Greetings from a medical office in Massachusetts, democracy’s laboratory!
A bill that will adjust virtually every piece of the state’s health care system is now law. Gov. Deval Patrick signed the legislation Monday morning in a packed State House hall.
“Massachusetts has been a model for access to health care,” Patrick reminded the crowd. Now, “we become the first to crack the code on costs.”
Pardon me while I take a steadying sip of my coffee… Righto! On we go.
“It’s a very big deal,” said Ralph de la Torre, CEO at Steward Health Care, the state’s second-largest hospital network. “We’re starting to deal with the second part of health care reform. The first part was increasing access and expanding coverage to everybody. Now the second part is figuring out how to contain costs so that it doesn’t impact businesses and society in general. It’s a clear move in the right direction.”
I almost agree with all of that. While I, like almost every American, am still not entirely sure how the Affordable Care Act is going to work in practice, I think the goal of increased access to healthcare is eminently laudable. I want access to be as universal as possible. And increased access without efforts at cost containment will only worsen the already unsustainable morass of healthcare expenditures in this country, so I am also quite pleased to see elected officials making an effort to address that part of healthcare reform as well. My only qualm regards that bit about “so that it doesn’t impact businesses and society in general.”
As partner in a business that provides healthcare, I have rather a significant stake in how this plays out. And I would love to believe that somehow costs can be contained in such a way that our bottom line doesn’t take a hit. Indeed, I am reasonably hopeful that expenses can be reigned in in a way that doesn’t hurt practices like mine. But the notion that cost containment can be enacted without society in general being impacted requires rather more fairy dust than I am willing to clap my hands for.
Someone somewhere is going to feel the cut somehow.
For my part, I’ve already observed that the hospitals where I am on staff are taking the issue seriously. Boston Children’s is trying to get out in front, which I think is smart. I have absolutely zero doubt that there are many, many areas where costs have run amok with no benefit to anyone and in which cuts are totally appropriate. But I am skeptical that all the cost containment that needs to be done can be done without anyone actually feeling it, or having to do with less than they want.
None of this is to say that I do not support Gov. Patrick’s new law. Given the broad coalition of groups that turned out in support when it was signed yesterday and what one might reasonably surmise about various factions getting at least some of what they want, I think it’s probably a step in the right direction. And sooner or later laws of this kind will be unavoidable, so better to start now. I can’t really argue with this:
The law says health care costs must stop growing faster than other household and business expenses, as of next year. While many hospitals and physicians say that’s not realistic, Lora Pellegrini, president of the Massachusetts Association of Health Plans, says having the target in place is important.
“Folks know there’s a microscope on health care costs,” she said. “So if somebody misbehaves and they’re trying to look for high rates and they’re unjustified, I think there’s a very public conversation that’s going on about those things.”
It’s hard to imagine the president of that group showing up to support a law that would gut healthcare reimbursement rates. Certainly it bears scrutiny if a medical center ups its rates for no reason than padding its bottom line, and if this law keeps that in check then I have a hard time faulting it.
All of that said, however, I have no choice but to pay close attention to how this law actually works in the coming months and years. My own bottom line could be affected, and I don’t yet know how (or if) the ramifications will touch on my practice and my patients. But I promise to keep you posted.
How close to the bone would you say any given hospital runs at?
I’m going to digress for a second but, swear to god, I have a point. When I was in high school, it seemed to me that the job of “guidance counsellor” was the eventual goal of the teacher. This was the guy or gal that administered personality tests and explained them to us, they talked about colleges that would best suit us, and, it seemed to me, coasted. They got their brass ring.
When I look at various colleges, as well, I see the number of positions that seem to exist as “you don’t have to retire quite yet” positions for the guys who have pretty much made it… and I wonder:
To what extent are similar positions at any given hospital? Is there such a thing as “doctor emeritus”?
I think it depends a whole lot on the hospital. The hospital where I was on staff before I took my current job? Pretty damn close to the bone. The ones where I’m on staff now? *coughs politely* Um… less so.
And I don’t think there’s the kind of sinecure in medicine, at least not clinical medicine, that you’re describing in academia and education.
I don’t think there’s the kind of sinecure in medicine, at least not clinical medicine, that you’re describing in academia and education.
