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July-22-2009

21:29

President Obama speaks to the nation about healthcare reform (AP photo)

President Obama speaks to the nation about healthcare reform (AP photo)

Tonight, President Obama spoke to the nation about his plans for healthcare reform. He outlined how he plans to reform the current system and how he plans to pay for it including cutting over $100 billion worth of subsidies to insurance companies as part of Medicare.

Few key points:

  • Wants to create an independent group of doctors and experts to eliminate waste in Medicare on an annual basis. (Obama gave credit to the Republicans for coming up with this plan–”Medpac“)
  • 2/3rds of the costs will come from cutting waste from the current system.
  • 97-98% of uninsured would be covered by his plan.
  • Open to tax increases on families with a combined income of $1 million or individuals making $500k or more per year–”millionaire’s tax
  • Medicare beneficiaries would not see any decline in benefits. “Here’s the thing I want to emphasize,” he said “It is not going to reduce Medicare benefits. What it is going to do is change how the benefits are delivered, so they are more efficient.”
  • The public option will match up with what is available to congress. Read Matt Miller in the NYT today on this one. Miller doesn’t believe that this is a good measure.
  • Wants to free doctors to make decisions based on evidence based medicine, not fee schedules. “Doctors a lot of times are forced to make decisions based on the fee payment schedule right now.”

He also touched upon the need to increase health IT and move way a fee for service system to a team-based approach to deliver healthcare.

Full Video:

Full Text: Obama’s Remarks on Health Care

(without question/answer session)

Following is a text of the prepared remarks by President Obama before his White House news conference on Wednesday, as released by the White House.

Good evening. Before I take your questions, I want to talk for a few minutes about the progress we’re making on health insurance reform and where it fits into our broader economic strategy.

Six months ago, I took office amid the worst recession in half a century. We were losing an average of 700,000 jobs per month and our financial system was on the verge of collapse.

As a result of the action we took in those first weeks, we have been able to pull our economy back from the brink. We took steps to stabilize our financial institutions and our housing market. And we passed a Recovery Act that has already saved jobs and created new ones; delivered billions in tax relief to families and small businesses; and extended unemployment insurance and health insurance to those who have been laid off.

Of course, we still have a long way to go. And the Recovery Act will continue to save and create more jobs over the next two years – just like it was designed to do. I realize this is little comfort to those Americans who are currently out of work, and I’ll be honest with you – new hiring is always one of the last things to bounce back after a recession.

And the fact is, even before this crisis hit, we had an economy that was creating a good deal of wealth for folks at the very top, but not a lot of good-paying jobs for the rest of America. It’s an economy that simply wasn’t ready to compete in the 21st century – one where we’ve been slow to invest in the clean energy technologies that have created new jobs and industries in other countries; where we’ve watched our graduation rates lag behind too much of the world; and where we spend much more on health care than any other nation but aren’t any healthier for it.

That is why I’ve said that even as we rescue this economy from a full-blown crisis, we must rebuild it stronger than before. And health insurance reform is central to that effort.

This is not just about the 47 million Americans who have no health insurance. Reform is about every American who has ever feared that they may lose their coverage if they become too sick, or lose their job, or change their job. It’s about every small business that has been forced to lay off employees or cut back on their coverage because it became too expensive. And it’s about the fact that the biggest driving force behind our federal deficit is the skyrocketing cost of Medicare and Medicaid.

So let me be clear: if we do not control these costs, we will not be able to control our deficit. If we do not reform health care, your premiums and out-of-pocket costs will continue to skyrocket. If we do not act, 14,000 Americans will continue to lose their health insurance every single day. These are the consequences of inaction. These are the stakes of the debate we’re having right now.

I realize that with all the charges and criticisms being thrown around in Washington, many Americans may be wondering, “What’s in this for me? How does my family stand to benefit from health insurance reform?”

Tonight I want to answer those questions. Because even though Congress is still working through a few key issues, we already have agreement on the following areas:

If you already have health insurance, the reform we’re proposing will provide you with more security and more stability. It will keep government out of health care decisions, giving you the option to keep your insurance if you’re happy with it. It will prevent insurance companies from dropping your coverage if you get too sick. It will give you the security of knowing that if you lose your job, move, or change your job, you will still be able to have coverage. It will limit the amount your insurance company can force you to pay for your medical costs out of your own pocket. And it will cover preventive care like check-ups and mammograms that save lives and money.

