Spike's Place

Money Driven Medicine

I've begun reading Maggie Mahar's treatise on the ills of America's Healthcare system, Money Driven Medicine (currently featured over in "What I'm reading"). It is truly a sobering read and I'm only 60 pages in. Her mission seems to be to chronicle how the increasing corporate influence in the practice of medicine is making it less efficient, not moreso. This is definitely the single most frustrating thing to me about the healthcare system. In fact, the original name for this blog was "Health Efficiency", but eh, there isn't enough material to have an entire blog devoted only to this subject, so I scrapped it. In any case, what frustrates me most about healthcare in America is that everybody touts "competition" as this great thing, but what it usually results in is turf wars, resource hogging, and ridiculous inefficiency, and the people who lose out are the patients and the people footing the bill, i.e. employers and the government. So, you can imagine how gratifying it was to see a book that devoted so much space to that idea.

Yesterday Calfornia Healthline highlighted an article in Health Affairs which is along these lines. The study by Robert A. Berenson, Thomas Bodenheimer, and Hoangmai H. Pham describes how highly competitive service areas often see their healthcare costs increase, even though capitalism theory tells us that competition reduces costs. Correcting for other factors, they found that a new clinic would increase the total amount of money spent on the services performed at that clinic in that area.

For example, if a new heart hospital were to enter Cleveland, Ohio, a capitalist would say "this area now has competition for heart patients. All Cleveland area hospitals that offer cardiology services will have to reduce costs and improve quality so they can get more of the patients to their facility instead of the others. This will result in better, cheaper care for the patients." The problem with that idea as it applies to healthcare is that healthcare supply and demand do not conform to normal economic theory. In normal economics, we are told that demand drives supply. If there is large demand for a product, supply will be created to meet that demand. Unfortunately in healthcare, the suppliers in many cases are also the ones creating the demand by convincing patients they need a service they may not need at all. If you're a frightened patient with symptoms you don't entirely understand, it's not hard to imagine a knowledgeably and experienced doctor convincing you that the invasive procedure (that happens to profit the doctor handily) is the way to alleviate your troubles.

Some would say it is unfair of me to target doctors in this way. They're trying to give patients a better experience and they are still bound to the Hippocratic oath, so we should assume that their actions are ethical. Unfortunately, the results speak for themselves. If you build a new clinic, you need money to make it worthwhile.

Of course, what upsets me most is this nugget tucked in the middle of the article: "Hospitals in several CTS markets have expanded profitable service lines while seeking to reduce or eliminate money-losing mental health services." Thank God for capitalism. A thousand specialty heart hospitals, but no mental health center because "it's not profitable". These are the kinds of things that make me glad and depressed that I'm working in healthcare. Glad because it's such an important field and there is so much that needs to be fixed. Depressed because it is such an important field and there is so much to be fixed.

Fleecing

While I was waiting at the doctor's office on Monday, I came across a brochure for a particularly egregious medical plan designed to "save you money". The ARC Advantage Card. For only $20 a month, you get the privilege of a 25% discount off of billed charges! Wow!

Of course, what they don't tell you is that your average health insurance carrier gets discounts over 50% off billed charges and Medicaid often gets up to a 75% discount. And you don't have to pay the clinic anything to get those savings. The clinic gives them away just to get more business. So, I'm paying you $20 every month, even if I never visit a doctor, just for the privilege of getting a crap discount off of ridiculously inflated billed charges? Where do I sign up??

Odds are good that if you showed up with cash on hand, they'd give you the same 50% discount they gave to Blue Cross and Blue Shield without any kind of monthly fees. But why would the Austin Regional Clinic publicize that and refrain from exploiting a vulnerable population? That would be madness!

Are you insured?

I went to the doctor earlier this week with what I thought was a sinus infection. It seems I get a sinus infection every summer I've lived in Austin, and I thought this might be this year's. So, I tried to get an appointment with my Ear, Nose & Throat guy, which didn't work out because he was booked. I like going to him because I have complex sinuses, and he understands them very well because I've had so many sinus infections that he has treated. But, I had to go to my PCP.

My sinuses kind of freak me out because I have a history of getting polyps. The first was a real nasty one in high school that required major surgery to remove. Since then, I get a polyp every time I get a sinus infection. Fortunately, Nasonex spray, anti-biotics, and steroids taken in concert have always made them go away. Given my past, though, I'm extremely paranoid about my sinuses. Having a nasal polyp removed surgically is easily one of my most uncomfortable experiences, so of course I am loathe to repeat it.

Well, I went to my PCP, who was very reluctant to call what I had a sinus infection. It looked more like the trail end of my flu from the previous week than the beginnings of a sinus infection. But, my left nostril had been completely blocked for the previous day, which always makes me think polyp. I asked him if he was sure, and he said "well, I would be more sure with an x-ray." That made me pause, because those tests are remarkably expensive. I know, I've already had them twice in my life. I balked. He responded:

"You have insurance, don't you?"