Hrm.
So now you’ve got me wondering about Administrators.
There? Maybe. I’m simply too far removed from the administration of the hospitals to be able to comment with authority.
If you google “hospitals losing money” you get some depressing results. A lot of hospitals are getting by subsidization from the clinic side of things. It seems to me there are ways to mitigate this with the right sort of cuts, but caution is necessary.
They just built a new hospital out here and tore down the old. They ran the numbers and determined that the new hospital would pay for itself by increased patient-load because new hospitals attract more business (either poaching from nearby ones – in our case the one in Redstone – or encouraging people to visit). It kind of makes my brain itch, and not in a good way, to destroy a perfectly serviceable hospital for the sake of revenue-generation. It strikes me as being indicative of a problem.
(That wasn’t the only reason they did it. It’s also in part to recruit doctors and personnel. That’s on the zero-sum side as well, though, in the greater scheme of things.)
note: UPMC just did the same thing with CHP. also removed the records storage area and went paperless.
Matt Yglesias, Cursed Be His Name, made a tangentially similar point the other day, when he pointed out that, if we are aiming to cut health care costs, it is simply unavoidable that we have to confront the right-wing specter of reduced innovation in the medical field. It’s tautological, or nearly so.
Your position w.r.t. to hospital revenue seems to be the same kind of thing. The only real workaround is to insist that health care costs continue on their current trajectory (or flatten where they are now), and almost no one takes that position.
It’s not clear to me why the tradeoff is either “high costs plus faster innovation” or “low costs plus slower innovation.”
At the very least this tradeoff isn’t going to continue for long. When innovations happen, costs for existing products and services decline. And when prices are perceived as too high, markets reward innovators who cut costs.
Whoops. I thought for a moment we had a more or less free market in health care, which of course we don’t. There’s your problem.
A) Erm, the obvious libertarian argument here is obvious. If you reduce the amount of money people spend on health care, you reduce the amount of profit there is in the industry. Lower profit –> less research –> fewer innovations. Sure, there are probably some marginal incentives to reduce the cost of providing the things we already know how to provide, but that’s not the same thing as inventing new treatments, drugs, machines, etc. See also B.
B) Generally speaking, medical innovation doesn’t cut costs. I mean, that’s the lesson I draw from the entire history of medicine. As we get better at treating diseases, usually by developing new treatments, drugs, or machines, we spend more money doing so. It’s probably true that leeching people for cancer is a lot cheaper than it used to be (maybe?), but that’s not really the issue at hand.
C) I don’t see how a free market gets you around the fundamental issue at the core of this, unless you’re willing to give up on the very idea of universal access. Since that position is self-evidently monstrous, here we are.
Research? isn’t research done by governmental grants where you’re from? Cause it sure as hell is around here, and this is rather a large nonprofit where I work.
New treatments will be biological, and are currently more in danger of being barred by “no stem cell research” than anything else.
Leeching people is probably more expensive now, as there are fewer legit purposes for it.
I see a LOT of new research into removing people from nursing homes, into giving people the tools so that they can help themselves, evne if their memory/stability is poor.
15% of medical care costs are avoidable waste caused by insurance overhead.
Since that position is self-evidently monstrous, here we are.
Here’s my problem with this particular flavor of monstrosity.
It reads similarly to the bad mother from the Solomon story talking about justice. Solomon’s solution was self-evidently just to her.
Given that I don’t know whether, deep down, I’m the good mom from the Solomon story or the bad mom from the Solomon story (and I’m pretty sure that, deep down, I’m not Solomon from the Solomon story), I think that self-evidence might be shaky ground from which to start any given discussion of justice.
I could change that to “massively unpopular”, if you like. Either way, we aren’t going the other way on universal access any time soon (I think), so we may as well start talking intelligently about the cost-cutting part.
That said, the history of medicine in a non-universal access paradigm in the United States doesn’t give me much hope that we’d be cutting costs that way either.
Not only would that change in phrasing be awesome, I’m considering requesting it of everyone for every use of the phrase at any time, forever, if I can figure out a way to deal with the degree to which it reveals nihilistic tendencies…
(a) The weak causal link here is between higher consumer costs and the incentive to cut those costs. When consumers do not bear the costs, those types of measures won’t be pursued or rewarded. And in our system, the consumer almost never bears the costs. Employers do, and when they don’t, the government does. It’s actually quite surprising to me that we have the level of medical innovation that we do, given where the incentives lie.
