Robert Waldmann on Health-Care Reform: Smart Cost Sharing

Robert Waldmann writes:

Robert's Stochastic thoughts: Ezra Klein writes about smart cost sharing... wants a committee to decide reimbursement rates. Oddly, I had another idea about smart cost sharing. Make the doctors pay for the care and pay the doctors based on outcomes... an idea I got from Mark Thoma:

...preventative care ... ought to be encouraged, and one way to help with this is ... to forge an unbreakable lifetime relationship between the insurance company and the consumer so that expected lifetime costs are important to the insurance carrier.

I strongly suspect (with no evidence) that Thoma's thoughts were influenced by an empirical result that very small financial incentives to doctors based on their patients' blood glucose caused big changes in those outcomes which will save huge amounts of money for medicare but small amounts of money for the HMO's that introduced the incentives.

One politically unfeasible approach to this would be to assign people randomly to HMOs and pay the HMOs based on their health but have the HMOs pay for their health care.... Now no way are Americans going to give up all choice (even in Italy I got to choose my GP), so So there would be a huge huge cherry picking problem. One could try to deal with it by charging the managed competitive insurance plans (that's not English it's Magazinerish) based on costs per patient minus predicted costs given region and patient characteristics and rewarding based on outcomes minus predicted outcomes. Obviously it would never work.

I think the best we can do is to charge medical costs not just to the current insurance plan but also, in part, to the one that covered the patients in the past (to give the an incentive to keep their clients healthy)... plus paying insurance plans based on documented improvement in, well, the 3 blood things say. If insurance companies saw obese people with horrible eating habits who watch TV all day as a profit opportunity, the USA would be a healthier place. Just think, sleazy insurance agent tells his boss (hey I just found someone with an LDL level of 300, we got to move fast before our competitors sign him).... [T]hey would be more willing to sign fat lazy smokers as there is lots of room for improvement compared to things as they are....

I know that there are non-compliant patients. My sister treats the homeless. My mother treats HIV positive people without insurance (by now most are intravenous drug addicts the nice polite gay men have learned to use condoms).... There is a huge literature on optimal incentive schemes when outcomes are not completely under the control of the agent. If agents (here doctors) are risk averse it is not optimal to pass all costs on to them.... That is why I proposed incentives at the level of the insurance company... they, as rational profit maximizing agents, will decide what incentives to pass on to the doctors. They can just take the hit for poor patient outcomes (note the fraction of non-compliant patients for a whole company has very low variance. It's like the point of insurance). Or they can pass them on to doctors and raise expected compensation so doctors accept their patients....

[P]art of the issue is that we have a strong sense that we must never punish the innocent... the market system... provides incentives which depend in part on individual choices and in part on luck... [but] somehow it's different if the government is involved. I once heard someone angrily opposing a gas tax (in the 70s) arguing that some people need to drive to get to work -- so it would punish people who weren't doing anything wrong. Look: I'm not talking about throwing people into jail. I'm talking about an MD getting $50 less in a year because he didn't manage to convince a non-compliant patient (note MDs can subcontract the nagging to nurses)...

I think that when Robert Waldmann says "the three blood thingees" he is refering to HDL, LDL, and TGC--high-density lipoproteins, low density lipoproteins, and triglycerides. But he might be refering to cholesterol, blood glucose, and blood pressure.

One prominent health care economist once said that the right way for an employer or a government to compensate health insurance companies is to require that everybody they cover compete in a mandatory decathlon every open enrollment period--sprint, long jump, shot put, high jump, hurdles, medium run (400m), throw the discuss, pole vault, throw the javelin, run the metric mile--and then pay the insurance company according to the change in performance between last year and this year, with a huge honking penalty for patients who die over the course of the year in order to eliminate the incentive to shoot the wounded. But even this doesn't get the incentives right. You want insurance companies to be paid for devising provider compensation schemes that help people get and stay healthy--without at the same time giving the insurance companies incentives to cherry-pick those likely to stay healthy and figure out some way not to cover or not to pay for the truly sick. That is incredibly hard to do.

There are four big problems in health care finance.

