Comments on: Supply-Side Health Policy

By: Eric

Eric — Sun, 23 Sep 2007 05:23:36 +0000

Eric

I do think you right on the spot with this post, i could use a lot a struff for my new study thank you very much.
Greets

By: Vic Wood

Vic Wood — Tue, 15 May 2007 16:28:55 +0000

I am a physician and would like to congratulate you on your article which ran today, PERVERSE INCENTIVES IN HEALTH CARE. The article was right on. I have been practicing medicine for almost 20 years and have seen all of the changes that the insurance industry have evolved into and from in an attempt to decrease cost to them. I recently was successful in the WV legislature in trying to bring my brand of Primary Care to my patients. The insurance industry tried to stop my attempt at introducing a patient financed system that could eventually bring to the market competition among practitioners that would improve cost and quality. If you would like to read more about it I’m on the cover of the 12/15/06 issue of MEDICAL ECONOMICS. It is nice to finally hear a voice that has reason and intelligence on an issue that can be solved without government or insurance control.

By: Brant S Mittler MD JD

Brant S Mittler MD JD — Wed, 25 Apr 2007 22:15:48 +0000

A few comments:
1. The Mayo Clinic is not cheap. My mitral valve repair surgery cost $53K for an thankfully uncomplicated procedure. The same surgery would have cost about 1/2 to 1/3 less anywhere else. But I happily paid more because I believed the surgeon was the best and that Mayo had the best outcomes. There weren’t a lot of good data at the time and no randomized trial data ( 2001). If Mayo Clinic medicine a la this surgery were replicated all over the country it would cost a lot more. For one thing, more cardiologists would know to refer mitral valve prolapse patients for surgery earlier than later and that would cost more initially. Two so-called national experts told me to not worry about new-onset atrial fibrillation with what was thought to be mild prolapse. Mayo’s “third opinion said to worry about it. Whether the overall costs would be less over the life of the patient remains to be seen. Mayo transthoracic echocardiograms for follow-up cost much more than those done in the average community hospital. So, that’s an extra cost. Adn Mayo tells you “Pay up or don’t come back” As usual, Dr. Wennberg gets all the headlines from the mainstream media and little critical analysis of his “scientific” findings. Don’t get me wrong, I love the Mayo Clinic. But it’s Rolls Royce care at Rolls Royce prices. Fortunately, I can afford to get care there — at least for now.

2. Doctors shouldn’t treat patients by telephone with good reason. As a lawyer, I can talk to a client by phone. Lawyers deal with words and verbal concepts. As a cardiologist I can’t evaluate chest pain over the phone. And it’s not because I don’t get paid for telephone calls. I have to listen to the patient’s heart and look at the ECG and chest x-ray and evaluate lab values. If I treated everyone who said they had “the flu” over the phone as “the flu” there would be a lot of dead patients and I would no longer have a license to practice medicine. When I hear “flu” I think “congestive heart failure,” among other serious diagnoses. Sorry to say this, but this is exactly why economists should not be put in charge of health care policy. And eonomists are precisely the folks who run health care policy. See the last time the Wall Street Journal or New York Times quoted a physician on health care policy.

3. In terms of buying health care, no one has the foggiest idea about outcomes. And I am talking about patients’ clinical outcomes not process outcomes. We are coming up on the 40 th anniversary of the Duke Cardiovascular Database — a project which is still going strong but not used to make real time patient care decisions — other than to support randomized trials. The payors didn’t want to support real outcomes collections which is expensive and hard to do. By the way, neither did the Robert Wood Johnson Foundation back in the 1970′s. ( They were content with having outcomes divined by hand picked “experts.” See Rand methodology) Everyone wants to advertise they have good outcomes and figure out a way to sweep bad results under the rug. Electronic medical records won’t solve this problem — which is a political problem not a technological one. There are some observational databases that do function — like the New York State registry for bypass surgery and angioplasty — but these are few and plagued by methodological issues. It’s hard to get a few – much less all – doctors to agree on what they mean by “unstable angina” or “acute coronary syndrome.”

John, thanks for stimulating this discussion. And thanks for your critical comments that Medicare HMOs won’t solve the Medicare cost crisis.
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By: Scott Chrimes

Scott Chrimes — Thu, 12 Apr 2007 19:38:53 +0000

It has been my observation that the big health insurance companies – United Health Care, Cigna, Humana, Blue Cross, etc. – actually drive up costs by funneling “captive” groups of employers to health care providers – thus eliminating any need for these providers to be competitive. In other words, the big insurers sell the fact they can win discounts for the employers’ health care plans they represent by delivering a large group of customers to the actual health care service providers. This group is hand-delivered to the providers, who in turn offer “discounts” to the insurance company. However, it is no trick for a provider to mark up his services and products beyond reason – and then – “discount” them back to the insurance company. This is like a department store marking everything up 100% and then having a 40% off sale. As long as the employer (the entity actually paying the bills) is not too upset with the cost of medical insurance, and has enough pricing power to pass these rising costs on to its customers, everyone is happy.
However, the point has long passed where employers have started to scream “uncle” over the rising cost of providing health insurance to their employees.