(b) Medical innovation has made many impossible things possible (which you say as if it were a bad thing). And then in some places costs have indeed declined; consider the prices of HIV drugs, or even just claritin, especially when it went off-prescription. But when consumers aren’t given choices that allow them to economize, you shouldn’t be surprised when costs don’t go down.
(c) Not sure what you’re getting at. I’ve several times said that some forms of single-payer might work out better than either Obamacare or the status quo ante. Not that any of them would be ideal, but I think the perverse incentives are greatest in a mixed system, where big corporations make every decision that matters, and where the consumer makes almost none of them.
Peer Pressure is apparently anathema to any discussion on public policy in America.
We have far fewer disagreements in practice than in theory. This is, perhaps, a running theme for us.
Just to be clear, I agree with you that the mixed system, filtered through employers, is quite possibly the thing I would have invented if you had asked me, in the original position, to come up with the worst fucking idea imaginable for running a health care industry. It’s just such an incredible disaster that I, too, am amazed at how well it works. (With respect to that last sentence, this is an argument I have deployed against both libertarians and the kinds of paternalistic liberals I went to grad school with: economic incentives appear to matter a lot less than our theories think they do. Conservatives are largely correct that culture dominates.)
Also, I don’t intend to imply that I think new treatments are bad! I just think that it bears understanding that, if we plan to spend less on health care – if the/a goal of our public policy is to reduce long-term health care spending – then we should be prepared to live in a world with less innovation. And we’ve long since reached a point at which the large majority of people think we should spend less on health care in the future. At the very least, our two presidential candidates, who represent the four inches of ideological space in American politics, both seem to hold this position.
Ryan,
Boomers need custom solutions. perhaps afterward, we can allow per capita spending to go up again?
“Peer Pressure is apparently anathema to any discussion on public policy in America.”
Peer Pressure in America is what kept women in the home, gays in the closet, and blacks somewhere else (in the absence of any explicit laws to the same end)
So yeah, it works great for public policy.
And in our system, the consumer almost never bears the costs. Employers do, and when they don’t, the government does.
Are you under the impression that employers pay 100% of health insurance costs, or that all costs are 100% covered by insurance?
I am under the impression — and correct me if I’m wrong about this — that when an insurance provider, government or private, provides crappy service to an individual, that individual almost never has any ability to change services. Because of that, when the consumer ends up receiving unwanted, unnecessary services, he or she never does anything about it.
Maybe that’s just crazy libertarian talk though. I dunno.
You’ve lost me. What are these unwanted, unnecessary services people receive from insurance companies? (It may be that I’m confused because you’ve used the word “service” three times and I can’t tell whether it’s changed meaning partway through.)
I’d thought the entire discussion was premised on the idea that much of our medical care does not actually conduce to health, is therefore unnecessary, and should absolutely be cut — if saving money is what we really wanted to do.
Much of this excess treatment comes in end-of-life care, as we have discussed here without controversy in the recent past.
Jason,
Most employers around here offer multiple different insurance plans… (I’m in about the only one that doesn’t… and that’s because of employee discounts)
I think the cause of confusion is that you seem to be conflating the services provided by insurance carriers (which are very hard to change, it’s true, unless you have a position with your employer that gives you such decision-making capacity) with unwanted, unnecessary services rendered by medical providers (who are much easier to change, believe me).
How many of those would be performed if the insurance wasn’t going to pay for them, and if the individuals didn’t want to either?
This is an honest, hope-I-actually-learn-something question, because I had thought insurance companies were paying here at the behest of employers, who were acting only on employees’ demands that they get “really good insurance,” which isn’t the most specific or responsive of incentive chains. Is that not it?
Jason,
a good deal of medical “overtesting” occurs because doctors don’t know about tests that other doctors did two days ago.
a further proportion of overtesting occurs because doctors don’t “trust” tests done two days ago.
The first is amenable to Electronic Health Records (you already had a ebv test, I don’t need to give you another).