If you don’t have health insurance, or are a small business looking to cover your employees, you’ll be able to choose a quality, affordable health plan through a health insurance exchange – a marketplace that promotes choice and competition Finally, no insurance company will be allowed to deny you coverage because of a pre-existing medical condition.

I have also pledged that health insurance reform will not add to our deficit over the next decade – and I mean it. In the past eight years, we saw the enactment of two tax cuts, primarily for the wealthiest Americans, and a Medicare prescription program, none of which were paid for. This is partly why I inherited a $1.3 trillion deficit.

That will not happen with health insurance reform. It will be paid for. Already, we have estimated that two-thirds of the cost of reform can be paid for by reallocating money that is simply being wasted in federal health care programs. This includes over one hundred billion dollars in unwarranted subsidies that go to insurance companies as part of Medicare – subsidies that do nothing to improve care for our seniors. And I’m pleased that Congress has already embraced these proposals. While they are currently working through proposals to finance the remaining costs, I continue to insist that health reform not be paid for on the backs of middle-class families.

In addition to making sure that this plan doesn’t add to the deficit in the short-term, the bill I sign must also slow the growth of health care costs in the long run. Our proposals would change incentives so that doctors and nurses are free to give patients the best care, not just the most expensive care. That’s why the nation’s largest organizations representing doctors and nurses have embraced our plan.

We also want to create an independent group of doctors and medical experts who are empowered to eliminate waste and inefficiency in Medicare on an annual basis – a proposal that could save even more money and ensure the long-term financial health of Medicare. Overall, our proposals will improve the quality of care for our seniors and save them thousands of dollars on prescription drugs, which is why the AARP has endorsed our reform efforts.

Not all of the cost savings measures I just mentioned were contained in Congress’s draft legislation, but we are now seeing broad agreement thanks to the work that was done over the last few days. So even though we still have a few issues to work out, what’s remarkable at this point is not how far we have left to go – it’s how far we have already come.

I understand how easy it is for this town to become consumed in the game of politics – to turn every issue into running tally of who’s up and who’s down. I’ve heard that one Republican strategist told his party that even though they may want to compromise, it’s better politics to “go for the kill.” Another Republican Senator said that defeating health reform is about “breaking” me.

So let me be clear: This isn’t about me. I have great health insurance, and so does every Member of Congress. This debate is about the letters I read when I sit in the Oval Office every day, and the stories I hear at town hall meetings. This is about the woman in Colorado who paid $700 a month to her insurance company only to find out that they wouldn’t pay a dime for her cancer treatment – who had to use up her retirement funds to save her own life. This is about the middle-class college graduate from Maryland whose health insurance expired when he changed jobs, and woke up from emergency surgery with $10,000 in debt. This is about every family, every business, and every taxpayer who continues to shoulder the burden of a problem that Washington has failed to solve for decades.

This debate is not a game for these Americans, and they cannot afford to wait for reform any longer. They are counting on us to get this done. They are looking to us for leadership. And we must not let them down. We will pass reform that lowers cost, promotes choice, and provides coverage that every American can count on. And we will do it this year. And with that, I’ll take your questions.

July-21-2009

15:28

The ONC policy committee on meaningful use has published an updated matrix on the subject. It can be found here.

July-15-2009

11:15

Someone in the GOP needs to learn how to use Microsoft Visio, or the Democrats need to come up with a better plan for improving our healthcare system.

Republicans immagination of Democratic Healthcare plan

Republicans imagination of the Democratic Healthcare plan

If you believe this nightmare chart created by Congressman Kevin Brady’s office (R-Texas 8th District), then you’ll need a PHD in obfuscation to figure out what the Democrats are planning. More likely, however, is that Brady is painting an overly bleak picture of what a government plan might look like.

Jokes aside, as this battle continues to play out, both sides are sticking to their guns; however, the Obama administration believes it has the trump card: 60 votes. Bloomberg News is reporting that “Obama Open to Partisan Vote on Health-Care Overhaul.”

We’ll follow how this plays out, and keep you apprised of any interesting happenings.

