Cost of Care – The Moral Healthcare Blog

How Equal Do We Want To Be – in Healthcare?

Along my journey in Cognitive Science I came to discover Dan Ariely, and then came across a TED talk he gave called How Equal Do We Want To Be? He explores economic inequality and what we think we know about economic inequality, the reality of income inequality and finally what we would like income inequality to be. I think there are important correlations to how equal do we want to be in healthcare, and brought this here for discussion.

You can easily skip my summary of his talk and just go over and watch it, but I also wanted to capture some of the graphics, as I think with just a little imagination, they can be transformed into important questions about our healthcare system!

So, from the top! What we think is that the top 20% have 58.5% of the wealth and the bottom 40% have about 10% of the wealth.

In reality, the top 20% have 85% of the wealth the next 20% have 11% in the bottom 60% share the last 5%. He calls this difference between what we think and reality the Knowledge Gap.

Along those lines, he asks what we think the pay ratio of CEOs is to that of unskilled workers. He shows this graph showing what people think it is (Estimated), when it actually is (Actual), and our ideal notion.

Not so bad, right? Oops, he didn’t adjust the scale. Here’s the reality.

We are in Alice in Wonderland territory now. But if you are in the CEO or top 20%, it’s a very happy Wonderland, indeed!

During the talk, Ariely references John Rawls and his theory of distributive justice. He asked whether, if we could design our system, would we choose what we have? So he asks, “How should the wealth be distributed?”

Quite a different picture! The fairness is striking! Sure, those at the top do better, but those at the bottom should not be destitute, either. He calls this difference between what we think we have and what we want the Desirability Gap.

His last step is to ask us not only what do we think we know and what do we want, but what are we going to do about it? This is the Action Gap. There is much activity in the action gap of late. (Well, maybe Bernie Sanders not just lately.) But the recognition of massive wealth inequality finally seems to be making it into mainstream debates on policy in America for the first time in decades.

I will leave that larger societal question to others. My lane is the healthcare line, particularly the fairness of healthcare lane, or the social justice Lane. Ariely notes that he has done research about other areas of inequality including health, availability of prescription medications, life expectancy, infant mortality, and education. He notes that we are even more averse to inequality in these areas than we are regarding wealth. We are even especially averse to inequality when the individuals have less agency, like children. (I would be interested in extending my research to see if it also applies to people born into all lower social economic statuses.)

I do not know if there is research on what Americans think about the injustices or performance of the US healthcare system. I do know that most Americans know that we are not the best and no favor major changes or complete overhaul of the system. And of course, we do know many of the realities. We know we spend far more than any other nation and do not cover everyone. We know we have very high out-of-pocket costs. We know we have relatively low life expectancy and high infant mortality. We know our citizens are less likely to survive serious illnesses. We know that we have less physicians and our people see our physicians less frequently than other nations.

At a baseline, we do not even know what The US Healthcare Knowledge Gap is. We do not know what the public does not know. That makes it hard to get to the Desirability Gap, let alone the Action Gap.

Can we get by without knowing what the Healthcare Knowledge Gap is? Maybe. But it will be nearly impossible to move forward without knowing the Desirability Gap.

This will take some serious work. Not only do we need to do the work to educate people on the reality of American healthcare, we then have to do research to find out what we,or at least what most of us, want to do. After decades of watching progressives telling people that what they should want is single-payer, I know that telling people what they want is not the answer. We need to do some work and we need to have some conversations and we need to come up with solutions.

The Role Of Sales Representatives In Driving Physicians’ Off-Label Prescription Habits – Health Affairs Blog

Off-label prescribing is widespread in Canada and the United States. One in nine prescriptions for Canadian adults are for off-label uses with the highest percentages coming from anticonvulsants (66.6 percent), antipsychotics (43.8 percent), and antidepressants (33.4 percent). Overall, 79 percent of the off-label prescriptions lacked strong scientific evidence for their use.

For 160 drugs commonly prescribed to U.S. adults and children, 21 percent were for off-label indications totaling 150 million prescriptions. In this case, 73 percent had little to no scientific backing and once again psychoactive drugs such as gabapentin had the highest level of off-label use.

Moreover, doctors do not seem to know what are and are not approved FDA use for many of the drugs that they prescribe. Now an article published in the June issue of Health Affairs by Ian Larkin and colleagues points to active promotion by sales representatives as one reason for the widespread off-label use of antipsychotics and antidepressants in children.

