Cost

"Health care costs"  are a constant companion of budget wonks, showing up in every discussion of long-term fiscal policy and discussions of healthcare reform going back decades. But in an Atlantic piece from the end of the year, coauthored with Thom Walsh of the Dartmouth Center for Healthcare Delivery Science, we argue that talking about "costs" ignores our increasing utilization of healthcare services,  misrepresenting the real nature of our spending problem and obscuring solutions:

"...the more worrisome reason for rising spending is the quantity of high technology specialty services we undergo. We get more high tech imaging studies, more days in the ICU, more robotic surgeries than we did 40 years ago, or even 14 years ago. Sometimes that high-tech medicine leads to better outcomes, but a lot of the time it does not -- it just means we spend more. 

Given this increasing use of high-tech services, it should be easy to see why the "rising healthcare costs" frame is misleading: if we're using more and more services each year, it's hardly reasonable to blame rising costs of production. [...]

 The real problem, then, isn't merely that we're spending a larger and larger percentage of our income on healthcare -- it's that we are spending indiscriminately. Yet when healthcare spending rhetorically becomes healthcare costs, it implies that overconsumption of useless, overpriced services is not part of the problem."

Read the full piece at The Atlantic.

As California’s oldest governor, Jerry Brown has gone out of his way to demonstrate his vigorous good health, jogging around the Capitol and even challenging reporters to pull-up contests—which he won. Now that he’s been diagnosed with prostate cancer and begun radiation therapy, some news outlets seem to be experiencing a bit of schadenfreude, gleefully calling the 74-year-old governor’s diagnosis a “blow to his healthy image.”

No fiscal policy event is complete without the plaintive cry that health care costs are out of control. The phrase has become a form of rhetorical boilerplate that is often used to imply that policy makers are helpless in the face of market forces, and that the only way to reduce "costs" is either cutting benefits or rationing.

Last week's Health Wonk Review is worth checking out--it has posts on a whole slew of topics, ranging from implementation of the ACA to Medicare readmissions penalties, and more. It's also stocked with Chanukah facts! Check it out here.

One of the particularly important posts covers a surprising JAMA paper looking at patients who had online access to their medical records and other information online. Contrary to the popular narrative that patients who have access to their information and can manage their medical needs will consume less healthcare, utilization among patients using the online system went up. The study is far from a complete analysis of the effects of better IT on healthcare spending, but it does pose serious problems for people who believe electronic medical records and giving patients better access to their information will make a serious difference in the healthcare system.

Australia's Medicare system took a big step toward cheaper and more effective healthcare recently by ordering a systematic compilation of procedures that are harmful, not supported by evidence, overused for a large number of patients, or of low value for some other reason. The list is based on recommendations from the British National Health Service's National Institute for Health and Clinical Excellence (NICE), evidence assessments from the Cochrane Collaboration, and other sources. The list is full of old favorites for people who pay attention to overtreatment--procedures like vertebroplasty, elective angioplasty for stable angina, PSA testing, and some arthroscopic knee surgeries. But it also includes a wide variety of specific surgical techniques and other, more technical examples of ineffective practices that we non-clinicians don't hear about or talk about as much.

It's hardly a complete list of all the ways patients get overtreated. The study didn't include pharmaceuticals, and lots of overtreatment is more the result of being in an overly-intense treatment environment (like a hospital or an ICU than the result of a specific decision to do a specific procedure. But it's certainly useful to see a good long list of ways that we can eliminate waste in the medical system--hopefully other systems outside Australia will take note, and groups like Choosing Wisely will take a look at the list, draw from it, and add their own examples!

The paper describing how the list was created is here; the full list is in an appendix to that paper, here.

Last night, CBS's 60 Minutes aired a segment reporting on the allegations that for-profit hospital chain Health Management Associates (HMA) has committed widespread Medicare fraud, including by pressuring ER docs to admit at least 20% of their patients (and at least 50% of patients over 65!), and by using a computer system that automatically ordered tests before patients even saw a doctor. The company has denied the accusations, but they are under investigation by the Justice Department.

Obviously, if HMA was breaking the law, it should be investigated and punished. But it's important to note that similar questionable admissions happen all the time, at hospitals across the country, without any deliberate Medicare fraud. Supply-sensitive admissions are a huge and expensive problem that the 60 Minutes story didn't address. It doesn't matter to a patient who ends up getting an infection if they were admitted explicitly to make more money, or "just in case" and because there was a bed available. Preventing fraud is yet another reason we need much better evidence on when being admitted to the hospital is helpful, and when it just puts patients in harm's way.