UPDATE July 22, 2009:

Corrected Visualization of the Democratic Healthcare plan

Corrected Visualization of the Democratic Healthcare plan (PDF)

A graphic designer, Robert Palmer, took it upon himself to “correct” the republican nightmare chart and made it significantly easier to understand. The updated chart, along with a PDF can be found on Mr. Palmer’s Flickr page. He also penned a note to Representative Boehner:

Dear Rep. Boehner,

Recently, you released a chart purportedly describing the organization of the House Democrats’ health plan. I think Democrats, Republicans, and independents agree that the problem is very complicated, no matter how you visualize it.

By releasing your chart, instead of meaningfully educating the public, you willfully obfuscated an already complicated proposal. There is no simple proposal to solve this problem. You instead chose to shout “12! 16! 37! 9! 24!” while we were trying to count something.

So, to try and do my duty both to the country and to information design (a profession and skill you have loudly shat upon), I have taken it upon myself to untangle your delightful chart. A few notes:

- I have removed the label referring to “federal website guidelines” as those are not a specific requirement of the Health and Human Services department. They are part of the U.S. Code. I should know: I have to follow them.

- I have relabeled the “Veterans Administration” to the “Department of Veterans’ Affairs.” The name change took effect in 1989.

- In the one change I made specifically for clarity, I omitted the line connecting the IRS and Health and Human Services department labeled “Individual Tax Return Information.”

In the future, please remember that you have a duty to inform the public, and not willfully confuse your constituents.

Sincerely,

Robert Palmer
Resident,
California 53rd District

July-1-2009

23:11

The Certification Commission for Healthcare Information Technology (CCHIT) has responded to the Office of the National Coordinator’s recently released Meaningful Use matrix [pdf]–and responded with a vengeance.

The bottom line: “CCHIT recommends that meaningful use measures be either simplified for 2011, or postponed until 2013.”

CCHIT Annotations to the ONC's Meaningful Use Matrix [PDF]

CCHIT Annotations to the ONC's Meaningful Use Matrix (PDF)


Its recommendation was formed by comparing the CCHIT 2008 criteria against the meaningful use matrix prepared by the National Coordinator’s Workgroup on Meaningful Use and finding that while many of the 22 proposed objectives are fully supported by the current certification, at least 8 have minor to major gaps with the CCHIT 08 criteria.

Why Postpone?

The commission argues that “the lag between a decision to invest in EHR technology and its full, meaningful use in a provider organization is 1 to 2 years at best, and more typically, 3 to 5 years,” and for this reason it recommends postponing the 2011 measures until 2013. It isn’t that some EHRs do not currently meet the standards drafted for 2011 (MTBC’s EMR does), it’s that CCHIT criteria does not currently cover or test for all of the proposed 2011 measures. Additionally, CCHIT does not believe that the marketplace is fully ready to support some of the reporting standards outlined in the draft.

CCHIT has prepared an annotated response to the ONC’s matrix which highlights the actual points in contention for 2011. CCHIT’s letter to the ONC further clarifies CCHIT position on the topic.

As always, we will continue to cover this story as new developments arise and as key shareholders continue to weigh in with comments and responses.

Why don’t you let us know what you think? Should the 2011 measures be postponed until 2013?

June-26-2009

18:04

When you buy a car, the manufacturer usually offers some kind of warranty on your purchase e.g. bumper-to-bumper coverage for 50,000 miles or 5 years, whichever comes first. Or coverage for 100,000 miles for the power train and 50,000 miles bumper-to-bumper. Some are now offering oil changes for life, free car washes, dry cleaning, or the salesman will pick up your kids from soccer practice if you make a purchase now.  Ok, maybe they won’t pick up your kids, but you will please! buy now?

Francois de Brantes

Francois de Brantes

Francois de Brantes, a nationally known advocate of health care quality, is hoping to bring warranties to healthcare. He and a few associates penned an article in Health Affairs describing the benefits of a new payment model for physicians which may inspire physicians to improve patient outcomes by putting their skin (and money) in the game.

The warranties which de Brantes proposes–Prometheus Payment as he’s called it–flip the current medical billing payment model on its ear. Prometheus Payment offers set fees to providers for recommended services, treatments and procedures. However, unlike the current system where all fees are covered by third-party payers, the provider now becomes a party in the payment process by assuming fiduciary responsibility for outcomes–should patients develop an avoidable outcome, providers become responsible for half the costs. The warranty is based on the costs of these avoidable outcomes and is risk adjusted for elderly or frail patients.

de Brantes and his co-authors explain that “the warranty concept has filtered into the self-pay portion of health care, such as corrective eye surgery, general cosmetic surgery, and dental care, which are often based on a global fee that includes any necessary rework by the provider. But it has taken much longer for warranties to appear in the third-party payer system.” They argue that with this global-fee model, overall costs in the healthcare can be reduced while improving outcomes for patients by making (and paying) the provider for any expenses before, during, and after the procedure.

