This week David Harlow is hosting Health Wonk Review. For a summary of the best health care posts of the last two weeks, go to HealthBlawg.
Monthly Archives: December 2007
The Drug War versus Health Care
Yesterday President Bush gave a speech on the success of his drug policies in celebration of a new report showing that teen drug use has continued a decline that began in 1997. But it is not entirely clear that there is much cause for celebration: use of some of the most hardcore stuff—such as cocaine, crack, LSD, and heroin—has held steady over the past five years or so. True, recently the use of marijuana, amphetamines, and methamphetamines has dropped, but that’s hardly reason to declare victory in the war on drugs.
Like any good president, Bush wants to take credit for good news. But as the lack of progress in the battle against heroin and crack suggests, the U.S. is on the wrong track when it comes to drugs. Our institutional bias is still to see drug use and drug control as criminal justice issues when we should really be thinking about them as public health concerns.
Just take a look at history. According to a Health Affairs article from earlier this year, since 1987 public and private investment in substance abuse (SA) treatment has not kept pace with other health spending. From 1987 to 2003, the average annual total growth rate for SA treatment was 4.8 percent, while U.S. health care spending grew by 8.0 percent each year. Because of this mismatched growth rate, SA spending fell as a share of all health spending from 2.1 percent in 1986 to 1.3 percent in 2003.
Compare this drop in treatment spending to the increase in drug arrests: according to the Bureau of Justice Statistics, in 1987 drug arrests were 7.4 percent of all arrests reported to the FBI; by 2005, drug arrests had risen to 13.1 percent of all arrests. Our spending on SA treatment and the volume of drug arrests are moving in opposite directions. And for all the political pageantry surrounding yesterday’s report, President Bush’s FY 2008 budget calls for cutting $158.7 million from the Substance Abuse and Mental Health Services Administration (SAMHSA) budget and $278.9 million from the Safe and Drug-Free Schools and Communities (SDFS) program.
Immigrants Exploit Our Health Care System…Right?
There’s no easier punching bag in politics today than undocumented immigrants. They can be blamed for any number of problems—including high health care costs. The Federation for American Immigration Reform (FAIR), for example, insists that “the costs of medical care for immigrants are staggering.”
But a handful of hot-off-the-press reports tell a different story. A just released Congressional Budget Office (CBO) study concludes that while immigrants are indeed “more likely [than American citizens] to rely on emergency rooms or public clinics for health care” the cost of caring for immigrants is much less than alarmists would have you believe.
This conclusion clashes with the widespread conception that emergency rooms around the nation are filled to the brim with Mexicans—all on the dime of the American taxpayer. In fact, a November UCLA study showed that “undocumented immigrants from Mexico and other Latin American countries are 50 percent less likely than U.S.-born Latinos to use hospital emergency rooms in California,” the state that incurs the most undocumented immigration-related costs. (The lower rate of hospital use is due to the fact that undocumented immigrants tend to be young and healthy. After all, border-crossing is a rough experience).
Of course, it’s not the rate of health care use that has people worried—it’s the cost of use. But a 2006 RAND study concluded that in 2000, health care for undocumented immigrants between 18 and 64 years old cost taxpayers about $11 per household—roughly the price of a cheeseburger in Manhattan.
Part of the reason the price tag is so low is that our health care
system does only the bare minimum for undocumented immigrants. The CBO
reports that 1986 Medicaid reforms stipulated that immigrants could
receive emergency Medicaid for must-have-care situations like
childbirth. But “emergency Medicaid covers only those services that are
necessary to stabilize a patient; any other services delivered after a
patient is stabilized are not covered.” Undocumented immigrants are
only assured enough health care to make sure they don’t die; so the
costs of emergency Medicaid are very low.
Reform under the Radar: What Medicare Needs to Do to Control Costs
Below, a very welcome contribution from Shannon Brownlee, author of Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer (2007), an outstanding report on why ‘more care’ often is not ‘better care’. An award-winning journalist and Schwartz Senior Fellow at the New America Foundation, Brownlee has written extensively about health care for the many publications including the Atlantic Monthly, the New York Times, and the Washington Post.
As I’ve suggested in the past, Medicare reform could be a stepping stone to national health reform. Ideally, we would do both simultaneously. In this post, Brownlee puts her finger on what is wrong with the way Medicare has traditionally tried to cut costs. In future HealthBeat posts, we’ll talk more about specific proposals for cutting Medicare waste.
