Wishing You…

Happy Thanksgiving from Wright on Health!

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What Jon Gruber’s Thankful For…

Unlike me, Ezra Klein’s a professional blogger with the weight of The Washington Post behind him. As such, he gets to conduct interviews with some pretty cool people. Recently, one of those people was Jon Gruber, a health economist–some might say the health economist–at MIT. This is a person who knows all that is known about health care costs and who is involved in the current health reform efforts. You can read the full interview here, but I wanted to highlight the most interesting quotes that convince me that, while the legislation is far from perfect, there is plenty about health reform to be thankful for….

“What we know for sure the bill will do is that it will lower the cost of buying non-group health insurance. We know the Senate bill will significantly reduce the amount of money employers spend on health care insurance for so-called ‘Cadillac’ plans and increase the amount they spend on wages….$1,000 per household.”

“In terms of the [cost] curve, I think that here there is more uncertainty. We know we will be closer to bending the curve with this bill than without it. But we can’t promise this bill alone will bend the curve….Once you get coverage off the table, the conversation gets more focused on cost control…People say you can’t do coverage without cost control. I think it’s the opposite. You can’t do cost control before coverage. We would do a huge amount for the cause of cost control just by covering people.”

“Do you know Pascal’s wager? Why not believe in God? I think of health reform similarly. We don’t know if we’ll really bend the cost curve. But if we do this and we don’t do anything, we still go bankrupt in 100 years. We don’t lose much. But if we do it and it works, then it’s a savior.”

Of course, the cynics will ask “What if this health ‘reform’ makes things worse?” To which I respond, be thankful for all things. If we drive the system to collapse more quickly, we will be that much closer to implementing something better than we are if we do nothing.

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Two Options

Robert Reich laments the dilution of the public option here. In his witty post, he cites the oft-made comparison between the Canadian and U.S. health care systems, particularly in terms of their cost (in terms of % of GDP) and their coverage (or lack thereof). That got me to thinking, what if, instead of a myriad of options, we had only two: Canada or the U.S.

Better yet, I thought, what if the options were framed in a way in which you could better relate to them? What would you choose then? Here they are:

Option A: You can insure everyone in your family and it will cost you 10% of your household income, or….

Option B: You can insure 5 out of every 6 members of your family and it will cost you 16% of your household income.

So what’s it gonna be? Option A or Option B? I’m sure I don’t have to tell you this, but Option A represents the Canadian system and Option B a slightly more generous system than that in the U.S. How we continue to be okay with paying more while getting less is beyond me. Could someone please tell me what it is about Option B that makes it such an attractive choice?

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U.S. Health Reform = War In Afghanistan ?

One of my favorite health economists is back again. This time, Uwe Reinhardt makes comparisons between the U.S. health care system and the nation of Afghanistan. In fact, he sees reform much like the Afghan war. He writes:

“…both are basically tribal systems that historically have fiercely resisted the constraints of any coherent national policy…The tribal chiefs in our health system are the heads of the myriad of associations that have been formed by the various economic interest groups who define ‘health care spending’ as ‘health care incomes.'”

He goes on to compare lobbyists to insurgents who write checks rather than shoot weapons. I don’t know if it’s the best analogy, but it is certainly entertaining reading. The real question–and the one Uwe poses at the end of his article–is which victory the U.S. will achieve first: passing meaningful health care reform or winning the war in Afghanistan?

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Continuous Quality Improvement In Health Care?

In the United States, we love competition. It tends to drive efficiency: our goods get better and cheaper at the same time. But there are exceptions, and health care is one of them. Sure, we continue to see new technologies and brilliant innovations introduced that promise to prevent, treat, or cure illness, but things aren’t getting cheaper. In fact, prices are going up faster in health care than they are in any other sector of the economy. People like to claim that this is because of the high cost of research and development that drives medical innovation, but technology in all other areas from automobiles to big screen TVs refute this view. As they’ve gotten bigger and better, they’ve also begun to cost less.

As Harold Pollack points out, the problem in health care is one of perverse incentives that encourages overutilization by rewarding providers on the basis of quantity supplied and removing the conditions that would make consumers place limits on the quantity of care they demand. All of this is further confounded by the fact that we lack information on what care works and what care doesn’t. In an excellent story in the New York Times Magazine, David Leonhardt makes the case that change can happen–that health care can become more efficient–and he cites the work of Dr. Brent James to prove it.