The first problem--let me explain it in terms I have borrowed from Uwe Reinhardt. Suppose a business offers employer-sponsored lunch as a benefit. Then when the business hires an extra worker, it has to take into account not just the salary it will pay him or her but also the cost of hiring the extra cooks and servers to serve them lunch. So it is with health care. In America today, for every hundred workers that a firm providing employer-sponsored health insurance hires, it must also come up with the money to pay for 18 more workers in health care--2 doctors, 6 nurses, 2 orderlies, 2 pharmacists, 1 physical therapist, and 5 health-care administrators. Those 5 health-care administrators' jobs are (a) to keep the system running and everybody showing up at the right time at the right place with the right materials, (b) to keep people from going to the doctor by making it expensive in time by hassling them, (c) to keep people from going to the doctor or getting reimbursed for money they have advanced by making them do more paperwork, and (d) to figure out which are the hot-potato expensive patients and persuade them to go take their business to some other facility or provider or insurance company--or take their business to nobody at all. If we could get rid of jobs (b), (c), and (d), we would need not five but two health-care administrators for every hundred workers with employer-sponsored coverage. That's a savings of $100 billion a year: $100 billion a year that could be used to hire people to do socially useful rather than useless and socially-destructive pass-the-hot-potato and ration-by-hassle jobs.

The second problem is, I think, best explained by David Cutler: leaving the excess administrators aside, a lot of what our doctors and nurses and pharmacists are doing isn't helping people:

David Cutler: Use a Scalpel, Not a Meat Cleaver: Medicare spending varies by a factor of two across parts of the country, without comparable health benefits.... [I]f the high spending areas were brought to the level of the lower spending areas... we could save 25 to 30 percent of Medicare spending.  No one doubts that the same is true about non-Medicare spending as well....

The problem in medical care is how to separate the good from the bad.  What can we do to maintain the services that are very effective but get rid of the waste?... Broadly speaking, there are two approaches to eliminating waste in medical care.  The first is the demand-side approach: give patients more information... raise the price that they pay for using care, and rely on informed choices to produce efficient outcomes.  The alternative is the supply-side approach: invest in information technology, monitor what physicians do, and pay providers more for better care than for less good care.... [L]et me state my sense of the literature: ...we have no evidence that consumers facing higher cost sharing will make the right medical care decisions.  Indeed, the evidence suggests the opposite.... [M]edical care consumers respond to prices of medical services... [but] cut back indiscriminately.... When firms raise the price of one medication in a class, some consumers switch to cheaper drugs in that class, but others stop taking the medication entirely... the people who stop taking the medication... [are not] those who benefit from it the least.... [T]he demand-side approach is wrong for many, perhaps most, of the population.... I see no alternative to thinking clearly, systematically, and expansively... targeted evaluations of what is done and how to pay for it better are the fundamental way that we can eliminate the waste in medical care but still retain the valuable core...

The third problem--well, it isn't a problem so much as an opportunity. We will want to spend even more on medical care in the future than we do now--even though a lot of what we spend now is wasted. Medical care in 2010 will be 17 percent of GDP. Medical care in 1975 was less than 8 percent of GDP. Medical care as a share of GDP has more than doubled in a generation primarily because we have developed new and better ways of treating patients. Let's listen to David Cutler again:

In 1950, a person with a heart attack received bed rest and morphine (to dull the pain). That was how Dwight Eisenhower was treated when he had a heart attack in 1955.  This therapy is not very expensive, but it is also not very effective.  Today, such a person receives clot-busting drugs and other medications, and intensive interventions such as bypass surgery or angioplasty. These technologies are certainly costly.  Spending in the few months after a heart attack is about $25,000 per patient.  And yet the care provides enormous benefits.  Mortality in the aftermath of a heart attack has fallen by three-quarters since the 1950s. The average person aged 45 will live 3 years longer than he used to solely because medical care for cardiovascular disease has improved...

There is every reason to think that as time passes and as we grow richer we are going to want to devote a larger and larger share of our economy to health care. I mean, how many large-screen LCD screens does one person need? Biomedical technologies will give us an enormous opportunity, which we might fail to grasp if we cannot fix our system so that it uses our health care dollars effectively and which we might fail to grasp if we stupidly and niggardly put global caps on health-care spending.

The fourth problem is a problem. (1) We as a country seem to believe in a relatively small government. (2) We also seem to believe that health care should be provided on the basis of how dire your need is rather than how thick your wallet is. (3) And we have good reason to suspect that our health care capabilities will become larger and better as time passes. (2) and (3) are inconsistent with (1). (1) and (3) are inconsistent with (2). (1) and (2) can go together only if (3) is false. I think that (3) is true. That leaves us with a societal choice to make: do we abandon (1) or abandon (2)? I favor throwing (1) over the side, but this is an important issue we can talk about.