The abstract to the Health Affairs article reads:

How health care providers get paid has implications for the delivery of care and cost control; the topic is especially important during an economic downturn with persistent growth in health spending. Adding “warranties” to care is an innovation that transfers risk to providers, because payment includes allowances for defects. How do such warranties affect patient care and bottom lines? We examine a proposed payment model to illustrate the role of warranties in health care and their potential impact on providers’ behavior and profitability. We conclude that warranties could motivate providers to improve quality and could increase their profit margins.

I find two points interesting.

  1. He named it Prometheus Payment. In Greek mythology Prometheus stole fire from Zeus and gave it to mortals–Zeus repaid him by tying him to a large rock and having an eagle eat his liver every day only to have it grow back and be eaten again the next day. Are the insurance companies Zeus? Are the payments the fire? Who is stealing from whom? Do physicians even want this kind of fire?
  2. This plan was developed with the support of the Commonwealth Fund and the Robert Wood Johnson Foundation and a similar plan is already in practice at the Geisinger Health System in Pennsylvania. These are not exactly small operations.

This whole idea adds a new wrinkle to medical billing. As your billing service, we’d not only be incentivized to help you collect more money but also provide you tools to provide better patient care. Great news for you, we have a CCHIT-certified EMR which provides just the tools you need. Find out more here.

We will keep you posted if this model crops up at any payers near you.

Read more about Prometheus Payment:

June-22-2009

17:57

On June 16 the Workgroup on Meaningful Use presented its recommendations on the definition of Meaningful Use. They prepared a preamble describing their overall path to this definition and a matrix to organize their recommendations for each year. For those who have been under a rock for the past 6 months, “meaningful use” is the defining measure by which the incentive payments included in the American Recovery and Reinvestment Act (ARRA) will be determined.

With this working definition, vendors, physicians, and hospitals can better plan for implementation and delivery of technology and services to achieve the measurable goals outlined by the Workgroup.

HITECH Act Incentives as outlined by the American Recovery and Reinvestment Act (ARRA)

HITECH Act Incentives as outlined by the American Recovery and Reinvestment Act (ARRA)

Meaningful Use for Whom?

First it is important to note that “meaningful use” will have different meanings for hospitals and for groups in private practice. The preamble states “some features and capabilities will be recommended as required in an ambulatory setting before similar functions are expected to be widely used in the hospital.” This means that proving “meaningful use” will be a more rigorous exercise for private practices than it is for hospitals. However, private practices have a broader range of options and lower barriers of entry (cost, availability of technology, shorter implementation time frames, etc) when it comes to implementing technologies which can deliver “meaningful use.”

The Details

Let’s go over some of the measures which are planned for 2011 and look at some examples of each item. More details for each of the items below can be found in the matrix. John Halamka, MD of the CareGroup Health System of Harvard Medical School and the chairman of the US Healthcare Information Technology Standards Panel (HITSP) said in Healthcare IT News that this matrix still needs to be populated with the most up to date standards and an implementation guide. These details will help vendors and physicians alike ensure that their software meets these measures. Expect this in July.

Each of the items below has associated metrics which will need to be reported to verify meaningful use; for example, one of the objectives calls for reminders to patients for preventive/follow-up care. In order to prove meaningful use, the EMR application must be able to provide a reporting of the percentage of patients over 50 with annual colorectal screening. Keep in mind that each of the items below has an associated measure (found in the matrix) which will require reporting to an authorized agency.

Items marked with a Yes! indicate that the MTBC EMR helps your practice meet or exceeds these measures.

