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COLUMNISTS
TODAY'S STORIES
17.07.2008
More Doctors, More Money, More Problems

The Senate Finance Committee held a hearing today on ways to improve the quality of health care while reducing cost. Peter Orszag, director of the Congressional Budget Office, has some succinct and informative testimony here--highly recommended. One of the most interesting parts of Orszag's testimony concerned geographic variation in health spending; the map above shows Medicare spending per beneficiary broken down by hospital region. As you can see, high-spending regions expend twice as much or more per beneficiary as low-spending regions do, and the correlation between spending and health (Figure 1 in Orszag's testimony) isn't clear at all. In fact, if anything, it's slightly negative. Part of the reason some areas have higher spending is that there are higher rates of illness there--note, for example, the degree of overlap between low-spending regions on the above map and thin regions on this map. But that's not the main explanation: According to researchers at Dartmouth, illness rates account for at most 30 percent of the observed variation.

So what's the primary culprit? A lot of it, as Shannon Brownlee argued in her book Overtreated, is simple availability. Where there are more doctors performing expensive procedures, more procedures get performed, even if they contribute minimally or not at all to improved health outcomes. (Notice how dark Boston is!) This is largely a result of Medicare's fee-for-service reimbursement system, which provides an incentive to deliver more care, not necessarily better care. The obvious response is to move more toward a fee-for-performance system; needless to say, that would be a monumental change that would arouse quite a bit of opposition from providers who like the current system just fine. Coaxing more providers into investing in better information technology, which would reduce the frequency of medical errors and help eliminate unnecessary care, wouldn't hurt either--though that too runs into opposition from technophobe doctors and independent practitioners who, absent big subsidies from the feds, don't have a financial incentive to do it.

--Josh Patashnik 

Posted: Thursday, July 17, 2008 3:24 PM with 16 comment(s)

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rozenson said:

I understand exactly what you mean, being a Boston resident myself. Treatments these days, like the cancer drug Avastin, manage to marginallly extend life, but at a cost of tens or hundreds of thousands of dollars. The current free-market system, as Jon Cohn has noted, encourages pharmaceuticals to provide only slightly better treatments over time, but label them as breakthroughs and charge however much they want.

July 17, 2008 4:41 PM

AlanSP said:

From the note for the chart you mentioned: "The composite measure of the quality of care, based on Medicare beneficiaries in the fee-for-service program who were hospitalized in 2004, conveys the percentage who received recommended care for myocardial infarction, heart failure, or pneumonia."

Maybe it's just me, but that seems like a really lousy way to measure overall quality of care.  And if you're going to insist on focusing on those 3 medical problems, wouldn't it make more sense to compare per-capita spending related to those three problems?

July 17, 2008 4:53 PM

GSpinks said:

I need to point out that most providers aren't technophobes. They're overly cautious because they jumped the bandwagon early and most of them got severely burned for their troubles. Many of the "new solutions" winded up never making it into production or not delivering the quality they promised. The real issue now is that most proven solutions are proprietary, and difficult or impossible to bring to market. The government needs to hold onto its money and wait until the IT/Healthcare market corrects itself.

I'd also like to point out that there is no such thing as an IT solution for "STUPID". As roz points out, there is a lot of "wasetful" practice that occurs (I won't begrudge a dying person a few extra months with their loved ones, though, especially if they're willing to shoulder the accompanied economic burden). It seems the new fad is drugs with "cosmetic" effects, like Viagra: lots of money, very little improvement to quality of life. This issue will require a health dose of Reality Check and Common Sense.

July 17, 2008 5:55 PM

ChanRobt said:

The American medical system worked superbly until the federal government got involved under Johnson.  And it's gotten worse ever since as insurance companies and doctors have gamed Medicare.

If the Democrats get their way and totally nationalize medicine, it will be a nightmare from which we will never extricate ourselves.

July 17, 2008 8:15 PM

aeromonas said:

"The American medical system worked superbly until the federal government got involved under Johnson.  And it's gotten worse ever since as insurance companies and doctors have gamed Medicare."

That, to quote one of the favorite sayings my internal medicine residency director (along with, 'If certainty is what you're after, we could always shoot you and do an autopsy,') is basic bullshit.