Ladies and Gentleman, our healthcare crisis explained. I didn't need an x-ray, I needed him to look up my stupid nose and tell me if there was a polyp growing in there. Finally we got it sorted out, and there was no polyp. Yay. So I agreed to wait it out a week and see if things improved. Overall, I'd have felt more comfortable going to my EN&T guy, just because we've been over this drill so many times together already. But it all worked out. Sometimes it's just as hard being an informed patient as it is being an uninformed one.

The AMA and DTC Advertising

Right after I get done bashing the AMA for their stance on Universal Health Care, I'm going to throw a little praise their way. California Healthline reported yesterday that the AMA is trying to extend the period pharmaceutical companies must wait before they can start running direct-to-consumer (DTC) advertising for a new treatment. Also, they want pharmaceutical companies to wait for FDA approval before they can begin DTC ads. Doctors want this delay so they can become fully informed on new drugs before their patients begin requesting it based on commercials they see on TV.

Given that my main focus is mental health policy, DTC advertising is something I pay a lot of attention to. It's one thing if you're selling blood pressure medication on TV (either you have high blood pressure or you don't), but selling anxiety or depression medication is another thing entirely. It's well known that the purpose of advertising in the modern age isn't so much to inform potential customers of new information as it is to convince those potential customers that they need what you are selling. Then, once you've created that perceived need in the mind of the consumer, you give them what they need. How insidious to use this philosophy when selling drugs to treat mental illness.

We all have experienced times of extreme anxiety or desperate sadness. But at what point do those times of despair cross over into diagnosible mental illness? If you go by the commercials, the producers of DTC advertising for psychotropic drugs would have you believe that almost everybody could benefit from their wares. And that's the problem. You don't want psychiatrists or (worse yet) Primary Care Physicians inundated with requests for this or that drug by patients who are influenced by commercials that convince them that normal day-to-day life is a condition helped only by a drug. Giving doctors some time to get ahead of the information curve on these drugs would at least give them a fighting chance to avoid needless prescriptions.

The AMA could have gone the other way, realizing that DTC advertising probably sends quite a few patients (and thus money) to their members because doctors are the ultimate gatekeepers on the drugs we think we need. But they chose professional integrity in pushing for less DTC advertising.

Of course, none of this really matters as the last line of Healthline's article shows:

FDA spokesperson Susan Bro said that the agency believes a required delay on DTC ads for new medications likely would not "survive a constitutional challenge".

So it goes.

I'm back

So it turns out that deciding to start a blog just when you've also decided to buy your first house and when your company has decided to explode in growth is not the best idea. I've been extremely busy and just too wiped out to update. Closing is tomorrow, so I'm hoping to get back in the swing of things in a week or two.

There was one thing that caught my eye today, as it no doubt caught the eye of anybody who would be reading my blog. The Chicago Tribune has reported that the American Medical Association has backed a bill that would require everybody making 5 times the federal poverty level to purchase at least catastrophic health insurance.

Many are touting this as a great shift towards expanded coverage for those without health insurance. Maybe even a step to universal coverage.

I understand that getting players like the AMA on board with expanded coverage is vital in order for it to ever happen, but it also strikes me as a cynical move (why should we expect anything else?) on the part of the AMA. This is the same organization that has stood in the way of every meaningful health care reform effort since Truman's failed attempt to introduce universal healthcare in the late 1940s. When Bill Clinton introduced his reform plan in 1993, they showed some lukewarm support for the idea, as long as it didn't have teeth.

Now, they finally looked up and realized that they're losing a ton of money on the health care mess they've been instrumental in creating. So it's "let's make sure everybody has health insurance." They are still afraid of government control over the healthcare system because they know it will force their incomes down to be more in line with those of the rest of the world.

You know the problem of the uninsured has reached critical proportions when even the AMA is welcoming government involvement to help sort it out. If only they'd had the foresight to prevent this mess decades ago when they could have.

Health Affairs

The latest issue of Health Affairs is all about Mental Health Issues. Needless to say, I'm thoroughly excited to see what they have to offer. As soon as I have some time I'll be writing about the articles I find interesting. YAY.

Asthma and Traffic

People often wonder why our health care costs are spiraling out of control in America. Studies like these lend insight:

Since its inception 13 years ago, the Children's Health Study has indicated that air pollution in Southern California communities reduces lung growth and development, raises the risk of developing asthma, and increases school absences due to respiratory illnesses. The latest finding from the study team zeroes in on the impact of exposure to traffic-related pollutants at home, and shows that kindergarten and first-grade students who lived near busy roads experienced a higher prevalence of asthma.

Asthma is a costly disease to treat and the American lifestyle of driving everywhere and delivering goods in smoke-belching 18-wheelers, with its attendant air pollution, is a driver of asthma in kids. My favorite part of California Healthline's Reporting of the story is their last line:

Study leader Rob McConnell of the Keck School of Medicine at the University of Southern California said it is unclear what residents living near busy roads can do to reduce their risk of developing asthma.

