Category: Health Care Costs

EHRs May Break the Bank in San Francisco

The San Francisco Department of Public Health says it is ahead of the curve in rolling out databases that keep tabs on tens of thousands of patients across a citywide network of clinics and hospitals. The rollout is needed not just to make a local form of “universal health care” work, but also to meet a 2014 deadline under national health reform…

An incomplete survey of technology costs borne by the clinics themselves this year reveals spending of at least $15 million in addition to what was budgeted for the whole program, adding at least 8.5 percent to the total cost. But that sum is likely millions higher, since eight clinics could not or would not say how much they spent or were planning to spend integrating their patient records…

One already financially stressed clinic, Lyon-Martin Health Services in Hayes Valley, which caters to the gay, lesbian and transgender communities, said buying a new electronic records system might break the bank.

Full post by Angela Hart at The Health Care Blog.

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Feb 03, 2012 | 4 comments | by

Teachers Get Free Botox in Buffalo

The Buffalo public school system’s health insurance covers plastic surgery. There is no copay. According to BuffaloNews.com, the cost of the benefit rose from $1 million in 2004 to $9 million in 2009. That was 9 percent of the district’s total spending on health benefits for employees and retirees. According to Jordan Weissmann of The Atlantic, the union has said that it will be happy to drop the benefit in the next round of contract negotiations.

However, Buffalo teachers haven’t bothered to negotiate a new contract since the last one expired in 2004. Thanks to New York State’s Triborough Amendment, they don’t have to. The old contract automatically stays in force until the union reaches a new agreement. As the old agreement has lavish benefits and yearly 2.5% step increases, the union has no incentive to enter into negotiations with a city that receives 48 percent of its revenues with from what New York Governor Andrew Cuomo calls a “functionally bankrupt” state and might, for once, actually be interested in driving a hard bargain.

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Jan 27, 2012 | 5 comments | by

Fact of the Day

Had health care costs grown no faster than the Consumer Price Index from 1999 to 2009, an average American family would have had an additional $450 per month—more than $5,000 per year—to spend on other goods and services.

Source: Rand. HT to Timothy Taylor.

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Jan 26, 2012 | 3 comments | by

Don’t Be Misled by the Prices, Stupid

Linda Gorman tells me that the previous post could play into the hands of those who claim that the U.S. spends more and gets less than just about every other country. I thought I had dealt with that issue in an earlier post. For those who missed it, here is a brief summary:

[T]he U.S. has fewer doctors, fewer physician visits, fewer hospital beds, fewer hospital stays and less time in the hospital than the OECD average. We’re not just a little bit lower. We are among the lowest in the developed world. In fact, about the only area where we “spend” more is on technology (MRI and CT scans, for example), as is reflected in the second table.

And here is the economic point:

Other things equal, a country that has more doctors per capita, more hospital beds, etc., is devoting more of its real income to health care than one that uses fewer resources — regardless of its reported spending.

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Jan 24, 2012 | 5 comments | by

Comparison Shopping

Source: New York Times

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Jan 23, 2012 | 10 comments | by

Diabetes Is Costly

A young person with diabetes could earn an average of $160,000 less over their lifetime compared to someone without the disease, according to a study published in the most recent issue of the journal Health Affairs.

Adolescents with diabetes are also more likely to drop out of high school than their peers — a more pronounced difference than seen in racial or gender disparities — and complete .25 fewer years of school, researchers found. That adds up to 150,000 lost years of school across the American population.

Source: Kaiser Health News

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Jan 11, 2012 | 5 comments | by

Why Quality Improvement Doesn’t Reduce Health Care Costs

Manufacturing and service companies around the world have demonstrated the cost benefits of improving product quality and production efficiency.  So why haven’t nearly two decades of work on improving health care quality had a measurable effect on health care costs?

The explanation lies in the cost structure of the typical health care setting.  Its management and organization create a rigid cost structure that is relatively insensitive to small changes in patient volume, resource use, or the severity of patients’ health conditions.  This fixed-cost dilemma leaves most health care costs insensitive to changes in volume and utilization, so clinical quality improvements typically create additional capacity rather than bottom-line savings…

Because of these cost behaviors, quality-improvement efforts that reduce lengths of stay or readmissions or increase radiology throughput do not create substantive bottom-line savings.  They generally create capacity to treat additional patients. Similarly, efforts to expand the access of disadvantaged populations to primary care under the assumption that such access will be paid for through avoiding use of high-cost care sites — such as emergency departments — do not generate cost savings.  The cost of staffing and equipping an emergency department does not change if there are small reductions in utilization. Indeed, improved access will increase health care costs if new physicians and staff are hired to serve new patients in primary care practices.

Entire NEJM article worth reading.

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Jan 10, 2012 | 6 comments | by

Caplan on Gruber

Jon Gruber has written a graphic novel.  This is from Bryan Caplan’s devastating review:

3. More generally, Gruber ignores almost everything government does to increase the cost of health care. There’s no discussion of medical licensing versus certification. There’s no discussion of the regulatory barriers to low-cost, high-deductible policies. There’s no discussion of medical liability. He mentions the high cost of “free” emergency room care, but fails to mention that this is a side effect of long-standing populist policy: government forces emergency rooms to treat people even if they certainly won’t pay.

4. There’s zero discussion of moral hazard – the unhealthy lifestyles that many people choose despite the risks. For Gruber, or at least Gruber the graphic novelist, bad health is something that “just happens to you.” Sigh. Insurance companies aren’t omniscient, but they could do a lot more to tailor rates to risks – if it were legal to do so. And maybe people would respond to those incentives by living healthier lives.

Entire review is worth reading.

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Jan 04, 2012 | 8 comments | by

The Cost of Saving Lives

Using cardiovascular disease as an example, [the authors] note that 44 percent of the reduction in mortality from 1980 to 2000 was due to improved health behaviors. Another 22 percent of the decline was due to inexpensive Category I treatments such as aspirin and beta blockers, 12 percent was due to Category II treatments like angioplasty, and perhaps 10 percent was due to Category III treatments. On the cost side, the spread of Category I and II treatments appears to have contributed only modestly to cost growth, suggesting a larger role for Category III spending. Despite the rapid diffusion of “home run” technologies like beta blockers during this period, the average cost of saving an additional life-year tripled, to nearly $250,000.

Source:  Jason Shafrin summary of an NBER paper by Amitabh Chandra and Jonathan Skinner.

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Dec 29, 2011 | 10 comments | by

Employer Knows Best

The share of companies that used financial rewards in health management programs increased to 54% in 2011 from 36% in 2009. In 2012, about 80% of companies plan to offer financial rewards… The percentage using penalties, such as for smoking, more than doubled — from 8% in 2009 to 19% in 2011. Nearly 40% of the companies surveyed plan to use penalties next year.

More from USA Today here.

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Dec 07, 2011 | 4 comments | by
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