Tuesday, November 09, 2010
More about the High Cost of American Medical Care
I may have written before about this subject. My source is Dr. Atul Gawande, who has written several articles on the subject in the New Yorker magazine. I have conservative friends who insist that the reason medical care in the United States costs more (at least twice that of the next most expensive country) than in any other country is (a) Americans live dangerous lives, with automobile accidents and gun fights injuring and killing people, or (b) The care provided in those countries is inferior and often too late to avert death. I have liberal friens who insist that the reason is (c) The greedy insurance companies make exhorbitant profits and cancel policies on patients who develop a new and expensive condition.
They're all wrong, of course. According to Dr. Gawande, the cost of good medical care varies greatly within the United States and depends on the model of medical care practiced by the doctors in each community. The cheapest and best is provided by the Mayo Clinic in Minnesota. Doctors work on salary. Specialists and laboratory services are available for the asking. The patient doesn't pay the doctor but rather the Clinic. An expensive model is one in which doctors operate as intependent businesses and refer their patients to specialists and to laboratories as needed. The patient pays the doctor, or primary care physician. If the doctor refers him or her to a specialist, the patient pays the specialist - usually a big fee. The patient pays for any laboratory work done. The doctor, or primary care physicion, receives a kick-back from the specialist and perhaps from the laboratory. In this model, specialists do not see any patients except those that have been sent or referred by a primary care physician.
When a doctor, whether primary care physician or specialist, operates as an independent business, usually a corporation, he or she has a strong incentive to maximize the income received from the practice. A primary care physician may prescribe unnecessary laboratory tests or specialist referrals and enjoy the extra revenue from these referrals.
Dr. Gawande has discovered, by comparing Medicare per-patient payments, that the clinical model exemplified by the Mayo Clinic provides good care at substantially less cost than the private physician model. It is clear to me that his results show that all three of the excuses listed above are incorrect. It remains to be seen whether the new health care bill has incentives to persuade medical doctors to adopt the clinical care approach instead of the individual practice approach.
In Canada and England, where there are systems to provide universal health care, one can of course choose to be treated by a private physician, one who is not in the British National Health Service or who receives payment from the Canadian single-payer system. This person can receive the same level of care as his neighbors and have the privilege of paying American prices for the care.
They're all wrong, of course. According to Dr. Gawande, the cost of good medical care varies greatly within the United States and depends on the model of medical care practiced by the doctors in each community. The cheapest and best is provided by the Mayo Clinic in Minnesota. Doctors work on salary. Specialists and laboratory services are available for the asking. The patient doesn't pay the doctor but rather the Clinic. An expensive model is one in which doctors operate as intependent businesses and refer their patients to specialists and to laboratories as needed. The patient pays the doctor, or primary care physician. If the doctor refers him or her to a specialist, the patient pays the specialist - usually a big fee. The patient pays for any laboratory work done. The doctor, or primary care physicion, receives a kick-back from the specialist and perhaps from the laboratory. In this model, specialists do not see any patients except those that have been sent or referred by a primary care physician.
When a doctor, whether primary care physician or specialist, operates as an independent business, usually a corporation, he or she has a strong incentive to maximize the income received from the practice. A primary care physician may prescribe unnecessary laboratory tests or specialist referrals and enjoy the extra revenue from these referrals.
Dr. Gawande has discovered, by comparing Medicare per-patient payments, that the clinical model exemplified by the Mayo Clinic provides good care at substantially less cost than the private physician model. It is clear to me that his results show that all three of the excuses listed above are incorrect. It remains to be seen whether the new health care bill has incentives to persuade medical doctors to adopt the clinical care approach instead of the individual practice approach.
In Canada and England, where there are systems to provide universal health care, one can of course choose to be treated by a private physician, one who is not in the British National Health Service or who receives payment from the Canadian single-payer system. This person can receive the same level of care as his neighbors and have the privilege of paying American prices for the care.
Labels: American medical practice, Clinical practice, Dr. Atul Gawande, Health insurance, Mayo Clinic, New Yorker Magazine, private practice
Saturday, September 12, 2009
A Simpleton’s View of the Healthcare Debate
Social Security and Medicare are two very popular federal programs. I don’t recall the vote on Social Security, but I believe Medicare was enacted with only Democratic votes in Congress. Probably Social Security was too. Republicans have railed against both programs, especially Social Security, ever since they went into effect.
I’ve been trying to make some sense of the partisan divide about reforming our healthcare system. Thinking Republicans and Democrats agree that the system needs fixing. They agree that more Americans should be covered, that the cost of medical care is increasing too rapidly, and that some insurance companies do some things that ought to be forbidden. I think that they agree that everyone (except illegal aliens) should be covered in some way.
