Only a 'health care Fed' can trim costs
Health care providers have pledged to cut $2 trillion in costs, but how they plan to do that is unclear. Commentator Jonathan Weiner offers his own suggestion on how to cut the fat.
Jonathan Weiner, professor of health policy at the Johns Hopkins Bloomberg School of Public Health (Courtesy of Jonathan Weiner)
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TEXT OF COMMENTARY
Kai Ryssdal: As we mentioned to start with today, President Obama spent some time at his press conference this morning talking about health care. Why he thinks some kind of public insurance plan has to be part of any overhaul. And how he's determined not to add substantially to the budget deficit to get reform done. Commentator Jonathan Weiner says there's really only one way to trim the fat.
JONATHAN WEINER: For decades health-care inflation has outstripped economic growth by 3 to 1. The main reason for these sky-rocketing costs? Medical technology.
A $100,000 biotech drug for cancer, a $600 MRI for tennis elbow, or a $3 purple-pill for whatever. It all adds up.
Today, deciding what's "medically necessary" is a rather haphazard business controlled by insurance companies. They try to make the right decisions. But the process is very flawed and often centers on the conflict between payer or provider profits, rather than on patient welfare.
So who should decide what care is, or isn't covered?
What we need is a "health-care Fed": A panel of independent experts, consumers and ethicists who would make these tough decisions based on scientific evidence about what works, and what doesn't.
Technologies that are real advances would go on the "A list" and be covered in full. "Me-too" drugs or devices with modest benefit for patients would only get partial coverage. And forget about treatments with unsubstantiated efficacy.
You'd be shocked by how little the medical community knows about which interventions really work. A health-care Fed would set national priorities for medical effectiveness research.
You may balk at more government oversight. But would you rather have your employer or the medical corporations decide?
Or maybe we should just leave your family doc alone to prescribe as she or he sees fit. But it's utterly impossible for them to handle all of this information on their own.
How do we know a health care Fed can work? Because every other industrialized nation in the world has something just like it: The Brits have one, as do the Canadians and Australians. That's why their costs are lower and patient outcomes better.
It's great that they're exploring private and public options on Capitol Hill. And its even better yet that the medical-industry has pledged to play nice. But reform of any kind will fail unless we find a rational and ethical way to eliminate the endemic of ineffective care.
RYSSDAL: Jonathan Weiner is a Professor of Health Policy at the Johns Hopkins Bloomberg School of Public Health in Baltimore.
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From Martinsburg, WV, 07/29/2009
I'm afraid Jonathan Weiner's comments
reflect the generally troubling view that only some government committee can
determine what is cost effective. When will he and many others learn that free competitive markets work best for this purpose! The current situation is the culmination of 40 years or more of government intrusion into cost decisions
by consumers. Bigger government is NOT the answer!
07/11/2009
"You'd be shocked by how little the medical community knows about which interventions really work." Ahh, but somehow beurocrats are going to be able to know, better than trained medical professionals?
From Overland Park, KS, 06/27/2009
"But reform of any kind will fail unless we find a rational and ethical way to eliminate the endemic of ineffective care."
Who decides 'ineffective care'? May I propose the patient and their physician? But further, the patient and their physician should not be insulated from the economic realities of their diagnostic and treatment decisions.
Professor Weiner, like President Obama, theorizes there is a magic wand called a “Health Care Fed” that can be waved over the U.S. healthcare system and that costs can be contained. Others argue for a single payer system, or expansion of certificate of need approval programs that currently exist in states. Oh, if it were that simple, to just create another bureaucracy or oversight commission! The problem with any government regulation or intervention into any market, be it financial, energy or healthcare or you name it are the unintended consequences.
