There is a push by the political body to expand the SCHIP program to the middle class, providing a government entitlement for children in households up to $83K in annual income.
On the surface, this sounds good– coverage for more children. As someone who strongly considered pediatrics as his calling, I wholeheartedly believe that better health for kids is something strongly needed– especially in an era with increasing childhood obesity, diabetes, etc. While at the LA County hospital, I cared for a number of kids with SCFE– kids so heavy that their growth plates in their hips started to slip/break from the weight being placed on them. It was heartbreaking to see young kids (12-14) who’s health was already compromised to the point that they were unlikely to live full, active lives.
One would expect that any additional funds for children’s health would be invested in creating additional programs to improve wellness, increase physical fitness, emphasize good nutritional habits, and screen for early-stage addressable illnesses.
However, this isn’t about better health for more children…this is about expanding government programs to those who don’t need them– and will likely be harmed by the change.
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If you listen to insurance companies and government healthcare proponents, you would believe that Americans are unable to determine value for care and therefore a benevolent, paternalistic entity is required to determine what types and how much care is “necessary” for all Americans and at what prices it should be delivered.
And yet, if you look at what happens when people are aware of differences in value of care across borders, its pretty clear that greater transparency will create huge shifts in pricing and approach to health services if and when retail transparency reaches consumers.
Hundreds of thousands of people already receive medical procedures across borders today. Interestingly enough, this includes people from developed countries with nationalized insurance as well as those with and without insurance from the US. When facilities are high quality, a fraction of the cost, and provide immediate service, and do it with a smile, there are numerous reasons to go.
What does this mean for countries providing this service? Often they utilize doctors trained in the US or other high-quality residency programs who return home with similar skills to Western doctors. Large hospitals catering to the wealthy and foreign nationals claim to provide care at an international standard (Brumrungrad, Singapore Medicine, Apollo Hospitals). Less-skilled providers and less-impressive facilities are left to provide care at a different, local standard. This is becoming a model that resembles the tiered hotel industry– and international players are establishing brands or utilizing international reputations to get into the act.
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As regular readers of this blog may have noted, I have an issue with misleading health headlines. Last night’s report titled: “No Cancer Benefit Found In Mega-Veggie-Diet Study” (WSJ) or “No Cancer Shield found in Fruit and Vegetable Diet” (NYtimes) is a perfect example of how a headline doesn’t tell the actual story.
Perspective from headline: eating lots of vegetables has no impact on any kind of cancer.
Better headline from blog posting reporting same article: “Fruit, Vegetables Don’t Prevent Breast Cancer Recurrence”
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Quality is a buzzword in medicine today–unfortunately, its application is anything but a high-quality, well-designed approach.
There are many reasons why quality is hard, and many reasons why defining quality well may not be fair to existing players who are trying hard to do the right thing. In settings like these, there is no one right approach that fits everyone. Ironically, by having quality efforts led by the government (P4P) and major payers, we’re less likely to get it right than by having a number of smaller players seek to play objective, third party roles that maximize benefits for specific constituents.
Structurally, quality is hard because:
- There are no established benchmarks
- The only metrics that matter–morbidity, mortality, and patient experience– are complicated and seem largely uncontrollable
- There is significant money at stake for the “chosen”
- Politically, no doctor believes they are inferior
- Society favors heroic intervention over statistically avoided event
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Service has largely been squeezed out of care provided by 3rd party payor medical systems: Rationing and long waits are expected in nationalized systems from Europe to Canada; hour-long waits are common in US primary care and emergency rooms as well. People even wait to get coverage before dealing with chronic health conditions. Until service quality is so bad that people stop showing up (and switch payers), there was no incentive for a third party to pay for its users convenience/ experience.
Recently, that trend appears to be reversing, through innovation occurring in the US and the privatization of the NHS system. It is interesting to look at the similarities and differences of the two major starting points in the US system: boutique care and retail clinics.
Boutique care/concierge medicine
A membership model has started to emerge, led by groups like MDVIP. Equated to a country club, there is a steep price to get in–which buys you access to additional services and fewer people in line. There is significant variation in services that come with the subscription, but they generally include reduced wait times, increased communication options (cellphone, beeper, email) and more time to speak with the physician. Tests and other normal procedural pieces of medicine are generally billed to an insurance company, although there are practices that only take cash. Because of its primary care focus, this model hasn’t spread to specialists. However, recent innovators do seem to be taking the model downstream to the average individual (thanks to Kevin MD and The Medical Quack for the link), in a stripped down, no-frills approach approach that seems reminiscent of Costco. The Qliance model seems like one mechanism where better service may become available to the masses.
