May 11, 2007

Over-Treated, Under-Insured

I can't really claim to be an expert on health-care policy. (Okay, I can't claim to be an expert on much of anything.) But Phillip Longman makes so many interesting points about the health-care industry in his Washington Monthly review of Jon Cohn's new book--which, by the way, is excellent--that I thought it might be worthwhile to try to sift through this stuff.

The fact that 47 million Americans don't have health insurance is, as we're all aware, a severe crisis. According to a recent RAND study, the uninsured only get about 53.7 percent of the care that experts say they should get. But what's stunning is that patients with private, fee-for-service insurance are "even less likely to receive the proper care." Likewise, it's true that lack of health insurance causes about 18,000 premature deaths annually. But about 98,000 people are killed each year by medical errors, and 126,000 die "from their doctor's failure to observe evidence-based protocols for just four common conditions: hypertension, heart attacks, pneumonia, and colorectal cancer."

The root problem here, Longman argues, is that doctors tend to perform lots and lots of unnecessary treatments--partly because they get paid per service, and have no real economic interest in their patients' long-term well-being. Dr. Elliot Fisher, a Dartmouth researcher, estimates that "30 percent of all Medicare spending goes for unnecessary operations and procedures." (Notably, an oversupply of specialists will often create its own demand: Per capita Medicare costs for terminally ill patients in Miami are $50,000 more per year than in Minneapolis, but patients in Miami don't live any longer--the city's high concentration of specialists are just providing more treatments that simply aren't needed.)

I've often wondered why insurance companies don't push back harder against unnecessary treatments. One answer, I think, would be that they tried once--with managed care in the early 1990s--and there was a huge public outcry. (That outcry was justified, mind you, since insurers were usually trying to manage costs, not care, and often to the detriment of patients--Jon Cohn's book illustrates this nicely.) So insurers have increasingly decided that it's not worth the effort, and instead they'll just cover whatever consumers want, pass along the costs in the form of higher and higher premiums, and try to turn a profit by refusing to cover sick people in the first place. (Or they'll try to weasel out of paying and stick the patient with the bill.) That's my sense, at least.

On the supply side, manufacturers certainly contribute to the over-treatment craze. After all, they spend millions marketing their products, pushing them on doctors, and lobbying the FDA to make sure they aren't scrutinized too closely. Drug-makers and device-makers, for instance, have prevented the FDA from doing head-to-head comparisons of different treatments. As long as the benefits of your product outweigh the risks when compared against a placebo, it's approved. There isn't really anyone pushing back, trying to figure out what treatments are most cost-effective and appropriate. (Conservatives, of course, have suggested that the patients themselves should be given incentives to push back, which seems unrealistic.)

Okay, back to Longman. His preferred solution would look much like the Veterans' Administration, in which the government would run the entire health-care system--rather than merely providing insurance. Because the VA has a lifetime relationship with its patients, it has "incentives to invest in prevention, disease management, and protocols of care that actually work--incentives that are weak or absent in the rest of America's fragmented health care system." There's the push-back. Doctors receive salaries rather than getting paid by the service, and the system uses evidence-based medicine and information technology. And studies show that the VA provides better care than the rest of the U.S. health care system, hands down.

I'd add two things. First, Longman says that universal health-care proposals such as "Medicare for All" wouldn't address many of the concerns raised above. After all, Medicare itself has fallen prey to the over-treatment craze, which has led to mistreatment and rising health-care costs. That may be true, but it's worth looking seriously at the MEDPAC reforms that are being proposed before Congress, which try to address some of these issues. Maggie Mahar has a nice piece covering MEDPAC here.

Second: Longman says the VA currently practices "evidence-based medicine" and steers clear of unnecessary or unproven treatments. But I assume this is possible because manufacturers and drug companies don't bother lobbying the VA to peddle their products. But if the VA covered all Americans, obviously you'd see more of that kind of lobbying. These are, after all, the same people who now control the FDA. So if over-treatment is a major problem, and over-treatment stems from manufacturers pushing their products too aggressively, that needs to be dealt with. But presumably you don't want to go too far, since not all marketing is bad. That... seems tricky.
-- Brad Plumer 8:08 AM || ||