The Role Of Sales Representatives In Driving Physicians’ Off-Label Prescription Habits – Health Affairs Blog

Cost of Treatment May Influence Doctors – NYTimes.com

Saying they can no longer ignore the rising prices of health care, some of the most influential medical groups in the nation are recommending that doctors weigh the costs, not just the effectiveness of treatments, as they make decisions about patient care.

The shift, little noticed outside the medical establishment but already controversial inside it, suggests that doctors are starting to redefine their roles, from being concerned exclusively about individual patients to exerting influence on how health care dollars are spent.

“We understand that we doctors should be and are stewards of the larger society as well as of the patient in our examination room,” said Dr. Lowell E. Schnipper, the chairman of a task force on value in cancer care at the American Society of Clinical Oncology.

Cost of Treatment May Influence Doctors – NYTimes.com

Patients’ Costs Skyrocket; Specialists’ Incomes Soar – NYTimes.com

CONWAY, Ark. — Kim Little had not thought much about the tiny white spot on the side of her cheek until a physician’s assistant at her dermatologist’s office warned that it might be cancerous. He took a biopsy, returning 15 minutes later to confirm the diagnosis and schedule her for an outpatient procedure at the Arkansas Skin Cancer Center in Little Rock, 30 miles away.

That was the prelude to a daylong medical odyssey several weeks later, through different private offices on the manicured campus at the Baptist Health Medical Center that involved a dermatologist, an anesthesiologist and an ophthalmologist who practices plastic surgery. It generated bills of more than $25,000.

“I felt like I was a hostage,” said Ms. Little, a professor of history at the University of Central Arkansas, who had been told beforehand that she would need just a couple of stitches. “I didn’t have any clue how much they were going to bill. I had no idea it would be so much.”

Ms. Little’s seemingly minor medical problem — she had the least dangerous form of skin cancer — racked up big bills because it involved three doctors from specialties that are among the highest compensated in medicine, and it was done on the grounds of a hospital. Many specialists have become particularly adept at the business of medicine by becoming more entrepreneurial, protecting their turf through aggressive lobbying by their medical societies, and most of all, increasing revenues by offering new procedures — or doing more of lucrative ones.

Patients’ Costs Skyrocket; Specialists’ Incomes Soar – NYTimes.com

JAMA Network | JAMA Internal Medicine | Medicare Payment for Cognitive vs Procedural Care: Minding the Gap

Importance Health care costs in the United States are rising rapidly, and consensus exists that we are not achieving sufficient value for this investment. Historically, US physicians have been paid more for performing costly procedures that drive up spending and less for cognitive services that may conserve costs and promote population health.

Objective To quantify the Medicare payment gap between representative cognitive and procedural services, each requiring similar amounts of physician time.

…

Results The revenue for physician time spent on 2 common procedures (colonoscopy and cataract extraction) was 368% and 486%, respectively, of the revenue for a similar amount of physician time spent on cognitive care.

Conclusions and Relevance Our analysis indicates that Medicare reimburses physicians 3 to 5 times more for common procedural care than for cognitive care and illustrates the financial pressures that may contribute to the US health care system’s emphasis on procedural care. We demonstrate that 2 common specialty procedures can generate more revenue in 1 to 2 hours of total time than a primary care physician receives for an entire day’s work.

JAMA Network | JAMA Internal Medicine | Medicare Payment for Cognitive vs Procedural Care: Minding the Gap

JAMA Network | JAMA | Views of US Physicians About Controlling Health Care Costs

Physicians’ views about health care costs are germane to pending policy reforms.

Objective To assess physicians’ attitudes toward and perceived role in addressing health care costs.

…

Results A total of 2556 physicians responded (response rate = 65%). Most believed that trial lawyers (60%), health insurance companies (59%), hospitals and health systems (56%), pharmaceutical and device manufacturers (56%), and patients (52%) have a “major responsibility” for reducing health care costs, whereas only 36% reported that practicing physicians have “major responsibility.” Most were “very enthusiastic” for “promoting continuity of care” (75%), “expanding access to quality and safety data” (51%), and “limiting access to expensive treatments with little net benefit” (51%) as a means of reducing health care costs. Few expressed enthusiasm for “eliminating fee-for-service payment models” (7%). Most physicians reported being “aware of the costs of the tests/treatments [they] recommend” (76%), agreed they should adhere to clinical guidelines that discourage the use of marginally beneficial care (79%), and agreed that they “should be solely devoted to individual patients’ best interests, even if that is expensive” (78%) and that “doctors need to take a more prominent role in limiting use of unnecessary tests” (89%). Most (85%) disagreed that they “should sometimes deny beneficial but costly services to certain patients because resources should go to other patients that need them more.” …

JAMA Network | JAMA | Views of US Physicians About Controlling Health Care Costs

Diagnosis – Insufficient Outrage – NYTimes.com

You don’t often see a good rant of moral outrage regarding health care in the Times, so here you go!

