Care or Cost? Is the problem Health Care or Health Insurance?

A recent NewYorker article reviewed health care in an article entitled "The Cost Conundrum". The linked www.thehealthcareblog.com analyzed this article and came up with a different take on the data after correcting for demographic and baseline health differences.

In essence the NewYorker article is a classic, although plausible, hit job on the "rich" doctors which draws the conclusion that it is a corrupt medical establishment, determined to exploit the system, that has driven up the costs. The medical establishment has done this by investing in surgical centers, lithotriptors, CT scanners and other medical facilities and equipment. They then greedily refer and prescribe the services of these facilities to their unwitting patients. Subsequently they are paid by medicare or Blue Cross or another insurer and thus leverage the system to their own selfish advantage.

Whenever I find a group vilified for an epidemic problem I am curious about the research, the political leanings and personal background of the author and the logic of the conclusion.. in approximately that order. My background is in history and I have noticed that one's personal history has a habit of forming the axiomatic basis for reasoning.
Read more after the jump:



Continued:
In this case a simple trip to wikipedia http://en.wikipedia.org/wiki/Atul_Gawande revealed the following about Atul Gawande (I did not see it noted in the article header that he was a medical doctor himself). He is qualified to evaluate medical histories and treatments having completed medical school and residency to become a practicing general and endocrine surgeon although my reading of Wikipedia indicates that his medical practice was at odds, competing for time, with his political activism. He is well educated via Stanford (Rhodes Scholar), Harvard Med (2yrs), Harvard School of Public Health all bastions of the left (with the possible exception of Stanford). Politically he is part of the Democratic insider cabal having served Gary Hart, Bill Clinton and Al Gore. He is personally connected to Slate editor Jacob Weisberg who proffered a pulpit in the online magazine. Doctor Gawande was a staff health care researcher for Congressman Jim Cooper (DTN) and in 1992 "He directed one of the three committees of the Clinton Health Care Task Force, ... and defined the benefits packages for Americans and subsidies and requirements for employers." Dr. Gawande has deep political and health care roots.

So.. Dr Gawande, who is no doubt qualified and well educated, son of two doctors himself (in our family we call that a paradocs) is a member of the democratic elite who traveled to the least wealthy county in the USA and returned to publish his findings in an article in that most elite of elite establishment magaziines, The NewYorker. He also published a short defense of the article, based primarily on the demographic similarities between El Paso and McAllen which you can find at http://www.newyorker.com/online/blogs/newsdesk/2009/06/atul-gawande-the-cost-conundrum-redux.html?printable=true&currentPage=all . It is interesting that there is little mention of the third city in the comparison, Grand Junction, Colorado. This could be because of the dissimilarities between Grand Junction and both El Paso and McAllen.

Gawande's conclusion is shown below. It is decidedly anti-capitalist and draws conclusions supporting the takeover of our medical economy by an elite that will save us from the ravages of capitalism. Hayek's economic observations indicate that the failure of a system or a part thereof leads to the creation of a solution to the resulting need so long as there is not an attempt, always doomed to failure, to centrally plan a system that has so many variables that it is the very definition of chaos. In essence, a snake sheds its skin and grows a new one in response to the need created. It is the fully evolved system called capitalism. It can be abused but its abuses can be refereed without killing off innovation.

Dr Gawande's article is a good read. It is a seductive case with villains, a predatory economic system that must be changed and victims (the taxpayers, the patients). The focus however is on policy, on demographics and robber barons and the need to determine what works via the salons of Washington DC and the Harvard educated East in order to inform the practitioners in the field. As always there is the assumption that the anointed can figure out the best solution and present it, fully functional, to the country, in a 2000 page bill that none of the legislators will ever read and which, by the way, rewards my cousin Bill mightily for his contributions to medicine via the concrete business.