  1. Improve quality, safety, efficiency, and reduce health disparities.
    1. Use CPOE (computerized physician order entry) for all order types including medications. Yes!
    2. Drug-drug, drug-allergy, drug-formulary checks. Yes!
    3. Maintain an update-to-date problem list. Yes!
    4. Generate and transmit electronic prescriptions. Yes!
    5. Record vital signs including height, weight, blood pressure. Yes!
    6. Generate list of patients by condition to use for quality improvement. Yes!
    7. Patient reminders for preventive/follow-up care. Yes!
  2. Engage patients and families
    1. Provide patients with access to clinical information (lab results, problem list, medications, etc.). Under development! Yes! A bit more information has filtered through on this point. It has to be “electronic” access i.e CD, flash drive, etc and not necessarily web-based access. We have this functionality and we are also working on web-based access to patient information which can be pushed through the EMR. (updated 7/1)
    2. Provide access to patient specific educational resources. Yes!
    3. Provide patients with clinical summaries for each encounter. Yes!
  3. Improve care coordination
    1. Exchange key clinical information among providers (problems, medications, allergies, test results). Yes!
    2. Perform medication reconciliation at relevant encounters. Yes!
  4. Improve population and public health
    1. Submit electronic data to immunization registries. Yes!
  5. Ensure adequate privacy and security protections for personal health information
    1. Compliance with HIPAA Privacy and Security Rules and state laws. Yes!
    2. Compliance with fair data sharing practices. Yes!

What Now?

Now that you know the definition of Meaningful Use what should you do now? The answer is simple: get an EMR. Ok it is not that simple, but you will be happy to know that you have plenty of options in the marketplace. Dr. Halamka writes, “Hospitals and Clinician offices now know what is expected for 2011, so the time is now to begin your software implementations.” Never before have there been so many EMRs which provide such a high level of functionality and interoperability. Today’s major differentiators are not function, but price and service.

MTBC Can Help

MTBC’s CCHIT certified EMR (free to MTBC medical billing clients) can help your practice meet the goals of 2011. Click here to find out more about MTBC’s unified medical billing and practice managagement services.

However, if “free” is not your bag, you have plenty of other options beginning at the $1,000 range and your imagination as the only limit. Vendors have become very creative in their pricing with new options emerging such as monthly subscriptions, charges for each fax sent from the EMR, hosting fees for web-based applications, fees for technical support by email, server replacement plans (a la replacement plans sold by big box stores), 50¢ per 100MB of storage, and many others.

MTBC’s EMR rivals those of its competitors because it is implemented, supported, and updated completely free of charge of its premium medical billing clients. To find out more about how MTBC’s EMR can help you meet the goals of Meaningful Use, request a demo today and, if you are not currently an MTBC billing client, find out how you can download a free trial.

Watch this space for more information regarding meaningful use and its impact on the healthcare IT.

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MedTech and Devices

Citizen Economists » Healthcare

January-13-2012

10:15

In honor of the first week in our Healthcare Economics class, and the beginning of a 6 week session on healthcare via OLLI, here is an interesting report from The New York Times.

National health spending rose a slight 3.9 percent in 2010, as Americans delayed hospital care, doctor’s visits and prescription drug purchases for the second year in a row, the Obama administration reported Monday.

The recession, which lasted from December 2007 to June 2009, reined in the growth of health spending as many people lost jobs, income and health insurance, the government said in a report, published in the journal Health Affairs.

from The New York Timesfrom The New York Times

There are a couple of takeaways from this news.

First, the reduction in spending on healthcare could mean a welcome, albeit temporary relief to those governments and organizations that pay for healthcare….BUT…no real relief for state and local agencies which provide/finance healthcare for poor people. Recessions, of course, result in greater numbers of people qualifying for government-supported care.

The other point is a reminder that some portion of healthcare services are discretionary. When healthcare spending was growing by 10 percent or more each year in the 1980s, that growth probably wasn’t driven by an increase in the need for services. Likewise the slower growth over the last several years is probably not due to the population getting healthier and needing fewer services. Instead, people moderated their demand for healthcare. They put off diagnostic tests, or did not follow through on treatments or prescriptions. Going in the other direction, hospitals routinely see increases in elective surgeries near the end of a calendar year, as people have already met insurance deductibles, and decide to seek care before those deductibles are reset in the new year.

Is this good news? Not necessarily. To the extent the people put off truly necessary tests and treatments, those delays may cost us more in the long run. To some extent, though, tough economic times force us to be more cautious about discretionary spending, and there may be very little impact on long run health status. There is the old saying that if you get a cold, it will take 7 days to go away, but if you see a doctor you’ll be cured in a week! One important element of effective healthcare reform is to introduce that sense of caution in our population. It is a delicate balance – not wanting to interfere with early testing and early, cost-effective treatment, but also discouraging care that has less impact on long term health.

