Atul Gwande’s Cost Conundrum

In “The Cost Conundrum,” his latest article for The New Yorker, staff writer Dr. Atul Gawande reports from McAllen, Texas, a border-town with the reputation of spending more per person on health care than almost any other area in America.

But higher spending doesn’t necessarily mean they provide better care, as Gawande discovers when he compares health outcomes in McAllen with those of El Paso, Texas — a city with similar population demographics, but where Medicare spending per enrollee is half that of McAllen.

Gawande writes that his findings, based on Medicare’s 25 metrics of care, indicate that, “On all but two of these [standards of care], McAllen’s five largest hospitals performed worse, on average, than El Paso’s. McAllen costs Medicare seven thousand dollars more per person each year than does the average city in America. But not, so far as one can tell, because it’s delivering better health care.”

Atul Gawande’s article has become a must-read for all of us interested in health care reform. I personally found it shocking and impressive. Honestly, this is a great article, though it may be long, it really is important if you want to understand the huge cost issue at hand.

A Diamond in the Rough of Health Care Systems

I have the opportunity of working for Intermountain Healthcare, which was mentioned by Pres. Obama when he said, “We have to ask why places like the Geisinger Health system in rural Pennsylvania, Intermountain Health in Salt Lake City, or communities like Green Bay can offer high-quality care at costs well below average, but other places in America can’t. We need to identify the best practices across the country, learn from the success, and replicate that success elsewhere…”

As we have discussed in earlier posts, the US health care system is a fragmented apparatus. However, within the clutter are some islands of outstanding health care. Intermountain healthcare is one such island that is able to deliver quality health care at a lower cost. The following CNN health video highlights some of IHC’s best practices.

Requirement to Buy Insurance

Before reading the rest of this post please click here and read.

Why should citizens be required to buy insurance?

 

Imagine you own an insurance company, and the government requires you to cover everyone regardless of pre-existing conditions. Now, imagine that citizens have the choice of buying insurance or not.I am 25 years-old and healthy. I choose not to buy insurance from your company because I do not really need it. However, on my 26th birthday I am diagnosed with skin cancer. Now, I walk into your insurance company to buy insurance, and according to the law you can not refuse me because skin cancer would be a pre-existing condition. Is this fair to your insurance company? No.

If we mandate insurance companies to insure everyone regardless of pre-existing conditions then we must require able citizens to purchase health insurance. Otherwise citizens will have the incentive to purchase insurance only when they are sick, which would be unfair to the insurance industry.

Obama Igniting Grass Roots Health Promotion

About two years ago, the Obama administration announced a contest that promised prize money for the best TV advertisement that promoted health care reform. The above video highlights the contest as well as the winner. I was impressed that the Obama administration sponsored such a contest. I think it encourages health promotion at a grass roots level. It helps citizens have a voice about health care reform.

The Obama administration is perhaps the most media savvy presidential administration in the history of White House. From campaigning heavily through facebook to igniting health promotion through YouTube, they seem to harness the power of social media.

Health Insurance Exchanges Already Making Waves – Kaiser Health News

Health Insurance Exchanges Already Making Waves – Kaiser Health News.

Opinion:

I am sure you have heard of health insurance exchanges, but many of us do not entirely understand what they are or their implications. Some say that they have the potential to stimulate competition among health insurance plans; therefore, they may be able to lower cost.

White House Reform Video

Although this video is a bit outdated, I do think Pres. Obama summarizes the feelings of most Americans regarding health care reform. Also, I am impressed that he takes a more objective role in motivating congress to come together. This video may help to remind us about what the goal of health reform is. Many Americans are against health reform due to the sole fact that a democratic president is the driver of this reform bill. Put aside your political party of choice, and ask yourself what does this country deserve? What kind of health care system provides cheap and fair health care.

Health Models of the World: Wrap Up

Over about the last month, I have posted information regarding the major health care models of the world. We have covered the the following models: Bismarck, Beveridge, National Health Insurance, and Out-of-Pocket. You may be asking yourself, ‘so what?’ or ‘where does the US fit into these models?’

These four models should be quite easy for Americans to understand because we have elements of all of them in our fragmented national health care contraption. When it comes to treating veterans, we are like Britain or Cuba. For Americans over the age of 65 on Medicare, we’re just like Canada. For working Americans who get insurance on the job, we’re Germany or other Bismarck Model countries.

For the 15 percent of the population (and counting) who have no health insurance, the United States is like a underdeveloped country, with access to a doctor available if you can pay the bill out-of-pocket at the time of treatment or if you’re sick enough to be admitted to a hospital.

The United States is unlike every other country because it maintains so many separate systems for separate classes of people. All the other countries have settled on one model for everybody. This is much simpler than the U.S. system; it’s fairer and cheaper, too.

Short Case in Point:

While I have been working on my undergraduate degree I have worked at a local hospital in admissions and case work. Every day at work we have to tell three or four of our patients that they are welcome to stay in the hospital if they do not feel well, but their insurance will not keep covering their stay. Regardless of some of our patients medical issue, we often tell them that their insurance is only willing to cover ‘x’ amount of days for their respective procedures. However, we also have some patients who have great insurance that will cover almost as many days as they need. How unfortunate? How unfair?

