10…9…8…7…6…5…4…3…2…1…

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The Problem With Free Market Health Care

I know these things. Many of you who’ve taken a course in health economics, read the newspaper, or lived long enough know these things. But, alas, a shocking number of people still don’t know these things. What things, you ask? Well, all the things that make health care markets work differently than markets for traditional goods and services. You need to learn about these things, because if you don’t, you’ll likely continue to think that a free market system will solve all of the problems with our health care system, but you’ll also continue to be wrong. So, hopefully you’re asking “Where can I learn about these things?” and the answer is right here.

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Merry Christmas

My wife and I are down in southeast Georgia spending the Christmas holidays with my side of the family, so I’ll be brief, but I wanted to wish all of you a safe, blessed, and Merry Christmas! And, to those of you from other faith traditions, Seasons Greetings!

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All Docs Want for Christmas Is a Second Opinion?

It’s no surprise that there’s a renewed call for repeal of health reform in the wake of the mid-term elections and the anticipation of a Republican-controlled House in 2011. What is a surprise is where the American Medical Association stands on the issue. Well, sort of. (I’ll explain.) You may already have seen this, but even if so, I think it’s worth taking a look at in a bit more detail.

The news, as reported in this Health Affairs blog post, is that the AMA voted to rescind its support of the individual mandate–that pesky requirement that everyone obtain insurance coverage–which it had previously backed. From an historical perspective, that isn’t really the shocker. No, the shocker was when the AMA endorsed the health reform legislation. In fact, I’ve heard plenty of people talk about how important neutralizing that group–if not rallying its support–was to the eventual passage of the legislation.

But not so fast. The AMA vote was overridden by another vote to postpone the issue until the annual meeting in June. That’s sure to give both sides time to formulate a strategy. And that’s what’s so interesting: There are two pretty evenly split groups within the AMA. Could this issue be controversial enough to split the AMA into two opposing lobbies? I highly doubt it. The AMA’s strength lies in the number of physicians it represents. But what it may do is make the AMA start to look a lot like the highly partisan Congress, and if that happens, it may not be the AMA lobbying Congress, but members of Congress appealing to members of the AMA in a bit of “reverse lobbying.”

After all, the AMA has played an important role over the years in determining the fate of various health reform initiatives. So, when Speaker Boehner picks up the gavel, you can rest assured that he and the rest of the GOP will be pulling for the AMA to rescind its endorsement–what a huge PR move in support of repeal–and you can also rest assured that the Democrats who championed the law will be working hard behind the scenes to make sure that the AMA keeps its word.

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Do a Good Thing Today

Today is my 30th birthday. It’s also getting really close to Christmas. Many of you who read this blog know me quite well. Others of you are regular readers, but complete strangers to me. Still others have happened to this space today for the first time, seemingly by accident. I’d like to suggest to all of you that you do something generous today in honor of me. I realize that that sounds a bit arrogant, but I’m actually hoping that it will result in something quite selfless. The fact is, I don’t need anything, so the best gift you could give me–and yourself–would be to do something good for someone else.

You might make a contribution to a charity of your choice. It could take the form of a cash donation or an in-kind gift. You might just take some items down to your local Goodwill store. Maybe you could spend a day in service at a soup kitchen, or go through the drive-thru at McDonald’s and pay for your order AND the order of the car behind you. Pay for someone else’s (or several someone else’s) coffee at Starbucks. Give a dollar (or ten) to someone begging for change. Tell your spouse how much you love them. Spend some extra time with your kids. Hold the door open for someone. Let a car into traffic in front of you. Smile at others. Ask someone how their day is going and sincerely listen to their answer.

If this sounds a little goofy, maybe it’s because we’ve gotten to a place where this type of kindness and generosity has become so foreign as to feel uncomfortable. Where we’re worried how others will react, or what they’ll think of us. It doesn’t have to be that way. In fact, it can be far, far better. The point is, do a good thing today. And, then, as your gift to me, leave a comment to this post letting everyone know what good thing(s) you did. Feel free to remain anonymous. It’s not a contest, just a thought I had to make the passing of my twenties more meaningful by brightening up the world a little bit. I hope you’ll do more than consider it.