Prices for medical care services and supplies also stayed roughly on par with general inflation during this last year, which is a change from the decades of the 1980s and 1990s where the medical care component of the consumer price index routinely outstripped regular price increases.

I wouldn’t have to polish my crystal ball very much to predict that spending increases for healthcare will pick up speed as the economy recovers. This remains the single most important issue in our nation’s federal deficit struggles.

October-21-2011

12:30

When I went into solo practice of internal medicine in 1981, it was very easy to get a doctor to see a Medicare patient. All I had to do was make a phone call. A courteous receptionist answered. If the doctor couldn’t come to the phone right away, I could count on a prompt callback.

Consultants saw patients quickly, and generally called me to discuss their findings and advice. And very often there would also be a letter in the mail: “Thank you for referring this delightful patient to me.”

How things have changed! Now a doctor gets the phone menu, just as the patients do, and it often ends in voice mail. It might be a few days before a staff member calls back—usually with the news that “we are not accepting any new Medicare patients.” At best, my patient might be offered an appointment in several months.

One very fine gentleman, who had recently moved to a rural area, found it easier to fly to Tucson to see me than to get in to see a local internist. That was in 2009. Recently, he has become unable to travel, so I needed to find him a local doctor.

I tried to expedite matters by ordering him an immediate diagnostic test: an abdominal CT scan. I don’t think anyone could argue that it wasn’t indicated under the circumstances. One little problem: I am not enrolled in Medicare and don’t have the proper government-issued number to enter into the computer. A license to practice medicine is not enough. This National Provider Identifier (NPI) is supposed to protect the system against being defrauded. Without that number, the imaging facility could not get paid by Medicare.

“Why not use the radiologist’s number?” I asked. After all, he was the one who would get paid. Nope, a referral was required. How about a self-referral from the patient? Nope, we can’t allow patients to decide what tests they need. “The patient is willing to pay for his own test,” I said. Nope, if he’s on Medicare, they aren’t allowed to take his money.

They gave the patient 24 hours to find a properly enumerated doctor to countersign my order. Fortunately, he found a specialist willing to do so, and assume potential criminal liability for committing “waste, fraud, and abuse” by ordering a “medically unnecessary” study. (Fortunately for the patient, he turned out not to have cancer, but that could be bad news for the doctor.)

So this is the status of retired Americans. They can’t just walk into a facility and request a medical test, and pay for it with their very own money.

A man may be qualified to pilot a 747 across the Pacific, but once he’s on Medicare, he is unfit to make an unsupervised decision about his own medical care.

I did find my patient a doctor. None of the internists within a 150-mile radius who “take Medicare” are willing to take on a new Medicare patient. But through the website of the Association of American Physicians and Surgeons (www.aapsonline.org), I found a link to the Medicare carrier’s list of opted out physicians. They don’t “take Medicare,” but many are pleased to see older patients, for a reasonable fee. There was one internist on the list, 150 miles from my patient. She has a courteous and helpful assistant who actually answers the phone, and told me the charge for a new patient visit: $300.
Things could be worse—and already are much worse in Canada. The “soul-destroying search for a family doctor” is described in the Globe and Mail on Aug 21. The Ontario government’s program called Health Care Connect manages to link only 60 percent of patients with a doctor—although you might find a concierge doctor for $3,000 a year.

That’s the cost of medicine when it’s “free”—if you can find it at all. If ObamaCare is implemented, all Americans will be in the same boat. And guess who will get thrown overboard first.

October-14-2011

10:40

Some new data out on Small Area Health Insurance Estimates from the census folks.

They have a tool there you can use to look this up yourself, but what I get is that for children (age 18 and under) in Pennsylania, Allegheny County is tied with Montgomery for the lowest percentage without health insurance at 3.9%.  The highest: 10% in Lancaster County.  Data is for 2009.

Join the forum discussion on this post - (1) Posts

June-7-2011

14:15
Robin Hanson on capping systemic health care costs:

The United Kingdom, where, on average, people live longer than in the U.S., spends only about 9 percent of gross domestic product on medicine, compared with our 18 percent. The British control costs in part by having the will to empower a hard-nosed agency, the National Institute for Health and Clinical Excellence, to study treatments and declare some ineffective. Some hope the United States will create a similar agency, but I fear it would be hopelessly politicized and declawed.

My solution: admit we are cost-control wimps, and outsource our treatment evaluation to the U.K. Pass a simple law saying Medicare (and Medicaid) won’t cover treatments considered but not positively appraised by the Britain’s national health institute.

