Despite its eye-catching caption, “The health care industry is bound to collapse soon, experts say”, this New York Post article is terribly short on details. Here are their main bullet points:
- Health care company debt is up 308 percent since 2009.
- The number of hospitals in health systems has expanded by 26 percent since 1999.
- The yearly medical costs for a family of four have jumped 189 percent since 2002, from $9,000 to $26,000.
all of which I believe are true. I don’t see how that results in “a couple of big health care companies take the economy down”. To their list of factors I’d add that people in the health care sector both personally and professionally assume that prices in the sector can rise at a multiple of prices in the rest of the economy indefinitely.
Regardless of the risk to individuals and companies I still don’t think that it present systemic risk. Increasing health care costs could take out some state and local governments, however. That’s why I’ve felt that controlling costs is the single most important health care reform.
Well, now we can say with confidence that increasing coverage doesn’t necessarily of itself result in cost control so at least we have that.
“people in the health care sector both personally and professionally assume that prices in the sector can rise at a multiple of prices in the rest of the economy indefinitely.”
I don’t think I have ever heard anyone make that claim. Everyone I know in upper management is concerned that costs cannot continue to outpace inflation or GDP growth (choose your metric).
Steve
BTW, you keep saying there has got to be some easy savings in Medicare. There are. Let me give you two easy ones. First, let Medicare negotiate drug prices and decide what to put on its formulary. Let them boot out expensive drugs that don’t work any better than more expensive ones. Next, put back the clause in the ACA that will pay physicians to talk with patients about end of life issues. This has been shown to cut spending while having outcomes that patients and family are happier about. Try to keep Republicans from claiming that this would be a death panel again. Maybe shoot Palin before they add this back in. Wasn’t she the one who was advocating 2nd Amendment remedies?
Steve
I sure have. I have had quite a few clients in the health care sector over the years and every single one of them has said that at one time or another.
Why don’t doctors prescribe less expensive drugs that don’t work any better than more expensive ones?
“Next, put back the clause in the ACA that will pay physicians to talk with patients about end of life issues. ”
Is there a clause that precludes such discussions? Why do doctors need to be paid an additional amount to have a complete discussion of treatment options ?
The problem with both proposals is time inconsistency. You’ve got to believe that under the same circumstances physicians and politicians will do different things at different times. In the case of physicians you’ve got to maintain simultaneously that they will take a pay cut and they won’t take a pay cut. In the case of politicians you’ve got to believe they will yield to pressure to cut costs and they won’t yield to pressure to cut costs.
Additionally, as I’ve written before, seeking heroic measures at end of life is a cultural issue and tends to be much more prevalent among groups who don’t trust the system. That doesn’t suggest that counseling will be much help.
“Why don’t doctors prescribe less expensive drugs that don’t work any better than more expensive ones?”
Because they can. (That is the real answer, but there are other reasons. A doc may fall for a sales pitch. They may have trained at some place that used the drug in a trial and it is what they are familiar with. The patient may have seen a commercial and demands it.)
“Why do doctors need to be paid an additional amount to have a complete discussion of treatment options ?”
It is not really a treatment option for an active condition. This is a discussion people should have well before they are terminal. Just having attended a bunch of coding meetings lately, mostly intended for PCPs, but I had to go anyway, you need to document a lot of specifics to get paid. There is no code for “I spent 45 minutes talking with this guy about what he would want done if he were dying”. Nor would it pay for the follow up 45 minute visit when the wife comes in to talk this over.
Dave- “Additionally, as I’ve written before, seeking heroic measures at end of life is a cultural issue and tends to be much more prevalent among groups who don’t trust the system. That doesn’t suggest that counseling will be much help.”
Not quite. The big Milwaukee study showed that just talking about end of life issues makes people more likely to spend less at the end of life. This fits pretty well with my personal experience. There are groups culturally predisposed to “do everything”, but most of the time we find that death was a topic that people were uncomfortable discussing so they never talked it over with anyone. Then, when you call the family and they don’t know what that person would have wanted they nearly always opt for “do everything”.
On the pay cut thing I am not really following you. The people doing the end of life discussions would be the PCPs. They would not be taking a pay cut. The pay cuts that would ensue would be for hospital based specialists. A lot of us would be pretty happy about making a bit less and not having to torture old people. Not sure the political thing makes that much sense either. They just need to decide when to stop catering to the special interest groups, mostly big pharma, that don’t want restrictions on Medicare drugs. When people get mad enough about drug prices they will start dumping politicians who won’t agree to change Medicare policies.
For the last 20 years Congress has manifestly refused to cut costs. It’s easy to see why. There’s nothing in it for them other than statesmanship, prudent stewardship, that boring stuff. It doesn’t get anybody re-elected.
The idea that Congress will suddenly become responsible is pretty hard to swallow. And under our system no Congress can bind a future Congress.
There’s a similar response to your remarks about end of life counseling. The claim is that somebody is going to take a pay cut. I see no evidence that will happen. What I think is more likely is that prices will rise to make up the difference. What Reinhardt and his co-authors found was the difference in costs between the U. S. health care system and that of other OECD countries was best explainable as a difference in prices.
As to the effectiveness of end of life counseling, some quantification of the effects would be interesting. All I can add is that until quite recently most palliative care programs have been in Catholic hospitals and that, statistically, Jews and blacks were more likely to seek heroic measures. That information is rather difficult to ferret out.
That implies that the demographics of those surveyed makes a difference in the results of the survey.
As cynical as I am, you are worse. If you are correct we will never decrease spending and we may as well give up now. On the latter point, I don’t think you realize how much most of us hate what we have to do to these old folks. Being pretty heavily involved with ICU care, I know how much the culture there has changed and how they no longer treat the ICU as a place to die, i.e. they actively seek to not have terminal people with no hope in the unit. They are already giving up a lot of potential income by doing that.
On the politician side, I think most people 4 years ago didn’t think it was possible for a Trump to get elected. He did. I don’t think it impossible that politicians might find it possible to give up the support of a special interest group so they can stay in office.
Steve
I hope your comment is wrong, or more complicated than you portray, Steve. Else that doesn’t speak highly of the profession. You are basically saying they are putting profit ahead of patient care. That puts doctors in the same category as the mortgage brokers you despise.
Or insurance brokers or shoe salesman.