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Our inequitable, inefficient, oftentimes uncaring health care "system," revealed. -- Jeffrey G. Kaplan, M.D., M.S.

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Healthcare Reform/Economic Imperative

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Is health care reform merely cost-minimization, an opaque attempt to force economic responsibility?

Simplifed, Here's the essence of health care reform and how to restore equity in access....

1)    To reform care we must manage the care

a)   The fact that delivery models vary or that they are evolving should not distract us from our goal to have effective care that is efficient and thereby cost-effective.  At the end of the day, however, it must be about the patient!

b)   There is no question that we need more primary care physicians (PCPs).  Accessibility is at issue. You know the adage about a ‘stitch in time saves nine.’ Well, with most treatable conditions, getting to the doctor early gives the best chance for having a salutary outcome.

c)   The friendly notion of a “Medical Home" is an integral part of reform; in 2 words it means “advocacy” and “continuity.”

d)   The theory behind “HMOs”—the right care at the right time and place—is the modus operandi of managed care.  The same principle applies to “ACOs,” the manage care term du jour.  (Recently I read how different ACOs are from HMOs—don’t kid yourself.  ‘Been there; done that.’  Of course, we considered hospitals as part of the mix and we had case management, episodes of care and outcome measurement. Nevertheless, when you squeeze a balloon, it pops out somewhere else, doesn’t it? You think hospitals bought medical practices to diversify?  That’s naïve.) 

e)   Who is in your panel of patients (patient attribution) is always a big question mark, regardless of health plan type.

f)    ‘Measurement and management; management and measurement’ (M&M) is the cornerstone of managed care, but  having good, continuous data about what happens to patients and their outcomes is elusive. (Patient loyalty ain’t what it used to be, for instance).  

i)     Examples of missing data: crossing state lines, having a preexisting condition like having a uterus, being uninsured like from losing your job or having a mental breakdown from having to quit therapy because you’ve exceeded the mental health ”benefit”; looking at process, not outcome; using your daughter’s medicine on your son; over the counter stuff or herbals; placebo effect; non-compliance; perverse incentives like paying doctors for every visit, which leads to “churning,” self-referral, unnecessary testing, or fractionated care; specialists doing primary care and primary care dumping patients on specialists when they are not at risk for “dumping,” etc.

2)   The 3-legged Stool of health and disease management

a)   Continuous qualityimprovement is important.

i)     Unwarranted variation (See 6, below)

ii)   Is Autism more prevalent or does it just seem to be so because of labeling (i.e., reimbursement is better when there is a diagnosis).

iii)  Measuring outcomes and then evaluating the antecedent processes of care

b)   Cost is the elephant in the room

c)   Cost-effectiveness àCost-benefit àCost-utility, rather than Cost-minimization

i)     Utilization and case management.  What happens when you squeeze a balloon?

ii)   Risk management; risk-pools and the need for a mandate and getting away from Job-lock

d)   Access: Is it more costly to not fund mental health care or social workers?

3)   Prevention– Primary, Secondary and Tertiary/Quaternary

a)   Prevention comes at a cost; sometimes it pays off; sometimes it can lead you down a blind alley—the so-called ‘red herrings’ of medicine.*

4)   Primary Care: Where are the primary care physicians (PCPs) when you need one?

5)   Cost-shifting and cost-sharing matters

a)   Do you save money if the generic* product tastes awful?

b)   Does having a mammogram or PSA test save lives (or does it worsen the quality of life?

c)   Are we too hygienic?

d)   Does having a low vitamin D level in a 1 year old increase their risk of food allergy?  [3.8 fold increased risk!—N Eng J Med 2011;364:248-254]

6)   Standards of care; evidence-based medicine and other forms of non-prescriptive guidelines

                        * Kolata G. “A Long View on Health Care: Think Like an Investor.” NY Times. 5/21/12

See: "Through the Looking Glass: A New Perspective on Population Management," an effective and entertaining way to introduce the notion of paradigm paralysis. Per Tom Robertson, EVP Member Relations and Insights UHJC REsearch Institute, "This short video is particularly helpful in articulating your essential role in the management of complex illness to your external constituencies."

UHC Research Institute via dialog@lists.harp.org

* Generic Drug Pricing Trends (from the Rx Price Watch Report by the AARP Public Policy Institute:

  • Over 75% of all retail prescriptions filled in the US are for generic drugs.
  • The average annual cost for a generic drug used for a chronic condition is $283.
  • Almost three quarters (73%) of widely used generic drugs included in the study had price decreases.
  • Retail prices for generic prescription drugs widely used by older Americans fell an average of 4% in 2013.
  • 27% of generic drugs had retail price increases.
  • 11 drugs had retail price increases of greater than 30%.

Source: AARP, May 28, 2015


What does it take to "save a health care system that is fundamentally failing the tens of millions of Americans who are either uninsured or faced with purchasing insurance in a dysfunctional insurance market"?

It is so annoying (read: pathetic) to follow the health care reform debate--both the right or the left positions are treating health care like a commodity and the patient as a pawn.  I cannot stand it!  (Where's Henry Clay when you need him?)


"There has been some negative news lately about Obamacare, but it is still a big success story."