This will by necessity be an experiment. We will need to do in-depth research on what makes the best systems successful—the peer-review committees? recruiting more primary-care doctors and nurses? putting doctors on salary?—and disseminate what we learn. Congress has provided vital funding for research that compares the effectiveness of different treatments, and this should help reduce uncertainty about which treatments are best. But we also need to fund research that compares the effectiveness of different systems of care—to reduce our uncertainty about which systems work best for communities. These are empirical, not ideological, questions. And we would do well to form a national institute for health-care delivery, bringing together clinicians, hospitals, insurers, employers, and citizens to assess, regularly, the quality and the cost of our care, review the strategies that produce good results, and make clear recommendations for local systems.
Dramatic improvements and savings will take at least a decade. But a choice must be made. Whom do we want in charge of managing the full complexity of medical care? We can turn to insurers (whether public or private), which have proved repeatedly that they can’t do it. Or we can turn to the local medical communities, which have proved that they can. But we have to choose someone—because, in much of the country, no one is in charge. And the result is the most wasteful and the least sustainable health-care system in the world.

Something even more worrisome is going on as well. In the war over the culture of medicine—the war over whether our country’s anchor model will be Mayo or McAllen—the Mayo model is losing. In the sharpest economic downturn that our health system has faced in half a century, many people in medicine don’t see why they should do the hard work of organizing themselves in ways that reduce waste and improve quality if it means sacrificing revenue.

In El Paso, the for-profit health-care executive told me, a few leading physicians recently followed McAllen’s lead and opened their own centers for surgery and imaging. When I was in Tulsa a few months ago, a fellow-surgeon explained how he had made up for lost revenue by shifting his operations for well-insured patients to a specialty hospital that he partially owned while keeping his poor and uninsured patients at a nonprofit hospital in town. Even in Grand Junction, Michael Pramenko told me, “some of the doctors are beginning to complain about ‘leaving money on the table.’ ”
As America struggles to extend health-care coverage while curbing health-care costs, we face a decision that is more important than whether we have a public-insurance option, more important than whether we will have a single-payer system in the long run or a mixture of public and private insurance, as we do now. The decision is whether we are going to reward the leaders who are trying to build a new generation of Mayos and Grand Junctions. If we don’t, McAllen won’t be an outlier. It will be our future. ♦

Dan Gilden (about whom I was unable to capture much additional information although I will continue to try), however, studied the data and came to the following conclusion. The key to this analysis is that he compared the incidence of specific disease patterns in the three locations and discovered that when considered in the absence of the very high incidence of heart disease and diabetes in McAllen, the differences disappear.

McAllen is different from many areas of the United States: it is sicker and poorer. The observed differences in the rates of chronic disease are highest for those conditions rampant in low income American populations: diabetes and heart disease. Further, Medicare beneficiaries in McAllen have significantly higher rates of co-occurring chronic conditions. As a result the costs of caring for McAllen Medicare population appears high in comparison to other areas but not abnormally so. McAllen suffers from a tremendous burden, but it not caused by its physicians: the care they provide leads to costs that are substantially comparable to the other counties in the article once adjustments are made for the magnitude of the health problems they face. The disturbing pattern of physician practices uncovered by Dr. Gawande sounds a warning not because it foretells a McAllen-like future but because it portrays the on-going crisis that affects both McAllen and Grand Junction and it is national in scope. Physician culture is only part of the McAllen story.

Patients with chronic disease, especially those with multiple conditions, are extremely costly to treat. Cost savings will not be realized by denouncing and penalizing medical systems because they treat patient populations with high rates of disease. Instead health care reform must develop policies that support streamlining and coordinating care for beneficiaries with multiple chronic conditions, wherever they reside. Policies that support lifetime continuity of coverage, disease prevention and early treatment, could reduce healthcare costs for populations who now reach Medicare eligibility with a history of under-service. Physician culture has a role to play: Accountable Care Entities are intended to reduce barriers to access by facilitating care coordination. The high costs of care in places like McAllen will not be dramatically reduced by transforming physician ethics and organization if the roots of the crisis are in the interaction between class, demographics and chronic disease.

