The Great Healthcare Debate

Healthcare is personal and front and center in our minds not just because we all intersect with it in some way but it employs 1 in 9 people in the United States. With the current state of our media and political system with polarized debates, he said she said talking heads on the media, the echo chamber of social media and the 24/7/365 barrage of news and fake news it can be hard to see a pathway out of the quagmire we find ourselves in. But we all want to see that path. I just don’t believe that people get up in the morning wondering how they can decimate the healthcare services and the lives of their fellow human beings. We don’t get up out of bed every day wondering how best to punish people who may have made bad choices in their lives or who find themselves in unfortunate positions though geography (the zip code effect) or genetics. I know I don’t and I don’t think you do either.
Yet the stream of coverage and what we read, see and hear online and sometimes even in person suggests that this is the case. I can’t answer the reasons why but I’ve read a string of articles and reporting that variably suggests its always been like this to this is the fault – and then insert the name of your favorite whipping horse. Ultimately it does not matter – unless you believe that people wake up with malintent every morning it’s better to start with an understanding of the problem and then thinking about possible solutions and how we can apply them quickly and effectively
So Let’s Start with some of the fundamental problems in our healthcare system – to be clear we are not alone in the world. I have seen and heard from many others in different countries who are all struggling to varying degrees and with different focus and priorities the same issues. If I had to boil it down to one issue I would say
[stextbox id=”download”]Limited Resources and the Prioritization of the Allocation of those resources[/stextbox]
It’s a familiar equation to anyone trying to balance their budget or allocate their time. If you are like me you may find there are just not enough hours in the day for the task list you created in the morning and wishing either to stretch time (time dilation) or perhaps be able to turn time back with the Wizarding world’s  Time Turner. There are two basic options available – reduce the inputs or reduce the outputs. In the vernacular of budgeting – either spend less or make more money. Both may be viable and depend on personal circumstance but undoubtedly there will be easier and harder solutions. Ultimately we all have to make our own personal decisions – so one solution or size does not fit all.

Photo from jenga.com

It would be foolish to suggest that this covers all the complexity of the healthcare system as we all know healthcare is incredibly complex and always reminds me of the game Jenga.
 
This does not cover everything and there are many other elements in play but it is certainly a start and one that individuals and organizations can focus on to start to make incremental improvements.
As one Chinese proverb states:

Every journey starts with a single step

And turning that step into a habit is one of the best ways of setting a path to improvement.

Demand Side of Healthcare

This is the access and use of the system and the burden does not just fall on the individual. But it does start there as it is out personal choices to access and use available services that creates demand. Historically in the United States, the cost and payment of this access have been disassociated from the individual. When you visit the doctor or pharmacy you don’t pay the actual cost of the service – your insurance carrier does. Ultimately we do all pay for this through our insurance premiums and for many the contributions made on our behalf by our employer that is part of the compensation we receive for working for them but at the point of care, we are disconnected from the price and cost of a service.

Patient Accessing Care

To a varying degree individuals have some form of co-pay – a personal cost that is defined by the insurance coverage and is shifting increasingly to the individual under the new insurance plans called High Deductible Health Plans (HDHP). One of the intentions of this policy is to make the individual responsible for this cost in an attempt to influence behavior and decrease unnecessary access. But this comes with the inevitable unintended consequences with cost avoidance strategies by individuals who knowing they will be held responsible for the full cost of a visit, drug or test may elect to decline to have or use the service.
 
I’d count myself in that crowd having been on a HDHP plan for several years. I can point to several decision where I have declined tests, treatment and access to care because of the nature of my personal responsibility – I have an associated health savings account (HSA) which should cover the capped amount of cost for the year. But the crippling nature of potential costs associated with a catastrophic medical problem – a serious accident, cancer, heart attack are all so terrifying that I see the HSA as a buffer against the potential of medical insolvency that might result especially when you consider the impact on a family with one source of income that would be impacted by any medical disability.
 

Insurers Paying for Care

Insurers want to reduce their costs – and even the non-profits have to make money so are focused on the bottom line if they want to continue to serve their customers and population. So they look to find ways to reduce the unnecessary access to care imposing barriers and limits. There was a gate keeper concept that requires a referral letter from a primary care physician before you can access s specialist – that service by the way costing you additional fees to see the primary care provider. There are formulary requirements that exclude certain drugs from coverage and attempts to limit access to specific doctors and networks to strengthen the buying and negotiation power of the payor with the providers in the system.
 

