Some time ago, I decided to channel three decades of working as an EP in a dysfunctional, sick health care system into producing a film that would explore the perverse incentives that drive it. What I found was a (non)system that is beyond broken. It’s dumb! It costs too much, access is problematic, and our results, by any measure of public health, are poor. Along the way, I found that equally bright people who agreed on the elements of the problem come to wildly divergent conclusions about how to fix it. In the following discussion, I will start with “the facts”, explicitly state my core values, and offer the framework for a solution.
The “Facts” as I See Them
1) Advances in technology give us better tools to diagnose and treat more conditions with greater certainty. These expensive technologies must meet the measure of risk/benefit, but they are rarely held to the standard of cost/benefit.
2) Our extreme fear of liability dictates that physicians invoke all available technologies that decrease (even slightly) the chances of a bad outcome. Patients (customers) demand perfection and we spare no costs in our attempts to deliver it.
3) The absence of a universal (electronic) medical record is problematic in coordinating patient care. Tests are duplicated. Mistakes are made. Information gets lost. Every facility spends a lot of money inventing wheels that don’t spin with each other.
4) Because of the wide income gap between primary care providers (PCP’s) and specialists, the former are disappearing at an alarming rate.
5) The dwindling supply of PCP’s manifests as fragmented care. Many people take too many medications. Often, no provider takes responsibility for the big picture. We do an admirable job of treating organ systems and a poor job treating people.
6) The mass marketing of prescription drugs amplifies the demand for “me too” drugs. They are rarely better than cheaper generics.
7) Since most premiums are tax deductible, health insurance companies are actually subsidized by the taxpayer to make a profit by cherry picking the healthy patients and “pit spitting” the sick ones. At every opportunity, they dump the total cost of caring for ill patients back on the taxpayer. The abundance of competing insurance companies adds a lot (25%?) to total cost without adding anything to health.
8) When people have serious progressive chronic and acute life-threatening diseases, we do a poor job helping them navigate the end-of-life decision tree with grace and wisdom… often leading to increased cost and greater suffering.
9) We spend more than twice as much per capita on health care than most of our international competitors. For all of the above reasons, the relative and total cost is increasing at an unsustainable rate.
10) The government (taxpayer) is already spending 60 cents of every health care dollar. Because of the recent economic turmoil (and our rekindled zeal for universal access), the public portion of spending is going to increase, probably dramatically.
11) Nobody is responsible for asking the question “How do we get the most health and the least suffering for the public (taxpayer) dollars we spend on health care?”
Your “solution” will depend on your core values. For clarity of argument, I will list mine. Yours may differ.
1) Access to basic health care is a right. What is “basic” is debatable, but it surely includes immunizations, well baby checks, appropriate appendectomies, and indicated cardiac catheterizations.
2) Public money should be spent in the spirit of social justice. (Example? Everybody in this country deserves free education through 12th grade. If the school district is short of funds, it cuts services to all by cutting programs like art and music. We don’t create arbitrary groups of deserving poor who receive it and undeserving poor who don’t. That’s what we are currently doing in health care.)
3) There is no inherent “goodness” or higher value in a free (open) marketplace. Don’t misunderstand. I love the marketplace when it comes to computers, golf clubs, and gin. Unfortunately, in health care, it doesn’t work so well. Why? The suppliers (that would be us) have far too much control over the demand, which is extremely elastic. Example? A good predictor of relative Medicare costs in the last year of your life is how many ICU beds you have in your community. More beds, more cost. Oops! That’s backwards.
4) There is no good reason that some specialists make 2-4 times the income of primary care providers. Yes, I know they undergo extra training, however, the huge debt that medical students accumulate amount to one or two years of the difference in yearly income between a family physician and an orthopedic surgeon. Perhaps the extra years of training could be understood as the penalty they must pay for not having to do primary care.
5) Public dollars are a precious, limited resource. People can do whatever they want with their private dollars.
6) Limited resources, in the context of elastic demand, necessarily means rationing. We should do so rationally.
Given those facts and values, when I am Tsar of the health care system, this is what it will look like, starting with medical education.
First, we provide free medical education for all doctors and nurse practitioners, with significant resources devoted to training more of the latter. This “gift” comes with three to four years of mandatory post-graduate public service. No buy out clause. In addition, we tell prospective medical students that if they want to make more that $350k/yr, they should do something else. How did I arrive at this arbitrary number? On one hand, it’s less than some specialist are making. On the other, it’s an unfathomably large amount of money for Joe Sixpack. I know “salary caps,” as some will characterize this, are problematic. We must provide incentives to get physicians to work harder at times and, frankly, I am not sure what to do about that. Physician income will be zero sum, with PCP’s making more and some specialists making less. I am confident that the pool of bright, qualified, motivated candidates will be more than sufficient.
