Addressing health care costs

One of the speakers at the Tacoma Health Care for All rally made the point that although our nation needs single payer healthcare yesterday, if we implemented it tomorrow, the U.S. would go bankrupt. That's because our health care system as it currently exists is very inefficient, and if we don't address the inefficiencies, single payer is doomed to fail. He mentioned a few possibilites for reining in costs, among them the option that every medical visit doesn't require a patient to see a doctor, because nurse practitioners and physician's assistants can often address their needs.

In the June 1, 2009 edition of The New Yorker, Dr. Atul Gawande addresses this issue in his article, "The Cost Conundrum." Dr. Gawande is a general and endocrine surgeon at Brigham and Women's Hospital in Boston and associate director of their Center for Surgery and Public Health, and he is an associate professor at both Harvard Medical School and the Harvard School of Public Health.*

In his article, Dr. Gawande decides to explore the issue of exploding health care costs by examining the second most expensive health care market in the country, Hidalgo County, TX, of which McAllen is the county seat (the highest is Miami, which is a much more expensive location overall). Health care spending in nearby El Paso County is half that of Hidalgo County, even though the two counties are of similar size and have similar demographics.

He explores several explanations for the high cost of medical care in McAllen, and finds most wanting. The residents are not sicker than in most places: rates of cardiovascular disease, asthma, HIV, infant mortality, cancer and injury are lower than national averages. Nor are the residents receiving unusually good health care: the five largest hospitals in Hidalgo County perform worse on all but two of 25 metrics of care in comparison to the hospitals in the much less expensive market of El Paso. And because of tough malpractice laws in the state of Texas, there are few medical malpractice suits driving up costs.

Dr. Gawande finally concludes that the reason for the high costs is because "patients in McAllen got more of pretty much everything--more diagnostic testing, more hospital treatment, more surgery, more home care." When he pointed this out to medical practitioners and hospital executives, they were surprised, and then concluded that this was happening because they are providing their patients with better care than elsewhere.

Not so, argues Dr. Gawande. He cites a 2003 study by Dartmouth University that shows that elderly patients in higher health care spending regions tended to receive more high-cost medical care, with equal or lesser results than in lower-spending regions. The reason for the lesser results? Almost all medical care carries risk, and the more expensive, complicated and/or invasive the care, the greater the risk. Thus, if a procedure isn't absolutely medically indicated, the treatment might be worse than the disease.

In addition, patients in higher spending regions were less likely to receive low cost preventive care services. So patients in high spending areas receive more risky care, with fewer services that would keep them from getting sick in the first place.

Dr. Gawande says, "In an odd way, this news is reassuring. Universal coverage won't be feasible unless we can control costs. Policymakers have worried that doing so would require rationing, which the public would never go along with. So the idea that there's plenty of fat in the system is proving deeply attractive." He goes on to note that some of the regions with the highest quality health care have costs lower than national averages, and if we could bring down spending and increase quality to match those regions, most of our health care (and federal budget!) problems would be solved. The question is how.

One of the problems he notes is that those who oversee most health care facilities are concerned about the bottom line, not quality of care. More patients, more procedures generally equals a better bottom line. This is not to cynically suggest that they care nothing about patients, but as Gawande put it, "[Hospital and clinic execs] have only the vaguest notion of whether the doctors are making their communities as healthy as they can, or whether they are more or less efficient than their counterparts elsewhere. ... [T]he best possible treatment for the patient... isn't what [the execs] are responsible or accountable for."

Patient care decisions more frequently fall to doctors, who can make widely different decisions about how to treats patients with similar health care issues, often depending on where the physican is located. Some of these differences are attributable to how the doctors are trained. But many of the differences come down to money.

Physicians, Gawande said, have different relationships with the money generated by their practices:

1) some are oblivious to it, just making the best decisions for patients they can;
2) some see money as a way to improve their practice. The more money they generate, the more they can do for patients, through improved equipment, adding additional staff, etc.
3) others see their practices as ways to increase their revenue stream, and will prescribe and offer more high-cost services and procedures to do so, over providing low-cost preventive care.

Which category a doctor falls into depends partly on each individual's personality and ethics. But it also depends partly on the culture of the medical community where the doctor practices. Gawande brings up the concept of "anchor" institutions: leading institutions in a region, which, given their strong influence, set the tone for the values in the given field throughout the community.

He then looks at several regions that provide high quality, low cost medical services, and explores this further. For example, in Rochester, MN, where Mayo Clinic is headquartered, the core tenet is, "The needs of the patient come first." Gawande also describes several other such communities, where, in addition to a "patients before profits" set of values, there is also an "accountable care" ethic, in which the leading medical providers adopt "measures to blunt harmful financial incentives" and take "collective responsibility for improving the sum total of patient care." (Something Gawande doesn't mention explicitly is that the best "accountable care" organizations he cites are not-for-profit).

"Harmful financial incentives" include such things as fee-for-service rather than salaries, and doctor investment in profit-sharing for their institution, both of which encourage doctors to over-provide services in order to get paid more. "Collective responsibility" refers to doctors (and other hospital/clinic/home care staff) working as teams to determine the best care for patients, and to prevent unnecessary procedures. He compares it to building a house: you hire a contractor who puts together a team, including architects, carpenters, electricians, plumbers, etc. If each of these groups worked independently, the costs would escalate dramatically, and your house would probably fall apart.

Gawande recommends rewarding doctors and hospitals that "band together to form ... accountable-care organizations [that] collaborate to increase prevention and the quality of care, while discouraging overtreatment, undertreatment, and sheer profiteering." A possible reward could be public and private insurers allowing such groups (if they meet quality goals) to keep half the savings they generate, or the government removing some of the burden of malpractice liability. Bottom line: unless we change the way medical providers do business, health care reform will fail, no matter who's paying for it.**

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* Reading Dr. Gawande's bio on Wikipedia, I wondered if my sister or husband know him. He grew up in Ohio, as we did, and was in the same Stanford class as my sister. Also, my hubby used to work at Brigham and Women's hospital, and had his open heart surgery there. He said his pre-surgery anxiety was eased when it turned out that the anesthesiologist was one of the friends he made when he worked there.

** I wonder if this is a "chicken and egg" thing. Did insurers trying to increase profits push doctors toward profiteering, or was it the other way around? I think it's the other way around. A young man at the rally, a LaRouche follower (!), told me that in the U.S. most medical facilities were non-profit, as were health insurance companies, until the '70s and '80s eras of deregulation. If that's the case, can you change one without changing the other?