The second is amenable to insurance companies penalizing doctors who are clearly overtesting. the second is also amenable to hospital “control boards” who say “you’re out of line with our current guidelines. Stop It, before the insurance companies bawl us out”
Jason,
So you’ve got a guy, who comes in, and the ER doc wants to do a CBC (complete blood count). The results are indeed necessary for his care, and he’d be likely to pay for it. However, his PCP just did a blood draw that week.
Does it really matter whether Joe says “but that’s already been done, I ain’t paying for it?”… No. Because the results are what’s needed. Joe lacks the actual facility to moot the test. It is NOT “joe can’t tell doc to go suck it” — it is “joe can’t tell doc to call Quest and pull all his records…”
Of course, we’d all love insurance that covers everything, with no deductible and no cap. I’d like a million dollars a year in salary and three months paid vacation too. As it is, I’ve got insurance partially paid for, where I determine the level of coverage by how much I want to pay, with deductibles, co-payments, caps, and different percentage coverage of different things. In general, if a doctor orders a test, I’m not going to say “no”, but it’s because I can’t tell that it’s unnecessary, not because it’s free.
At a previous employer, I had the choice of plans from different carriers, and could change my decision once a year. Does that moot any of your objections?
Mike,
even if you did know that it was unnecessary — how would you get the real data to your doc? With so many layers, you’re asking for a wildgoosechase… (Which, folks, is dangnab Expensive!!)
Jason, I think I better understand the crux of your question. You’re right to a great degree, I think, in that both the consumer (the patient) and the service provider (the doctor) are insulated from the actual costs of most tests because neither is responsible for those costs, which are sent on to a third party for payment. Indeed, a common cause for complaint is that the vagaries of some patient’s plan exempt the tests from coverage, and the irate patient then complains to the doctor when he gets the bill for the balance.
I certainly agree that having employer-provided insurance contributes to the run-up of medical expenses, because that buffer makes neither of the parties proximately involved in deciding which tests to order/receive aware of what they’re actually costing the system. There’s more to it, too, including physicians who were trained in our contemporary American medical education system, which (in my humble opinion) has become far too reliant on diagnostic tests at the expense of taking careful histories and performing thorough physical exams. Defensive medicine contributes a great deal, too. And of course there is a certain percentage of patients who will want as much testing and intervention as possible because they feel reassured by “covering all the bases.”
I visited the doctor a few weeks back for a sprained ankle. Since it hurt in a number of places atypical for a normal sprain, he took a series of x-rays to make sure nothing was broken. Upon confirmation that nothing was broken and noting that despite the pain and soreness, I was able to walk, he figured it was likely a grade 2 sprain and that we should start a course of physical therapy (done with an unaffiliated therapist) and check back in a month.
“No MRI’s?” I said.
“It is unlikely that the MRI is going to tell us anything we don’t already know. And it will cost you at least some money out of your pocket. You’re going to need physical therapy one way or an other, so we’ll start with that and if you don’t respond, we’ll use an MRI to figure out why and determine a new course of action,” he replied.
The honesty was refreshing.
Another story:
I’m battling some difficulties with my teeth, which will not be easy or cheap to fix. I will need to see a variety of specialists (only some of whom are in-network for my plan) for a variety of procedures (only some of which are covered by insurance). Fortunately, none are immediately urgent. In going through this process, I’ve learned how easily it would be for me to make a decision that would end up costing me a lot of money. Holding off on procedures until January 2013 will save me money because I can refill my FSA. Having specialists submit estimates beforehand to the insurance company to determine what is covered, what is not, and what I will owe allows me to make a decision before any work is done. A careful reading of the insurance policy helped me determine that I could use an out-of-network specialist without being on the hook for the entire bill. Etc.
On the one hand, I am fortunate to have, in both stories, worked with honest and forthright professionals.
On the other hand, I hold an advanced degree and had several days of during which I made all the necessary phone calls and read all the paperwork and am still not 100% certain of anything.
My point in all this is that, when faced with the realities of the costs to me of various procedures, I was able to make prudent and informed decision. If I were insulated from the realities of the cost, either through not bearing any responsibility for it OR only finding out after-the-fact what I owe, I might have chosen a different path, one that would have possibly led to unnecessary expenditures.
