Blog | Tuesday, June 4, 2013

Health care economics and history--how we got here and how we might get out


[The following is adapted from a presentation by the author to the League of Women Voters.]

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 health care 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 three 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 health care 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 countries that belong to the Organisation for Economic Co-operation and Development, 34 countries that joined together to promote economic development, that do not have some sort of universal health care. At any one time, 17% of Americans have no health insurance, and many more are underinsured. Canada, for instance, requires access to basic medical care without copay and pays about $1,800 per person in health care costs to America's $2,800 per person. For our higher health care 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 health care 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 $1,000 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 health care costs today are over $8,600 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 health care, 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 health care.

In 1965, health care spending was about 5% of GNP and today it is nearly 17%. Health care 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 health care coverage will make sure that everyone at least theoretically has access to health care, 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 health care 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 health care equation. Hospital costs make up about $850 billion of the $2.7+ trillion that the U.S. spends on health care. 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 health care 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 health care 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 health care 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.

Take the example of 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 $5,000. 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 high-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 hospital's 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 three 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 health care 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.

Alternative therapies that tap into the connection between the mind and the body, and the mind's ability to promote healing are gaining some respect. Because there is no technology behind this, so it doesn't make anybody very much money, it has been slow to catch on, but folks like Herb Benson at the Harvard Medical School and Jon Kabat Zinn have been pushing to make mind body medicine take its rightful place among the medical therapies that really work. In our community we have an increasingly popular program of Mindfulness Based Stress reduction which has made a very significant dent in the burden of misery for people with physical pain, anxiety, depression and sleep problems.

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 health care 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 health care 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 health care. 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 health care payment machine.
Janice Boughton, MD, FACP, practiced in the Seattle area for four years and in rural Idaho for 17 years before deciding to take a few years off to see more places, learn more about medicine and increase her knowledge base and perspective by practicing hospital and primary care medicine as a locum tenens physician. She lives in Idaho when not traveling. Disturbed by various aspects of the practice of medicine that make no sense and concerned about the cost of providing health care to every American, she blogs at Why is American Health Care So Expensive?, where this post originally appeared.