Category Archives: Quality Care

More Health Care Equals Better Health. Wanna Bet?


You are 80 years old and have two years to live.  Which hospital would you prefer, Bellvue (large NYC public hospital) or Columbia-Presbyterian (NYC academic private hospital)? 

I assume that most who know these hospitals would jump at Columbia-Presbyterian.  I think that is a safe assumption, but…(you knew it was coming)

I was listening to the Brian Lehrer show on WNYC (NPR) and was fortunate enough to listen to an interview discussing Consumer Reports findings (based on Dartmouth Atlas of Health Care 2008) in which consumer reports says that, especially at end of life (data comes from Medicare), more aggressive health care leads to worse outcomes.  Too many pricks, tests, procedures, hospital acquired infections, extensive recoveries, pharmaceutical mix-ups, etc.  Exposure to more health care can be bad for you. Sometimes conservative health care is better.  Sometimes the primary care physician is better than the specialist.  Sometimes the neighborhood hospital is better than the state-of-the-art hospital.  Bigger is not always better – a lesson Americans are slow to grasp.  SUV’s are not necessarily better than compact cars.  The 6,000 square foot mansion is not necessarily better than the 1,000 square foot apartment. The truth is that the private hospitals have perverse incentives to do more – to the point of harm.  The public hospitals might have incentives to do less.  Both extremes can be to the detriment of the patient.

Most health economics and policy makers grant that health care resources have diminishing returns the more you receive.  Meaning the first few interventions will have dramatic effects, but each additional resource used will have less and less impact until the care actually becomes harmful. Some patients reach that point in some of our hospitals. 

Overuse reaches the point where some states, hospitals, cities use 3x more health care resources than others with unmeasurable effects.  Why?  Because more is not always better, just richer. Health care needs to be smarter. Cars need to be smarter. We need to be smarter. However, getting back to the quiz…

With all that said I would still choose Columbia-Presbyterian, however, I would ask the questions to determine if the care proposed is really going to be good for me.   

No Individual Mandate, Really?

I’m resisting an individual mandate despite my left leaning ways.  Underneath it all I do not like large programs that dictate behavior. Liberty is important, but more than anything mandtaes can be impractical. How would you enforce such a thing? How much would enforcement cost?  How effective are mandates? And do we want to be punitive toward those who do not obtain insurance? These are all tough questions and questions I would direct to Hillary Clinton.

Under “My Prescription” all people would have equal access to health insurance while establishing equitable tax incentives to purchase insurance. Those people not purchasing health insurance are losing out on their tax credit and thus throwing money away. It changes the calculation.  Currently, a person looks at the $8,000 premium and walks away. No health insurance, but $8,000 in their pocket. Under “My Prescription” they look at the tax credit (let’s say $3,000), and they have the choice whether to spend $5,000 on the insurance ($8,000-$3,000 tax credit) and have health insurance or do I pay $3,000 more in taxes and not have the insurance.  That changes the game (these numbers are fictitious, but make the point) because people would now practically be paying to not have insurance. 

So do we need a mandate? I would like to give the “My Prescription” plan a chance to work without a mandate. I believe it would lower the number of uninsured tremendously.  It would eliminate the excuse that a person could not get insurance becasue of their medical history. It would make obtaining insurance very appealling, and lastly, it would have a better chance of political passage without such a mandate. If I turned out to be too optimistic in my estimates toward universal health care a mandate could be added later, but in the meantime “My Prescription” would improve quality by stimulating competition on costs and quality. It would improve incentives for public health and prevention of disease.  It would improve relationships between patient, doctor, and insurer by improving continuity of care. It would align the incentives with cost controls and quality of care. No, for now, I’m going to pass on the mandate.

Now We Build

Part of the “My Prescription” series.

But before we do let’s recap. In brief we need a new foundation. The employer based system is not working. So I am suggesting two fundamental changes: Health insurance exchanges and tax reform.

Health Exchanges will provide the pooling mechanism. They would be run by the States and would regulate the plans much like the New York Stock Exchange regulates stocks. The exchanges would have to force the plans to accept all applicants, to have a fairly standardized set of benefits, and I believe use a modified community rating. Community rating is when the premiums are based on the risk of the community as a whole, not the risk of the insured person and their specific circumstances. The modification is that insurers would charge everyone within their plan the same amount, but that each insurer can set that price (and thus compete on price).

I can hear the screams right now, “What about smokers? I don’t want to pay for them?” Neither do I, but I do want to make sure that the cancer survivor has access to good medical care. Further, competition would make smoking cessation programs financially viable. Second, I can anticipate, “You need to let the market operate unregulated.” I believe in the market, but without regulation insurers will only compete by avoiding high risk people, not on quality and price. Under this plan competition is limited in several aspects. I won’t deny it, but there is still competition. The insurer is competing on quality of care and efficiency of providing that care. And, “Won’t this make premiums more expensive?” Yes, community rating makes insurance premiums higher. Insuring sick people costs money, but I do believe that it is the morally correct choice.  Let’s see if this competition can reduce costs over time through directed competition.