Ideally, we would better inform and involve patients about the costs of their care, while also providing them the tools and information necessary to make informed choices. Simplify the whole damn process and to whatever extent wasted expenditures are a part of rising costs will be lessened.
Kazzy, I know that when I have been uninsured or minimally insured, I was a rather different consumer of health care than I am now. Whether it was more, less, or equally optimal to my health I am not sure. But I would do the sort or thing like checking prices (or, in some cases, the provider would check for me), waiting to see if things would improve naturally, and so on. So I think there’s something to it.
The trick, if we are to go this route, is for people not to forgo necessary care for lack of fundage. That’s one of the reasons that I think any universal HSA program would need to be coupled with means-based subsidization with the incentives in-tact. Ideally, I’d like something like “Here is your alotment, whatever you don’t use you can roll over or you can get a percentage at the end of your term.” Something along those lines. The delayed gratification may negate the benefit, or may not. I’m not sure. It’s something I’d like to see tried somewhere (the same way I would like to see single-payer tried somewhere in the US).
I think the basic structure of the system is a problem…
Show me a doctor who posts his prices? I have yet to meet one. I was briefly without dental insurance once when a major problem developed that needed immediate care. Try as I might, I couldn’t get a single dentist office to give me pricing information over the phone. Now, maybe I just didn’t ask the right way or had bad luck with who I called, but all of them wanted me to come in for a consultation, which itself would cost me (this cost some places would offer). I realize that they couldn’t say with even a modicum of certainly what my specific procedures would cost without looking inside my teeth, but why couldn’t they have told me, “A basic root canal costs $2000, so you’d be looking at at least that much.”
Even folks with insurance often have no idea what things will cost. How often do you show up to a doctor, get treated, and leave without paying a dime and then later get a bill in the mail that supposedly details what you were charged for, what insurance picked up, and what you still owe… with a level of complexity that approaches string theory?
The whole basic system is screwy and, though I don’t now what they are, I’m sure there are some simpler fixes that wouldn’t require as drastic changes as you propose (though I’m not opposed to drastic changes… I’m just thinking about how to make incremental changes that might be more palatable to folks). Mandate that doctors provide written estimates which must be preauthorized by insurance if the patient is insured. Before any work is done, a patient can know what things are going to cost.
This will also aid the doctors. While discussing my upcoming procedures with my primary dentist, he mentioned that most specialist require money up front, which will then be reimbursed via insurance. He said the reason for this is that many folks see specialists for a one-off procedure… there is less of a relationship… which leads to more patients walking off without paying. As such, most now require it up front. Which is wise, on their behalf, but also serves to complicate the system, since the patient still doesn’t know what he’ll get back and is out a large chunk of money waiting on an insurance check. A more streamlined system with more transparency can work within the given system.
As for giving people incentive to spend wisely, I’d move away from a flat co-pay model to one that works on percentages (which is how most dental plans seem to work). As suggested, these percentages could be means-tested such that a low-income person pays a lower percentage than a middle- or high-income individual. But nothing is done for free and people will at least begin to get a sense of what things cost. When I pay $20 for a visit, I have no clue what that costs the doctor. If I pay 10% and still get charged $20, well at least I know that that last visit incurred fees totaling $200. I wouldn’t be surprised if a not-insigifigant number of people thought their co-pay was the actual cost of their treatment.
I’ve always thought that whomever named the “Explanation of Benefits” forms had a pretty wicked sense of humor. It’s a lousy “explanation” and it’s usually the “this is not one of your benefits” that are the most pertinent.
I think a system that had more interaction between customer and actual price would have to have at least somewhat more transparent pricing. Half the time they don’t know because they are so infrequently asked. Not that we would ever get flat-rate pricing – too many variables – but it would be more like, say, auto mechanics, where you at least have a ballpark quote and you end up paying more or less depending on how much labor was required.
To be fair, though, when I have been uninsured or under-insured, I typically have been able to get answers.
The lack of transparency is maddening. Not just in what the actual prices are, but in what is and is not covered. One of the nice things about when I was off-the-grid, insurance wise, was that I could find out roughly what it would cost going in. And there are price benefits if you say “I can pay right now.” In some ways, it was actually a less stressful process than dealing with the insurance companies is. Especially with all of the “Oh, she’s pregnant, so now this thing that we have always covered is pregnancy-related and therefore must be applied to the deductible” we’ve got going on now.