Health Models of the World: Out-of-Pocket

Background:

Only the developed countries, about 40 of the world’s 200 countries, have established health care systems. Most of the nations are too poor and too disorganized to provide any kind of mass medical care. The basic rule in such countries is that the rich get medical care; the poor stay sick or die.

In rural regions of Africa, India, China and South America, hundreds of millions of people go their whole lives without ever seeing a doctor. They might have access, though, to a village healer using home-brewed remedies that may or not be effective against disease.

In the poor world, patients can sometimes scratch together enough money to pay a doctor bill; otherwise, they pay in goods like potatoes or goat’s milk or whatever else they may have to give. If they have nothing, they don’t get medical care.

Opinion:

These type of systems can draw some pretty disheartening conclusions. Millions of people each year simply die of diseases that would be easily treated in an industrialized nation.

For the 15 percent of the US population who have no health insurance, the United States is Cambodia or Sudan or rural India, with access to a doctor available if you can pay the bill out-of-pocket at the time of treatment or if you’re sick enough to be admitted to the emergency department at a hospital.

There is NO excuse for the US to have any form of an out-of-pocket system. I fully understand that many in the US do not want to have any form of socialized medicine; however, we have an obligation to provide medical care for citizens of our country. Many Americans would agree with the statement, “Every US child should have access to a public school…”. However, do you agree with the statement, “Every US citizen should have access to basic health care…”.

O’ Canada: The National Health Insurance Model

History:

It was not until 1946 that the first Canadian province introduced near universal health coverage. Saskatchewan had a shortage of doctors, leading to the creation of municipal doctor programs in which a town would subsidize a doctor to practice there.

Soon after, groups of communities joined to open union hospitals under a similar model. There had been a long history of government involvement in Saskatchewan health care, and a significant section of it was already controlled and paid for by the government. In 1946, Tommy Douglas’ government in Saskatchewan passed the Saskatchewan Hospitalization Act, which guaranteed free hospital care for much of the population. Soon after this, the province passed a national insurance to help cover the cost. This model worked so well in Saskatchewan that other provinces passed similar acts until Canada became unified under a national act.

Key Elements:

This system has elements of both Beveridge and Bismarck. It uses private-sector providers, but payment comes from a government-run insurance program that every citizen pays into. Since there’s no need for marketing, no financial motive to deny claims and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style for-profit insurance.

The single payer tends to have considerable market power to negotiate for lower prices; Canada’s system, for example, has negotiated such low prices from pharmaceutical companies that Americans have spurned their own drug stores to buy pills north of the border. National Health Insurance plans also control costs by limiting the medical services they will pay for, or by making patients wait to be treated.

The classic NHI system is found in Canada, but some newly industrialized countries — Taiwan and South Korea, for example — have also adopted the NHI model.

Opinion:

This is a great system. In fact, if you actually talk to Canadians, they often are proud of their health care system.

Yes, they do have lines, but it is important to remember that many of the longer lines are for elective surgeries. Americans often exaggerate this detail. Some people assume that long lines apply for everyone, even those who are bleeding like crazy and on the verge of death. This is simply not true. Urgent care in Canada has a reputation of having great outcomes; however, it is true that for many procedures, such as a shoulder replacement, you may be on a long waiting list. It is important to note that many Americans are already subject to waiting times. I work at an orthopaedic hospital, and generally patients need to schedule at least two months in advance to have a knee or shoulder replacement. I understand this is much shorter than waiting a whole year, but it is important to remember that we also wait in America for health care.

Health Care Models of the World: The Beveridge Model

The Beveridge Model 
History:

Named after William Beveridge, the daring social reformer who designed Britain’s National Health Service (NHS). In this system, health care is provided and financed by the government through tax payments, just like the US police force or the public libraries.

Key Elements:

Many, but not all, hospitals and clinics are owned by the government; some doctors are government employees, but there are also private doctors who collect their fees from the government. In Britain, you never get a doctor bill. These systems tend to have low costs per capita, because the government, as the sole payer, controls what doctors can do and what they can charge.

Countries using the Beveridge plan or variations on it include its birthplace Great Britain, Spain, most of Scandinavia and New Zealand. Hong Kong still has its own Beveridge-style health care, because the populace simply refused to give it up when the Chinese took over that former British colony in 1997. Cuba represents the extreme application of the Beveridge approach; it is probably the world’s purest example of total government control.

Opinion:

I think this system is actually a great system for providing equal health care to the entire population. In addition, it tends to emphasize prevention, which is proven to yield better health results at a cheaper cost. British hospitals tend to have a reputation for being drab and bleak, but they do provide quality health care at a low cost. In addition, British doctors do not make as much as US physicians, but they do not have outrageous malpractice insurance premiums. Also, the British government subsidizes medical school tuition, which on average is about $5,000 per semester. As I mentioned, British doctors settle for a smaller salary, but do not worry, many of them still drive a Bentley to work.

I think this system does decrease the incentive for health care innovation. This makes sense considering that pharmaceuticals are less lucrative, and with such an emphasis on prevention you lose the drive for medical innovation. In contrast, the US system is somewhat of a “oh shit” system. Meaning, we are amazing at handling extreme health issues, such as very premature babies, stage IV cancer, and many others; however, we often fail to prevent these issues from occurring.