But one thing is clear. We could be spending half as much on health care as America is today and we still be as healthy. Take 10% savings from eliminating maladministration, 20% from removing unnecessary, inappropriate, and counterproductive care, add on lifetime disease management so that we are not in our current emergency room-driven dealing with problems only when they reach crisis--and you can easily get American health care spending down to the level of, say, France.

Or we could be healthier: to the exercycle!

Comments

[foolishmortal]

Or, both!
Infant Mortality:
France: 3.36 deaths/1,000 live births
U.S.: total: 6.3 deaths/1,000 live births
(CIA World Factbook)

[Robert Waldmann]

The 3 blood thingies were glucose, pressure and LDL cholesterol. My momma says LDL is the one that matters (and she's a doctor).

I'd like to point out how much faith I have in the profit motive and how much respect I have for insurance companies. My plan rewards and penalizes insurance companies. They then decide how much to pass on to doctors and patients (subject to the "start with the Edwards plan" rule that they basically can't pass on the penalties as they must provide insurance that that means the must pay doctors). Cutler et al. have claimed to have proven that if and only if insurance companies feel the costs and benefits of preventive care is it profitable for them to invest in nagging doctors to nag patients and in giving doctors rewards for improved blood glucose.

I guess that insurance companies are very good at maximizing profits and, in particular, can design incentives for MDs (and directly for their clients) to make the MDs and patients internalize the benefit to the insurance companies of patients losing weight, exercising, quitting smoking and getting their blood thingies in line while 1) providing insurance for all comers and paying doctors and 2) not losing their business to competitors. I stress this because several commenters over at economists view and angrybear.blogspot.com seem to think that I am proposing punishing doctors for having noncompliant patients. For a whole insurance company, the fraction noncompliant is barely stochastic (that's what insurance is for) and, in theory, they will pass the incentives on to MDs in a way which optimally balances protecting the MDs from risk and giving them incentives. The "in theory" is blind faith that firms actually know how to maximize profits. I really just think that they are better at seeking profit that congress is at serving the public interest.

My proposal is an effort to use Cutler et al's results subject to two rules of the wonkosphere version of political feasibility 1) The plan must give insurance companies part of the action or they will block reform and 2) people who have adequate insurance must be allowed by the plan to keep exactly what they have or they wil block reform. "By the plan" means they can't keep it if they lose their job and need to go in the general pool well they couldn't keep their old insurance even without reform.

[save_the_rustbelt]

Speaking on behalf of health care administrators, perhaps you should do a clearer job of separating those who do the Lord's work (keep the system moving, (a)) from those who work for insurance companies.

"We could be spending half as much on health care as America is today and we still be as healthy."

Strong assertion based on little evidence.

[Maynard Handley]

"[L]et me state my sense of the literature: ...we have no evidence that consumers facing higher cost sharing will make the right medical care decisions. Indeed, the evidence suggests the opposite..."

When I last visited my dentist I was asked if I wanted if I wanted to run some test that apparently checks for cancer in my mouth. On what planet does this sort of behavior make sense?
- I have no idea about the efficacy of this test. False positives and negatives and all that.
- I have no idea about the likelihood that I might have this sort of cancer.
- I have no idea about the costs of treatment, likelihood of success, etc, for this cancer.
- They certainly don't go out of their way to tell you what the cost of the test will be.

It boggles the mind to hear free market types claim that patients should be making informed choices. The only rational choice available to me is to ask the dentist "Well, do you recommend it". But, of course, why should I believe the answer? These are, after all, the same people who will try, as you leave the practice, to sell you for $30 a (small) pack of toothpaste + mouthwash that supposedly provides superior bad breath removal over normal toothpaste + listerine; they've pretty obviously already demonstrated their primary concern is making a profit from you, not providing objective advice on the cost-benefits that best meet your individual situation.

And of course this situation is hardly rare. We all know of the doctors that have part shares in MRI facilities, sleep labs, and similar such conflict-of-interest situations.

[PrahaPartizan]

My spouse and I joke constantly that our health insurance provider should be required to send a chef to our house to make salads for us for dinner, if they truly wanted us to be healthy. How else can one eat lightly when one gets home in the middle of the evening from work? Especially when the doctors are telling everyone that they shouldn't eat within three or four hours of going to bed. What is a person to do if they don't get home from work but an hour before needing to go to bed?