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While Barack, Hillary, and Paul Krugman slug it out over the individual mandate, it’s worth pausing for a second to wonder why nobody is saying much about controlling health care costs. Yes, covering everybody is the right thing to do, it’s the moral thing to do, but it isn’t the only thing to do. Theoretically, it shouldn’t even be the hardest thing to do, because at its core, covering everybody is mostly a matter of being willing to come up with the money. In reality, of course, coming up with the money is a political nightmare.
Controlling costs, on the other hand, is a much deeper problem, but oddly enough it may be easier to achieve politically at the federal level than universal coverage. That’s because cost containment can begin with Medicare, which has been instituting cost control measures under the radar for years. Its efforts have resulted in a lot of bitching and moaning from the hospital industry and doctors, but not a lot of political fallout.
So why aren’t Medicare’s cost control measures working? Because CMS has focused most of its efforts to limit spending on controlling prices. This strategy arises out of the mistaken belief that if they could just rein in the price per unit of care, the price of each CT scan and each office visit, they could control spending overall. This would be a dandy strategy in any other industry, but in health care it hasn’t worked out. And it hasn’t worked out because in health care, the real driver of cost is volume. Costs go up when the amount of care doctors and hospitals deliver to each patient goes up. And because the amount of care delivered doesn’t have all that much to do with the amount of care that patients actually need, whenever Medicare slashes the price it will pay, hospitals and individual physicians can always find ways to deliver more stuff in order to maintain their revenue stream.
The Academic Buzz around Health Care
Being a young whippersnapper, it never occurred to me that health care policy was a relatively new field of study within our universities. But when Health Beat reader Bradley Flansbaum passed along the Reuters story below to Maggie (original here) and she passed it on to me, I gained a new perspective on the issue. It turns out that until very recently, health care used to just mean medicine. But today, thinking about health care demands thinking about a lot of different things, like public policy, public administration, economics, politics, and even sociology.
This mixed bag is reflected in the diverse academic offerings at colleges and universities—as well as the swell of students interested in them. The Reuters story below suggests that there are three main motivations for the increased student interest: fascination, idealism, and profit. That sounds about right. You can either be genuinely interested in the complexities of health care or the politics surrounding it; want to fix the system for the greater good; or want to learn as much as you can about the system to better navigate it for GlaxoSmithKline.
There’s obviously a lot of good to be had from generations growing up understanding more about our insanely complex and counter-productive health care system. Teaching college students about the system now might instill a long-term openness to reform and improvement that wasn’t present in generations who never knew about health care until they got sick.
But I can’t help but wonder about the faddishness of it all. After all, health care isn’t the only broken system that could use some attention. Consider the criminal justice system. Back in the day, law and order meant being a lawyer or a cop. But today there are criminology and criminal justice programs around the world that focus on issues like incarceration, community policing, cost, risk management, and more. Yet the buzz surrounding these issues hasn’t been comparable to the much louder debate about health care—even though one out of 32 Americans is currently in the corrections system and a black male is more likely to have served time in jail than have a college degree. This too is a crisis.
Update on Mandates
Today the Wall Street Journal has been running a poll asking readers how they feel about mandates requiring that everyone sign up for health insurance. Asking “What should the federal government do about the uninsured?” the Journal gives readers three options:
(1) Require everyone to have insurance coverage, but keep private insurance.
(2) Adopt a single-payer, government-funded system.
(3) The government shouldn’t require everyone to have health care.
Late this afternoon, 347 people had responded, with 40 percent favoring mandates, 31 percent picking single-payer, and 29 percent saying the government should keep its sticky mitts off our free-market health care system.
Okay, this a very small poll, and it’s not random. But that is precisely what I find interesting.
I was surprised that 40 percent of the Journal’s relatively affluent readers voted for mandates since some of them are healthy and wealthy enough that they could easily “self-insure” by saving enough money in a health savings account to cover all but catastrophic medical expenses and then buying a low-cost, high deductible policy. Premiums for high-deductible insurance are going to be significantly lower than the premiums for mandated policies designed to ensure that everyone has comprehensive coverage (i.e. benefits comparable to what Medicare offers, plus maternity and other coverage younger people need).
