Healthcare economics and history--how we got here and how we might get out. (Notes for my talk to the League of Women Voters)
I’m going to be talking about what has taken me away from my
practice this last year and what I’ve learned about how healthcare is doing and
why it’s so expensive. I’m going to talk about what’s going well and not so
well and the ways we can have an impact for the better.
In 2011 my friend and nurse practitioner died unexpectedly and my longtime medical partner decided to move far away to
take a different job. This left me and my remaining partner to take care of our
large practice. We were both also
covering patients in the hospital so had no more room to accept new patients. It
turns out that almost no more outpatient
internal medicine physicians are coming out of residencies, so recruiting a new
physician was not going to happen. I had also been writing and speaking about
healthcare reform for a few years and felt like getting more and new experience
would help flesh out my understanding of what was going on. So I left my job
and the patients I loved taking care of and, since November 2011, I have been working as a hospital physician
for hospitals in Oregon, Washington, California, Alaska and here at home. I
have been studying internal medicine and have recertified with the Board of
Specialties. I have learned to do bedside ultrasound and taken a one month
fellowship in that at University of California, Irvine medical school. I also
took 3 weeks to go to the Republic of Georgia and learn new songs and performed
with a trio in Tbilisi. It has been a glorious and sometimes incredibly tiring
adventure. I have learned a ton and met lots of interesting people, both
patients and caregivers. I have written about 80 articles for my blog, some of
which have been re-published by the American College of Physicians and on other
websites. I don’t seem to run out of things to say.
The big problem with American healthcare is that we spend
too much money on it and for that we offer it to fewer of our citizens than
other developed nations. We are only 1 of 2 OECD (Organisation for Economic Co-operation and Development, 34 countries
that joined together to promote economic development) countries that do not have some sort of universal healthcare. 17% of
Americans at any one time have no health insurance, and many more are
underinsured. Canada, for instance, requires access to basic medical care
without copay and pays about $1800 per person in healthcare costs to America’s
$2800 per person. For our higher healthcare costs, with have a lower life
expectancy and a higher infant mortality rate. It is hard to compare countries
in this way due to the diversity of our population, but the message is pretty
clear. We are paying too much for our healthcare and we are not getting
excellent results.
But you could have looked all of
that information up on your handheld devices. The real question is why is this
true and what can we do about it?
In 1965 a very popular program came
into existence. President Lyndon B. Johnson signed Medicare into existence
under title 18 of the Social Security Act. Before that time only half of
seniors could afford health insurance.
Medicare made sure that older people, often on reduced or fixed incomes,
didn’t die of disease because they couldn’t pay for medical care or perish from
bankruptcy. Prior to this, elderly people paid the equivalent of $1000 of
today’s dollars in a year without a hospitalization and up to $7000 with a
hospital stay. This was paid for by family, out of savings and sometimes
through charity or public assistance. The average per capita healthcare costs
today are over $8600 in the US and over $10,000 for patients 65 and older.
Health insurance had become more common even before the inception of Medicare
and Medicaid, in the 1940s, but was more like our catastrophic policies are
now. With Medicare and Medicaid many more people were insured and insurance was
more often comprehensive. Since consumers were no longer exposed to a
significant financial disincentive to obtain healthcare, use of services
expanded and because it was not the consumer who paid the majority of the
bills, costs rose. Because there were deeper pockets, technology blossomed,
with more and more expensive treatments and tests. Insurance companies attempted
to cut costs by increasing requirement for documentation of appropriateness of
care, but this just increased the administrative burden which increased costs
further. Higher costs were handed back to the consumer in the form of higher
premiums, which made consumers even more eager to get their money’s worth by
using health insurance benefits. More and more often insurance was provided by
employers which further shielded patients from the costs of healthcare. In 1965 healthcare spending was about 5% of GNP
and today it is nearly 17%. Healthcare is big and getting bigger and it acts
like a bureaucracy does with little incentive to downsize or become more
efficient.
You may ask how universal health
insurance coverage or even a single payer system will help fix this. The answer
is that it won’t. Universal healthcare coverage will make sure that everyone at
least theoretically has access to healthcare, but it will not in itself reduce
costs. A single payer with really good oversight (since bureaucracies do get
larger and cost more if left to themselves) could potentially dictate payment
levels, but does not tend to motivate elegant solutions and small efficiencies.
