Real health care reform

This post takes a look at some changes that might produce
constructive ways to contain health care costs.


Courtesy of Sue Lowden: A chicken in every doctor's pot
By Eugene Robinson
Washington Post Op-Ed, 2010-04-30

[Although regular Washington Post op-ed columnist Eugene Robinson
is a fairly reliable voice for high health care spending,
he does, perhaps inadvertently, allude to what is, in my opinion,
the best way to get health care spending back down to
a reasonable and sustainable level,
one that frees up societies resources for things other than health care.
Robinson writes (but of course the emphasis is added):]

[Nevada GOP Senate candidate Sue Lowden’s] words
conjured the image of a kindly old man named Doc
who made the rounds of frontier homesteads,
presumably with his horse and buggy, and fixed everybody up, good as new --
“Just pay me when you can, Sue.”
But the truth is that in those days,

doctors routinely watched people die from
diseases that are easily cured today;
simple infections and even childbirth carried grave risks.

[That, in my opinion, is the answer:
Apply medical techniques on a cost-effectiveness basis:
Thankfully, practically all of the big old killers of people
who were not over, say, 70, and kept themselves in reasonable health
(e.g., kept their weight under 250 pounds, or a BMI under 30)
have been vanquished at reasonable cost.
What is, I suspect, driving up today’s health costs are in large part
the efforts to treat three types of problems:
  1. Those of the elderly, who often suffer from multiple ailments
    (heart problems, joint problems, diabetes problems, mental problems).
  2. People who bring on their own problems, through, say,
    overeating, underexercising, using drugs, promiscuity, etc.
  3. People who have boutique diseases.


Study of U.S. Health Care System Finds Both Waste and Opportunity to Improve
New York Times, 2012-09-12


The American medical system squanders
30 cents of every dollar spent on health care,

according to new calculations by the respected Institute of Medicine.
But in all that waste and misuse,
policy experts and economists see a significant opportunity —
a way to curb runaway health spending,
to improve medical outcomes
and even to put the economy on sounder footing.

“Everybody from Paul Krugman to Paul Ryan
agrees it is essential to restrain costs,”
said Dr. Mark D. Smith, the president of the California HealthCare Foundation
and the chairman of the committee that wrote the report,
referring to the liberal economist and Op-Ed columnist for The New York Times,
and the conservative Wisconsin congressman
who is Mitt Romney’s vice-presidential running mate.
“The health care industry agrees, too.”

The Institute of Medicine report
its research led by 18 best-of-class clinicians, policy experts
and business leaders —
details how the American medical system
wastes an estimated $750 billion a year
while failing to deliver reliable, top-notch care.
That is roughly equivalent to
the annual cost of health coverage for 150 million workers,
or the budget of the Defense Department, or the 2008 bank bailout.

The institute’s analysis of 2009 data shows
$210 billion spent on unnecessary services, like repeated tests, and
$130 billion spent on inefficiently delivered services,
like a scan performed in a hospital rather than an outpatient center.

It also shows the health care system wasting
$75 billion a year on fraud,
$55 billion on missed prevention opportunities and
a whopping $190 billion on paperwork and unnecessary administrative costs.
The Institute of Medicine
is an independent adviser to the government and the public,
and part of the National Academy of Sciences.

The report depicts a system that saves lives in miraculous fashion,
but is also expensive and outmoded and in some cases downright Kafkaesque.

“If banking were like health care,
automated teller machine transactions would take not seconds
but perhaps days or longer as a result of unavailable or misplaced records,”
the report said.
“If home building were like health care,
carpenters, electricians and plumbers
each would work with different blueprints,
with very little coordination.”

Along with the squandered money there is a human toll, the report said,
as medical errors and inefficiencies mean that
doctors fail to deliver the best and most timely care to patients.

“If the care in every state
were of the quality delivered by the highest-performing state,
an estimated 75,000 fewer deaths
would have occurred across the country in 2005,”
the report said.

But the report —
and independent health care experts and economists analyzing it —
identified an opportunity in that $750 billion of wasted health spending.
If hospitals, doctors and insurers
could wring even a fraction of that money out,
it would help to bend the so-called cost curve of runaway health inflation
while improving patient outcomes.

The point of the report is that
“Americans should expect to get and should demand to get
better value for their health care dollar,”
Dr. Smith said.

“That money is not only not buying anything,”
said David Cutler, the Harvard health economist.
“It is actually a sign of poor care.
A lot of cost reductions, if we do them the right way,
would mean improved health, not worse health.”

Professor Cutler gave as an example
rules to make sure that doctors
do not perform inductions for otherwise healthy pregnant women
before 39 weeks of gestation.
It would both save money and improve health outcomes
by reducing the rate of Caesarean sections, he said.

The report gives recommendations
intended to reduce spending and improve care:
ensuring doctors work in teams and share information;
making prices and costs transparent to consumers;
rewarding doctors for outcomes, not procedures;
ensuring all doctors use the best-tested practices,
and identifying and correcting errors among them.

The report also detailed instances of health care providers
offering such smarter care:
hospitals preventing re-hospitalizations,
upgrading their records systems
and cutting out ineffective therapies, for example.

Some health economists and policy experts believe that
political changes and financial pressure
have already spurred insurers and health care providers
to start squeezing out costs,
contributing to the slowdown in health spending growth
seen in the past few years.

“We’re starting to see some very early results,”
said Wendy Everett, the president of NEHI,
a health care research group based in Cambridge, Mass.

She said she expected to see
more and more adoption of best practices in the next few years,
spurred by President Obama’s Affordable Care Act,
other changes to Medicare and Medicaid
and a recognition among doctors and insurers
that the current trajectory of health care spending is unsustainable.

“This train’s coming much faster than we thought,” Ms. Everett said.
She guessed that within a decade
providers being paid for the quality, not quantity, of care
would be “the norm.”