The health insurance companies just want to talk as if they gave a hoot about the health of their customers. They don't care. They just care that they not utilize the coverage they're supposed to have. Ditto for the employers. Both are just interested in what they can squeeze from the citizen without having to actually pay for it.

[Robert Waldmann]

""We could be spending half as much on health care as America is today and we still be as healthy."

Strong assertion based on little evidence."

The evidence is that many other countries spend half as much per capita as the US does and are just as healthy. I live in one of them (Italy) . Believe me you can tell they spend much less, but they are at least as healthy.

[pireader]

Profressor DeLong wrote--"There is every reason to think that as time passes and as we grow richer we are going to want to devote a larger and larger share of our economy to health care."

Why should we believe that? I suspect that you're overly-influenced by the US experience.

The share of GDP that the US devotes to health care has risen dramatically over the past 20+ years; and the quality of health care has improved dramatically over the same period. But that doesn't mean one caused the other.

Specifically, health outcomes have improved to a similar extent in the other developed countries as well. (There's no evidence I'm aware of that US outcomes are any better than theirs.)

But no other developed country had a similar run-up in health-care spending. Rather, they've stayed on the same spending path as in the mid-1980s: ~10% of GDP above $4000 per capita (in $2000).

So it seems much more likely that advancing technology caused the improved outcomes in all countries. And the US cost run-up is simple inefficiency.

[piotr]

I think that pireader is a bit wrong, namely, the increase of GDP percentage devoted to healthcare is rather universal, but ours is the fastests, so he/she is also a bit right.

[pireader]

Piotr -

On the substance, we seem to agree. So lets turn to the nit-picky details, where we apparently went past each other.

First, about fact sourcing ...OECD has collected a sizable database on health-care spending, across countires and over time, that's available on their website. It's the source for my earlier statements as well as those below.

Second, you're right that health-care spending grows faster than GDP. Specifically, it's directly proportional to the part of a country's GDP that's above $4000 per capita [which part must grow faster than the whole, as a matter of arithmetic].

But the fraction of that part of GDP spent on health care is highly consistent across countries and over decades. Since 1985, it's barely moved, from 9% to 10%.

Of course, the US is the great exception ... since we're spending ~17% of that part of our GDP, up from 12% in 1985.

So we're both right.

[Patrick Schoenfelder]

Wow. Where to begin.