Our employer based healthcare system is a perfect example. Wage controls during WWII led to the expansion of healthcare benefits. Why? Because employers could increase benefits that weren’t frozen to attract the scarce number of workers not drafted into the military services. The employer based system has insulated the ultimate purchaser, the patient, from the costs of the professional medical services, supplies or drugs consumed. Generations of U.S. citizens have grown up not having to pay a great deal for healthcare premiums or when utilizing the system. The whole concept of ‘insurance’ is lost. Insurance implies management of risk and risk sharing. In my opinion people perceive their employer provided health insurance more like a health guarantee allowing access to use the latest and greatest. When you have employer based insurance what incentive is there to NOT use the latest medical technology? Is there any wonder when there is this kind of demand that costs go up? Add to this the introduction of Medicare and Medicaid in the 1960s and you have even more demand. Hey, you paid your FICA taxes for years so don’t you have every right to have Medicare pay for anything and everything?! Medicare covers people over 65 and the disabled. Hello, when do people need healthcare during their lives? Yes when we get old things fall apart. Again, what incentives do Medicare beneficiaries have to NOT utilize the system? It is amusing when people say Medicare has such low overhead costs in the 3% range. Yes, anyone can have low overhead when you just keep paying out clinical claims exponentially.
We do not have a true healthcare consumer market. Until we do, costs will continue to rise. No commissions, “Health Feds” or rules can change that. If “Health Care Feds” are tried, the edicts they hand down will provide for even further unintended consequences we can’t even comprehend yet.
Under my old employer insurance I paid a $15 pharmacy co pay for a 30 day supply of Crestor. Life was fine. I could have gone on for the rest of my life with Crestor. I changed three years ago to a $5,000 high deductible plan and my employer contributes $3,000 to a Health Savings Account (HSA). I also contribute $2,000 pre tax to the HSA so my deductible is covered. I can carry over unused amounts. When I went to the pharmacy the first time under the high deductible plan, the Crestor bill was $119! A year would cost about $1,400! Until that moment, I didn’t know or care that I could have used another drug Simvastatin for $17 a month or $204. I didn’t need a ‘Health Fed’. What I needed was the drug cost information and interaction with my doctor, who said the Simvastatin would be OK.
One example, but there, the market works. Let’s make changes to let the market do for healthcare what it has done for other sectors…allocate resources in the most efficient manner to maximize the benefit for the greatest number of people.
From Loma Linda, CA, 06/25/2009
I am a medical student that is devoted to this show and really enjoy the complex topic of healthcare policy. From my limited view it seems we have 3 major problems getting between cost effective reforms.
1. Major cost shifting due to inadequate reimbursement.
2. Fractured billing claims due to a non-standardized billing code, and regional “usual and customary” payment.
3. A much larger legal liability that puts tremendous pressure one doctors to be able to satisfy the “beyond a reasonable doubt” standard that truly can not be done in the medical sector.
If we were able to realistically address cost shifting by reimbursing for cost of all tests and procedures then the heavy profit tests, like MRI’s and CT’s would not be over utilized. In California vaccinations are a loss for doctors. The more people they help the faster they loose money.
Our healthcare system is broken up into regions and we do not allow for insurance companies to compete across these lines. That comfort allows for price inflation. The lack of standardization allows administrative expenses to fly up as Howard Barkan, DrPH pointed out and after all this when the doctors submit a bill the insurance company or government program uses “usual and customary” rules to nearly ignore the bill and reimburse sometimes as low as 35% of the original bill.
The problem is not that doctors should not be immune to litigation, some need to have their license taken away, or that our legal system is flawed. The hang up is that our legal system is based on clearly defined, set parameters, and medicine is really statistical guesses from a legal standpoint. There are so many shades of gray in medicine! Not one doctor can diagnose a complex, life threatening disease with 100% accuracy. The other problem is that some families turn to litigation as part of their grieving process, but this is not as much of an issue.