Will-
I wonder if I could go to my doctor, fully insured, tell them I’d like to “pay now”, get whatever discount the might give for advance/cash pay, and then independently submit the claim to my insurance…
That last part, about the pregnancy things, do they start covering things differently if the lady is with child?
Kazzy,
I actually have an answer for that! When I was last at the eye-doctor, they did some tests covered by medical insurance (not optical, but medical). They basically said “This visit cost $161. It’s $112 if you pay today, though. We will still bill the insurance company and if they reimburse, we’ll credit your account.”
I don’t know how universal the “we will bill the insurance company” is, but I suspect the other part is common. Once they have their money, though, I wouldn’t necessarily expect them to put up the same fight that they would if it were their money on the line. I’d also expect that if I went to the insurance company myself, they’d take me less seriously than they’d take a provider with whom they have any sort of ongoing relationship (or with whom they would like an ongoing relationship).
Oh, with regard to the pregnancy thing, the way it basically works is that anything pregnancy-related gets filed away as such and therefore applied to a $3k deductible. So we have to pay out-of-pocket until we hit that deductible. The issue is that they are counting things as pregnancy-related that she would be getting anyway. One example of this is her regular blood test (due to her exposure risk by working at a hospital) and ongoing care for things that existed prior to the pregnancy. Sometimes it feels like they’d call my health care needs pregnancy-related if they could.
We’ll hit the deductible soon enough. Then coverage will be more favorable than if it weren’t pregnancy-related. It’ll be interesting to see if they are suddenly no longer considered pregnancy-related.
We’re actually not talking about ridiculous amounts of money (especially considering the overall costs of pregnancy), but I find it particularly irritating for some reason.
I had one sprained ankle when I was minimally covered by insurance. Without insurance, it would have cost $5000. This, i repeat, is NOT for anything more than “nope, it’s not broken.” Maybe other people get told to go to physical therapists. My doc just gave me a couple of exercises.
Most doctors I’ve talked to know at least the basics of how much things cost. I asked how much a heart attack costs to treat — 50K to 100K. People do research on these sorts of things, folks. It’s not like a doctor can’t tell you what a visit costs… (believe that’s upwards of a hundred dollars).
But more to the point –as an uninsured&unemployed person, I was a prisoner in my own home, doomed to declining health — because the streets were too dangerous to walk in the winter. The odds of injuring myself were too great.
Because cutting costs can’t EVER be associated with better outcomes.
ERs are chock full of Diabetes patients, every damn day. You get me a couple apps to Remind People, and Voila! Fewer people nearly dead. Cheaper healthcare (even if we need to buy them an annoying phone — that costs way less than an ER visit).
Or trying the “scare approach” of “this is what happens if you eat a double cheeseburger — and we really mean it.”
Because cutting costs can’t EVER be associated with better outcomes.
Balderdash.
If cutting costs means looking at testing that is done unnecessarily, that not only cuts the cost but also saves both future expense of following up potentially erroneous results and potential for harm when said erroneous results lead to unnecessary interventions.
Is cutting costs always going to lead to better outcomes? I daresay no. But a blanket statement in the other direction is nonsense.
yes, good doctor, my rant, which you are incidentally supporting, kinda deflated upon Ryan bothering to put a bit more nuance later.
This strikes me as a very important point. In the popular mind, more medical tests are always better.
The popular mind isn’t Bayesian. We’d all be better off if it were.
“The popular mind isn’t Bayesian. We’d all be better off if it were.”
Maybe there’s a gene for that.
I’ve come to believe most of what anyone could charitably call Cost Containment would come in the form of early diagnosis and treatment. But for every silver lining there’s a dark cloud: the cheapest treatment for Type II diabetes is the Push-Away. Push away the plate. Lose some damned weight. Cheapest treatment for COPD? Stop smoking. Heart attacks? Ditto all above.
While we go on trying to “treat” these diseases, we can’t contain costs. That’s just so much palliative care. The very idea, that we’re putting kids on asthma regimens while their parents are puffing away on cigarettes in the house, well, it’s darkly amusing.