Republicans also believe that one of the main problems in the present system is that it is too easy to sue a doctor or medical provider on the basis of unfulfilled expectations. They want “tort reform.” Tort reform would make it very difficult to sue a doctor for malpractice. Republicans believe, with some justification, that most malpractice suits have no basis in fact but go to court anyway because everyone knows doctors are rich and can afford to pay for their “mistakes.” Republicans assert, again with justification, that doctors are forced to protect themselves by purchasing malpractice insurance and by practicing defensive medicine, thereby greatly increasing the total cost of health care. Some Republicans believe that simply getting rid of frivolous malpractice lawsuits would to a great deal to rein in the rapid increase in the cost of medical care.
Democrats believe, in addition to those beliefs that they share with Republicans, that the biggest problem in American healthcare is the strong influence of insurance companies that provide health insurance. These firms, in order to stay in business and make a profit, have to be careful not to insure persons that are going to have very expensive health problems, just as firms selling auto insurance try not to sell policies to reckless drivers. Some of the practices of health insurance companies include dropping policy holders who develop expensive illnesses or other medical problems after having been insured for a number of years. Insurance firms are not motivated to reduce the actual costs of medical care; they simply pass along the increasing cost of care to policy holders in the form of increased premiums.
Hence, Democrats want to set up an insurance system that will cover the individuals who lose or can’t get health insurance. They’re rather vague as to who will be able to participate in this non-profit “public option” insurance plan. It will have to be subsidized with public money to enable persons who can’t afford any other insurance to buy “public option” insurance policies. Of course, these same individuals would be offered subsidies to buy private insurance if they wished.
Republicans hate the “public option” plan. They have both a philosophical and an economic objection. The philosophic objection is that it goes against the Republican principle of small government. The economic objection is that the plan would grow into a national single-payer plan and put the insurance companies out of business.
Democrats are cool to the idea that tort reform would have a big impact on the cost of health care. They know that tort reform would not provide health insurance coverage to a single additional person. They also believe that the present methods of penalizing and eliminating bad or incompetent doctors are inadequate. Bad doctors continue to practice for years and nothing is done to stop them.
So, from what I’ve read and heard, there seems to be a set of concepts on which there is agreement and some concepts on which there is disagreement. Reasonable people among our representatives and Senators ought to be able to find compromises that everyone can live with. Why is there such great opposition to trying to find compromises? Is it that Republicans are simply trying to make a Democratic president look incompetent, to improve their chances at coming elections? Are Democrats simply trying to get even with Republicans for the years of Republican domination under Speakers Gingrich and Hastert and Representative Tom Delay?
Will someone please set me straight? Post your comments below this article, please.
I’ve been trying to make some sense of the partisan divide about reforming our healthcare system. Thinking Republicans and Democrats agree that the system needs fixing. They agree that more Americans should be covered, that the cost of medical care is increasing too rapidly, and that some insurance companies do some things that ought to be forbidden. I think that they agree that everyone (except illegal aliens) should be covered in some way.
Republicans also believe that one of the main problems in the present system is that it is too easy to sue a doctor or medical provider on the basis of unfulfilled expectations. They want “tort reform.” Tort reform would make it very difficult to sue a doctor for malpractice. Republicans believe, with some justification, that most malpractice suits have no basis in fact but go to court anyway because everyone knows doctors are rich and can afford to pay for their “mistakes.” Republicans assert, again with justification, that doctors are forced to protect themselves by purchasing malpractice insurance and by practicing defensive medicine, thereby greatly increasing the total cost of health care. Some Republicans believe that simply getting rid of frivolous malpractice lawsuits would to a great deal to rein in the rapid increase in the cost of medical care.
Democrats believe, in addition to those beliefs that they share with Republicans, that the biggest problem in American healthcare is the strong influence of insurance companies that provide health insurance. These firms, in order to stay in business and make a profit, have to be careful not to insure persons that are going to have very expensive health problems, just as firms selling auto insurance try not to sell policies to reckless drivers. Some of the practices of health insurance companies include dropping policy holders who develop expensive illnesses or other medical problems after having been insured for a number of years. Insurance firms are not motivated to reduce the actual costs of medical care; they simply pass along the increasing cost of care to policy holders in the form of increased premiums.
Hence, Democrats want to set up an insurance system that will cover the individuals who lose or can’t get health insurance. They’re rather vague as to who will be able to participate in this non-profit “public option” insurance plan. It will have to be subsidized with public money to enable persons who can’t afford any other insurance to buy “public option” insurance policies. Of course, these same individuals would be offered subsidies to buy private insurance if they wished.