Whether in terms of cost or outcomes, there can be no comparisson between the health care system of today and that which existed before the Johnson administration.  The 1960s saw only the earliest beginnings of the explosion of effective--and expensive--technology that has transformed medicine.  Sure, that system worked fine by its own terms, but compared with the outcomes that can be achieved today, it didn't work worth a damn.  Pre-1970 (really pre-1980) doctors could prescribe antibiotics to treat an infection and they could cut you open to take a look inside and replumb your internal hookups to fix anything that was grossly awry, but other than that, they couldn't really do much of anything except hold your hand while either you recovered on your own or went to meet your maker.  

As late as 1977, when my grandfater, aged 72, died of a heart attack, the standard treatment for myocardial infarction was the blood thinner heparin (made from animal carcasses), nitroglycerine, morphine, and bed rest.  We now know that bed rest alone would have produced outcomes that were almost as good, albeit at the expense of major discomfort.  Contrast that to today, where a 72 year old who rolls into the ER with an ST-elevation MI in the middle of the night gets whisked straight to the cath lab where an interventional cardiologist with about 8 years of training under his belt, a couple of skilled nurses, x-ray technicians and the like catheterize him immediately and throw in a stent costing thousands, protect the stent from blocking up with drugs that cost further thousands, admit him to a coronary care unit, do an echocardiogram to assess the degree of damage to the heart, put him on about five long-term medications to prevent future events and, if he has heart failure of even moderate severity, throw in a $60,000 automated defibrillator to prevent sudden death from a cardiac arrhythmia.  All of these treatments have been validated in randomized, controlled trials, and on average they prolong people's lives, but at great cost.  So before you wax nostalgic for the days before the Federal government fucked up medical treatment, just tell me how you'd plan to pay for modern cardiac treatment under a system modeled on that that existed pre-Medicare.

July 17, 2008 10:05 PM

aeromonas said:

AlanSP, regarding your concerns about measures of quality, quality of health care is damn hard to measure no matter how you slice it.  You can't really compare outcomes such as deahts or need for rehospitalization because the patient population you're treating exerts a strong influence on such outcomes, regardless of how well or poorly you treat them.  For example, if I'm a cardiologist whose practice is based in a wealthy retirement community in Arizona, my age-adjusted outcomes are going to be a LOT better than those of a colleague who works with indigent patients in inner-city Detroit, and they'll probably be better even if I'm a worse doctor.

Using MI, heart failure, and pneumonia treatment as the benchmark makes a fair amount of sense.  These are some of the most common admitting diagnoses going--especially among the elderly, Medicare population--and their optimal treatment is well-established, so it's easy to tic off the boxes and say that the treatment given was both timely and appropriate.  You could broaden the list of diagnoses examined including other common problems such as DVT, cellulitis, exacerbations of COPD etc where treatment algorithms are well-established, but that'd be require more intensive data collection, and the people who look at this may well have already established that if a particular doctor or institution is providing good quality with respect to MI, CHF, and pneumonia, that tracks with other diagnoses as well.

July 17, 2008 10:19 PM

AlanSP said:

aeromonas,

My objection wasn't so much the particular problems they chose so much as the fact that I think it's sort of comparing apples and oranges.  On one hand you have the percentage of appropriate treatment for 3 common problems, and on the other hand you're looking at the amount of money spent on *everything*

Also, the goal of spending more money on medical care is not to increase the percentage of MI, heart failure and pneumonia cases that get appropriate treatment, so that seems like an inadequate way to measure its success.  I'm well aware of the difficulties in coming up with a good way to measure overall quality of care, let alone one that can be reasonably used to compare care across many different areas with different demographic characteristics, but this seems like an overly simplistic solution to a complex problem.

July 17, 2008 10:45 PM

Robert Powell said:

Great, informative comments.

I highly recommend Brownlee's "Overtreated".  It goes to the heart of a major problem in our system that's often overlooked. Simply throwing money and doctors at the problem is a typical Washington solution, but it simply misses many of the most important points.

Back in the 70's I attended a seminar at Yale New Haven Hospital that featured an wonderful guy who had practiced as a pediatrician for many years before becoming Chief Medical Examiner of Cook County (Chicago). The take-away line from his presentation: "In my considered professional judgment, the greatest risk to public health today is the medical profession."