So what does expensive healthcare
look like from my perspective? I suspect many of you have seen it in action. I
have been in hospitals lately which is a pretty good vantage point from which
to see high costs, since hospital costs are the largest sector of the
healthcare equation. Hospital costs make up about 850 billion of the
2.7+trillion dollars that the US spends on healthcare. Hospitals continue to
spend way more resources to take care of patients than are necessary for good
care. Although Medicare began in the early 1980s to pay hospitals for patients
according to diagnosis rather than how much was done to them, other insurance
companies continued to pay “fee for service” which is to say paying for each
service that was performed. Doctors not employed by the hospital also are paid
according to the volume of services done. Doctors are so used to doing
unnecessary tests and procedures from decades of practicing in an environment
where neither the patient nor the doctor suffers from excess costs that we feel
that this is the only responsible way to practice.
So what do we do that is crazy
expensive? Much of what I say refers primarily to the big hospitals where I
have practiced, which represent American healthcare much more than our local
hospital, where we are much more circumspect. What doctors do is to order
unnecessary tests, ones which could be avoided by taking a good history from
the patient or contacting the patient’s regular doctor for background.
Sometimes that is done because the patient is admitted to the hospital after
closing time for outpatient clinics or because of lack of time. We recommend aggressive and technological
approaches to diseases where a “wait and see” approach might work just as well.
We do this because of a prevailing belief that to do more means that we care
more. We
also worry that if we are conservative with our use of resources our
colleagues will fault us or we will look negligent should we end up at the
receiving end of a lawsuit. Because of lack of communication between many care
providers, hospitalists, specialists, intensive care providers, primary care
doctors, patients are often kept alive far longer than they would have wanted,
with much poorer quality of life leading to more unstable patients in nursing
homes and specialty centers. Some of these patients, those requiring high level
chronic support including ventilators and feeding tubes, can cost upwards of a
million dollars a year, paid for out of public assistance programs such as
Medicaid and Medicare. These patients develop multi-drug resistant infections
which are a reservoir for infecting other patients, and become increasingly
medically complex, taking physicians attention and time away from care of
patients whose prognoses might be better.
There is a lack of elegant
solutions to common problems because elegant solutions use less resources and
the healthcare system grows larger and more powerful with increased resource
utilization. With no limit to the amount of money available to pay for things
in the healthcare arena, the solutions become larger and more expensive, rather
than simpler and cleverer as they do in so many other sectors.
What are some examples? Every
physician longs for a user friendly effective computerized medical record
system that has good communication across different locations and levels of
care. If you even barely scratch the surface, most physicians could tell you
what they want and how it needs to work. They will also tell you that there
needs to be one system for the whole country and that every office needs to
have it. Instead we have many medical record systems and we can only reliably
access information from the hospital in which we are working. Our communication
with other physicians responsible for care, if not within the hospital are
haphazard and usually by telephone, since we are unable to communicate via the
medical record. A universal medical record is a very feasible option but it
will not happen as long as large software companies can continue to make enough
money through competition with each other by making mutually exclusive products.
Our computerized medical records are often owned by large multinational
corporations, are very expensive, don’t do what we want them to do and don’t
talk to each other. They don’t have to be inexpensive or efficient since deep
pockets which extend to everyone’s pockets by secret subterranean tunnels can
pay for them.
Stress tests. When I graduated from
medical school I learned to perform exercise stress tests in which we had
patients exercise hard on a treadmill while we monitored their
electrocardiogram to see if their heart would develop abnormalities to suggest
a blockage in a coronary artery. This test was very helpful in some cases, but
no good for patients who couldn’t exercise and less accurate for women. Imaging
of the heart with ultrasound or using chemicals could help to make this kind of
a test more accurate. The most accurate pictures were obtained when a nuclear
isotope was injected which went to areas of the heart well supplied with blood.
