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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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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Source: Rand. HT to Timothy Taylor.

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[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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Source: New York Times

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

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More from USA Today here.

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