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Michael Cannon at Cato announces the formation of the
Anti-Universal Coverage Club. As a taxpayer who believes that the current administration of Great Society programs (and the laissez faire manner in which the general fund treats cash flows and absconds any temporary surpluses) will lead to tremendous pain within my generation, I think the defined benefit entitlements should stop at Medicare/Medicaid (I’m open to reasonable defined contribution schemes to redistribute funds between healthy/sick and for basic service for the poor).
The current program is already taxing physicians and consumers. As the bureaucratic infrastructure becomes increasingly ossified and irrelevant to a rapidly changing global economy, I imagine that the cracks in the system will only get worse. Only by leaving open the opportunity for new players to sweep away the old (as our Founding Fathers rebelled against taxes they couldn’t control) will we retain a government for and by the People.
Brian Klepper of the Center for Practical Healthcare Reform has put together a great summary of the 2007 Congressional Budget Office report on US healthcare spending dynamics.
Of note:
- Medicare and Medicaid are growing significantly faster than GDP– and on their current trajectory will rise to 20% of GDP (the size of the federal budget) by 2050
- Rate of spending increase for private and public health plans have been about the same. This means that single payor systems (Medicare and Medicaid) haven’t held down costs any better than managed care– the money is just spent differently (excess care vs. administration)
- Doctors and hospitals don’t treat Medicare differently from private plans
- Dramatic differences in utilization between doctors –even in the same city– for similar procedures. Indicating that real opportunities lie in making sure that the extra spend is extra value created.
The retirement of Dr. Jack Wennberg provides good reason to reflect on the implication of his work over the last 30 years. Dr. Wennberg’s Dartmouth Atlas showed that medicine is in fact as much art as science– science could not explain the tremendous variation in healthcare usage given similar populations in neighboring towns.
After analyzing patterns of health care use in Vermont, he found that his kids, who lived with him in the Waterbury area, had roughly a 20% chance of getting their tonsils out. Kids a few miles away, in Stowe, had about a 70% chance of undergoing the same procedure. Yet there was no significant difference between the children in the two towns.
More troubling, the variation often showed no health benefit– and exposed participants who had an unnecessary procedure to side effects ranging from temporary injury to death. Clearly, rather than being an artistic or professional preference, the decisions of a health care professional have a profound impact on the lives of their patients…and too many procedures make one wonder if “walletitis” has gained the upper hand against “first do no harm”.
For example, chronically ill patients treated at New York University Medical Center spent an average of 32.1 days in the hospital during the last six months of life, compared with 12.9 days for patients at the Mayo Clinic’s main hospital. For the last two years of life, Medicare spending for both inpatient care and doctor fees averaged $79,280 per patient at NYU compared with $37,271 at the Mayo Clinic.
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In the era of the $4 generic prescription at Wal-Mart, there’s an interesting post on Musings of a Dinosaur.
Seriously, from a sales standpoint, prescription medicine is unique. Think about it: despite the fact that all sales figures are dependent on my actions, I neither use nor pay for the product. Same goes for medical devices. Crazy.
So when some of us go out of our way to discover that certain old but extremely effective medications are not just inexpensive but downright cheap — and then actually make an effort not only to prescribe them but explain to the patient why such old, cheap drugs are really an excellent choice for their mild hypertension — exchanges like this become frustrating as all hell:
Patient on phone: “I need a refill of my HCTZ 12.5 mg.”
Me: “I gave you a prescription for 90 of them in March. You should still have refills.”
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Repeat with me: Health insurance does not equal health care. Health insurance does not equal health care.
Now onto the news that universal healthcare has now been launched in Massachusetts, administered by the Commonwealth Connector. As Michael Cannon at Cato notes, this strangely enough has been timed to honor Canada Day. Michael Moore would be so proud.
So lets take a look at what has actually emerged as the Universal Solution for Boston’s uninsured (thanks to David Hyman of Cato for a great paper discussing this plan). First off (and not surprising), the plan has come in overbudget.
Originally promised by Mitt Romney at around $200/month, initial versions of the plan came in at an average of $300/month, with even high-deductible versions starting at $210. And that is just the average. The plan allows for different rates by age, so coverage for older individuals could start over $500/month for those in their 50′s for a high-deductible plan. This means, a healthy 50 year old who had low risk and no need to go to the doctor would see $6000+ annually evaporate under the state mandate. And those with care (under a high deductible policy) would need to shell out substantial additional dollars before getting anything back from the insurance companies. Does this strike anyone else as insane (outside of the fact that it already works this way today)? But it does make me ask why I should subsidize the nimwit who spent his 20s -40s eating Big Macs when he has a heart attack–when I’m spending quite a bit more time and money to eat well and get back to the gym (to eliminate my 20 lb gain while at McKinsey).
Even for the young (18-26 year olds not expected to use the system), plans were reported as starting at $119/month for limited coverage. Again $1500/yr goes up in smoke for young people who could use it for many other things. I’m older than that, and I still got cheaper coverage in California– and will continue to escalate the deductible as my HSA balances grow.
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