New Takes on Healthcare Costs from the Ground Up

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Costs Of Care Primer

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Costs Of Care Primer

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Practicing medicine by numbers

Practicing medicine by numbers

In a system of upside down incentives – a fee-for-service payment model that results in doctors doing too much – more tests, more procedures and more treatments, left almost entirely up to a doctors “informed intuition”.

Intuition indeed is necessary in medicine, explains Jerome Groopman, in How Doctors Think, but can lead doctors astray. Numbers on the other hand can help resolve quality variation by data-driven methods.

After years of knowing the benefits of beta-blocker prescriptions, safety checklists and so called ‘evidence based practices’, what keeps doctors from doing what they know? Can we afford to rely on the variability of their good judgment and intuition? Why are quality managing practices like lean and Six Sigma facing so much resistance in the practice of healthcare?

Quite simply put, because we trust our doctors to do what is best for us. Hospitals and physicians that provide less than top-quality care are rarely punished. There is that, and how we pay for healthcare. Volume care is compensated, irrespective of the added value for patients.

In the midst of the country’s struggle to health reform (or lack thereof), this article offers a refreshing look at what can be done right. Brendt James – the champion of the ‘Intermountain way’ challenges doctors to continuously test and tweak protocols, set clinical goals, track patient outcomes and deliver quality care at low costs – offers reason for optimism.

Too many drugs?

Ever wondered about the contents in your medicine cabinet? Or the forces that got you on those prescription medications in the first place?

This NPR editorial does a great job bringing to light how Merck’s Fosamax for ostopenia, a condition deemed treatable by this drug, got into the cabinets of million women across America. And how the marketing of the pill changed the definition of bone disease and sought women to seek unnecessary treatment.

This pharmaceuticalisation phenomenon, meaning the pharma companies quest to turn every research endeavor into a blockbuster drug highlights the manipulative role of drug companies in deciding what constitutes the definition of a disease just so they can market a drug to cure it.

Set against the backdrop of the controversial evolution of ostopenia as a disease, we read
about how pharma companies are vying to get the FDA to sign off on a prescription pill for jet lag! Do we really need a pill for jet lag? Or worse yet, should we let the pharmaceutical industry decide which drugs fit what therapies? With spiraling healthcare costs are we going to let pharmaceutical companies hold the reigns?

More importantly, can we draw the line between treatment, research and development for the greater good versus drugs that are downright redundant?

Healthcare Reform & End-of-life Costs

When President Obama's chief budget deputy Peter Orzag announced the stimulus bill (American Recovery and Reinvestment Act of 2009), he mentioned that the U.S. spends $700 billion each year on medical tests that don't help patients get healthier.

Policy analysts have long known that much of this seemingly wasteful spending occurs during emotionally challenging moments at the end of life. We often are willing to spend the most on those who are the sickest--even when it is unlikely to make them better. Given the highly sensitive situations involved, most politicians have been reluctant to touch this issue with a ten foot poll.

At least until now.

The recent healthcare bill drafted by the House takes on the costs of end-of-life care heads-on by providing doctors with financial incentives to counsel patients on creating "advanced directives" (commonly known as "Do Not Rescusitate/Do Not Intubate" orders). Since many patients can be sustained indefinitely on ICU life-support, the bill is meant to save money by reducing so-called "futile care".

However, the normally sympathetic editorial staff of the Washington Post has taken issue with this aspect of the bill, on the grounds that it is unethical to put financial rewards and end-of-life counseling in such close proximity. What do you think?

Caveat Emptor

(Pursuing universal access to health care while reigning in the spiraling cost of care and bracing for an army of aging baby boomers is a modern policy nightmare. Compounding the challenge is a public all too used to over-consuming everything from prescription medication to flat screen TVs. In this Washington Post article, MacGillis points out the more problematic elements of any health care reform, and suggests that a substantial behavioral shift may be necessary if America's medical infrastructure is to survive the coming financial apocalypse...)

In Retooled Health-Care System, Who Will Say No?
By Alec MacGillis
Updated: 07/08/2009

The question came from a Colorado neurologist. "Mr. President," he said at a recent forum, "what can you do to convince the American public that there actually are limits to what we can pay for with our American health-care system? And if there are going to be limits, who . . . is going to enforce the rules for a system like that?"

President Obama called it the "right question" -- then failed to answer it. This was not surprising: The query is emerging as the ultimate challenge in reining in health-care costs that now consume $2.5 trillion per year, or 16 percent of the economy. How will tough decisions be made about what to spend money on? In a country where "rationing" is a dirty word, who will say no?

Read on...

AMA Speech and Media Response

In the wake of President Obama’s speech in front of the American Medical Association, various interesting conversations about health care costs have occurred in national media. The New York Times ran an editorial on what could be done so that doctors no longer feel they need to order potentially unnecessary tests to protect themselves against malpractice suits. The Times also ran a story scrutinizing the health care “rationing” rhetoric.

On NPR, health care was the topic of the day following Obama’s address. It’s worth listening to On Point’s show where professors and journalists field questions about the feasibility of reform. Also interesting is Talk of the Nation’s examination of whether doctors are the problem with healthcare. And then a reported piece on a model, low-cost county.

At Costs of Care, we work to contribute to this important effort – addressing one of our nation’s greatest contemporary challenges.