From Bethel, CT, 06/23/2009
"The main reason for ... sky-rocketing costs? Medical technology." This statement doesn't stand on its own. Advanced technology makes everything else cheap -- why is medical care different? I can buy an electronic quartz-crystal watch for ten bucks that keeps time as accurately as a mechanical watch costing thousands. A present-day $500 laptop computer is orders of magnitude more powerful than the devices that took the Apollo astronauts to the Moon. From another angle, costs of care in Rochester, Minnesota are substantially lower than in Southern California or New York, according to research from Dartmouth. Is the Mayo Clinic using outdated technology? Well, their outcomes are just as good or better than the high-cost areas. Why? Evidence-based practice and research into therapeutic efficacy are essential, but not because technology inevitably means high-cost. If we accept this facile and unsupported explanation, we will miss opportunities to manage and utilize medical technology efficiently and cost-effectively.
From Berkeley, CA, 06/23/2009
Hi,
Dr. Weiner argues that much of medical care cost inflation is driven by implementation of medical innovations. He argues for the evaluation of the effectiveness and risks of those innovations (and of currently available interventions). I fully agree that such evaluations are needed (and long overdue). Indeed, much of my professional life has been involved with participating in such evaluations. However, innovations are not the driving force in the xlinical care cost differences between the US and every other industrialized nation. As has been pointed out numerous times, administrative costs account for about 3% of the total health care budget in Canada (similar percentages in European countries). In contrast, administrative costs have been estimated to account for at least 15% of the clinical care budget in the US. A large proportion of that difference results from the need to file individual claims for services with hundreds of different third party payers. Want to have equivalent third party coverage for everybody in the US without increasing the clinical care budget? My recommendation should be obvious.
I'll be glad to carry on this discussion with Dr. Weiner or with anybody else who wants to explore the fiscal topic. I would also be glad to discuss the evaluation of the effectiveness (and risks) of clinical procedures.
Be well,
Howard
Howard Barkan, DrPH
howardbarkan@cs.com
(510) 332-9755
From houston, TX, 06/23/2009
The only way one can control Health Cost of a given nation is by having every citizen taking responsibilities of their own heath in their own hands thus by caring for themselves learning about their body and what works and what does not thus preventing illnesses from happening way in advance own their own.
From Belmont, MA, 06/23/2009
Thank you for Jonathan Weiner's op-ed. I've been waiting for years for someone with any kind of authority or audience to throw a spotlight on the contribution of technology to health care costs. Perhaps 'health care fed' is a poor choice of words, however. The real Fed is a corporation controlled by banks, mostly the big national banks who have permanent board seats. I wouldn't want a "Health Fed" controlled by insurance and drug companies. But that's what we are likely to get under the prevailing political process. Mr. Weiner's analysis didn't extend to asking WHY all this technology exists and HOW it has been forced upon us. Consumers only demand things that they know about. Most products that they request are heavily marketed to generate that demand. Doctors have been dealt a double whammy of marketing, first as consumers, then as providers. So, properly promoted, every new diagnostic system, drug, therapeutic device, or even a sharps disposal system becomes just another must-have and cost of doing business. I think statistics would bear out my sense that the rate of introduction of new medical technologies and medical applications of other technologies has far outpaced the rate at which morbidity and mortality has improved over the past quarter century or so. Here's what I mean: When a needy burn victim receives a revolutionary synthetic skin transplant, the patient's insurance pool gets hit for a quarter of a million dollars. Everybody's premiums go up next year in order to cover future applications of this innovation. How many people benefit? There's no proportionality here. If a truly disinterested agency could triage technologies to balance, cost, risk, efficacy, and fairness. it would help a lot. But how that agency is constituted will make all the difference. We don't need a Federal Reserve Board or Federal Elections Commission overseeing medical decisions. We need some kind of oversight, but we'll need to clear out a lot of political cobwebs to make it achieve what we expect of it. How does Mr. Weiner think that can happen?
From MI, 06/23/2009
Two questions:
Has Prof. Weiner never heard of "Peer Review Organizations"?
If he became seriously ill, would Prof. Weiner stay in the United States or would he head to one of "every other industrialized nation in the world"?
Even Dr. Gawande found that different doctors ethically prescribe different treatments for the same conditions.
Really, the CDC, and a many other organizations, put a lot of effort into evaluating the effectiveness of different treatments, drugs and tests.
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