When you read this the health care reform bill will have passed in the Congress—or not. And if it passes, it will certainly be different from what is on the table now due to the inevitable compromises made to garner enough votes. But I have stopped reading about this issue, including what must now be a book-length series in the New England Journal of Medicine, because I now believe there will be no “true” reform.
The two major issues that have stimulated the current and past attempts at reform are the large number of uninsured persons and the high cost of health care in this country; all other issues pale in comparison.
And I believe that these two issues are connected in such a way that there really is only one issue: the cost of care in our current system. We have always had a large number of uninsured individuals in the US, but if our costs were in the same general range as in Canada or France, there would be no reform bill, and the cost of providing at least basic health care insurance to all would be manageable because of the much lower marginal cost of care.
The mechanisms proposed in this bill will not, in my view, lower the cost of care substantially. Electronic medical records may reduce fraud, though criminals always find a way to game the system, but they are not likely to reduce costs. Building, maintaining, synchronizing, and repairing these systems is neither easy nor cheap, and the workers responsible are usually technologists who are paid more than clerks. Now that we have computers and the Internet, we actually use more paper than we did before. So what often happens is that technology makes certain aspects of work easier and more efficient, but the technology creates other demands on workers’ time. Has anyone had an office copy machine that worked flawlessly for more than a whole week? I exaggerate, but you get the point.
A second feature of the reform bill intended to reduce cost includes the terms “comparative effectiveness” and “evidence-based.” These terms are interpreted in many ways but, in general, they are meant to bring some uniformity and limits to the widely disparate usage and cost of care from region to region. The innate problem with this approach is that the “method” generates information, but it does not have teeth, such as limiting the cost of a unit of care.
The Dartmouth group's pioneering studies of regional differences in care and its cost, and Atul Gawande's article in The New Yorker comparing the cost and effectiveness in two similar Texas communities have led to proposals that money could be saved by “reorganizing care” (Fisher et al, NEJM 2009; 360,849) or rationing care; but both seem daunting and unpalatable with, in my view, no chance of appearing in any reform bill.
All of these approaches look away from the single most important factor in the high cost of care in the US: a physician reimbursement system that financially rewards doctors for doing more tests and more procedures, which they themselves have decided are needed. So the physicians, especially specialists and subspecialists, control the market that determines their reimbursement.
If General Motors had the ability to decide who needs a car and then sells the car to that customer, they would never have gone broke and the production of poor designs and shoddy workmanship would have continued.
One of the Clearest Descriptions of the Problem
One of the clearest descriptions of this problem was written by Arnold Relman, a former editor of the New England Journal of Medicine. Selected quotes from the article (NEJM 2009; 361:1225-1227) follow.
“Doctors, in consultation with their patients—not insurance companies, legislators, or government officials—make most of the decisions to use medical resources, thereby determining what the United States spends on medical care…Most doctors are paid on a fee-for-service basis, which is a strong financial incentive for them to maximize the elective services they provide. This incentive, combined with the continued introduction of new and more expensive technology, is a major factor in driving up medical expenses. The same incentive is attracting more and more young doctors into specialties that command much higher fees—and therefore guarantee much greater income—than those earned by primary care practitioners.
“A system like ours, which is grossly deficient in primary care physicians and dominated by specialists who are trained to use expensive tests and procedures, is inevitably costly, particularly when most specialists practice as independent small businesses, competing for patient referrals and for income. Adjusting the fees….based on the quality or outcome of care won't solve this problem, because specialists can easily control the volume and kinds of services they provide…competition doesn't lower prices in medical care…because physicians usually choose the services to be provided and are paid largely by insurance, not by the consumers [as] if this were an ordinary market.”
Relman, and the Congressional Budget Office, are pessimistic that any of the proposals will limit the cost of care. “We are not likely to control medical inflation unless the incentives in the traditional fee-for-service payment of doctors are eliminated.”
Relman favors tax-supported universal health insurance for care in doctor-managed, multispecialty group practices to provide comprehensive medical care, like the Mayo Clinic, the Permanente Medical Group, and the Geisinger Health System. The unit costs of care in these groups are generally substantially lower because of a number of operational and organizational efficiencies, economies of scale, and lower physician salaries (but very good benefits). Relman provides more details in this article as well as in others he cites.
I am with Relman on his main point: Without reforming the reimbursement system and changing the financial incentives, it is unlikely that the cost of medical care will be controlled.