He referred to hospitals as "Temples of Doom", described much of the medical profession as shamanistic,  cited over-treatment, mis-treatment, medication errors, communications snafus, and data collected worldwide during doctors' strikes during which death rates went DOWN.

July 18, 2008 4:53 AM

ChanRobt said:

aeromonas, every generation has the conceit that theirs is better and smarter than their elder's.  And, I'm sure you're right in many regards about the efficacy of medicine now vs 40 years ago.

But, just as I'm not certain that-- much as I employ it myself-- the microprocessor and Web revolutions are truly a net gain for the world, I'm not very sanguine about modern medicine.

What I have little doubt about is that the insertion of the Federal government into medicine created vast distortions, both from the government itself, and from the inevitable massive gaming of the bottomless money system by insurance companies, hospitals, and docs.

And docs have also been very much the victims of federalized medicine and the role of the insurance companies as it has evolved.

I shiver at the thought of the totally nationalized medical system dreamt of by Obama and Hillary.  I'll die soon enough.  But my children will have to live with this horror for their entire lives, should it come about.

July 18, 2008 3:04 PM

ChanRobt said:

The other factor that leads to overtreatment is the out of control tort sysrtem which compels docs and hospitals to throw every possible procedure at a patient, lest they be sued for negligence.

July 18, 2008 3:05 PM

ChanRobt said:

Oh, and have we talked about how dangerous hospitals are?  How many people die from being administered the wrong drugs or overdoses of the right ones?  Of the plain danger of disease in hospitals?

If airline travel were as dangerous as hospital treatment, we'd all be back on trains.

Hey, and I'm old enough to remember when all the nurses actually were RNs and they all spoke perfect English.

July 18, 2008 3:08 PM

ChanRobt said:

aeromonas, in your ticking off all the costs associated with a typical cardiac event today, you told us how incredibly expensive it was.  But, you didn't say if these costs were justified.

If market forces were brought to bear in medicine would all these procedures, machines, and techniques cost what they do.  Is this not possibly akin to the Defense Department $1000 toilet seat?

How much would a PC cost if the government decided what to pay for each one?

Although I understand that a rare disease may always be expnsive to treat, I won der why economies of scale have not shown up in the treatment of common problems like heart disease.

You're telling me that a highly distorted medical system is inordinately expensive.  I'm saying, you're right.  But, what would it be like without the distortions of the federal government?  (Not to mention 12 million illegals and others are subsidized with free medical care.)

July 18, 2008 3:15 PM

aeromonas said:

They're generally justified.  Where such costs edge into futility is when such expensive interventions are applied to the very aged, to those greater than 80, say.  

Back in the 60s, a significant proportion of men--LBJ for example--could expect to die in their 50s and 60s of coronary artery disease.  The interventions I've described have enabled many of these men to live healthy, active lives into their 80s.  Is 25 years of additional life worth $250K?  I think most of us would say yes.  I also think that most of us think that a society in which such goods are available to all who need them would be a better one in which to live than a society that grants these benefits only to those who can afford to pay for private insurance.  You are, of course, free to disagree.

If you would, though, please explain just how Medicare has "distorted" health care delivery.  Medicare functions more or less the same as private insurers, and I can't see how modern health care could exist at all without insurance in some form.  Most doctors I know will tell you that the private insurance bureaucracy is every bit as intrusive and irrational as Medicare.

July 19, 2008 1:42 AM

aeromonas said:

And if you genuinely question whether modern coronary care is worth it, when you wake in the middle of the night with a feeling like an elephant sitting on your chest and pain down your left arm, just take a Valium and a shot of Bourbon and go back to bed.

July 19, 2008 1:46 AM

aeromonas said:

Many health economists have demonstrated that "market forces" as usually defined, don't operate in health care.  Users of health care--patients--are different from those who make decisions about whether or not to purchase particular treatments--doctors--are different from the entities that actually pay for treatment--insurers.  This, together with the fact that to a person about to die a life-saving treatment is of infinite value, means that the usual laws of supply and demand don't apply.

July 19, 2008 1:52 AM

aeromonas said:

And for a personal perspective, I, an American, am currently working in a fully nationalized health care system--in Australia.  It works just fine.  My compensation is a little lower than what it'd be in the States, but not much, and whether you choose to believe it or not, the degree of pain-in-the-assedness of my day to day work is less.  

July 19, 2008 1:55 AM