And their parents are busy driving those same kids from place to place, causing yet more asthma!
Early Diagnosis and Treatment, and more Technological treatment. How do we currently treat dementia? With an inhome assistant, I’m sure. That’s expensive in a hurry.
As my wife describes it, there is a lot of redundancies in the business side of hospitals, many of which are implemented solely to ensure all the money that is supposed to be coming in is coming in. As she tells it, a lot of the costs for care in a hospital have little to do with the direct care received and everything to do with all the behind-the-scenes stuff going on. Now, I’m sure a great deal of that behind-the-scenes stuff is important. If I mentioned my wife’s title, most folks would say, “What the hell does that have to do with medicine?” If I explained to them its importance, they would ask, “Well, how does that impact me as a patient.” If I explained to them that it probably doesn’t right now but likely will have profoundly positive impacts going forward, they might accept that or they might give me a brush off. All that being said, she’s fairly confident that cleaning up the backside, especially all the people committed to making sure everyone gets paid, would have a huge impact on costs.
This, too, would be greatly cleaned up by single payer. But alas…
My local PCP’s office appears to have at least three full time employees whose entire job is…dealing with insurance companies.
One of the things that we do have to keep in mind is that any successful cost-containment strategy is going to end up costing somebody money. Getting rid of unnecessary tests will cost the hospitals that rely on them, testing labs, and medical equipment manufacturers money. Obviously, reducing fees (if successful, and we shouldn’t assume doing so constitutes cost-containment) would cost providers money. Single-payer or administration streamlining would cost the insurance companies money.
The question is who we can take money from that won’t hinder care.
Now, I say this, but looking at it this way can lead to problems. Simply taking money out of the system by, say, reducing payouts, if done incorrectly could result in driving the good doctors out of business while the bad doctors simply make it up by ordering more tests or doing more procedures. Reductions in insurance administration could be like gutting IRS auditing capacity that actually pays for itself compared to its absence.
I’m not advocating, or trash-talking any particular plan. Just that we do need to keep in mind the likely results of our proposals. A lot of people in the larger discussion oversimplify a lot of these things. That changing who pays (single-payer) will obviously fix things, or changing payment amounts will obviously cut costs. Even my favorite, cutting down on unnecessary tests, could prove very problematic on the ground.
I feel like a bit of a nihilist on the subject. Obviously, all bleeding stops eventually and unsustainable cost increases won’t be sustained indefinitely. My concern is that when we hit the wall, we will just make the immediate changes we can and the results will be, from just about every perspective, pretty bad.
I agree with everything you say here. Really, it’s these considerations that are completely lost when clumsy phrases like “figuring out how to contain costs so that it doesn’t impact businesses and society in general” are used. It sets up a wholly unrealistic expectation that these costs can be cut without any pain to anyone, like we’ll just have to make due with slightly fewer staplers.
Meaningful cost containment means some kind of meaningful and not entirely pleasant change for someone. Who and how much remain to be seen.
And WHEN! If we put the stupid insurance billing people to work putting medical records into EHRs (when they’re actually functional), we can delay the impact until after the upcoming depression.
Some people lose jobs, it’s a fact of life. They maybe get better jobs. Certainly we spend the money on better things.
“One of the things that we do have to keep in mind is that any successful cost-containment strategy is going to end up costing somebody money. ”
This assumes (probably correctly, but it is an assumption) that you can’t do better alignment.
If you’re giving 20 CBC tests to a guy that only needs 3, and you get rid of 17 tests… yes, that costs someone money, somewhere.
On the other hand, if you’re giving 20 CBC tests to a guy that only needs 3 and there are 17 other people who all need one who aren’t currently getting it for some reason, you’re not necessarily costing anybody anything.
Most likely, you’re going to pay a vigorish on getting those other 17 people those tests, because the reason they’re not getting them *now* is because they can’t afford it. But if you’re also carrying a debt load because those 17 people are free-riding on the emergency system after they get critical, then you *still* might wind up saving money, in the long run.
There’s a lot of 11-dimensional chess going on here.
yeah. note that those 17 people are paying in time, to get the test, at any rate. Someone always has to pay — here they might be willing, though!!
