzymes, a cardiologist for every elevation of troponins and a nephrologist for every elevation of creatinine.
the costs naturally go up. the respect for and influence of internists goes down, and the specialists tend to do more tests and procedures, all of which rarely if ever have been convincingly shown to improve risk adjusted outcomes.
It is a shame, the reimbursement system and the effect it has had on health care organization and delivery systems, as well as health care staffing.
A fundamental change in reimbursement system for physicians is needed to alter the situation to where doctors are paid for quality of service and not simply quantity. The Kaiser system of salaries is one way of restricting unnecessary provider driven demand, but it lacks quality incentives to reward the people doing more work and higher quality work.
From the perspective of the patient, there is increased demand for services, specialists, tests and procedures because of the insulation from costs, and/or unawareness of the costs at the outset. The economy works because individuals work in their self interest but a free market is able to align these disparate interests to provide the invisible hand that maximizes returns on resources. Health care is also a domain that should allow the exercise of basic priniciples of self interest to regulate transactions. It will certainly be a problem to define quality and measure it, and to prevent provider driven demand due to the asymmetry of information between provider and patient. That needs more thought to come up with a regulatory system that discourages unnecessary overutilization driven by the doctors.
Finally, internists and their trianing programs need to wake up to the reality that if they dont remain competent and able to solve the medical problems of their patients and simply refer patients, as many at my institution do, then eventually this function will be taken over by less trained mid level providers. we cant be sending all our asthma patients to pulmonologists and our migraine patients to neurologists. a defined area of expertise should be the purview of the generalist, both in training and subsequently in practice.

November 21, 2008 at 10:25 PM  

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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