RECENT revelations should lead those of us involved in America’s health care system to ask a hard question about our business: At what point does it become a crime?

Diagnosis – Insufficient Outrage – NYTimes.com

Colonoscopies Explain Why U.S. Leads the World in Health Expenditures – NYTimes.com

By ELISABETH ROSENTHAL | Published: June 1, 2013

MERRICK, N.Y. — Deirdre Yapalater’s recent colonoscopy at a surgical center near her home here on Long Island went smoothly: she was whisked from pre-op to an operating room where a gastroenterologist, assisted by an anesthesiologist and a nurse, performed the routine cancer screening procedure in less than an hour. The test, which found nothing worrisome, racked up what is likely her most expensive medical bill of the year: $6,385.
That is fairly typical: in Keene, N.H., Matt Meyer’s colonoscopy was billed at $7,563.56. Maggie Christ of Chappaqua, N.Y., received $9,142.84 in bills for the procedure. In Durham, N.C., the charges for Curtiss Devereux came to $19,438, which included a polyp removal. While their insurers negotiated down the price, the final tab for each test was more than $3,500.
“Could that be right?” said Ms. Yapalater, stunned by charges on the statement on her dining room table. Although her insurer covered the procedure and she paid nothing, her health care costs still bite: Her premium payments jumped 10 percent last year, and rising co-payments and deductibles are straining the finances of her middle-class family, with its mission-style house in the suburbs and two S.U.V.’s parked outside. “You keep thinking it’s free,” she said. “We call it free, but of course it’s not.”
In many other developed countries, a basic colonoscopy costs just a few hundred dollars and certainly well under $1,000. That chasm in price helps explain why the United States is far and away the world leader in medical spending, even though numerous studies have concluded that Americans do not get better care.
Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system. They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories — and often by a huge margin.
Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain. The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy.

Colonoscopies Explain Why U.S. Leads the World in Health Expenditures – NYTimes.com

Overruns Forcing Lower Payments to Some Providers in Stopgap Health Program – NYTimes.com

WASHINGTON — The Obama administration said Monday that it was cutting payments to doctors and hospitals after finding that cost overruns are threatening to use up the money available in a health insurance program for people with cancer, heart disease and other serious illnesses.

The administration had predicted that up to 400,000 people would enroll in the program, created by the 2010 health care law. In fact, about 135,000 have enrolled, but the cost of their claims has far exceeded White House estimates, exhausting most of the $5 billion provided by Congress.

Under a new policy issued by Kathleen Sebelius, the secretary of health and human services, “health care facilities and providers will get paid less” for providing the same services to patients in the federal program, known as the Pre-Existing Condition Insurance Plan.

In most cases, payments to health care providers will be capped at Medicare rates, which are substantially less than the commercial insurance rates they have been receiving. The new policy generally prohibits doctors and hospitals from increasing charges to consumers to make up the difference.

Michael T. Keough, the executive director of the North Carolina Health Insurance Risk Pool, said the new policy was one of several steps taken recently by federal officials to control spending.

“They are trying to stanch the hemorrhaging,” Mr. Keough said.

The federal government notified some states last month that it was setting a ceiling on costs that would be reimbursed from June through December of this year. In effect, state officials said, the new limits shift the financial risk of the program from the federal government to those states.

Congress established the program to provide coverage to people with pre-existing conditions who had been uninsured for at least six months, and Ms. Sebelius has said, “It literally saves lives.”

The program provides a transition to 2014, when most consumers will be able to obtain insurance regardless of their pre-existing conditions.

Federal officials froze enrollment in the program in February, but costs continued to grow rapidly.

Overruns Forcing Lower Payments to Some Providers in Stopgap Health Program – NYTimes.com

It is worth remembering, that these patients had run out of options for access to treatment before the program.