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Diabetes. Whoa.

Slate Labs does it again–this time looking at the rise and spread of diabetes rates in the United States over the 2004 to 2008 period. It is, how do you say, alarming. Check it out. (And sorry, southeastern United States and Appalachia.)

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A Word on Monday’s Ruling

A federal judge in Virginia ruled Monday that parts of the health reform law–specifically its requirement that individuals purchase coverage or pay a penalty–are unconstitutional. CNN, among other news outlets, has the story here. If you want the flaming liberal version, it’s here. And, for you freedom loving haters of social justice, head here. If you’re the kind who likes to go straight to the source, you can read the judge’s ruling here. Since I know how much you like to hear my opinion on things, here it is:

If this had been a best-of-three series, this latest case would never have been heard. That said, it’s now 2-1 in favor of the law, with the multi-state challenge still pending in Florida. Contrary to what you might expect, I don’t actually put much stock in either the two cases (one in Michigan, one in Virginia) to support the law, or the single case thus far to rule against parts of the law. I stand by my earlier remarks that judges are not apolitical beings. The rulings to date have borne this out. Monday’s case is important only because it shows that there is support from judges on both sides of this issue–and that is the prerequisite for this case making its way to the Supreme Court. How things will play out there is anyone’s guess–and mostly Justice Kennedy’s choice.

As to other more timely and important consequences of Monday’s ruling, it does nothing to impede the current implementation of the law, which it could have. So, that’s good. Still, this fight is far from over.

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A Look At The Politics of Bad Health Insurance

Read this from Slate’s Tim Noah. It’s painfully true and a wonderful example of how absurd our system has become. And confirmed by a conservative news source.

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Health Wonk Review: Year-End Holiday Edition

Update: I noticed that many of the links were initially entered incorrectly–and attempted to send you, the reader, to the posts via my webmail account. Oops! That has hopefully now been corrected. Please let me know if you encounter any additional broken links. Thanks!
 
Time flies. In between working to finish my dissertation and traveling the country for job interviews, another year has come and gone (and this edition has been posted a little late). And, if your life has been anything like mine for the last little while, you’re probably wondering where it all went. But the year’s not over yet. There’s still time for some excellent health policy blogging. With that in mind, my Christmas gift to you is the last Health Wonk Review of 2010.

Leading things off this time is Aaron Carroll writing for the Incidental Economist. In a post entitled “Cost and Access — This Time with Income!” Aaron shows just how pervasive the problems our in our health care system. It isn’t just the poor in our country who face barriers to access, it can also be a problem for the relatively wealthy. When so much need confronts limited resources, what are we to do?

Enter Managed Care Matters blogger Joe Paduda who brings us the ugly truth that “rationing exists, it will continue to exist, and we have an obligation to ration in a fair way.” His post “Health Care Rationing – Reality in Arizona” takes a look at some of the tough decisions being made in that state’s Medicaid program, and explores the lessons they hold for all of us.

Then we have Dr. Jaan Sidorov of the Disease Management Care Blog, who presents “The Definition of Disease Management.” In this posting, Dr. Sidorov provides us with his definition of “disease management.”  Yes, it is an overused term that has fallen out of policymaking favor but Jaan thinks the concept is still useful and worth a review.  While he’s at it, he pulls some quotes from the published literature that define other related terms including, among others, “patient centered care.” If you think you know what these words and phrases mean, you might want to do yourself a favor and double check.

When we start talking about things like disease management and patient centered care, it isn’t long before the focus of discussion turns to how to finance these approaches. One oft-mentioned mechanism is pay for performance. Jason Shafrin of the Healthcare Economist takes a look at an interesting study that examines whether the frequency of evaluation makes pay-for-performance incentives more or less effective. I thought of this one in a Pavlovian sense “Do the dogs salivate more when the bell is rung immediately proceeding feeding as opposed to a few hours before?” His take is worth looking at.