On the administrative side, we pool all the public money (Medicare, Medicaid, Public Employees, Veterans, SCHIP, subsidies to private insurance…) along with some percentage of the private insurance premiums that we are currently spending on health care. This one giant risk pool, administered by a quasi-governmental organization, will cover everybody and treat them all equally. Using the Oregon Health Plan as a model, we rank diagnosis/treatments based on cost effectiveness with the goal of advancing health and alleviating the most suffering. Immunizations and prenatal visits will be near the top of the list. Farther down the list will be managing diabetes and removing inflamed gall bladders. Everybody receives those services. Interventions that are marginally effective and extremely expensive, like proton beam radiation treatments for old men with prostate cancer, will be at the bottom. This public insurance company pays for treatments for everybody down to the level that the budget permits. If you want it and “we” can’t afford it, you can still get it but you must pay for it on your own. Vintage Americana.
We rekindle the National Center for Health Care Technology (establish by Congress in 1978, killed in 1981) to assess medical technology for safety and cost effectiveness We educate the public and fund ethics committees in hospitals with the goal of doing a better job helping people approach the end of life with maturity. We disallow the mass marketing of prescription drugs, even if it requires a constitutional amendment.
There are some beneficial unintended consequence of centralization. Since we aren’t trying to hide information from insurance companies, “privacy” will be less of a barrier in developing a national electronic medical record. Since everybody is covered forever, malpractice suits to cover “future costs” will be moot, making substantive liability reform more likely. Additionally, if the taxpayer is clearly responsible for the cost of keeping the community healthy, we will be motivated to better regulate other industries (Drug? Food? Tobacco?) that are engaged in behaviors that are detrimental to our health and increase “our” health care costs. That is already happening in much of the European Community.
This “solution” can be fairly described as publicly financed, privately delivered health care. To those equally bright or even brighter people who believe we need less government involvement and more free markets, I ask:
Is access to basic health care a right?
Are we going to spend more or less taxpayer money on health care in the future?
When people who can’t afford care get very sick (in part because they don’t have adequate access to routine care), do we care for them, and who pays for that care if not all of us? How does your free market accommodate this?
Without more centralization, how are you going to control the multiple drivers on cost listed earlier?
Since our public health care dollars (like all other resources) are limited, how do you propose we ration these resources rationally?
Is social justice just a phrase thrown around by fruitcake socialists or is there a moral imperative to using public money, equitably and efficiently, for the public good?
1) Advances in technology give us better tools to diagnose and treat more conditions with greater certainty. These expensive technologies must meet the measure of risk/benefit, but they are rarely held to the standard of cost/benefit.
2) Our extreme fear of liability dictates that physicians invoke all available technologies that decrease (even slightly) the chances of a bad outcome. Patients (customers) demand perfection and we spare no costs in our attempts to deliver it.
3) The absence of a universal (electronic) medical record is problematic in coordinating patient care. Tests are duplicated. Mistakes are made. Information gets lost. Every facility spends a lot of money inventing wheels that don’t spin with each other.
4) Because of the wide income gap between primary care providers (PCP’s) and specialists, the former are disappearing at an alarming rate.
5) The dwindling supply of PCP’s manifests as fragmented care. Many people take too many medications. Often, no provider takes responsibility for the big picture. We do an admirable job of treating organ systems and a poor job treating people.
6) The mass marketing of prescription drugs amplifies the demand for “me too” drugs. They are rarely better than cheaper generics.
7) Since most premiums are tax deductible, health insurance companies are actually subsidized by the taxpayer to make a profit by cherry picking the healthy patients and “pit spitting” the sick ones. At every opportunity, they dump the total cost of caring for ill patients back on the taxpayer. The abundance of competing insurance companies adds a lot (25%?) to total cost without adding anything to health.
8) When people have serious progressive chronic and acute life-threatening diseases, we do a poor job helping them navigate the end-of-life decision tree with grace and wisdom… often leading to increased cost and greater suffering.
9) We spend more than twice as much per capita on health care than most of our international competitors. For all of the above reasons, the relative and total cost is increasing at an unsustainable rate.
10) The government (taxpayer) is already spending 60 cents of every health care dollar. Because of the recent economic turmoil (and our rekindled zeal for universal access), the public portion of spending is going to increase, probably dramatically.
11) Nobody is responsible for asking the question “How do we get the most health and the least suffering for the public (taxpayer) dollars we spend on health care?”
Your “solution” will depend on your core values. For clarity of argument, I will list mine. Yours may differ.