James is a surgeon by training with a passion for improving health care quality. His approach is one familiar to most in the quality control division of other sectors: continuous quality improvement. How does he go about it? Basically, he and his colleagues draft care protocols for given situations and then gather data and revise the protocols based on that data. In short, it’s about continuing to make steps in the right direction. It also relies heavily on electronic medical records to facilitate the process at both ends: gathering data from physicians, but also prompting them to follow the current protocol.

Leonhardt also acknowledges the work of Dr. Jerome Groopman, whose book How Doctors Think is rather anti-protocol, preferring the physician to think outside the box to successfully treat non-textbook cases. But Dr. James’ protocol doesn’t prevent physicians from treating patients as they see fit. Instead, it just reminds them of the protocol and gives them the option of overriding it.

I think they’re both right. Doctors do need to be able to synthesize a large amount of information and handle the “tricky” patients. That’s why I and so many others love to watch the brilliant–if completely fictitious–diagnosticians on House. At the same time, physicians are likely to benefit from a better understanding of what typically does or does not work given the indications. We don’t have enough of that in medicine now, and it costs us thousands of lives and billions of dollars in wasted procedures every year. As my childhood report cards would say: Needs Improvement.

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The House and The Senate

Back when I was hemorrhaging cash to get a masters degree from George Washington University, I learned a handy policy analysis skill: the side-by-side table. It is just what you think it would be. Well, assuming you know what a table is, and what it means for something to be displayed side-by-side. The real question is: What is being compared? In this case, it’s the House’s health reform bill vis-a-vis the Senate’s health reform bill. I waited until the Senate voted to open debate on the floor before bringing you this information. (I didn’t want to act too prematurely, after all.) But the vote passed 60-39 kicking off what’s sure to be fun for those of you who like to watch the few minutes of entertaining antics that are interspersed throughout hours of dull-enough-to-kill-you coverage on C-SPAN.

Now, if it were an assignment for school, or if I were actually being paid to work on this, I’d present you with my very own side-by-side analysis of the two bills. Alas, neither of those things is true. As a result, I’m just going to give you the briefest of my thoughts–those who want more than that are encouraged to take me out for dinner, or at least a drink–and then point you in the direction of some excellent resources created by those who do get paid to do this sort of thing.

Alright, here’s my quick and dirty analysis: The House bill does more to cover the uninsured than the Senate bill, offers a slightly stronger version of the public option and puts more stringent mandates on individuals and employers than does the Senate. Oh, and both bills plan to pay for all this in different ways. Assuming the Senate passes a bill, what do I think will happen in conference? Obviously, I think the conference report will fall somewhere in between the House and the Senate versions, but I think that things in the final bill will be closer to the Senate bill if only because clearing the Senate represents a more challenging procedural hurdle (60 votes to end the filibuster and all that).

Okay. Now for the side-by-side table. The best one I’ve seen yet comes from Kathleen Masterson at NPR with the assistance of Mary Agnes Carey of Kaiser Health News. You can see their work here. The best thing about it, in my opinion, is the “Likely In Final Bill?”-o-meter that gives an indication of what will or won’t make it out of conference.

Erica Werner and Ricardo Alonso-Zaldivar of the Associated Press also have a nice comparison here. It’s primary drawback? It’s just text with clear headings rather than a pretty table.

For those of you who are intimidated by the side-by-side table or just prefer to get your information in a more indirect prose form, you should check out the stories from The Washington Post or The New York Times. (I’m especially fond of the Times piece, which is co-authored by the brilliant Robert Pear.) Of course, last but not least, is the fine blog work of Jonathan Cohn. You should be reading him all the time anyway.

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"I Did NOT Have Sexual Relations With That Health Reform"

President Bill Clinton is back on the scene and promoting health reform in Washington. Is that a good thing or a bad thing? I’m not sure I know. On the one hand, he certainly learned a lot of good lessons from reform’s failure under his watch and he remains the consummate politician. Both of those things point to Clinton’s ability to spur the Senate toward the finish line. Then again, he’s sort of the poster child for the last serious health reform effort–especially an effort spearheaded by Democrats–and its resounding failure. Is that an association that needs to be made? Might it open up anew a weak chink in the progressive armor?