1.) The assertion that high tech/high cost intervention is responsible for improvement in coronary disease mortality is at least questionable and probably wrong. The US actually trails most other developed nations in the effectiveness of care for coronary disease, and almost all of them use much more conservative care based on medicines and rehab and much less coronary bypass (the US performs 75% of the bypasses done in the world) and angioplasty. The big changes in coronary disease mortality are better ascribed to the development of new classes of drugs (especially beta blockers) than to interventional techniques. A recent US study showed that angioplasty actually resulted in worse outcomes than medical treatment in most patients.
2.) The regional differences in health care costs people like to talk about are based on two things: lower utilization of high tech/high cost techniques and the government policy of paying providers much less for care in some parts of the country than others. The index study on this compared Minneapolis and Miami. Miami happens to be the highest reimbursement area in the country. Minneapolis is in the low range for reimbursement among large metro areas. The government (HCFA) justifies these differences – often as much as 80% -- in reimbursement based on cost of living, but in reality political considerations are very important (if you are a congressman from South Florida and wish to continue your employment, you had better be very interested in Medicare reimbursement issues regardless of what party you belong to, whereas a congressman from Minnesota may be much more interested in farm policy.)
3.) The notion that health care costs are lower for people with good health habits is true only in the short term. Investigation by the Dutch national health system showed that non-smokers, people of more ideal weight, and people with healthy exercise patterns actually cost the system more in the long run. The reason is that they live longer. All people absorb large amounts of health care expense when they go through the process of health collapse and dying, and all people – especially old people – absorb health care expense in both a regular (normal year to year care) and irregular (more acute care) basis over time. People with less healthy habits enter the crisis stage of health care at a younger age. The baby boomer population of the US is now in an age range (45-65) where there is sharply increased morbidity and mortality among people with poor health habits. The more healthy boomers will experience the same sort of spike when they reach their 70’s, 80’s, and 90’s, and in the meantime will receive cataract surgeries, hip replacements, hysterectomies, prostate surgeries, treatment for low grade skin cancers, etc. etc. In the words of Bruce Springsteen, “everyone dies, and that’s a fact.” The only health care systems that benefit financially in the long term from insuring more healthy patients are systems, like our private insurance programs and HMO’s, which can dump the cost of caring for older people on other systems – Medicare. So while better health habits benefit the patients themselves and are to be strongly encouraged, they will actually increase costs to the entire national medical system in the long run. The notion that better health habits will reduce overall health costs is not correct.
4.) Prospective payment systems – paying providers a lump sum based on numbers and possibly types of enrolled patients – do not save money and do not improve health outcomes. America’s thirty year flirtation with HMO’s has shown that beyond a reasonable doubt. Most systems throughout the world have found that fee for service payments work best. While fee for service does contain some perverse incentive to provide extra unnecessary service in order to increase profits, that tendency can be controlled by use of practice standards enforced by central payers in single payer and social insurance systems. The perverse incentives in prospective payment systems are to deny necessary service in order to increase profits and to select patients less likely to require services while rejecting patients who need them. This has proven much more difficult to control since it involves much more subtle forms of behavior. It is much easier to tell a provider that they will not be paid for lumber spine MRI in a patient who does not meet certain criteria than it is to figure out that providers are not offering MRI to people who actually need it or are avoiding covering people with history of back pain.
5.) THE MOST IMPORTANT POINT: I am always amazed at the discussions by American economists, political scientists, health care providers, health care theorists, and politicians about health care and the question of what will work. This discussion is similar to someone debating how to manage infectious diseases but pretending that they have never heard of antibiotics or that antibiotics are a strange and questionable development. The answers to how to make health care work are on the shelf. They have been discovered by everyone else in the developed world. They have been shown to work well in general and specifically to work much better than our system both economically and medically. We are at the bottom or near the bottom in terms of health care performance in the developed world and at the top in terms of health care costs by a wide margin. To deliberately pretend that there is a question as to what would work better than our system is to literally bury our heads in the sand. Conservative politicians of all stripes, and the insurance companies, pharmaceutical companies, HMO’s, medical equipment providers and others who realize huge profits from our current mess of a system (at the expense of both patients and the economy) are only too glad to encourage this behavior, but it is disappointing when people who should know better play along.

[Jonathan Goldberg]

A health care economist of my acquaintance (whose name annoyingly escapes me) claims that he cannot find evidence of improved health results for any expenditure greater than $1000/person/year. The rest goes on what he call "Consumption Amenities." These include private or semi-private rooms instead of wards, the fountain in the lobby of a hospital here (St. Louis), treatments of marginal effectiveness, etc..

He also commented that this involves treating hope as a consumption amenity, which makes him a little queazy.

I asked him if the $1000 covered expensive cancer treatments. He said it did.

I haven't seen any primary data myself; I just pass this on as an example of a perhaps extreme view held by someone who has spent his professional career collecting and analyzing the data to support it. (Myself, I prefer to pay for some consumption amenities).

[Life Insurance Canada]

Nice discussion. "They have been shown to work well in general and specifically to work much better than our system both economically and medically" Which system is the best? Because I believe there are no two countries with the same system. And you can find horror stories dealing with local health care everywhere.
But I think the main question for US is not "what is the goal?" but "what is the way?". You can't change your health care system from one day to another, when there's 16% of GDP involved, but some politicians act like they are able to do something like that...
Lorne

[piotr]

One puzzling fact about high tech medicine, shared with military technology, is that technological progress leads to a cost explosion.

In other fields, a large part of technological progress decreases the cost, while the other increases quality.

For example, the unit cost of civilian airplanes is probably not increasing very fast, while the places are becoming better in many respects. But the costs of military places are where they "belong": shooting to the sky!

In both fields, marketing is based on the principle: "if you will not pay more, you will die!" (or suffer). Except, even most marginal and dubious improvement can be marketed -- particularly to people who do not spend their own money.

It would be interesting to offer a good model of proper incentives for developing new medical technologies. For example, new drugs and procedures, if much more expensive then predecessors, could be kept in "experimental" status until superior efficacy is proven to somewhat higher standard than in the case of cheap novelties. Moreover, there would be some way of letting the "experimental" stuff be used, say, in 10-20% of cases, so it actually has a fair chance of proving itself.