CBS based the report on conversation with a large number of former HMA employees, as well as on some documents that apparently show the pressure from inside the organization. We've asked to see the documents, and will update this post to reflect anything we hear about that request from CBS.

Watch the full segment here!

In most industries, quality-improving and cost-cutting innovations don't sit around for years while people keep muddling through with old technology. When an innovation is ready for widespread use, it disrupts the market, whether the market wants it or not. In the process, some entrepreneur usually makes a killing.

Tara Parker-Pope, Well columnist for the New York Times website, highlighted overtreatment as a serious problem in a blog post yesterday. The post describes several people's direct experiences with unnecessary testing and treatment, and does a good job conveying the physical, emotional, and financial harm that comes from a disorganized system prone to overtreatment.

Overtreatment is a human issue, and reducing the personal harm it causes is at least as important as controlling healthcare spending growth. But healthcare spending is a crucial political issue, so it was smart to put the post on the Times's current campaign issues channel, The Agenda. Tackling overtreatment will be a defining issue of the next few years--either because we make crucial progress toward eliminating overse and reducing total medical spending, or because the next President ignores the problem while we continue on the ruinous path of letting healthcare strangle the rest of our economy.

Given the importance of the issue, though, I wish the post had looked a little bit closer at the policy issues involved. Most importantly, the post doesn't address the causes of overtreatment, including the financial incentives faced by clinicians and hospitals, lack of research on what treatments are effective, and physicians' failure to communicate to patients about their treatment options. The thing is, there are huge differences in policy between the two tickets on those issues. Since the post appeared on The Agenda, it could have done a lot more to point out those differences--like the fact that the ACA moves Medicare away from paying for the volume of services and toward rewarding higher-quality, more cost-effective care, or that it funds patient-centered outcomes research to determine which treatments actually work. On the other hand, Romney's running mate, Paul Ryan, recently parroted the absurd idea that IPAB is a "death panel," even though it is specifically prohibited from rationing care. That kind of rhetoric is hard to square with the notion that a Romney/Ryan administration would be willing to take any political risk to push back against unnecessary care.

Finally, on a related note, Dr. Aaron Carroll of The Incidental Economist has pulled together an incredibly useful set of politically difficult truths about reducing healthcare spending, in a set of posts titled "Why is this so hard to understand?" All of them are important and worth reading:

Part 1: When Medicare spending goes up, seniors’ premium costs go up.

Part 2: You can be for reducing Medicare spending, or you can be for increasing Medicare spending, but you can’t be for both.

Part 3: If you spend more on Medicare, someone has to pay for it.

Part 4: Don’t argue that reducing government involvement is the way to reduce spending.

We don't often weigh in on electoral politcs here on New Health Dialogue, but the introduction of Paul Ryan into the race as Mitt Romney's running mate has distinctly shifted the focus of the debate onto Medicare, at least for the moment, and the editor of Delve Into '12, the New America campaign blog, asked for our thoughts.

You should definitely check out the full post (here) and the rest of their campaign commentary, but if you're short on time, here's an excerpt from the end of our post:

[...T]he Ryan budget slashes government healthcare spending, but it does relatively little to reduce total health spending. (In fact, if Ryan’s plan was implemented, it could reduce Medicare’s bargaining power and actually increase total spending.) While the ACA includes specific programs aimed at reducing waste (for instance by giving doctors incentives to reduce spending on ineffective treatments, funding research on which treatments actually benefit patients, and making it easier for cheaper generic drugs to get approved), the Ryan plan’s main savings mechanism is competition among private insurers. In theory, giving people a choice of insurer should reduce healthcare spending –people will choose plans that offer  better value, forcing inefficient plans out of the market. But competition among private insurers has failed to control spending in the private insurance market for decades, so some skepticism of its ability to rein in spending on the elderly is warranted. If that doesn’t actually work and total medical spending doesn’t go down, the Ryan budget saves money by shifting spending from the federal government to individuals.

Ultimately, the Ryan budget's laser-like focus on reducing the federal deficit has led to a glaring oversight in the proposal’s healthcare component. Policy should be focused on reducing total healthcare spending, including private insurance premiums and out-of-pocket payments, not just on reducing what the federal government spends. Healthcare spending has become a drag on the economy, accounting for up to two percentage points of unemployment—and that drag isn’t dependent on whether it’s funded by the government or the private sector. That’s the much more important challenge, and the Ryan budget ignores it completely.

Enjoy the weekend!

Hosted this week by Dr. Jaan Sidorov at the Disease Management Care Blog, it's "A Brainy Health Wonk Review on Health Reform, the Affordable Care Act and Lots More!" Go check it out.

Health Wonk Review will be back on September 13th, hosted by Louise Norris of the Colorado Health Insurance Insider Blog.