Even better, use clinical evidence evaluations of the British Medical Journal. They’ve classified more than 3,000 treatments as either unknown effectiveness (51 percent), beneficial (11 percent), likely to be beneficial (23 percent), trade-off between benefits and harms (7 percent), unlikely to be beneficial (5 percent) and likely to be ineffective or harmful (3 percent). Let’s at least stop paying for these last two categories of treatments! And to put pressure on doctors to collect evidence, let’s stop paying for “unknown effectiveness” treatments after 10 years of use.

As I’ve said before, and will continue to say until everyone in this world understands, universal health care plans will never work. Resources are limited, and no amount of political posturing will change that fact. As Robin Hanson notes, there will come a point where the government must cut back on providing health care, and that’s because there are simply not enough resources available to make sure that everyone is always in perfect health. Anyone who says otherwise is stupid, ignorant, or lying.

June-6-2011

13:05

Suppose you went into a grocery store, and found no prices on anything. You ask a clerk how much five pounds of potatoes would be, and he asks you whether you are 65 or older. You’re taken aback, but you tell him you are 64, and he asks whether your income is less than $40,000.00 a year. Startled, you say it is more than that, and then he asks whether you have food insurance. Why would the
price of potatoes depend on the buyer’s age, income, and insurance status, rather than on the cost of growing, transporting, and stocking the potatoes? That would be absurd.

Yet that’s how it is with medical care. I would be unable to find out, for example, the cost of an echocardiogram from the hospital where I did my residency. The price is different for different people.  The government instituted this ridiculous situation, in 1965, with Medicare and Medicaid. There is a lot of mythology about these programs, but few people understand them like the physicians who are on the front lines actually seeing the patients. For some of them, it has been a gravy train. They game the system. For others, it has been a disaster to go through medical school and residency, and come out a de facto servant to government programs, but of
course, without “benefits” or retirement. If you are scrupulously honest, these programs will bankrupt you—even while turning you into Public Enemy #1.

Senators Ron Wyden and Charles Grassley have put forth the Medicare Data Access for Transparency and Accountability Act (the DATA Act) to open a database so that everyone can see how much money Medicare has sent to any physician enrolled in it. Regardless of the cost to provide medical services, the price the taxpayers are forced by the government to pay for other people’s medical care has gone down and down per procedure, per diagnosis, per office visit.

The public won’t see that, but it will hear about some isolated cases; for example, an Oregon neurosurgeon who allegedly performed multiple spine surgeries on the same patient, or a Florida physician accused of $3 million dollars in Medicare fraud.

Gaming the system is fraud. But the biggest fraud is the one perpetrated on the working people of this nation who are forced to pay for other people’s medical problems. When Medicare was first instituted, Americans were reassured that it would never cost the taxpayers more than $9 billion a year. It is more like $500 billion a year now.

Patients learn to game the system too. Workers must pay through their taxes for even the most trivial complaint when someone on Medicare makes an appointment for it—; say for a cosmetic skin lesion that has been present for 30 years without causing any problem. Working people are also forced to pay for the consequences of other people’s smoking, excess drinking, or risky lifestyle choices. That’s fraud, perpetrated by the government on taxpayers. It’s hidden behind political smoke and mirrors.

Amazingly, we managed somehow for 189 years after 1776 without Medicare and Medicaid, and things were getting better and better —until Lyndon Johnson came up with a good fraudulent vote-buying scheme, and then a lot of people decided there was money to be made off medical problems with the taxpayers the losers.

So, Wyden and Grassley, open your database. But include a list of all the procedures and diagnoses, and what Medicare and Medicaid actually send the physicians as “reimbursement” so people can see that physicians— who spent years of their life in training while incurring tremendous debt—are paid about the same as auto mechanics. And also account for where the rest (about 80%) of the
$500 billion goes.

That would be a good start for medical price transparency. And a good precedent for another database, one detailing just how much value politicians give taxpayers who pay their salaries.

About the Author:

Dr. Tamzin Rosenwasser earned her MD from Washington University in St Louis.  She is board-certified in Internal Medicine and Dermatology and has practiced Emergency Medicine and Dermatology.  Dr. Rosenwasser served as President of the Association of American Physicians and Surgeons (AAPS) in 2007-2008 and is currently on the Board of Directors.  She also serves as the chair of the Research Advisory Committee of the Newfoundland Club of America.  As a life-long dog lover and trainer, she realizes that her dogs have better access to medical care and more medical privacy than she has, and her veterinarians are paid more than physicians in the United States for exactly the same types of surgery.