Also, such judgments are enormously complicated, and there are so many different combinations of conditions and treatments that there should be more of international cooperation about investigating treatments and using the results.

[Patrick Schoenfelder]

Lorne: "Which system is the best?"

Technically, France is probably the best, although others are close, especially Japan. France uses a "social insurance" model -- private non-profit insurance companies provide coverage that meets strict guidelines set by government; people who can afford coverage pay for it or their employers pay for it; and the government pays for low income people. No exclusions for pre-existing conditions are allowed. (In US business systems this most closely resembles the model of privately owned utilities back in the day when utility regulation actually meant something.)

Lorne: "you can find horror stories dealing with local health care everywhere"

Definitely true, whether you are talking about France, England, Japan, Canada, or the US. However, anecdotes, primarily colored by human error, are of very little use in evaluating a system. Statistics are where the money is.

Lorne: "You can't change your health care system from one day to another"

Actually you can. The US implemented its Medicare and Medicaid system over a period of less than two years back in the 60's. Taiwan went from a totally chaotic private system to an excellent single payer system over a very short time in the mid-90's. Britain literally implemented the National Health System overnight back in the 40's.

As to the question of utility of high tech innovations, the US is unique in the world in that there is pretty much a free fire zone as far as implementation of innovations, with huge changes occuring with no central control and often with questionable evidence. Almost all other systems have centralized agencies charged with evaluating new innovations and in some cases conducting scientific studies of utility if the studies are not otherwise available. Interestingly, the area of US health that most closely follows that sort of model, cancer care under the leadership of the National Cancer Institute and regional cancer systems, is the only medical area where the US leads the world statistically in quality of care. In the US, cancer care in reputable centers either conforms to established standards, or is involved in well designed studies to measure the effectiveness of new approaches. Oncologists have given up the right to practice shoot from the hip medical care in favor of rigorous scientific practice standards. Other specialties are reluctant to do so.

[Dean Baker]

How about problem #5 in this story. The vast majority of really expensive items in this story come with price tags that vastly exceed marginal costs due to patent protection. This means that the sellers garner enormous economic rents. There is also a huge problem of assymmetric information, they know much better than doctors or patients how effective (if at all) their treatments are. As a result, they can get us to pay big amounts of money for treatments that may be of little use or even harmful.

Why oh why can't we get better health care economists?

[Maynard Handley]

As a followup to Dean Baker's point:

I had the chance to interact with a man who had invented a new way of visualizing the motion of the heart, and went to an early (pre-production) meeting where he discussed this. He was very proud to announce that what this device showed was that 80% of all hearts were flawed. I then raised the issue of what value was this information - if practically everyone, by some metric, has something wrong with their heart, what do we as individuals and societies do with this information? Can this technique tell an individual what SPECIFICALLY is wrong with their heart in a way that can lead to useful life advice?

Not only did I not get a useful answer, it was like he hadn't even understood the very point of the question. He simply assumed that hospitals would buy this device, that patients would pay some large number of dollars to get a TV view of their heart in action, that they'd then be told, "sorry, your heart is not perfect, do all the things like eat well and exercise, that we would have told you anyway without you paying a fortune for this TV view" and this was a fine way to run a society.

Dean Baker's framing of the problem sounds like rampant cynicism, and I perhaps would not have believed it was as bad as he states if I had not encountered this with my very own eyes. I guess I would temper his statements by saying that (at least at the inventor level, I make no claims for the corporate level), it's not so much that these inventors are deliberately setting out to fleece the public, more that they are massively in love with the concept they have devised and view what they are doing as an issue of "coolness", not as an issue of "is this actually doing something useful for its price".

[James Wimberley]

Brad: "How many large-screen LCD screens does one person need?"
If you have a screen on each of the 3 inside walls of every living room, so you have one in your field of view from every angle, and 1 per bedroom and bathroom, the answer will be about 12. Of course. in the other, King Lear sense of "need", the answer is zero.
Remember when pundits couldn't think what earthly use there could be for a home computer? Many well-off households must be now be approaching the one per room standard, if you count games consoles.

[Jrossi]

Patrick, I'm a family doctor interested in these issues. Please give the references you are using regarding the efficacy of beta-blockers versus interventional cardiology in CAD mortality as well as the reference or references regarding the Dutch health system.