And for those of you who think that Medicaid and Medicare are so much more cost-effective than private insurance, Mike Feehan of the InsureBlog would like to let you know that roughly $90 billion gets shifted from the public sector onto the private sector every year. Don’t believe it? Read his post. John Goodman also writes about what he calls “A Dumb Payment System” and explains why changes need to be made to the Medicare payment system to make it more cost-effective. Similarly, Louise of the Colorado Health Insurance Insider writes:

“It’s easy for people who aren’t in the medical profession to take the position that doctors should just accept the Medicare payment cuts, as they are probably more able to withstand the financial setback than the average American senior citizen – most of whom rely heavily on the Medicare system.  But we’ve also created a system that requires a huge financial outlay in order to become a doctor in the first place, and that has to be taken into consideration when we look at physicians’ incomes.  There is no simple solution, but in order to keep the health care system sustainable, it would seem that most players in the industry may need to accept at least some sort of pay cut.  Health insurance agents will see lower incomes across the board starting next year, as the new MLR requirements result in lower commissions, and it’s likely that numerous other aspects of health insurance administration will see financial cuts in order to comply with the new law.”

Of course, the private sector hasn’t done much better. Just take a look at the nearly worthless health insurance plans offered by places like McDonalds. Anthony Wright of the Health Access WeBlog does just that in a post entitled “Even Cheap Junk is Still Junk.” As he puts it, “Maybe something isn’t always better than nothing” when it comes to health insurance. Although, at the other extreme, according to The Hospitalist Leader’s Bradley Flansbaum, we have hospitals that are operating more like hotels than health care delivery systems–and this may have important–albeit misguided–consequences for how patients perceive the quality of care they receive. After all, Roy Poses tells us in his post on the Health Care Renewal blog, that American Medical Schools are only in it for the money. So what else should we expect?

Well, medical errors for one thing. Writing for the Health Affairs blog, Michael Millenson writes “Why We Still Kill Patients: Invisibility, Inertia, and Income.” Millenson notes the lack of progress on patient safety and asks: “Why are we still killing so many patients?” His answer: the “three I’s”: invisibility, inertia and income. The Health Business Blog also looks at errors–this time focusing on stents–and attempts to put the Abbott/St. Joseph’s/Mark Midei scandal in perspective.

Looking forward, what can we expect? It’s been a busy year, passing health reform and beginning its implementation, but as Dr. Glenn Laffel writes on the Pizaazz blog, the state courts may soon put the whole process on hold. The idea that the courts pose the biggest threat to the successful implementation of reform is nothing new, but Dr. Laffel’s lighthearted take on an issue that is of serious concern to many is actually quite refreshing.

By contrast, The Covert Rationing Blog’s Dr. Rich writes about “How the Obesity Crisis is Like the Mortgage Crisis.” Progressives have been and are still  making unwise health policy choices, he contends, and they can expect the outcome to be just as disastrous as that of the Great Recession.

In the world of health IT, Peggy Salvatore of Healthcare Talent Transformation presents “Deciphering Data in Unsettling Times” and draws the following conclusions:

When you overlay the needs of the patient care industry and the needs of the information technology industry on top of a struggling economy and its struggling participants, a picture emerges. The broad outlines are that:

1. There will be jobs in healthcare and IT 
2. Some of those jobs will be in the area where those two fields overlap
3. Pay will be kept down in some fields where specialized knowledge and higher education are not required due to supply (a lot of unemployed people) and demand (people who don’t have a lot of skills and education).
4. Pay will be driven up in some fields where specialized knowledge and education are required due to supply (a finite number of people who have a lot of special skills and education) and demand (patient care experts and IT gurus).

And Richard Elmore of Healthcare Technology News describes the Direct Project to send health care messages over the internet. Communication of health information among providers and patients is most often achieved by sending paper through the mail or via fax. The Direct Project seeks to benefit patients and providers by improving the transport of health information, making it faster, more secure, and less expensive. The Direct Project will facilitate “direct” communication patterns with an eye toward approaching more advanced levels of interoperability than simple paper can provide. It seems like a promising idea.

Whatever happens, there will be much work ahead in 2011. Some, like Avik Roy, are more cynical than others, like David Harlow. Roy writes about his disappointment with deficit reduction commission and how none of its recommendations will do anything useful for health reform. Harlow, by contrast, accentuates the positive, noting that payers and providers are going to have to learn how to collaborate better if they are to be successful in a post-reform environment. Meanwhile, at Workers’ Comp Insider, Jon Coppelman talks about the trail of unpaid liabilities facing California businesses in the wake of CRM self-insurance group (SIG) insolvency, wondering if it will be a repeat of New York’s experience with the defaulting CRM, which resulted in the collapse of the SIG system in that state. In all these matters, only time will tell.