See:  Paul Krugman's (healthcare economist) "Health Reform Lives!" in the NY Times; Nov. 23, 2015 [copy and paste the following URL into your browser: http://nyti.ms/1Se3oke]

Krugman acknowledges that "premiums are going up for next year, because insurers are finding that their risk pool is somewhat sicker and hence more expensive than they expected. There’s a lot of variation across states, but the average increase will be around 11 percent. That’s a slight disappointment, but it’s not shocking, given both the good news of the previous two years and the long-term tendency of insurance premiums to rise 5-10 percent a year.

Second, some Americans who bought low-cost insurance plans have been unpleasantly surprised by high deductibles. This is a real issue, but it shouldn’t be exaggerated. All allowed plans cover preventive services without a deductible, and many plans cover other health services as well. Furthermore, additional financial aid is available to lower-income families to help cover such gaps. Some people may not know about these mitigating factors — that’s the problem with a fairly complex system — but awareness should improve over time."

Aside: I suggest this political debate and, indeed, this discussion needs a degree of forthright Rashomon–we have two opposing sides, transparent, each presenting their case; they argue not only the legal principles that, of course, favor their side, but also their version of the events, i.e., their spin.

Rashomon is a classic film that explores the concept of truth where four narrators retell an incident, and leave the audience to figure out what's real and the obverse.


Constitutional challenges to the Affordable Care Act (ACA) are now under way.  Is the "individual mandate to purchase health insurance (or pay a tax).... about regulating individuals’ economic conduct or regulating their noneconomic status? Depending on which characterization of the facts prevails, the individual mandate either falls within or lies outside Congress’s power to act."  Whose version of events will serve as the "judicial analytic filter"?

Spread the Risk

The U.S. market for health care services is 17.5% of the gross domestic product, according to Congress and non-elderly Americans consider it the main means of financing their health care. Thus,

"The existing system has broad economic implications for both the insured and the uninsured. Far from being passive and noneconomic, the uninsured consume more than $50 billion in uncompensated care, the costs of which are passed through health care institutions to insured Americans. Moreover, medical expenses not covered by insurance are one of the leading causes of bankruptcy in the United States, and the costs of resolving those bankruptcies are borne throughout the U.S. economy. In addition, the lack of health insurance leads to poorer health, which can, in turn, reduce workplace productivity. Even the possibility of losing health insurance makes many workers afraid to leave their jobs for more productive positions elsewhere, so the current system reduces the overall productivity of the U.S. labor force."

"The changes made by the ACA to stabilize the insurance market are fundamentally economic. The legislation’s core is its mandate to end pervasive discriminatory insurance practices while making care affordable. But such change is not possible without an individual mandate. If people who are in better health can opt out of the market and effectively gamble that they can pay for whatever health care they need at the point of service, prices rise for those who are in poorer health, leading to an “adverse selection” spiral that raises insurance prices for all. This is not an idle conjecture. Five states have tried to undertake reforms of the nongroup insurance market like those in the ACA without enacting an individual mandate; those five states are now among the eight states with the most expensive nongroup health insurance."

In the final analysis, the ACA is predicated on sharing the expense of coverage across a community - like it or not, it is all about altering individual economic conduct.

Sara Rosenbaum, J.D., and Jonathan Gruber, Ph.D. "Buying Health Care, the Individual Mandate, and the Constitution." Posted by New England J. Med. • June 23rd, 2010.
For more discussion on this topic, please go to the "Elephant in the room -- cost."

Dr. David Belk presents a compelling argument about deceptive, if not outrageous practices occurring in health care now.  Right off the bat, he offers: "Forget everything you ever thought you knew about healthcare costs!"  He blasts the insurance model--rightly so.  Nevertheless, he  fails to recognize their skills in case management and analytic techniques.  He decries Big Pharma, however, he does not understand what I consider to be a valid role the industry plays in medication development and disease management, as well as the important role pharmaceutical reps do in provider education.  He exposes markups by all saying there's no penalty for overcharging.  ETC.
For example, he says, and I quote: 
-Most generic medication cost less if you don't use your insurance to buy them.
-Most doctors have no idea what they get paid for an office visit.
-Hospitals routinely bill TEN times what they expect to be paid.
-Most diagnostic tests are very inexpensive to run
-Insurance companies deliberately bargain in bad faith when it's your money.
And much more. If you've ever found yourself to be completely lost in the healthcare industry and totally perplexed by your bills, you're not alone! Your doctor is just as lost as you are.

Cutting Costs may Cost One Politically

"Quietly, Washington policymakers have begun to concede the need to weigh health care's benefits against its costs if our country is to avert fiscal ruin. That costs must be counted against benefits is common sense in other domains — and among health policy professionals. But it's anathema in public discussion of medical care. To silence talk of tradeoffs, politicians invoke the “R word” — rationing."

"State-of-the-art management methods, research on comparative effectiveness, and incentives for providers to apply this know-how can make care cheaper and better.1 It has become common wisdom that 30% of health care spending, or $800 billion a year, is wasted on ineffective measures. But cutting this 30% (an estimate from the Dartmouth Institute for Health Policy and Clinical Practice2) is a distant hope. Useless care, critics note, is easy to spot after the fact; it's much more difficult to recognize at the moment of clinical decision.3"

[In summary, beware] "hidden tradeoffs between cost and therapeutic possibility," [lest the ACA suffers the same fate as HMOs].

Bloche MG,. "Beyond the “R Word”? Medicine's New Frugality."  Posted in the New England J. Med. May 2, 2012 (10.1056/NEJMp1203521)