There is no incentive for insurance companies to control health care costs in this environment because they merely pass rising costs on to the employer/healthcare plan payor. There is no incentive for employee/beneficiaries to control costs because they, typically, are only paying a tiny fraction of the actual cost of the services being consumed. Ultimately, the only way to control medical related inflation is to make the consumer of the services responsible for paying the bulk of routine medical services. This can be accomplished by offering some sort of medical savings account in conjunction with catastrophic loss coverage. I would think this model is going to become increasingly prevalent as fewer employers can continue absorbing rising medical expenses – unless big government steps in first and mandates some model of socialized medicine, which would be a disaster for everyone.
Everyone, that is, except the Hillary Clintons, Al Gores, and other similar politicians in this world, who make their livings convincing other people they are “victims” and setting themselves up as “saviors” – and gaining power, wealth and influence in the bargain.

By: Michael F. Cannon

Michael F. Cannon — Wed, 11 Apr 2007 20:56:08 +0000

Fantastic. For the first 90% you had me thinking, yet again, “I wish I had written this.”

The last 10% threw me, though. For Medicare to create more Mayo Clinics the way you suggest would be a demand-side reform — driven by the demand side — wouldn’t it? Wouldn’t it be just another variation on pay-for-performance?

By: Robert W. Geist MD

Robert W. Geist MD — Wed, 11 Apr 2007 20:51:53 +0000

John you slipped on the managed care banana peel, “Managed care, pay-for-performance, and even Health Savings Accounts
are all demand-side reforms”. Wrong, MCOs are supply side rationing agents for their customers—government bureau and employer “buyers”. MCOs want as little as possible to do with consumers (patients) except to figure out ways they can’t “consume” scarce “resources” (corporate money). That’s not demand-side economics with price sensitive customers; that’s rationing by a corporation that already has in it pocket the family’s medical budget.

More later on the “wonders” of massive federal Medicare subsidies, the 112% “investment” (MedPAC figure) to which you obliquely referred in the WSJ piece. When the fed (CMS) puts its thumb on the Medicare scale, how is that anything but putting a few mega corporations in control and thousands of private clinics out of business? That’s not competition. That doesn’t pass the smell test.

Since Medicare+C HMOs were best known for “cherry picking” subscribers and “lemon dropping” the sick and frail and still could not make money thanks to high overhead and other inefficiencies, how will things be different when the “Advantage” MBAs get to feed at a bigger federal trough? The question to ask is how did Bush and congressional Republicans get bamboozled into thinking that HMOs would save money when they have been in charge of an untenable premium inflation rate and been delivering progressively poor quality in the private sector for over a decade?

The HMOs don’t work and can’t compete with HSA/HDHPs. HSAs are what would work in the public sector—and that is possible thanks to you! Let’s get going on HSAs for seniors and Medicaid too.

By: Stephen Entin

Stephen Entin — Wed, 11 Apr 2007 19:57:30 +0000

Excellent analysis of the inherent screw-up in the health care market.

By: Bill Lewis

Bill Lewis — Sat, 07 Apr 2007 16:14:51 +0000

Even though your article is right on the mark, such reform will most likely never take place. Our societal mode is one that utilizes blame rather than an honest approach to solving the health care cost problems. All one needs to do is compare comments on your article from the various players in the health care marketplace.

Government, at any level, will never get it right. Unfortunately, they will continue to try to use bandaids to fix the problems.

By: A J Kearney

A J Kearney — Fri, 06 Apr 2007 22:43:04 +0000

I found your article intriguing because I’ve always been troubled by the idea that people will really negotiate case by case with their health provider which implies a willingness to walk away from their most personal service provider. However, in looking for examples of how the market works, I’m not sure it works with Dentists. There’s nominal insurance for many people but the coverage is about 25% once major work is done. Having spent quite heavily on dentistry the passed few years, I’ve looked for the more cost effecient alternative but don’t see any providers marketing on cost differential.

By: William M. Wallace

William M. Wallace — Fri, 06 Apr 2007 19:31:04 +0000

Excellent…

From my perspective, we must restore the competitive side to the delivery of the medical product and eliminate the Entitlement Mentality.

Thank you for all you do