Good luck guys, you're on your own. Unless of course you can afford to move to a higher-priced home that's further from a major freeway.

Throw in the diabetes epidemic caused by diets rich in refined carbohydrates and sedentary lifestyles, and it's easy to see why we spend so much on health care for such poor results. We live horrible lifestyles that make us sick. Single payer can help, but the underlying outlook is still poor, no matter how well-coordinated care is or how much more efficient the system of treating these illneses becomes. As studies like these show, we have a lot of work to do from a public health standpoint before single payer will deliver us to the promised land.

 

The Cost of Inefficiency

The Houston Chronicle reports that an increasing number of doctors are opting out of accepting managed care contracts and going "off the grid" so to speak. The typical such doctor has been in practice for over 20 years, is in a 1- or 2-doctor office, or is not board certified in their specialty, making them less desirable to managed care networks. Currently, over 11% of all providers does not belong to any managed care networks.

A main reason these doctors are not interested in managed care is because of the administrative burden membership presents. The average doctor who is contracted with more than one health plan is contracted with 12. 12 health plans!! That's 12 different credentialing applications that need to be submitted, 12 different contracts to maintain, and 12 different sets of claim idiosyncracies to master. No wonder your average doctor dreams of the nirvana of not having to deal with all that hassle. But only the doctors who have been in practice long enough to develop a large patient base and an outstanding reputation can survive on patient payments alone.

Hmm... how could we reduce the administrative burden placed upon providers? I know! How about a single-payer system that is completely uniform? Maybe the government could contract with providers in a single point of entry into the system. Then the government could also fund 5 or 6 health plans with uniform benefit designs which compete for members based on service.

People who are opposed to single-payer say that competition is vital to improving the system as a whole. But this study comes as compelling evidence that the competition itself creates so much inefficiency that the system is losing some of its best providers. There will always be some doctors who will take payments only from the patients themselves (plastic surgeons come to mind), but 11%? Add this to the costs of a disjointed healthcare system loaded with inefficiencies.

AHIP Update

I haven't posted in a while, it's been a busy week. Luckily, I've been storing up posts I wanted to make.

First, Sen. Olympia Snow, (R-Maine) is considering an amendment to the Association Health Plan Bill that might address some of the concerns mentioned in my previous post on the subject, namely that the bill would allow AHPs to be exempt from state regulations which provide protections to health plan members. Snow's amendment would mandate that all offered benefit packages would have all benefits offered in at least two thirds of the states. Snow says that this amendment would help attract Democrats and moderate Republicans (they still exist?) to approve a bill that has received heavy opposition from the American Cancer Society (becauses mammograms wouldn't be mandated) and AARP (because the bill allows discrimination against older and sicker workers).

The only problem now is Joe Paduda's comment at Managed Care Matters. Joe thinks that because there is such a pervasive oligarchy in health care, bargaining power is something of a mirage in healthcare today. If there is only one major insurer in your market, it doesn't matter how much clout you have, the insurer knows you're a captive audience and doesn't have to bargain down to get your business. Accordingly, the only benefit keeping prices down is the economies of scale that might result with a larger contract compared to a smaller contract. But then, the small companies would still have to be administrated separately, thus eliminating many of the economy of scale benefits as well.

So... this amendment may kill the ability for AHPs to save small businesses money in the insurance market (though I still think there would be small savings), but without it, it likely won't get passed. We'll have to see how it plays out.

When Good Policies Go Bad

This is what pisses me off about Republicans. They take a great idea like Association Health Plans (AHPs), which allow small businesses to band together to buy group insurance at lower rates, and then screw it up by gutting regulations that keep people safe. California Healthline has done some great reporting as this issue has developed over the past few weeks.

So why are AHPs a good thing? It goes back to how companies purchase group health insurance from health insurance companies. If you have a lot of employees, you are able to command a good rate both because an insurer will drop rates in order to get a large book of business and because of risk management issues. Basically, the more employees you have, the less one tragic case like an expensive brain tumor will increase your per employee medical costs. Spreading risk like this allows larger companies to be able to guarantee that their per employee medical costs will be within a narrower, lower range than smaller companies with fewer employees. Because smaller companies have less ability to predict their medical costs, insurers charge them a much higher rate to offset the risk of that one person with a brain tumor blowing the insurer's profitability on the contract.

AHPs are good in concept because they would allow those small businesses to band together and buy insurance as if they were one large company.

In this case, it looks like the reason they're going to be cheaper is because they're going to be exempt of many of laws that have been passed to protect health plan members from getting screwed. Gone would be laws protecting sicker and older employees from being discriminated against. Gone would be laws requiring that health plans cover preventive treatments like mammograms.

Worse, many state attorneys general are concerned that this law would create a loophole that would allow every health plan to be exempt from those requirements. Conservatives would reply "but the market will ensure that health plans would offer those things even if they aren't required because the consumer would demand them." Call me crazy, but states wouldn't have passed these laws if health plans were offering these benefits on their own. Another example of Republicans turning a good idea into a bad one.