[Jrossi]

Never mind about the Dutch study. I found it. Something I have long suspected. If this turns out to be true in HC systems generally, it will be an absolutely crucial fact in HC economics. It means that the old conventional wisdom that healthy living reduces HC costs is wrong. Medical advance is important because it can improve people's lives, even if it doesn't save money, but society has to realize there is no free lunch from healthy living. The ideas that others here have proposed for saving money are all good: Single payer, changing reimbursement from piece-work to bundled, with appropriate incentives for better quality and service, more primary care MDs, better institution of practice guidelines to deny payment for useless care, etc. I agree that demand management is tough due to asymmetric information and medical and psychological factors: the patients who cost the most money are often in such straits that bargaining with their doctors is out of the question. You don't bargain with the doctor (or the insurance company) when it's 2 am and you can't breathe and you hope to God this guy's going to keep you alive so you can see your grandkids again. You don't bargain when it's 3 am and your 2 year-old has just had a seizure and the doc wants to do a mega-work-up. People just aren't like that. The relationship is closer to that of parent and child than that of two autonomous adults. Difficult to explain to people who have never been very sick or very old or both.

[Patrick Schoenfelder]

The most recent study comparing angioplasty with medical therapy alone was published in the NEJM 3/26/2007. In randomized arms 2287 patients were assigned to either angioplasty plus optimal medical therapy or optimal medical therapy alone. The med therapy alone group did slightly better in death, stroke, MI, and hospitalization for cardiac cause. Multiple types of drugs were used, including lipid agents, beta blockers, and aspirin.

I don't have the actual reference, but two different articles about comparing CABG with medical treatment with aspirin and beta blocker therapy were published in the Swedish literature in the 1980's and 1990's, using two different generations of beta blockers. The beta blocker group did better in both studies, and in the 1990 group some newer beta blocker -- sorry, can't which one -- outperformed atenalol by a slight margin.

Of course the index study on CABG clear back in the 70's showed that only patients with left main coronary disease benefitted from bypass.

The most convincing data of all is that in many studies involving the whole populations of developed countries, countries using much less high tech therapy for coronary disease attain better results than the US, where high tech therapy is the rule. It is also worth noting that the most dramatic improvement in coronary event mortality happened before high tech intervention became widely available outside a few large cities.

As of now, there is evidence that patients with acute MI in progress -- not general coronary disease patients -- do benefit from angioplasty. I would be very curious to see a study that compared direct infusion of clot busting drugs into the coronary arteries compared to actual angioplasty, since angioplasty in acute cases is always proceeded by clot drugs.

Of course, there is evidence that our entire model for coronary artery disease and MI is wrong, with evidence now suggesting that the culprit is plaque rupture and associated clotting, not narrowing due to fixed hard plaques. The apparent lack of success of angioplasty may be due to the fact that in non-acute patients the lesions being treated may not be the correct lesions.

As far as the scenario of the distressed patient or parent having aggressive high tech procedures foisted on them by doctors when they are helpless to resist, I believe that that does happen sometimes, especially in some areas of the country and in some practices. However, in many settings it is the patients themselves demanding the high tech approaches. I cannot tell you how many times I have had ER doctors, FP's, and internists tell me that they have to get some procedure because the patient simply will not accept the assurances of the doctor that they don't need it. "This person is just not going to leave the ER until they get a CT," and "this person is insisting on seeing a surgeon about his chest pain rather than have just medical therapy." The media, promotion by specialists who benefit from the procedures, promotion and advertisement by hospitals and other health care facilities, promotion and advertisements by suppliers, and a general mindset that the more expensive and dramatic something is the better it must be are all partly responsible for this, as is the onmipresent notion of potential legal liability if the MD's best judgement is wrong.

Insurance companies and HMO's are also victims in this. It is impossible to market an insurance or HMO program that is known as the program where you can't get an MRI or an elective angioplasy. That happened back in the 1980's, and the companies lost market share to companies that were more inclined to pay for and promote high tech.

That is why we need good practice standards, backed by good scientific research with randomization and large enough sample size. We need to save doctors, patients, and the economy from themselves, and it just is not happening now.

[FB]

A logical conclusion of this excellent post is that the US may do good to look at France - now, I admit our system has a number of faults, and we also find it difficult to finance, but it still costs half of the US's, accomodates full competition in provision of services, and a strong emphasis on preventive care. What it does, is that insurance is mostly quasi-state provided, and partly (the "top up" part) state-regulated...when one looks at the US from France, private provision of insurance does not look attractive...