Nevertheless, 40 percent think it is fair to require that everyone to pay into the pool while another 31 percent pick a single-payer system that would be funded by taxpayers.
Of course, 71 percent isn’t everyone. Consider the curmudgeon who sent in this comment: “Medical needs are endless…You are not your brother’s keeper no matter what the Bible or any other book written by superstitious savages says.”
That is why we need mandates. Trust me, this fellow is not going to sign up voluntarily.
Doctors Who Know Better—But Do the Wrong Thing
On Health Care Renewal , Dr. Roy Poses reports on a disturbing new study just published in The Annals of Internal Medicine contrasting physicians’ attitudes toward professional norms with their self reports of whether they acted in conformity with these norms.
Poses does an excellent job of summarizing, so I’m re-posting his piece in full below:
“In brief, the authors developed a survey which asked physicians whether they agreed with various professional norms organized according to the 2002 ABIM/ ACP/ ESIM Physician Charter. They also asked them about whether they acted in conformity with these principles in terms of their recent actions, or in responses to scenarios. Physicians surveyed were primary care practitioners (family medicine, general internal medicine, and pediatrics), cardiologists, anesthesiologists, and general surgeons. The overall response rate was 52%.
“In general, large majorities of physicians agreed with the ethical norms. How often they reported acting in agreement with these norms varied. In particular, nearly all physicians reported treating patients honestly (less than 1% reported telling a patient’s family member something untrue in the last 3 years, 3% reported withholding information from a patient or a family member.) However, although 96% agreed that "physicians should put the patient’s welfare above the physician’s financial interests," 24% would refer a patient to an imaging facility in which the physician was an investor, without revealing this conflict of interest.
“Some commentators suggested that external pressures may prevent
physicians living up to the standards they themselves have endorsed.
For example, physicians interviewed in a Washington Post article
suggested that the current emphasis on patient satisfaction may
conflict with the physician’s ethical obligation to avoid wasting
resources when a patient demands an unnecessary but not clearly harmful
test. The Congressional Quarterly reported
quoted the CEO of the Federation of State Medical Boards saying that
physicians "were penned in by the American the health care system,
fighting giant bureaucracies while fearing legal action if they make a
mistake."
Health Care Spending: The Basics
JUST HOW MUCH DO PRIVATE INSURERS ADD TO THE NATION’S HEALTH CARE BILL?
As a nation, we are spending well over $2 trillion a year on health care. This includes: all of the money that you and I pay out-of pocket to cover co-pays, deductibles and drugs; the dollars that you and I (and our employers) fork over for private insurance; the money Medicare, Medicaid and SCHIP lay out to reimburse doctors, hospitals and patients; the billions taxpayers chip in to fund veterans’ health programs, public hospitals, school programs, and health insurance for government employees as well as the money private charities contribute to health care.
What exactly are we paying for? How much of that money is used to pay the CEOs of drug companies salaries that read like telephone numbers? How much do hospitals eat up? How much is spent on insurance company ads? How much is used to provide healthcare for the poor?
I’ve decided to do a series of posts spelling out exactly where the money goes. Today, I’m going to start with private insurance.
Many people believe that if we just eliminated the private insurance industry, healthcare would become much more affordable. There is a general sense that the “administrative costs” of private insurance are siphoning off a sizable share of our health care dollars.
There is some truth to that: because we have multiple insurers—not to mention so many solo practitioners, small hospitals, clinics, and individuals filing for reimbursement—the paperwork is enormous. If we had only one big insurance company that used just one set of forms we could simplify the paperwork greatly. People who want a “single payer” system, with the government paying all of the bills, point out that the savings would be enormous.
And we could cut costs even more if, instead of having tens of thousands of health care providers filing for separate reimbursements, doctors, hospitals and clinics joined together into, say, eight our ten large organizations like Kaiser Permanente, each with its own back office. The doctors would be on salary, so rather than filing for payment for each service they performed, they would receive a monthly check for taking care of their patients, just as they do at Kaiser Permanent or the Mayo Clinic (where doctors are on salary).
In other words, it is not only a fragmented multi-payer insurance industry that generates so much paperwork; on the other side of the transaction a fractured network of separate providers adds to a mind-boggling stack of paper. Unlike most other developed countries, we have turned healthcare into a cottage industry. This gives us lots of choices: we can select from a Chinese menu of insurance plans and proviers. But it also means higher administrative costs. In this post I would like to focus first on just on how much our huge private insurance industry is costing us. (In a later post, we’ll look at the price we pay for a fee-for-service system of independent providers.)