Kevin Drum noted a cath lab that was doing a lot of unnecessary work — partly, one supposes, for profit but also because (he surmises) that if one spends a lot of money on a new gadget or facility, one wants to see it used.
As noted, tossing 50 million more Americans into the ranks of “insured” might not make this lab any less busy. But it’s likely to make the procedures more necessary.
Speaking solely of myself, if I owned a state of the art imaging facility, I’d prefer to image people who needed it rather than maximizing my profit by convincing people who didn’t — either way, I make the same money. I’m just less likely to get sued or denied payment if I’m not acting unethically.
OTOH, if it was running at half capacity — I’d like to think I wouldn’t be pushing my doctors to order more tests. But then, I’m not the sort to own such a facility in the first place.
I’d prefer to image people who needed it rather than maximizing my profit by convincing people who didn’t
I suspect that we’re not in “convincing people who didn’t” territory anywhere near as much as just wanting to make sure, leaving no stone unturned, and otherwise covering one’s backside.
Really? So healthcare ISN’T a business? Owners of healthcare facilities are just pleased as punch to see machines idle, beds empty, doctor’s twiddling their thumbs, lab-workers playing solitaire on their PCs?
I doubt it occurs to most Doctors, but the people that employ them and the people who own the facilities they often use? It occurs to THEM.
And somehow, I don’t think they’re shy about sharing their concerns. You didn’t think pharmacuticals were the only capitalistic aspect of the medical industry, did you? (And so unabashedly so, aren’t they? Even doctors tend to complain, while signing things with their phrama-branded pens given to them by generally lovely sales reps extolling the virtues of their latest wonder drug, so superior to those pitiful generics…)
Health care is a business, and some doctors are strictly mercenary in their pursuit of profit, but a whole lot of the time it’s more nuanced than that. Something more like “Having this particular hammer sitting in the other room, it’s been interesting how many more of the things I see start looking like they might be nails.”
Just for the record, Morat20, plenty of doctors are unwelcoming to pharmaceutical representatives, your humble blogger included. All of my stationary and writing implements are unbranded.
Good man, Dr. Saunders. Gives me a little hope and faith in mankind, to realise there are still a few physicians who aren’t yet corrupted by the pharmaceutical industry. I mean that. What I saw at Pfizer would gag a buzzard.
We have pharm pens all over the place around the house. And coffee mugs. I don’t think this translates into “I’m going to recommend a super-expensive brand name drug over an inexpensive generic.” To be honest, I’ve never had a doctor do anything of the sort, though maybe I am not seen as an easy mark.
Obviously, they are doing the advertising and bribery for a reason. So presumably it works on some level. Pens and mugs, though, I’m not so sure. That may fall into a “no reason not to try” level of expense. The pens are notoriously cheap.
Will, I have no idea where I saw it, but I’m vaguely aware of at least some evidence that even cheap knickknacks can influence a doctor’s practices. I don’t know how much stock to put in that, and please don’t read that as implicit criticism. But even the trinkets may sway providers a little bit.
Depends. MRIs I’d wager are often used in sports medicine, where “convincing” people is warranted. A stent lab is a completely different matter.
Will,
Phexophenadine versus the other famous allergy medicine (forgotten the name, sorry!). You get pens for one, you’re probably going to choose it. Both do about the same thing (for normal people at any rate…).
My workplace has forbidden any contact with pharm reps.
Free pens are free pens. Branded clocks are where I draw the line and think less of a doc. They look tacky as all get out.
Anyone who thinks all these new healthcare regs are going to control costs are high as Hell. They will speed conglomeration and to a lesser degree centralization, though. Which is cool for me as I already live in the machine but less hot for those who don’t want to think of two and three physician pc groups as “quaint”.
conglomeration and centralization are necessary, kiddo.
Economies of scale are killing most small hospitals.
And with conglomeration and centralization comes cost savings (in people who write equipment orders, if nothing else)
“And with conglomeration and centralization comes cost savings (in people who write equipment orders, if nothing else)”
absolutely, though by and large not for the people who seem to expect them via ppaca – patients. (it’s even baked into the name!)
hey now, I work for a nonprofit! If the patients aren’t benefitting — who the hell is?