In addition, I've been wondering why American health care performs so poorly against other health care systems worldwide. In other countries, they spend a fraction of what we spend on health care, but their health outcomes are usually much better than ours. Why does our health system do so poorly with all the money we put in?
I think I've finally found an answer, and it has almost nothing to do with malpractice lawsuits, greedy insurance companies, or "socialized medicine" or lack thereof. The problem is, unfortunately, doctors that have become businessmen (and women). Doctors make money on tests, surgeries, procedures, referrals, and so forth. It is in their interests to maximize the use of health care, which drives up total costs and, since all medical procedures have risks, this actually makes for poorer health outcomes. Or so this article (byAtul Gawande) claims. Go read it. Most interesting thing I've ever read about the health care cost problem.
A snippet from the conclusion:
When you look across the spectrum from Grand Junction to McAllen—and the almost threefold difference in the costs of care—you come to realize that we are witnessing a battle for the soul of American medicine. Somewhere in the United States at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And the damning question we have to ask is whether the doctor is set up to meet the needs of the patient, first and foremost, or to maximize revenue.
There is no insurance system that will make the two aims match perfectly. But having a system that does so much to misalign them has proved disastrous. As economists have often pointed out, we pay doctors for quantity, not quality. As they point out less often, we also pay them as individuals, rather than as members of a team working together for their patients. Both practices have made for serious problems.
Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coordination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.
6 comments:
This is Bryan commenting. As a physician in training, I feel I should comment on this topic. Although, I do not understand all of the fine details of billing, I would like to clarify some points. I agree that health care is ridiculously expensive. Physicians bill according to coding systems. There are procedure codes and codes of office visits as well as consults. Physicians can bill more for an increased complexity of patient problems or difficulty of procedure. In general, the physician ordering a lab or diagnostic study does not get paid extra for the work. He/She only gets paid based on procedure he/she personally does or increasing complexity of patient. In contrast to the argument made here, in my opinion, there is no added interest in ordering extra tests, labs, or procedures. In the five years, I have been working in healthcare,I have never seen a physician do a procedure simply for increasing ability to bill. Again, I agree that health care is too expensive, but take a look at the trend in physician reimbursements; they are decreasing dramatically. For example, to perform a Carotid Endarterectomy (vascular surgery procedure removing plaque from the carotid artery, thereby decreasing the risk of stroke dramatically. Usually takes about 2 hours and involves dissecting plaque out of the major artery that feeds the brain) the physician reimbursement is $600. 10 years ago the reimbursement was $2500. Try to get your car breaks fixed for less than $600 dollars! With increasing healthcare costs and decreasing physician reimbursement, to me, it is clear that the physicians are not the direct culprit. I think the cause is inefficiency in the healthcare system. I have already written too much to comment further, but would entertain a discussion later if desired.
Dr. Bryan Palmer! Thanks for chiming in with your expertise. I was hoping some of my doctor friends would comment on this. We should definitely get a group together to talk more about this.
Say more, though, what inefficiencies do you see driving up costs? Or maybe we can just talk in person.
To be fair, Dr. Gawande seems to argue that billing issues (who gets paid for what) depend on your particular institutional context. In some contexts (like the Mayo Clinic) physicians are paid a flat salary and not even according to the procedure codes you describe. On the other extreme, like in McAllen, TX, things seem to be set up very differently. In McAllen, for example, doctors do make contracts with various agencies (e.g., home-health agencies and, in extreme cases, hospitals) and are paid for referrals to those agencies. If this is true, it might explain why there is such a vast regional difference in health care costs. Costs are very low in Mayo, very high in McAllen. I wonder where the Columbus area ranks according to health care cost?
This is actually becoming a true blog. I like it! As far as inefficiencies, I could illustrate a few, that as an obstetrician, I see everyday. These may be specific to Riverside hospital but assuredly, similar situations are seen elsewhere. For example, one inefficiency would be patients that are sent to the triage area of L&D for complaints that could easily be evaluated in the Dr's office. This results in a facility fee, likely unnecessary blood work, an NST (fetal monitoring) that usually results is a bill over $1,000. This is very inefficient considering an office appointment co-pay may be $20 dollars. An other example of inefficiency would be the ED. This is very inefficient in 2 ways. Pt without a primary care physician are seen for routine problems (earaches, cold symptoms, fevers, vaginal bleeding, headaches etc). ED physicians are trained to rule out the life-threatening causes of the symptom. This results in the "million dollar work-up" as we describe it. For example, the Headache patient may end up with a head CT scan or worse yet, an MRI of the brain. This is thousands of dollars for something that is likely a tension headache relieved with ibuprofen. I have seen this time and time again for pelvic pain. women, sometimes without even being seen by the ED physician, have pelvic ultrasound ordered and often a CT scan of the pelvis. they often have no real problem for the symptoms. But again, the ED physicians are trained to find the life-threatening problems like an ectopic pregnancy or appendicitis. Again, thousands of dollars are spent. Yet another example is the Hospitalist system that the U.S. is starting to employ. Internal medicine physicians are hired in groups of 60-100 doctors. they care for only patients while they are admitted to the hospital. They do not know the patient prior to admission nor after discharge. They do not know the work-up that has been done by the patient's primary care doctor in the days and weeks prior to admission, so costly blood-work and radiology is repeated. Very inefficient! There are dozens of more examples. I have come some conclusions as to why this has happened. We should discuss this together. I obviously find it very intriguing. I could also shed some light on why your recent hospital bills were so expensive, if you are interested.
One of the costs "hidden" in a doctors bill is the large amount of support staff. When I worked with Opthalmologists (eye surgeons), for every hour they were seeing patients, there was at least one quite busy receptionist, medical office assistant, and rn also being paid to provide parts of the patient care or service. Thier contributions to the process were vital, but the cost is not insignificant,
[Kyle] Hey Bryan, long time reader, first time commenter. I thought I would throw my hat in the ring on this one. We all want there to be an easy answer to the question you posed, I don't think there is one. The system is too complex, and as you mentioned each region is different from another. I think it is too simplistic to say it's just the greedy doctors. Can you find examples of doctors on commission exploiting the system, sure. But to take those examples and throw other credible explanations out the window seems a little over anxious. It's always difficult to get generally applicable answers while studying why the outliers are the way they are.
You mentioned doctors ordering extra tests and doing arguably unnecessary procedures to increase revenue. It seems to me this happens more from doctors afraid of lawsuits than any other reason. I am not saying that what you described isn't happening, I agree with you that it is happening. All I am saying is the situation is too complex to be able to point to one factor and claim it to be THE answer (although that does make for a more interesting read than an article entitled "The top 456 reasons you paid so much at the doctors" :))
Anyway, thanks for the post. You're always thought provoking, it's easy to tell you are a professor from your posts!
Kyle, thanks for your comments. I'm happy to hear you read the blog! I'm obviously no expert at this, so it is good to hear other people's perspective.You are certainly right that things are really complex. I'm still trying to make sense of it all.
Malpractice might be one important factor in the complexity. But there is much that this theory does not explain. For example, it does not explain why costs vary so much among hospitals and states. The article says that even states that have placed restrictive caps on malpractice awards (like Texas) have not seen any drop in health care prices. If worries about malpractice claims are driving costs, this should not have been the case.
Anyway, you should read Dr. Gawande's article. It's a good one. It seems to capture the complexity you describe (a complexity that admittedly does not show itself in the paragraph I pasted into my original post).
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