Nuclear isotopes, like thallium or technetium, are made in nuclear reactors or
cyclotrons, which are big, expensive, few and far between. A third of the
nuclear isotopes used in north America are made in a reactor in Chalk River,
Ontario, Canada. They are unstable and must be used relatively soon after being
made. There is also a special machine for detecting them and doctors must have
2 months of training plus many hours of radiation safety education to be
credentialed to interpret the results.
Over the 25 years since I graduated from medical school the nuclear
stress tests have all but replaced the standard exercise stress tests. Standard
exercise stress tests, even at hospitals, cost around $200 and nuclear stress
tests, which also involve a very significant amount of radiation exposure and
concomitant cancer risk, cost over $5000. Are there no other less expensive
tests that can do the job? Yes, there probably are, but there is no really good
incentive to find them since, in the big economic scheme of things, a nuclear
stress test pays so many salaries. When you think about it, there are the jobs
of all of those people who work in the nuclear power plant, the truck drivers
who get the isotope to the hospital, the
people who make the machines that detect the isotope, cardiologists, folks who
teach radiation safety—the financial fallout is huge.
We also do too much technological
medicine at the end of life, and similar economic pressures contribute to that.
Obviously the very sickest patients are the ones who will soon die, and so we
naturally pull out all of our very most hi tech medicines, tests and procedures
in our patients’ last few usually pretty miserable days, weeks or months of
life. To be fair, it is not always clear whether the hi tech offerings will
cure a patient and restore them to function, but in many cases at least
discussing what we are doing with patients and families might reduce the use of
medical technology that prolongs misery. It has become the standard of care to
do so much that, in other countries or cultures, would be seen as cutting edge
and only used in extreme need. This includes routine use of multiple very
expensive antibiotics when infection is only remotely expected and invasive
long term IV catheters with risk of blood clots and infection as well as high
cost for patients who may not even need intravenous medications, imaging tests
from neck to groin for pain complaints which then lead us on wild goose chases
due to incidental findings. Exploring humane ways to spend the waning days or
more uses very few resources and is reimbursed poorly. Hospitals have
palliative care teams which move this process away from the acute care doctor,
but this fragments care more and often increases costs. Hospice, both at home
and in specific inpatient hospice facilities is big business and associated
costs are huge, as we continue to medicalize the process of death.
Third party payers also influence
costs by becoming part of our network of communication. I heard once that administrative costs are
half of a hospitals actual expenses. I think that it is impossible to really
estimate the burden of billing for services since a significant amount of all
of what we do as nurses or doctors, especially in the realm of record keeping,
is about getting paid to the highest level for what we do. Legal influences
also increase the cost of the care we provide. There are various estimates of
the impact of the risk of being sued for malpractice on the medicine we
practice. That, too, will be very difficult to estimate, since a large portion
of how we think, how we document what we do, how we communicate is influenced
by the internal picture of a courtroom with lawyers asking us to justify our
actions based on standards of care for our profession.
Costs in hospitals are higher even
than they need to be for the admittedly technologically advanced procedures we
perform. This is due to the fact that much of what is done in a hospital can’t
be billed for, such as the work of social workers and discharge planners, nurses
and nurse managers, administrators and janitors. There are uninsured patients
who require care and who are unable to pay even a little of their expenses.
Hospitals do not usually function very far in the black, so the high costs we
pay for care is probably about right, though individual prices for things do
not necessarily correlate well with their value. Without the burden of billing
and without the perverse incentives of third party payment, though, hospitals
could definitely be more efficient and considerably less expensive.
Despite perverse incentives, there
are bright spots, movement in the right direction. The American Board of
Internal Medicine has started the Choosing Wisely Initiative in which most of
the fields of medicine have chosen to unveil the most expensive least effective
most commonly performed procedures or tests and marketed that information to
both patients and physicians. This includes information about what procedures
are appropriate to do for low back pain or chest pain, when antibiotics are
helpful, which preventive procedures work and for whom.
Antibiotics in hospitals are
associated with the development of Clostridium Difficile diarrhea which can be
disabling and sometimes fatal. Antibiotics for this are sometimes effective but
often not. It has been demonstrated for over 50 years that transplantation of
healthy stool into the colon of a person with this condition can be curative,
but it has been extremely slow to catch on. Hospitals are finally starting to
develop protocols for doing this and it is likely to revolutionize the
treatment of this disease, using a procedure that, at least theoretically,
could cost next to nothing.