So the next big thing is that we need publicly reported information about the quality of health plans, hospitals, physician groups, and physicians. There is an emerging movement already, but it needs to be a national priority. Competition only works when the consumer is an informed consumer. Let’s educate!

So we have exchanges that regulate health plans and use community rating. All people are included and all can choose their own plan. The plans are portable from job to job providing consistency of care and long-term relationships with insurers. The tax credits provide equity in the tax code, but still preserve the employer’s incentive to contribute. Employer’s continue to facilitate health insurance, but no longer sponsor it. Quality measures are reported to the public forcing health care plans, hospitals, and providers compete on quality and price while minimizing selection issues.

Next time we’ll discuss a few nuances of the tax proposals, why an individual mandate may not be necessary, and the need for either re-insurance or risk adjustment.

A Most Sincere and Irreverent Letter to John McCain

Dear John McCain,

It seems that you have only listened to half of what the health care experts have told you and then were shamed into cobbling some rhetoric to cover the glaring gaps. Let me help you.

Let’s first go over what is good about your plan. I like most of your tax reform. Tax credits are better than tax deductions. They are fairer and more progressive. However, you still may want to give a small incentive for employers to stay in the game. I would hate to lose their support, and with your plan they might just all get up and leave. If they do it seems that the small government plan you are envisioning may have to grow to fill the gap. But you have the general right idea with tax credits and $2,500 per individual and $5,000 per family is getting close to the price of insurance, but still falls short. Does everyone get this credit? Is it related to income? Does it rise with inflation, or even better yet rise with health care inflation? Just wondering. Those damn details.

Cost reduction. That’s big with you and you are right to emphasize it. We spend too much on health care – over $6,000 per person. Almost double what the next most generous country spent. And some of your ideas are fine. They are the same as your Democratic rivals (good copying skills), and will only nibble at the corners, but important nonetheless. We should invest in electronic health records, have improved coordinated care, generic drugs, re-importation of drugs (very maverick of you), smoking cessation, state flexibility to encourage creativity, increased focus on chronic conditions, tort reform, and Medicaid and Medicare reform. All good suggestions. Your two sentences on each of them really demonstrates your breadth of understanding. And again your competition beat you to the punch on almost all of these. I like the bipartisan spirit, but I was hoping that since cost reduction was your big thing you might have a new trick up your sleeve. I guess your big price reducer is increased competition. So let’s talk about that.

Your plan will cripple the employer-based health care system. Not a bad thing, but since health care accounts for 16% of our GDP and you are recommending pulling the foundation out from under it (I admit a shaky foundation) you might want to say a little more than you want to put health care decisions back in the hands of the patient. So under your plan the patient would select their health plan, right? And you are assuming that the patient has the information to sort through all of the health plans to choose what is best. Surveys on this topic show that the typical person shopping for insurance bases their decision on things that do not reflect quality. How do you plan to educate America on this? Remember for a market system to work you need an informed consumer. The quality reporting systems in America are improving, but any plan that puts the insurance decisions with the consumer better focus more on quality measurement and reporting than you do. I would suggest you expand on that a bit.

Lastly, Elizabeth Edwards. You two have been so cute fighting in your sandbox, but I would listen to her. I think you have. You realized that she is right saying your plan would leave out the sick. Maybe a person with a history of melanoma? We know that insurers compete by avoiding high-risk people. Risk avoidance is where the profits are – not quality delivery systems. That pre-existing condition thing. That age discrimination thing. Shoot foiled again, and you know it. In the last minute you threw in the line, “We will work with the States,” to make sure these people are covered. What does that mean. High risk pools, perhaps? Well, that is really expensive. Under your plan the really high cost people (up to 30% of the national health care bill) would be denied coverage by insurers (remember since they are not under an employers plan they could be denied) and potentially fall into these groups which would be subsidized heavily with tax dollars. Oops, that sounds like a big government plan. So I would suggest you rethink how you are going to pool people together. Did you know that the premise behind insurance is pooling? You have to find a way for the high-risk people to be pooled with the low risk people based on something besides health. That is what employer-based health insurance was all about.

And lastly, many States have their ways of dealing with these issues. For example New York uses community rating. Under your plan with cross-state purchasing these New York plans would all collapse because nobody who is healthy would join. So much for State flexibility.

I would suggest that you go back to the table and provide a bit more detail. Again, I like the tax credits and I am okay with leaving the employer-based model, but you have to have thought through what’s next. I look forward to your third draft.