New CDC Report: The Nail in the Coffin for Health Care Myths
On Monday the CDC released a landmark, and in many ways devastating, report on health care in the U.S. The report contains a wealth of data that, while not surprising to some, should help silence the dwindling few who insist that America’s health care system is doing just fine. As a public service, I thought it’d be helpful to list some of the myths that the report demolishes (with some help from other sources as needed).
Myth: If people don’t have health insurance or get medical care, it’s because they don’t want it.
Reality: Actually, the big issue with access is cost. According to the CDC report, more than 40 million Americans—almost one in five Americans over the age of 18—have foregone one of the following in the past year because they couldn’t afford it: medical care, prescription medicines, mental health care, dental care, or eyeglasses.
It’s not that uninsured people don’t understand the value of coverage. Last year a study from the Urban Institute found that less than 3 percent of uninsured adults and children have never had insurance or report having no need for insurance. That same report also found that the high cost of coverage alone explained over 50 percent of those cases where people are uninsured
And even when the uninsured cite job-related difficulties as the reason why they can’t access employer sponsored coverage, the problem isn’t just that they can’t get it through work—it’s also that they can’t afford individual policies. (Individual policies are much more expensive than group policies, and in many states private insurers can charge individuals astronomical premiums if individuals have any “pre-existing conditions.) According to the Urban Institute, for 79 percent of adults and 74 percent of children who are uninsured because of job-related problems, the high cost of individual insurance is a major problem.
Myth: The American system relies mostly, if not exclusively, on private enterprise to support health care.
Reality: Yes and no. While the U.S. does have the biggest private sector share of health expenditures in the world, making up 55 percent of our funding, personal health care expenditures (i.e. spending on actual patient care) is mostly public. The CDC reports that in 2005 the federal government and state and local governments combined paid 45 percent of personal health care expenditures; private insurers only paid 36 percent, with 15 percent coming from out-of-pocket payments. So much for the libertarian utopia.
There’s also a bigger public sector coverage presence than many would like to admit. Though two-thirds of insurance policyholders have private coverage, a Census bureau report from earlier this year noted that more than one quarter of Americans (about 27 percent) are covered by government insurance. The American model is much more of a private-public mix than some pundits—and candidates—are willing to admit.
The FDA: What Happens When You Starve the Beast
In October, I talked to a source inside the FDA who suggested that the agency was having a hard time keeping up with work-flow. I quoted him on this blog as explaining that since the FDA has committed to reviewing applications for approval of a new drug within 10 months, drug-makers have been submitting “shabbier” applications that contain less evidence about risks and benefits.
“For the drug-maker it’s a gamble. The company is betting that, because we want to make the 10-month deadline, we won’t send the application back,” said the source. And often, he acknowledged, the drug-maker is right. “If you find a problem or there is something missing and it doesn’t seem terribly material, there is a tendency to overlook it. Because if you don’t it will just delay the whole process.”
In the past, he added, a company submitting an application knew that if the application wasn’t up to snuff, the FDA would send it back. But those standards have fallen: “Now we send it back [only] if it’s really crappy.”
Yesterday the FDA Science Board dropped a bombshell in the form of a report which suggests that standards at the FDA haven’t just fallen—they’ve fallen off a cliff. The title of the report says it all: FDA: Science and Mission At Risk.
The problem, according to the report: a lack of funding. The Coalition for a Stronger FDA, co-chaired by the last three secretaries of Health and Human Services (the department that oversees the FDA), says the FDA needs a 15 percent boost in funding per year for the next five years.
Here are just a few highlights from the report:
- “The Information Technology situation is problematic at best—and at worst it is dangerous.”
- “The FDA has substantial recruitment and retention issues”.
- “Critical data…including valuable clinical trial data…are sequestered in piles and piles of paper documents in large warehouses."
- “The FDA has an inadequate and ineffective program for scientist performance."
- "The FDA has inadequate funding for professional development to ensure that staff maintain scientific competence."
William Hubbard, a former FDA associate commissioner who supports the Coalition for a Stronger FDA, told ABC News that the report stands out because of the "intensity of the feelings" expressed by the subcommittee.
"These people were horrified by what they found," he added.