Peggy Salvatore makes her Health Wonk Review hosting debut this week at the Healthcare Talent Transformation blog. She includes one of my posts, for which I am thankful, and the rest are pretty good, too. I always like HWR day, because it gives me a brief respite from having to come up with something to write about. Enjoy it! (I am.)
Monthly Archives: September 2010
There are a number of good articles on the topic of medical malpractice in the September issue of Health Affairs. Here is my very quick synopsis of four of them and how they fit together. Michelle Mello, Amitabh Chandra, Atul Guwande, and David Studdert make a valiant attempt at quantifying the national costs of the medical liability system. They put a price tag on malpractice claim and settlement payments, administrative expenses (i.e., lawyers), and defensive medicine costs. Defensive medicine contributed the bulk ($45.6 billion) of a total $55.6 billion. That’s a significant amount of money in absolute terms, but it actually represents just 2.4 percent of national health expenditures. Granted, the team based their calculations on assumptions, but they are transparent about what those assumptions were, and they present a range of estimates under differing assumptions. This estimate represents the middle of the road.
If we could cut that amount in half through tort reform, we’d be doing well, right? After all, reform can’t eliminate negligence or accidents. That’s exactly why William Thomas and colleagues report that tort reform would likely reduce national health care spending by a little less than 1 percent.
A better approach might be to implement some common sense policies, like surgical safety checklists, which, according to an article by Marcus Semel and colleagues would actually save hospitals a substantial amount of money. The authors estimate the implementation of a checklist system to cost $12,635 dollars, and to cost $11 each time it is used (mostly because of preventive antibiotic use). The cost of a major surgical complication averages $13,372 though, and happens in about 3% of the 4,000 or so non-cardiac inpatient operations an average hospital performs each year. Assuming that the checklist reduces major complications by 10% (by some accounts a very conservative estimate), using the checklist would save the average hospital almost $104,000 a year–and patients would benefit from it, too. What are we waiting for?
The biggest obstacle seems to be physicians’ fear of the unknown, coupled with a lack of control, which leads to gross overestimation of the probability of facing a malpractice suit. Doctors are more worried about being sued than the data suggests they ought to be. It seems likely that this drives the bulk of defensive medicine in practice, and short of granting physicians immunity, it’s unclear how tort reform may be able to alter this thinking.
I have to say, looking at these studies collectively, I think we need to focus our cost-saving efforts somewhere other than tort reform.
This video from the Kaiser Family Foundation explains health reform in just 9 minutes. Did I mention that it’s animated? This is the kind of thing you not only need to watch, but should also circulate widely to everyone you know, because the only antidote to misinformation is information.
Before September ends, I need to turn my attention to some of the excellent studies in this month’s issue of Health Affairs. The focus here is on where Americans go for health care–especially as it concerns going to the emergency room. You’ll have to excuse the increasingly brief nature of my posts, they won’t always be so short, but I’m really trying to graduate in a timely fashion. Okay, I feel better now that that’s out there. On to the studies.
For starters, Stephen Pitt and colleagues find that fewer than half (42%) of patients’ acute care visits are to their primary care physician, while 28% are made to emergency rooms. The issue? Non-emergent care delivered in ERs is inefficient, and the last thing we need to be doing in this country is wasting more money on health care. So how do we get people to stay out of the ER when they don’t have an emergency? Well, for Medicaid patients, increasing co-payments for nonemergency use of ERs doesn’t work. Perhaps it would help if we made other alternatives more widely available? Apparently the answer here is yes and no. In rural counties with a community health center, ER visit rates were 33% lower than they were in counties without a community health center. At the same time, however, other research finds that people are still going to the ER when they could just as well be going to more efficient urgent care centers or retail clinics (the so-called “Doc in a Box”). This, I fear, is a sociological phenomenon, and effectively targeting policy to change it is likely to remain a challenge for quite some time.