Republicans hate the “public option” plan. They have both a philosophical and an economic objection. The philosophic objection is that it goes against the Republican principle of small government. The economic objection is that the plan would grow into a national single-payer plan and put the insurance companies out of business.
Democrats are cool to the idea that tort reform would have a big impact on the cost of health care. They know that tort reform would not provide health insurance coverage to a single additional person. They also believe that the present methods of penalizing and eliminating bad or incompetent doctors are inadequate. Bad doctors continue to practice for years and nothing is done to stop them.
So, from what I’ve read and heard, there seems to be a set of concepts on which there is agreement and some concepts on which there is disagreement. Reasonable people among our representatives and Senators ought to be able to find compromises that everyone can live with. Why is there such great opposition to trying to find compromises? Is it that Republicans are simply trying to make a Democratic president look incompetent, to improve their chances at coming elections? Are Democrats simply trying to get even with Republicans for the years of Republican domination under Speakers Gingrich and Hastert and Representative Tom Delay?
Will someone please set me straight? Post your comments below this article, please.
Labels: Gingrich, Health insurance, Partisan divide, public option, tort reform
Saturday, May 10, 2008
Whose Health Care Plan is Best?
Candidates Clinton, Obama, and McCain all offer plans to improve the existing health care system of our country. Clinton tries to achieve universal health care by simply requiring everyone to buy health insurance. Obama tries to make health insurance more affordable for low income residents. McCain offers the most radical proposal: decouple health insurance availability from employment and instead create insurance pools based on labor unions, organizations, and other definable groups.
I haven’t seen any details of McCain’s plan. I like the idea of separating health insurance from employment. I would like to believe that McCain’s advisors have in mind something like the system of health insurance of Germany. In Germany there are numerous insurance pools. An individual joins one of the pools and obtains health insurance. Because the pools are large, individuals can be insured without regard to pre-existing conditions.
I suspect that McCain’s advisors have not yet thought through the implications of their proposal. These pools should be operated with an incentive to provide needed and good quality medical care rather than an incentive to provide high dividends to share holders. Decisions about coverage should be made by medical experts rather than accountants. Pool managers should be rewarded according to the care paid for by the pool and not by the profit or the increase in the pool’s financial resources. It will take some thought to create such incentives for pool managers.
There are many things that McCain proposes doing if he becomes President. I oppose many of them. In particular, I oppose investing more lives and money in the Iraq project in the vain hope of eventual “victory.” I oppose making the Bush tax cuts permanent. Instead, the President and the Congress must be free to investigate any and all plans to reduce our growing national debt, if only to escape the situation in which all available revenue would have to be used to pay the interest. I oppose McCain’s presumed policy of appointing more ultra-conservatives to the federal courts. I have many reasons for voting against McCain this coming November.
However, I hope that whoever becomes President will take a close look at McCain’s proposal to create insurance groups that are not connected to employment. That looks like a good first step toward repairing our broken health care system.
I haven’t seen any details of McCain’s plan. I like the idea of separating health insurance from employment. I would like to believe that McCain’s advisors have in mind something like the system of health insurance of Germany. In Germany there are numerous insurance pools. An individual joins one of the pools and obtains health insurance. Because the pools are large, individuals can be insured without regard to pre-existing conditions.
I suspect that McCain’s advisors have not yet thought through the implications of their proposal. These pools should be operated with an incentive to provide needed and good quality medical care rather than an incentive to provide high dividends to share holders. Decisions about coverage should be made by medical experts rather than accountants. Pool managers should be rewarded according to the care paid for by the pool and not by the profit or the increase in the pool’s financial resources. It will take some thought to create such incentives for pool managers.
There are many things that McCain proposes doing if he becomes President. I oppose many of them. In particular, I oppose investing more lives and money in the Iraq project in the vain hope of eventual “victory.” I oppose making the Bush tax cuts permanent. Instead, the President and the Congress must be free to investigate any and all plans to reduce our growing national debt, if only to escape the situation in which all available revenue would have to be used to pay the interest. I oppose McCain’s presumed policy of appointing more ultra-conservatives to the federal courts. I have many reasons for voting against McCain this coming November.
However, I hope that whoever becomes President will take a close look at McCain’s proposal to create insurance groups that are not connected to employment. That looks like a good first step toward repairing our broken health care system.
Labels: German plan, Health insurance, insurance groups, Plans of Presidential Candidates, Universal Health Insurance
