Heroes and villains – why costs accelerate

by rcentor on August 6, 2009

Who are the good guys and the bad guys? Why are health care costs accelerating? If we can identify the good guys and the bad guys, perhaps we could rein in costs.

Heroes

  1. Doctors and nurses who work in the trenches.  The trenches include outpatient practices, emergency departments, nursing homes, home visits and hospital care.
  2. Free clinics – although I wish they were not necessary
  3. The generic drug industry – and yes WalMart for making the $4 prescription a marketing success
  4. Patients who work hard to decrease their risk factors – smoking, excess drinking, obesity and lack of exercise
  5. Public health initiatives

Villians

  1. Our dysfunctional payment system leads the list.  This payment system encourages short visits and documentation of details but not thought processes.
  2. Pharmaceutical marketing departments  – I applaud the research departments and the production of new and sometimes important drugs.  However, marketing activities lead to overuse of many new drugs.  I object vigorously with direct to consumer advertising.
  3. Government regulations add costs through increasing overhead, both for individual practices and hospitals.  A Senator becomes outraged and everyone ends up paying for his or her outrage.
  4. Our malpractice laws lead to defensive medicine and directly add overhead through malpractice insurance.  Just compare our malpractice with the countries of Western Europe, Canada, Australia and New Zealand.
  5. The health insurance industry profits while patients and health care workers have unnecessary hassles and expenses.  The lack of consistency between insurance companies, the inane forms, the pre-authorization dances, the ability to deny coverage, the pre-existing coverage hassles all drive this ranter a bit crazy.  We need a reinvention of the rules of health insurance.
  6. The lack of sufficient primary care physicians in this country – and the many factors that discourage physicians from doing primary care.

These lists occur to me this morning.  I thought about this concept last night while entering the land of nod.  I thought about this concept this morning in the shower.  I probably have left out some heroes and villains – please add yours in the comments.  Given productive comments, I will repost with my favorite suggestions.

{ 7 comments… read them below or add one }

Matt August 6, 2009 at 8:24 am

” Just compare our malpractice with the countries of Western Europe, Canada, Australia and New Zealand.”

We have. It doesn’t support your claims. Sometimes I wonder if you read them. Your list of complaints is tired, given the options you put out for solving them. You complain about senators wanting more, the odd payment system, and about government regulation, yet you support universal healthcare. The position is nonsensical.

Karen August 6, 2009 at 11:33 am

About villain #4: Would you say that medicare/medicaid is more or less expense and paperwork than private insurance?

Karen August 6, 2009 at 11:35 am

Error. That would be villain #5.

LibraryGryffon August 6, 2009 at 12:17 pm

I’m not a provider, but I work with a lot of them. From what I’ve heard, the paperwork for Medicare/Medicaid/Tricare is at least as onerous as that for private insurance, and the reimbursement is less, so the return for time spent on the visit and the paperwork combined is far less.

I’ve had one doc I work with tell me he’d rather deal with charity cases than Tricare, because with charity cases, once he’s done, he’s done. With Tricare (and the other gov’t plans) someone in his office has to spend hours fighting to get the minimal payment, often so much time that the cost to the practice of the billing office staff alone is greater than the amount they will (eventually) get.

I’ve also known quite a few who’ve stopped taking Medicare and/or Medicaid patients for the same reasons.

Michael Kirsch, M.D. August 7, 2009 at 6:32 am

Respectfully, I wouldn’t include the ER in the ‘good guys’ column. While the professionals there may may dedicated and well meaning, this is the premier example of medical excess and wastefulness. (See related post at http://www.MDWhistleblower.blogspot.com). I am always shocked when I see patients in the office who have endured a prior ER evaluation, which usually includes unnecessary CAT scans, EKGs, labs, etc. Of course, these tests always spawn others whent the scan shows some trivial abnormality that must be pursued. Yes, I know all of the arguments from my ER friends defending their practice style, but I don’t buy them. I’m sure I’m guilty of my own excesses also, but I can’t match the ER.

a happy oncologist August 7, 2009 at 12:16 pm

Professor- Longtime appreciative reader, here but I have to agree with Matt here. I don’t think this is a very fruitful formulation at all. It oversimplifies the problem, and really has less to do with cost control in particular than a hodgepodge of complaints you have about our health system as a whole.

Ambiguity: “doctors in the trenches” have a great deal to do with escalating costs because of their love of expensive technologies and drugs and their infidelity to evidence-based medicine on what actually works in a cost-effective way (on which point I’d agree with Dr. Hirsch above though would expand it to much of primary care and certainly most of specialty care, gastroenterology and oncology included!). Furthermore, they have failed their patients by not adequately agitating for change in the (admittedly corrupt) payment system. ACP is not quite as implicated in that mess than AMA, but has not been effective in effecting change.

Ambiguity: public health measures, while morallly good (and which will meet little complaint from me) are often not cost-saving, cf. the ample evidence that smokers over a lifetime incur less cost than their nonsmoking counterparts. Again, not that that I would object to significantly augmenting anti-smoking efforts, but not really a big factor in our issues with the cost of healthcare at present.

Ambiguity: on villians 3 and 5, you realize it will be more governmental regulation that will be required to deal with the issues with the health insurance system you cite? And to foes of the “public option” in the current health reform discussion, I’d say that even though reimbursement is probably not sustainably high enough, Medicare is efficient at payment in a timely fashion with a minimum of rigamorole (and might I remind everyone, has an overhead in the 2-3% range compared to 20-30%+ in for-profit insurance plants)

Again, not to say that any of your points individually isn’t well-taken, but this framework doesn’t add much to the conversation and polarizes the issues that in actuality are quite gray.

Best, a happy oncologist

TMLutas August 9, 2009 at 11:29 am

Something to think about that doesn’t neatly fit in hero/villain terms. Medical IT could be plausibly put in both lists. Structured data transmission (medical XML) could play a huge role in reducing costs. At the same time IT as it is practiced today is sometimes getting in the way of better patient care.

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