1) Access to basic health care is a right. What is “basic” is debatable, but it surely includes immunizations, well baby checks, appropriate appendectomies, and indicated cardiac catheterizations.
2) Public money should be spent in the spirit of social justice. (Example? Everybody in this country deserves free education through 12th grade. If the school district is short of funds, it cuts services to all by cutting programs like art and music. We don’t create arbitrary groups of deserving poor who receive it and undeserving poor who don’t. That’s what we are currently doing in health care.)
3) There is no inherent “goodness” or higher value in a free (open) marketplace. Don’t misunderstand. I love the marketplace when it comes to computers, golf clubs, and gin. Unfortunately, in health care, it doesn’t work so well. Why? The suppliers (that would be us) have far too much control over the demand, which is extremely elastic. Example? A good predictor of relative Medicare costs in the last year of your life is how many ICU beds you have in your community. More beds, more cost. Oops! That’s backwards.
4) There is no good reason that some specialists make 2-4 times the income of primary care providers. Yes, I know they undergo extra training, however, the huge debt that medical students accumulate amount to one or two years of the difference in yearly income between a family physician and an orthopedic surgeon. Perhaps the extra years of training could be understood as the penalty they must pay for not having to do primary care.
5) Public dollars are a precious, limited resource. People can do whatever they want with their private dollars.
6) Limited resources, in the context of elastic demand, necessarily means rationing. We should do so rationally.
Given those facts and values, when I am Tsar of the health care system, this is what it will look like, starting with medical education.
First, we provide free medical education for all doctors and nurse practitioners, with significant resources devoted to training more of the latter. This “gift” comes with three to four years of mandatory post-graduate public service. No buy out clause. In addition, we tell prospective medical students that if they want to make more that $350k/yr, they should do something else. How did I arrive at this arbitrary number? On one hand, it’s less than some specialist are making. On the other, it’s an unfathomably large amount of money for Joe Sixpack. I know “salary caps,” as some will characterize this, are problematic. We must provide incentives to get physicians to work harder at times and, frankly, I am not sure what to do about that. Physician income will be zero sum, with PCP’s making more and some specialists making less. I am confident that the pool of bright, qualified, motivated candidates will be more than sufficient.
On the administrative side, we pool all the public money (Medicare, Medicaid, Public Employees, Veterans, SCHIP, subsidies to private insurance…) along with some percentage of the private insurance premiums that we are currently spending on health care. This one giant risk pool, administered by a quasi-governmental organization, will cover everybody and treat them all equally. Using the Oregon Health Plan as a model, we rank diagnosis/treatments based on cost effectiveness with the goal of advancing health and alleviating the most suffering. Immunizations and prenatal visits will be near the top of the list. Farther down the list will be managing diabetes and removing inflamed gall bladders. Everybody receives those services. Interventions that are marginally effective and extremely expensive, like proton beam radiation treatments for old men with prostate cancer, will be at the bottom. This public insurance company pays for treatments for everybody down to the level that the budget permits. If you want it and “we” can’t afford it, you can still get it but you must pay for it on your own. Vintage Americana.
We rekindle the National Center for Health Care Technology (establish by Congress in 1978, killed in 1981) to assess medical technology for safety and cost effectiveness We educate the public and fund ethics committees in hospitals with the goal of doing a better job helping people approach the end of life with maturity. We disallow the mass marketing of prescription drugs, even if it requires a constitutional amendment.
There are some beneficial unintended consequence of centralization. Since we aren’t trying to hide information from insurance companies, “privacy” will be less of a barrier in developing a national electronic medical record. Since everybody is covered forever, malpractice suits to cover “future costs” will be moot, making substantive liability reform more likely. Additionally, if the taxpayer is clearly responsible for the cost of keeping the community healthy, we will be motivated to better regulate other industries (Drug? Food? Tobacco?) that are engaged in behaviors that are detrimental to our health and increase “our” health care costs. That is already happening in much of the European Community.
This “solution” can be fairly described as publicly financed, privately delivered health care. To those equally bright or even brighter people who believe we need less government involvement and more free markets, I ask:
Is access to basic health care a right?
Are we going to spend more or less taxpayer money on health care in the future?
When people who can’t afford care get very sick (in part because they don’t have adequate access to routine care), do we care for them, and who pays for that care if not all of us? How does your free market accommodate this?
Without more centralization, how are you going to control the multiple drivers on cost listed earlier?
Since our public health care dollars (like all other resources) are limited, how do you propose we ration these resources rationally?
Is social justice just a phrase thrown around by fruitcake socialists or is there a moral imperative to using public money, equitably and efficiently, for the public good?
Paul Hochfeld is the Producer/Director of the recent film Health, Money and Fear, which can be viewed at his web site, www.ourailinghealthcare.com
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