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.

Doctors and the Costs of Care

A recent New Yorker article described a small border town in Texas with the most expensive healthcare in the United States. The author, Atul Gawande, investigated what led to such high costs in such an unlikely place. The answer was surprisingly simple: doctors in McAllen, Texas, have the most incentives to order unnecessary tests and treatments for their patients.

Unfortunately, researchers at Dartmouth have demonstrated that the problem in McAllen is pervasive throughout the country--a fact that has not escaped the Obama administration. In fact, Atul Gawande's article has become so influential, that the New York Times recently reported that it is now required reading in the White House.

These developments were followed by a New York Times editorial today that specifically advocates for the type of solution that our organization, Costs of Care, is trying to address.

We believe that cost-sensitive doctors are less likely to inflate medical bills with expensive and unnecessary tests. You can join our community of healthcare providers and patients interested in lowering costs at the point of care by becoming a fan on facebook.

Price Transparency in Boston

A few weeks back, we contributed a blog post to the Institute for Healthcare Improvement Open School.

Check it out and leave a comment :)

http://ihiopenschool.blogspot.com/2009/05/price-transparency-in-boston.html

Putting Prices on Your Doctor's Menu

Over the last four years, I’ve had the opportunity to work at the best academic medical centers in the country, alongside some of the most competent and caring doctors one can imagine.

These doctors made every effort to address the needs of their patients, diligently and compassionately attending to each physical symptom.

But even the best doctors neglect something critical: the bill.

In a time when tightening belts and pinching pennies has become especially important, we too often pay exorbitant amounts—enough to bankrupt two million American families a year—on medical care we may not even need. As patients, we’ll spend hundreds of dollars on a medication we are prescribed, even when a generic version is available that contains the exact same stuff and is 90% cheaper. We might pay thousands of dollars for an MRI, even when its results are unlikely to be informative.

The reason is painfully simple. Information on the prices patients face is rarely available to doctors when they are deciding which tests and treatments will go on the bill. A 2003 American Medical Association study showed that fewer than one in five doctors understands how much their patients pay for care.

In fact, healthcare is the only sector in our market economy where we routinely contract for services without knowing what the costs are or even exactly what we are buying. For good reasons, we trust doctors to make purchasing decisions for us. But when doctors are looking at menus without prices, it’s easy for them to order filet mignon at every meal—even when their patients are the ones picking up the tab.

True, when we are sick, certain tests and treatments may be appropriate no matter how much they cost. Doctors weigh several factors when ordering tests, including how sick the patient is and how good the test is. However, the Congressional Budget Office has estimated that the United States spends $700 billion (an amount comparable to our total spending on the Iraq War) each year on medical tests and procedures that do not measurably improve health outcomes.

Given this evidence of wasteful spending, and the impact it has on Americans, it would be sensible to also make costs part of that calculus.

This is especially true given the potentially catastrophic impact of the rising costs of health care. Today, spending on health care is approximately 16% of GDP, up from 8% twenty years ago, and 4% twenty years before that. In the near future, Medicare and Medicaid, which account for half of this spending, will become unsustainable. Investment in other things that matter to us—roads, schools, security—will be crowded out.

To add insult to injury, we’re not even getting much bang for our buck. A 2008 Health Affairs report compared health care spending in the United States to other countries in the Organization for Economic Cooperation and Development (OECD). Per capita, the U.S. spends double the amount everyone else does, but we rank in the bottom half of developed countries for most health quality indicators.

Debates about this cost-quality discrepancy are inevitably abstracted to the population as a whole—the millions who cannot afford coverage, the staggering percentages of GDP. The underlying problem is often framed as an irreconcilable tension between the interests of individual patients to have everything possible done and the collective interests of all of us to have a sustainable system.

But there may be a simple solution.

Doctors are trained to focus entirely on the patient in front them. Unlike policymakers, they are not trained to assume responsibility for entire populations. And rightly so. If you were sick, you would want your doctors to make decisions about your care based on their assessment of you, and only you.

It’s no wonder that high-level policy discussions about the macroeconomic implications of health care sometimes fall flat at medical conferences. The debate must be reframed in terms of the potential financial burdens a doctor’s decisions may impose on the patient in front of them. The availability of price information at the point of care would do just that.

Putting prices on doctors’ menus offers an opportunity to move beyond the apparent tension between individual and collective interests. In the end, doctors, policymakers, and patients can all agree that we don’t always need to order the filet mignon.

Neel Shah recently completed the requirements for his medical degree and is the Executive Director at Costs of Care, a nonprofit organization aimed at preventing medical bankruptcy by providing doctors with price information.