Medicare–insurance for seniors and the disabled–is an entirely federal program. Medicaid–the program for low-income persons–is jointly financed and operated by the federal and state governments. Health reform expands Medicaid and aims to make Medicare more efficient. It also arguably paves the way for Medicaid to become a purely federal program, which is something that most states would be pleased with, given the difficulties they have in balancing their annual budgets because of Medicaid costs. There are many other benefits to federalizing Medicaid, which are outlined in a policy paper authored by The Century Foundation’s Vice-President Greg Anrig. I’ve chosen to write about this topic today primarily because I want you to have the entire weekend to read the paper. Some of you might see shifting Medicaid away from the states to the feds as taking the country further down the road towards a single payer system. Others of you might see it as one of the most viable options for confronting some of the major problems in our health care system and our state economies. In my opinion, both of you would be right.
Merrill Goozner wrote an opinion piece in The Fiscal Times recently explaining how “health reform could shift increases to consumers.” His piece basically speaks to employers deciding to forfeit the grandfathered status of their health plans by raising coinsurance rates in the face of rising premiums. I see a slight problem with the way he’s framed this. Because the Affordable Care Act requires insurers to pay out 85 cents worth of benefits for every premium dollar collected, insurers have a weak–albeit not absent–incentive to raise premiums. If an insurer charges $1,000 a year in premiums, they have to pay out $850. If they charge $2,000 a year in premiums, they have to pay out $1,700. They do, indeed, double their potential profit, but that’s quite different than if they were to charge $2,000, face no requirements to pay out more than the $850 and net a cool $1,150.
The point that Goozner makes, somewhat indirectly, is that employers can sidestep cost increases, or even get out of the game altogether. This is one of those things that people just don’t seem to get. **Ahem** YOUR EMPLOYER IS UNDER ABSOLUTELY NO OBLIGATION TO PROVIDE YOU WITH HEALTH INSURANCE, NOR TO PAY ANY PARTICULAR AMOUNT TOWARDS THE COST OF ANY COVERAGE THEY DO OPT TO OFFER YOU.
Sorry about that. The point is that if costs go up, or if they don’t, your employer may decide to shift the costs your way. Recessions help that sort of thing. Case in point, one of my family members was talking with me the other day about the increased amount they were going to have to pay for their health insurance. Let’s say their insurance cost $10,000 a year, but their employer paid 90% of the total. That left them paying $1,000. Well, now their employer is only going to be paying 80% of the total. That means, even if the insurance doesn’t get more expensive, they’re going to have to pay $2,000. That’s right. Their bill just doubled. So, if what you pay for health insurance goes up, don’t assume that it’s because of health reform. It could just be your employer deciding to shift a portion of their costs your way. I would say that they decided to shirk some of their responsibility, but per my statement in all caps above, it was never really their responsibility to begin with.
Proponents of health reform have long claimed that one of the biggest problems with our health care system is an overemphasis on expensive specialists and an underemphasis on primary care physicians–who, much research shows, produce high quality care at a much lower cost. In essence, the argument is that we’re using (and paying for) rocket scientists to fly kites. If we bolster the primary care workforce, suddenly we’ll start saving buckets of cash and people will not only be just as healthy–but they might actually start becoming healthier, as greater emphasis is placed on things like prevention, continuity of care, and chronic disease management.
To be fair, not every study supports the “more primary care is better” philosophy, but that hasn’t much mattered. It has become a central tenet of reform for most. Tom Ricketts and I actually authored a paper that raises some methodological concerns, which call some of the typical findings into question. (Warning: If you’re not accustomed to reading academic papers, this may not be for you.) But the most recent kicker comes from the folks at the Dartmouth Atlas who are well known for their work revealing the wide geographic variation in Medicare spending. The group recently released a report that, simply put, says primary care isn’t the panacea many people claim it to be.
What in the world is one to make of this?! Nothing really. Primary care practices don’t exist in a vacuum. People’s environments, their lifestyle choices and health behaviors still play a large role in their health outcomes. Furthermore, patients rely on both generalists and specialists, not generalists alone. The Dartmouth report doesn’t mean that primary care is suddenly more expensive than previously thought, or that it doesn’t provide the high quality of care it was once believed to. Rather, it means that there is no “magic bullet” that will suddenly solve all that ails our country’s health care system. Let me be as clear as possible about this: Primary care is a good thing–it’s just not the only thing. Now back to your regularly scheduled programming……