How To Fix Health -- Use Less

No health reform plan will succeed unless it cuts consumption.

Today's debate, with its focus on refighting old wars and settling old scores, is straying from this focus. There's very broad agreement that our national health bill is becoming unaffordable. So unless we cut costs for those now insured we won't be able to extend coverage to the uninsured.

Administrative reforms won't do the trick. Paying providers less via a government plan that sets low prices won't work either. Past efforts to do so have seen volume expand to more than compensate for the loss of income. Ultimately, the system must provide fewer services.

That doesn't mean the sick will be denied what they need. In an environment where an estimated 30% of spending - including a large number of unneeded tests and procedures as well as some bloated administrative expenses - is wasted, everyone can be provided with what's necessary.

Some call that rationing, but that's simplistic and misleading. Any environment where everyone can't have anything anytime involves choices and priorities. That's what life is all about. So far, no society has been able to overcome this constraint and there's no reason to believe anyone will anytime soon.

Too many are now invested in a series of side debates irrelevant to this central issue. The existence of a public plan won't cut consumption unless it includes limits on services like those now imposed by Medicare and once used by private firms during the managed care effort. A public plan isn't a prerequisite for imposing such limits.

Changing the tax status of employer-provided insurance won't make much difference either. If four-fifths of our health bill is run up by the one fifth among us who are very sick, changing the behavior of those who are well will have a marginal impact at best. And asking those who are sick to shop in a dysfunctional market that lacks reliable signals about price or quality makes little sense.

America could simply decide that health is a top priority and make a commitment to spend whatever it takes to provide universal insurance, but there's little sentiment for moving in that direction. State after state has pulled back from Medicaid expansions in response to budget pressures. The electorate is not willing to write a blank check and our political leaders are reluctant to try to lead in that direction.

We're now witnessing a political two-step where there's a hope that the extra expense of covering the uninsured in the short run will be largely offset by greater long-run efficiencies in a reformed system. In terms of expense, phase one is a certainty and phase two, the reformed system, is a theory.

Turning that theory into practice won't be easy and may not be possible unless there's an acknowledgement at the outset about the need to reduce consumption.

Comments

[fpie]

My girlfriend (a swede living in America) found a small lump in her breast. Her doctor sent her to the radiologist who sent the x-rays to another specialist who sent word to her doctor who recomended surgery in order to perform a biopsy. We're talking hospital stay, anisthetic, nurses, operating room...! Estimated cost: between $4000-$7000.
She went to Sweden got a needle biopsey using a real time ultra sound. Lab results next day were negative. Out of pocket cost about $100.
That doctor told her about a group of American doctors he was teaching the technique to when one asked him, why he wanted to perform a $100 procedure when he could perform a $5000 procedure?
Waste in healthcare is all through the system but if even doctors are motivated by profit above the needs of the patient (much less society) we have a real steep hill to climb.

[Maerwynn]

Where are all these people that apparently seek medical care as their entertainment or something? I don't know anybody like that. My family literally goes for years without seeing a health care provider. The most recent events were an emergency appendectomy 2 years ago and a broken arm 4 years ago. If I had some of that roll bandage with the plaster in it I wouldn't have gone for my broken arm.

[Jim Jaffe - Huffpost Blogger]

two things are happening. first the worried well are making many visits. some doctors report that a quarter of those who report with concerns don't appear to have any problem and are there for a social visit. then there's inappropriate intensity as when someone with a minor problem reports to an emergency room. that's happening as the average severity of an emergency room complaint appears to be declining.

[ckdogs]

One of the ways to reduce consumption is to make the patient responsible for a significant co-pay. Patients are so separated from costs that they basically ignore them, and t's almost impossible to compare costs, even if we wanted to do so.
And what do you call unnecessary care? Any test that comes back negative could be considered unnecessary. But if your chest hurts, or your back is in pain, you don't know if it's a minor issue until you have the expensive tests. Maybe 10 people with chest pain have heartburn - but the 11th will die if he doesn't get a prompt diagnosis.

There are other ways to cut costs. Prices of all hospital services should be clearly posted on web sites, for comparison. There should be maximum allowable charges. Alternative therapies ie chiropractic, acupuncture, etc. should not be covered. Things like podiatry, physical therapy, and hospice should be shared 50/50 between patient and provider. I could go on, but you get the drift. Rationing is a bad scene.

[classicalgeek]

And what about the research that shows the effectiveness of "alternative" therapies? One man's alternative therapy is another man's medicine. Don't forget that, just to cite one kind of alternative therapy, aspirin came from willow bark, digitalis came from foxglove, etc. and the Journal of Applied Microbiology makes a very strong case for the efficacy of many different kinds of herbs.

[Jim Jaffe - Huffpost Blogger]

rationing is, of course, in the eye of the beholder. when you post prices -- a good idea -- and people elect not to have a service because they can't afford it, that's rationing. consumption decisions should be based on what works, so that the less effective options are the ones left behind.