Providers Delivering Care

On the provider side the clinal professionals delivering the care all arrived at this point having selected the expensive assault course of education to train and qualify to be able to deliver care. For doctors, it’s persistence and endurance that win out. The barriers to entry are high and tied to economics. They all have the same desire to help patients – but economics and the burden of the educational system can overwhelm just about anyone and they have bills to pay both for their education but also the infrastructure they must use to be able to both deliver care but also bill and be paid for delivering. They want to reduce their overhead and spend as much of their time and resources on the delivery of care but to survive in the system must allocate significant amounts of money to non-clinal systems and activities. Estimates of these costs suggest that at least 30% of the healthcare costs we as a society pay in the United States are tied to administrative and billing functions. The data’s still lagging but projections for 2016 put the total healthcare bill at $3.207 Trillion (thats $3,207,000,000,000 or more than $10,000 per person in the USA)
[stextbox id=”alert”]Healthcare Administrative Cost: $962 Billion Dollars
$962,100,000,000[/stextbox]
 

Reconciling the Differences

The difference of opinion often centers on what is unnecessary – in the eyes of the patient they need and want the care they think is appropriate to them. Some of this is fed by a constant stream of information that even for an well informed clinically experienced specialist can be difficult to comprehend and make informed decision. We want wants best for our personal health and the health of our family and loved ones. But sometimes what the patient may think is best may not be – a great example is the steady stream of requests for antibiotics for treatments of minor infections. Not every sore throat or cough demands the use of antibiotics and in fact, in many cases, their use is damaging as we face a future where this line of defense is increasingly being overrun with smartly adaptive bacteria who develop resistance with terrifying speed.
 

Payors Perspectives

The same is true of payor and insurers – they face a rising tide of costs associated with care that is increasingly complicated and expensive and struggle to balance their budget.Faced with one patient who’s costs for treatment might be hundreds of thousands of dollars or more so they limit or decline this in favor of treating multiple other patients where their cost of treatment is thousands of dollars or less? The utopian answer is treat everyone but we they like each of us do not have unlimited budget or resources and have to make hard decisions. And the problem with healthcare fundedfor the population but access individually.
 
[stextbox id=”download”]Healthcare is funded for the population but access individually [/stextbox]
 

Clinicians Perspectives

Clinicians also have a view on what’s appropriate – and the vast majority act with total integrity (I would like to say all of them but sadly there are occasional stories of clinicians and healthcare professionals who game the system – sometimes with simple prescription based fraud or other times over treatment of stenting in cardiac cases). Sadly for a profession that is so dependent on trust the rare cases of fraud and abuse unfairly tar everyone with the same brush. As I said above – I believe everyone gets up in the morning with the best intentions and this is true of the clinal professionals who each and every day battle a system to deliver the care and compassion they set out to deliver when they took the path into healthcare. They want to say no to unnecessary treatment but the personal pressures applied and the underlying compassion and the innate drive that was the foundation of why they entered the profession can influence them to order and prescribe because they are unable to explain the lack of value and offering this option makes their patient happier and comfortable.
So how do we reconcile these differing opinions
 

Economics and Making Choices

There’s a sad fact in the US healthcare system – we do not talk about cost effectiveness. Its not just a taboo subject but also a forbidden topic, As Aaron Carroll (The Incidental Economist) noted in his piece Forbidden Topic in Health Policy Debate: Cost Effectiveness we avoid talking about cost-effectiveness in the United States.

Some think that discussing cost effectiveness puts us on the slippery slope to rationing, or even “death panels.”

As he points out – if there was a pill available that could extend your life by one day but costs a billion dollars, most would accept this as an unacceptable trade off and decline it. But that’ extreme – as you decrease the cost where does that line become blurred?

what’s to stop us from deciding that spending a couple hundred thousand dollars to extend grandma’s life for a year isn’t worth it either?

More troubling is the shackles that have been placed on the Patient Centered Outcomes Research Institute – who were founded but explicitly prohibited it from funding any cost-effectiveness research at all! How can an outcomes institute assess healthcare if cost effectiveness is not part of the equation?

“We don’t consider cost effectiveness to be an outcome of direct importance to patients.”

In fact, we in the United States are so averse to the idea of cost effectiveness that when the Patient Centered Outcomes Research Institute, the body specifically set up to do comparative effectiveness research, was founded, the law explicitly prohibited it from funding any cost-effectiveness research at all. As it says on its website,

PCORI was established to fund research that can help patients and those who care for them make better-informed decisions about the healthcare choices they face every day, guided by those who will use that information.

 

Quality-Adjusted Life Years

As he points out there is actually a fairly robust strategy and measure that can offer insights into the value of measuring health outcomes – QALY’s (Quality-Adjusted Life Years) which the National Health Service has been using fro some time in the National Institute for Health and Care Excellence (NICE) that provides guidance, advice, quality standards and information services for health, public health and social care. Also contains resources to help maximise use of evidence and guidance. There is no doubt they are imperfect but very little in life is perfect and perfection should not be a barrier to progress. The use of this is not a sole determinant – but offers some measure of science and data to making what are incredibly difficult tdecisions
So in the current debate of what health system we need to put in place I would advocate the inclusion of cost effectiveness as one of the factors that must be considered and the QALY and perhaps even the Incremental cost-effectiveness ratio (ICER) as part of this difficult discussion.
I’m all about incremental changes and while including a cost effectiveness as a measure may seem a bigger stretch I feel it is a smaller step in the right direction. Can we achieve this? Is there a better incremental step we can take to resolve the challenges of our healthcare system? Leave your thoughts below.

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Tagged as Economics, Healthcare Reform, Incremental Healthcare, Insurance