Lucas Pauls

Headlines – 3/29/08

  • The first national report on patient’s views of hospital care was released this week. Results were mixed. The most interesting aspect of this news is just how little we know of the quality of our health institutions.
  • Hillary Clinton adds some details to her health care plan, most significantly a general cap on health care costs based on income. No one would pay more than 10% of their income on health insurance.

The Newest Rankings

If you are like me you like rankings. I like their simplicity and clarity. I like to know who is first and second. Who is in and who is out. Black and white. During college basketball season I find my eyes scanning down the polls weekly from first to 25th to see how the Big East is doing – and most importantly where Connecticut ranks.

Health care has its own rankings. They aren’t done weekly or even annually at times, but they are done. On paper they provide that clarity that I seek. But as any college football fan knows rankings can be a little muddy. Can you say BCS?

So the latest health care rankings are out and as one scans down the list of 19 OECD (developed countries) countries you will find that it takes some time before the U.S. shows up. It takes until the 19th spot. Yes, dead last.

That’s some clarity!

Further as the rest of the countries posted on average a 16% improvement since 1998 we posted a meager 4% improvement (by far the worse). If we as a country lowered our amenable mortality rates to the average of the top three countries (France, Japan, and Australia) we could prevent 101,000 deaths annually.

Yes, the international comparisons have their faults and weaknesses. They are muddy, but this study is a bit different than the one most commonly used. The World Health Organization (WHO) has its rankings (used famously in Sicko) that are heavily weighted for equality. The U.S. does poorly as it is does not provide universal coverage. See my discussion here. This latest ranking does not use equality directly, but measures the amount of deaths in a country that typically could be prevented through health care intervention. They call it amenable mortality. Of course it is hard to determine what deaths are “amenable” to health care.

Further, using the population statistic (used here) to measure the one-on-one doctor/patient relationship is a difficult thing to do. I appreciate that. But at some point we as a country have to become responsible for the health of our country – for the health of our neighbors. Ranking after ranking we fall to the bottom. Whether it is based on doctor and patients surveys, or from the WHO, or this latest ranking we do not come to play.

Our system is broken. We have amazing doctors, schools, and cutting edge technology, but we do not have the best health care. The rankings tell some portion of the truth. Some will attack the rankings as unfair, biased, or just useless. And some of the criticisms are justified, but at the same time the rankings (especially in mass) point to problems that we as a nation need to address.

The rankings come out Health Affairs. A synposis can be found at the Commonwealth Fund.

Technology’s Two-Sided Sword

Technological advances in medicine are and have been astounding.  This includes pharmaceuticals, surgical techniques, diagnostic equipment, various implants from stents to joint replacements, and a whole onslaught of therapies that can only amaze.  Medicine today looks very different than the medicine of the 1970’s let’s say.  The amount of life saved, diseases cured, and hope given to those who have benefited from such advances is remarkable and practically immeasurable.  We are blessed to live in a time filled with the miraculous wonder of medicine today. 

So what’s the issue, you ask? 

You know me too well. It’s the other side of that sword. Advances cost money. Even advances that save money cost money.  For example, various new heart procedures save money per procedure, but since they are also less invasive, have fewer side-effects, and are cheaper, more and more people are having them performed.  Overall, the costs are higher.  It’s all about: Costs = Price X Quantity.  Often when the price drops the quantity rises and this more than offsets the price reduction.  But surely the overall cost is worth all the benefits?  I would argue that it is. 

But what if the therapy isn’t really proven (at least not yet)?  What if the costs per procedure are higher and the benefit small or not known?  Is that advance still a positive thing for society?       

Imagine that a company invests millions of dollars into a new treatment and it’s proven to be safe.  The company will obviously market the new technology to everybody and anybody to recoup its huge investment.  The company will tout its new proton, laser-guided, micro-fabulous device that has such great promise to treat <insert disease of your choice>.  The company will discuss why this therapy is the next thing. The company will talk about how the protons are better than the x-ray or how the laser is more powerful than its predecessor.  Maybe it is.  The theory could be sound, but as of yet its effectiveness is unproven (how much health does it provide?). Meanwhile, the marketing campaign by the company is a smashing success, and hospitals are building new wings for such devices. Millions more pour into this device.  Hospitals buy in and the company turns a profit.  Hospitals now need to create demand so they can recoup their investments.  Before the science is in, the device is deemed effective by professionals. It’s too late now to turn back.  The investment needs to be recouped. The fancy new device is a go and there is no turning back. 

This scenario does happen.  Is it a bad thing?  Is this how progress is made?  Or is this responsible for our rising health care bill? Question one is difficult.  The answer to question two is a firm YES.

Check out this article for a real, well-funded, unproven, proton, cancer-treating therapy. Or this article.