May-31-2011

10:50
‘The Taskforce says that prevention is everyone’s business – and we call on the state, territory and local governments, on non-government and peak organisations, health professionals and practitioners, communities, families and on individuals to contribute towards making Australia the healthiest country by 2020.’ (Extract from ‘Taking Preventative Action’, the federal government’s response to the Report of the National Preventative Health Taskforce).

I find the sentiments in the quoted passage objectionable for two reasons. First, preventative health care is not ‘everyone’s business’. Individual adults have primary responsibility for their own preventative health care because no-one is better able to exercise that responsibility than they are. Individuals who are persuaded that preventative health care is a collective responsibility could be expected to look increasingly to the various levels of government, non-government organisations, health professionals and practitioners, communities and families – everyone except themselves – to accept responsibility for what they eat, drink and inhale.

Second, the goal of making Australia the healthiest country by 2020 is being put forward as though it is self-evidently desirable collective good that should be pursued by any and every means available to everyone. The goal is not self-evidently desirable. Individual health is not a collective good. And the end does not justify the means that are being proposed to pursue it.

If you delve behind the spin about making Australia the healthiest country by 2020, the underlying goal seems to be to raise average life expectancy in Australia to the highest level in the world by reducing the incidence of chronic disease. What does this entail? It would be hard to object to the goal of enabling individual Australians to reduce their risk of chronic disease. The problem is that the government’s strategy is more about achieving national goals than providing better opportunities for individuals – more about behaviour modification than about ‘enabling’ individuals to reduce their health risks.

The government claims that analysis of ‘the drivers of preventable chronic disease demonstrates that a small number of modifiable risk factors are responsible for the greatest share of the burden’. The behavioural risk factors led by obesity, tobacco and alcohol apparently account for nearly one-third of Australia’s total burden of disease and injury. The chronic conditions for which some of these factors are implicated include heart disease, stroke, kidney disease, arthritis, osteoporosis, lung cancer, colorectal cancer, depression and oral health problems.

Since these risk factors stem from individual lifestyles it is obviously desirable for individuals to be aware of them. There may be a role for governments in provision of this information. Perhaps governments should also be involved in helping people in various ways to live more healthy lifestyles. It is questionable how far governments should go down this path, but it is difficult to object to modest efforts by governments to improve opportunities for people to live healthier lifestyles.

However, rather than helping people to help themselves the federal government has chosen the path of Skinnerian behaviour modification. It has chosen to drive changes in behaviour through what it describes as the ‘world’s strongest tobacco crackdown’. (This is one instance when I hope the government doesn’t actually mean what it says – some people in Bhutan have apparently been jailed recently for possession of more than small amounts of tobacco products.) The government’s strategy also involves ‘changing the culture of binge drinking’ and ‘tackling obesity’, but in this post I will focus on smoking.

Some of the tactics being used in the tobacco crackdown involve information and persuasion but there is also an element of punishment involved. The tobacco excise has been increased to over $10 for a packet of 30 cigarettes and legislation is proposed to require cigarettes to be sold in plain packaging. It seems to me that this amounts to persecution of smokers and their families. It will reduce the amount of household budgets available to be spent on other products and encourage some to avoid excise by obtaining tobacco from illegal sources.

As a former smoker, I am probably more strongly against smoking than most people who have never smoked. I encourage other people to quit smoking and discourage young people from taking up the habit. But having given up smoking several times, I know how hard this can be. Governments have no basis on which to judge that people are not in their right mind if they consider that the pleasures they might obtain from additional years of life are not worth the pain of giving up smoking.

In my view this question of whether smokers are capable of judging what is in their own best interests is at the crux of the matter. The politicians and bureaucrats who seek to modify the behaviour of smokers may see themselves as enhancing the capability of these people to have lives that they ‘have reason to value’, in accordance with well-being criteria proposed by Amartya Sen. If so, their attitudes highlight a major problem with Sen’s approach. Governments have no business deciding what kinds of lives individuals have reason to value.

Enrolling into a drug rehab program can be the hardest thing to do but it can save a life.

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http://www.citizeneconomists.com/blogs/

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