What passes for good news about healthcare costs came in recently: they grew by “only” 4 percent between February 2011 and February 2012, significantly faster than the overall rate of inflation, but less quickly than they’ve grown in the past. Health care now accounts for 18 percent of total US GDP and costs are rising at almost double the rate of GDP growth.
The reduction in the rate of increase is not an Obamacare effect: to tweak the budget math in order to disguise its true costs and otherwise groom that sketchy law in hopes the public would hate it less, Dems made sure most Obamacare provisions wouldn’t kick in until after the 2012 election.
However, debates over the future of health care in the US are opening up some interesting ideas about how to cut costs. Early this month the New York Times picked up on an intriguing development. A group of nine medical specialty boards has recommended doctors perform 45 common tests and procedures less often:
The specialty groups are announcing the educational initiative called Choosing Wisely, directed at both patients and physicians, under the auspices of the American Board of Internal Medicine Foundation and in partnership with Consumer Reports.
The list of tests and procedures they advise against includes EKGs done routinely during a physical, even when there is no sign of heart trouble, M.R.I.’s ordered whenever a patient complains of back pain, and antibiotics prescribed for mild sinusitis—all quite common.
According to the Times, many of these additional routine procedures are ordered by doctors because they fear malpractice lawsuits. The more tests they run, the better protected they are. They are also ordered because, well, they pay, and doctors and hospitals are, on the whole, fond of money.
Some estimates cited in the Times piece suggest that unnecessary treatment accounts for one third of total medical spending in the country. Obamacare advocates sometimes played that down in the debate over the law before it was passed. Any talk about cutting back on “unnecessary” procedures was sure to spook the voters; as fast as you can say “death panel” voters worry when health care reformers talk about those horrible bitter clingers out there in the boonies using “too much” health care to prolong their worthless Snuggie wrapped, polyester-clad existences for a few more miserable months of watching Fox News and American Idol.
Physician greed and patient insensitivity to cost (if insurance is paying, why not have just one more little test to make sure?) are definitely part of the mess. But every doctor I’ve ever talked to — and the Mead family has been producing physicians in every generation back to great-grandfather Mead who graduated from medical school in the late 1800s — says that malpractice fears play a huge role in driving doctors and hospitals to play defensive medicine.
Malpractice reform, an issue the pusillanimous authors of Obamacare shrank from addressing (obeisance to tort lawyers being an important community value in the political party that selected John Edwards as its vice presidential nominee), might well accomplish more than any other single step to bring health care costs down to earth in the short term. To this end, reports by well respected physicians could be useful — if, for example, no doctor who followed certain approved guidelines by reputable physician associations could be sued for malpractice.
No system will ever work perfectly in the gritty, murky world of illness and treatment. People confronting their own mortality and that of their loved ones, people suffering from disabling and debilitating diseases, harried professionals trying to get the job done, government and insurance company green eye shade types trying to audit the whole mess, uninsured drug addicts popping into emergency rooms hoping for an Oxycontin scrip or a hot meal, hotshot CEOs looking to ramp up their bonuses by gaming the system, unions grimly fighting to hold onto their turf, the very young and the very old: to expect this complicated mix of people and priorities to be simply and efficiently organized is simply not in the cards. And no top down administration will ever bring order to this chaos.
America is a much more diverse and complicated country than any of the member states of the European Union or, for that matter, Canada, and national systems that work acceptably well there would fail pretty spectacularly over here.
One perverse result of centralizing the health care system and regulating it more through top down rules rather than price signals and incentives: Obamacare may actually make it harder to cut back unnecessary treatments and slow the rise of health costs. Patients and patient advocates all over the country are going to fight mandated cutbacks in medical services and allowable treatments, especially if these are perceived as being required by some Orwellian Ministry of Life. Pictures of grannies and toddlers denied lifesaving treatment by heartless bureaucrats will fill the media. (The Times piece features a breast cancer survivor who might not have survived under the new and ‘improved’ guidelines being proposed.)
Once the “Let my Mommy live!” campaigns start, and they surely will, laws and regulations will be changed, insurance and pharmaceutical lobbyists inserting phrases here and exceptions there, to mitigate whatever horror has the press and the blogosphere up in arms — this week. The inevitable result will be a ferocious cost bloat and an ever more complex, ever less workable and less affordable health care system.
A decentralized system with built in incentives (patients wanting to save money, for example) and malpractice protection that ends physicians’ need to practice defensive medicine will have the same or greater effect on costs as National Death Panel rulings, but will not elicit the same kind of focused outrage.
I don’t think we can build a great or even a sustainably mediocre health care system on a national basis, but we can start to get rid of bad things — like the plague of ambulance chasing, second-guessing tort lawyers, the distorted incentives that ensure that patients don’t ask how much some marginal procedure will cost, and the crazy financial incentives that force both doctors and hospitals to over-use expensive technology to recoup their costs.
Ultimately the fixes will have to be more aggressive and more out of the box, but there are some things we can short term to ensure that we get more of the care that we do need, and less of the care that we don’t. I’d suggest we start with the tort reform before moving on to the death panels, but maybe that is just four generations of medical Mead-talk.
If something like a third of our health costs are unnecessary, we are squandering the equivalent of six percent of GDP. Tort reform is the easiest way to gather some low hanging fruit: defensive medicine generally involves tests that patients don’t ask for and that doctors think aren’t needed. Surely health care expenditures that are both unneeded and unwanted are the ones we ought to cut first.
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