I think it all depends on how much attention the media gives his efforts. If he’s relatively confined to the back rooms and recessed chambers of the Senate, I think he is a great resource that must be used. If, on the other hand, the public spotlight is placed on him, there’s a good chance that he’ll foster animosity among not only the right, but also the cynical left.

As I’ve written before, not much has changed since Clinton tried to pass reform. Now, according to a recent New England Journal of Medicine article by Bob Blendon and John Benson, it appears that public opinion on health reform is one of the things that hasn’t changed much between 1994 and 2009. That’s pretty interesting considering that the rising costs and other problems with the health care system have only gotten worse during that time. To me, that’s an indication that most people’s views are shaped more by ideology–which hasn’t changed–than by the realities of the health care system that’s failing them a little more every year.

The authors put it this way “Most Americans are not health policy specialists, and they are unlikely to read a long and complex piece of legislation. Instead, they will rely on trusted intermediaries to clarify its likely impact on them.” That’s quite true, and also quite scary, simply because of who qualifies as a “trusted intermediary” in many cases. Still, the one bright spot in the report is that Americans have a more favorable opinion of President Obama and his efforts than they did of Clinton back in 1994. To read the full report, which is available online for free, go here.

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The Price of Prescription Drugs Around the World

We’ve come to the end of the health care costs world tour and conclude today with a look at the price of three prescription drugs: Plavix, Nexium, and Lipitor. Please note that the $0 for the U.S. Medicare figures are outdated–I guess that Part D didn’t report to this group or something. But the rest of the numbers are interesting.

Really, what can I say about these figures? It all has to do with patent law and direct-to-consumer marketing (the U.S. is the only country on the chart that still permits this practice). If you’ve ever wondered what all the fuss over “drug reimportation” was about, now you know. Prices in Canada are one-half to one-fourth the prices in the United States. Show me one American (who doesn’t work for a pharmaceutical company) who would be opposed to getting their drugs at 50% to 75% off. I think you’ll be hard pressed to do so. And this says nothing of the high-end U.S. prices. They’re simply asinine.

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The Price of Lab Tests Around the World

• Imaging: More expensive in the U.S.
• Physicians’ fees: More expensive in the U.S.
• Hospital fees: More expensive in the U.S.

Laboratory tests? Oh, come on. You know what these charts are going to look like before you even see them, don’t you? Fair enough. Here they are to confirm what you already knew. First, the Pap Smear, and then the throat culture:

Aha! Not so fast! Sure, the high end U.S. prices still blow everyone out of the water for the Pap smear, and beat all but Australia for the throat culture, but take a look at the low-end U.S. average for both tests. The U.S. prices actually look reasonable by comparison–a handful of countries actually pay more for these tests. How can that be?! What makes these lab tests different from all of the other aspects of health care that we have seen thus far? Is it that they are just too common, too basic a technology to get away with charging exorbitant amounts under the guise of “medical technology?” These are older tests to be sure, but there was certainly a time when they were anything but routine. Does that mean we’ll eventually see the price of MRIs go down, too? I’m not sure what explains this phenomenon, but I am intrigued. If you’ve got the answer–or think you do–let’s hear it.

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The Price of Hospital Stays Around the World

Technology costs more in the United States. Physicians cost more in the United States. What about the charges of health care facilities? Today, we examine the cost of hospitalization to find more of the same. First, the average cost of a day spent in the hospital:

The average day spent in a U.S. hospital costs anywhere from 6 to 25 times the cost of staying in a hospital for a day in the world’s other industrialized nations. Maybe that’s because we have cable television in the room? It’s actually hard to imagine what could account for such a wide disparity in prices. What happens if we take into account the average length of stay and take a look at the average hospital stay?

Surprisingly, the gap narrows slightly. What does this mean? That patients in U.S. hospitals have, on average, shorter lengths of stay than they do in other industrialized nations. It’s not possible to tell from these data whether the difference is statistically significant, or whether there’s any relationship between length of stay and quality of outcomes, but if we want to feel better about ourselves as a nation, I suppose we can take pride in the fact that we seem to keep people in the hospital for less time than other countries do. Hooray!

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