Finally, before signing off for the year, I must engage in an act of shameless self-promotion and include a post of my own. This is the essay I wrote for a contest being held by Costs of Care. It’s not a wonkish post, but a telling narrative of the lack of price transparency in our health care system. I encourage you to read it with a nice mug of warm cider or hot cocoa as winter approaches. Cheers!

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The Real Challenge (My Costs of Care Contest Entry)

In the spring of 2005, the sinus infection returned. I awoke severely congested with a pounding forehead and pain around my eyes that grew worse when I bent to tie my shoes. The feeling was familiar. Two years earlier, I had similar symptoms, but was uninsured and endured a miserable week with nothing but over-the-counter medication. Now they were back.

Fortunately, when I started graduate school, my father insisted that I have health insurance. As a healthy 24 year old, I didn’t see the need, but he agreed to foot the bill for a high-deductible insurance policy to cover me in the event of catastrophic illness. Except for four physician office visits subject only to a $35 co-payment, my policy offered no benefits until I spent $3,000 out of my own pocket. With my sinuses throbbing, I knew I needed to use one of those visits. Overwhelmed by the list of “in-network” providers on the insurer’s website, I picked an internist based on convenience—his practice was located in a medical complex near my home.

Arriving for my appointment, I checked in and presented my insurance card to the receptionist. “Your visit today will be $35,” said the woman behind the desk. I was relieved to hear that my coverage was working as promised. A nurse ushered me to an exam room, where the physician promptly entered, half-heartedly listened to my complaint, and confidently asserted that I did not have a sinus infection because I had no fever. I wanted to say “Really? Mind handing me a tissue so that I can show you what’s been coming out of my head?” but resisted the urge. Instead, I clarified that fever or no, I didn’t feel well, and believed my sinuses were the culprit. At this, the internist lost patience. He ordered some lab work and a sinus CT scan to rule out infection, and said that I could have everything done downstairs.

Despite my $35 office visit, I knew my insurance wouldn’t cover anything else until I met my deductible, so I needed to find out the cost of the CT scan. Doing so was much more difficult than I expected. Admissions didn’t know the cost, so they called the imaging department. Imaging had no idea, and threw it back to admissions where, after much searching, a big black binder full of prices was located in a cabinet, alongside packets of coffee creamer, some paper clips, and a couple of dried up ink pens. The sinus CT would cost roughly $900, which I could not afford. I headed instead to the lab to get my blood drawn, not knowing that I was about to make a costly mistake.

I worked as a phlebotomist during college, so I knew that lab tests were expensive, but that most insurers negotiated discounted rates that were only a fraction of the sticker price. Besides, the lab work was routine—a comprehensive metabolic panel and complete blood count—so I didn’t think to ask how much it would cost. My mistake was assuming that the lab was in-network, because the in-network internist I had just seen worked in the same building and referred me to the lab.

A month later, the bad news came in the mail. The lab was out-of-network, and I owed $478. While this wasn’t the five-figure medical bill many families face, everything is relative. For me, a graduate student living almost entirely on borrowed money, the bill changed how I bought groceries, socialized with friends, and commuted to school. For six months, I fought to scrape together enough money to make monthly payments. The experience, while costly, taught me a lot about our fragmented health care system, how little patients or providers know about the real cost of health care, and how hard it is for patients to make price-based decisions when the system isn’t designed with that in mind.

I had learned my lesson. Later, when a dermatologist put me on medication requiring monthly blood tests, I took out the yellow pages, looked up laboratories, and dialed the phone. “I’m uninsured,” I said (not far from the truth given my coverage) “and I need to have a lipid panel and a liver function test. How much will this cost?” Some labs knew, and some labs didn’t, and the answers varied widely. Needless to say, I chose the least expensive option. Making the decision was easy, getting the information on which to base the decision was—and is—the real challenge.

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