The evil drug companies have come
up with 3 drugs to replace warfarin (Coumadin) which will probably make the use
of injectable anticoagulants with associated hospital stays very rare and,
since they don’t require blood test monitoring, make patients with blood clots
and atrial fibrillation less dependent on doctors’ offices. This will also
reduce the very common complications that warfarin patients have of bleeding or
clotting due to varying levels, which is responsible for many hospitalizations
and much disability. We have been slow to adopt these medications since we are
more comfortable with the very resource intensive use of warfarin, but these
new drugs will allow many more patients to be treated for conditions at home
rather than in the hospital.
The Affordable Care Act has set up
money for various pilot projects that involve delivering care in more efficient
ways, including use of midlevel providers such as nurse practitioners and
physicians’ assistants, and these people are becoming more important parts of
healthcare teams and often do a better job than physicians of monitoring and
treating chronic conditions.
I just learned how to do bedside
ultrasound and am very excited about its ability to streamline and improve
care. Small and affordable ultrasound machines that can live in a pocket allow
me, as a physician, to get real time information about the function of internal
organs that can help guide appropriate care and can reduce the need for imaging
and the delays and costs associated with that. It can also help to focus my
test ordering so that the imaging I do order is more appropriate. At the
American College of Cardiology a researcher just announced results of a study
comparing the use of a handheld ultrasound to physical exam by a cardiologist
and found that it was vastly superior in many important ways. This is no
surprise to me since I have been using such a machine for over a year and the
impact on patient care is huge. Medical students are now learning how to use
this technology and though it may take some time for it to diffuse into common
use, its time will come.
Our local hospital continues to
look for programs that will allow it to serve the community better. Tiny
hospitals like ours don’t make much of an impact on legislation and so novel
models of payment such as ACOs (accountable care organizations) which try to
reduce costs by coordinating care of patients and having healthcare
organizations have financial incentives to be more efficient, do not fit
us. If our hospital, along with
representatives of the medical community and community members, had the money
all of us spend on the healthcare we get through insurance, we could
much more than pay for our medical needs. It would also become financially as
well as morally desirable to prevent illness and reduce our need for medical
care. This is the idea behind health care cooperatives, organizations such as
Kaiser and Group Health in the Northwest, which have been quite successful. We will soon have a clinic that serves people
with poor or no insurance, the CHAS clinic, which will help provide care that
will keep people out of the hospital. Their model uses multiple sources of
funding to defray costs.
But what can you do about this as
an individual and as a voter and community member?
As an individual: have discussions
with your physicians about your goals of care. If a doctor doesn’t know what you want or care
about, he or she will likely err on the side of ordering too many tests or
consultations or treatments. If your doctor doesn’t want to talk about this,
there is a problem. Keep in mind that many doctors do have time constraints,
but if they are juggling less data because you asked them not to order that
extra test or procedure, they may just have more time for you. Go to the
Choosing Wisely website and see what it says about your particular condition.
If you have questions based on this, print out the information and bring it to
your doctor. Discuss with your doctor what you want at the end of life. Fill
out an Idaho POST form or a 5 Wishes form and have it in your chart and in your
possession, discuss it with those you love as well. Live well. Eat good food, lots of vegetables
and fruits, fish, local grains and beans, fish, make meat be a treat, not a staple,
same with ice cream. Do the things that give you joy, and if exercise isn’t
something that gives you joy, go out for a walk regularly anyway. Don’t smoke.
Take as few drugs, legal or otherwise, as possible. Stay well so none of what I
have talked about needs to apply to you.
As a voter and citizen: try not to
make knee jerk Democrat versus Republican judgments about legislation regarding
healthcare. Neither party has it right, at least not yet. Read the legislation
and think about what it says. Remember that Medicare IS too expensive and that
it is not necessarily headed in the right direction, so legislation to change
it in some way is not necessarily evil. Question high cost care, even if it’s
something that seems sacrosanct, like hospice or preventive services. Get
involved in community projects that support good health especially those which
bypass or partially bypass the whole healthcare payment machine.
Comments