I am not neutral in this argument. Currently I am without health insurance due to a variety of administrative and personal glitches. The renewal I was offered was 175% of the previous rate and impossibly expensive. It would require that the first $25,000 of taxable income be devoted solely to betting that I will get sick and need the health care more than the dollars. This with a $2500 deductible. Where is the money going? I have several doctors in my family. They are great and concerned men who take their medical responsibilities seriously. I do not know why they would go to school for 12 - 14 years and take on the debt to do it if they were going to be "put on salary" by the government. I wouldn't.

Do they want to make a good (very good) living? Of course they do. They have scarce knowledge and a market that needs what they have. Do they have a social conscience? Of course they do. They are committed to healing the sick.

We send our best and brightest to medical school in our society. Historically we have rewarded them with respect, honored them for achievement and paid them handsomely for their efforts. In return they take and honor the hippocratic oath. As in any group there are a few who abuse their position. This is the burden of mankind. Can we solve this problem by removing the incentives that have historically baited the best into med school? I don't think so.

I can say that I have almost never had an issue with the quality of my health care. I have generally found the care I received, whether in an emergency room in rural Missouri or at the Medical Center in Houston, Texas to be conscientious and expert. Perhaps the only place I have had an issue is in emergency rooms.. the most socialized of medical environments where the most shell shocked doctors and staff take the public on a first come first serve basis (absent recognizable death threatening injuries).

I find the insurance system to be unworkable precisely because it is a bureaucracy that is all about cost and cost containment, just as Dr Gawande's article suggests we should be. There is no doubt that there is something that needs to be done to make sure that health insurance (not health care) is available to all. However, as a small business employer who has always offered 50% payment of health insurance to all employees, I know that there are many, who I harangued at length over their decision, who simply choose not to be insured. They say they can just go to an emergency room if they have a problem.

Dr. Gawande's general concerns are my own. However, his solution, is not. This is the type of problem that must be worked out in the thousands of knowledge nodes that exist across the country. Anyone who has attempted to describe the problem recognizes the complexity. The complexity can only be simplified by removing and/or simplifying regulations on insurance companies and doctors and allowing the experimentation that Dr Gawande supports to occur naturally within the capitalistic system on a local and regional level. Encourage innovation by removing restraints from the innovators.

Doctors and businessmen and employees from Texas and Tennessee and Colorado and other Trans-Flyover states, who are practicing and operating on a daily basis, should be involved with solving the problem instead of just the conveniently located, politically powerful class of doctors.

It is instructive that the most powerful computers on the planet these days are assemblies of relatively low powered processors in large arrays to act as one. The software allows them to split the problem (whatever it might be) into many multiple smaller segments and then reassemble into a whole. The day of mainframe computers with a single ultra powerful cpu are gone. The new supercomputing platforms are cheaper, faster and many use off the shelf technology. I submit that the problem is best solved by removing restrictions that keep the medical community from innovating on a local level.

An interesting article recently ( I will link it as soon as I can find it) described how a doctor decided that he would offer a program to his patients, absent any insurance requirement, that they would pay $60 per month to him directly, no insurance company, no government, no copay, no intermediary at all. In return he would provide basic care, checkups, minor medical and month to month maintenance, just the things that the McAllen folks were missing all their lives that put them in the high risk category that caused the high incidence of diabetes and heart disease that caused the incredibly high medicare situation. He was shut down by the state because he was deemed to be offering insurance. How stupid is that? What he was offering was a health annuity. Health care instead of sick care.

I submit that even ACORN had to offer a capitalistic incentive program to get their workers to register voters. Lets design or at least open the door to incentive programs that will spur the current population of the medical community to innovate, create more doctors, lessen costs, reduce bureaucracy and make care more available and lets do it in thousands of locales at once.