How health reform may help ... or hurt

[ziggy29]

That's meaningful, but I'm trying to explain 50%.

Have you compared prescription drug prices? The U.S. is, to some degree, subsidizing the rest of the world for the R&D for new drugs.

 

[jdw_fire]

but I'm trying to explain 50%.

do other contries spend as much on "heroic/end of life" medical proceedures as we do? i read somewhere that the majority of medical costs for the average american happens in their last years of life. also do LTC costs count as medical in the stats quoted here?

 

[bubba]

A personal trainer told me that with losing weight, it's 20% exercise and 80% diet (good food choices, so called "clean eating"). Just throwing that out there because I always believed you could exercise yourself to sleek and slim, but evidently not; you'll just have gorgeous muscles under that fat layer.....

Also, strictly antecdotal but my sister is a nurse in a dialysis center, and if I remember correctly, they treat around 40 patients per day in her center. Many, many, many of their patients suffering from kidney failure have uncontrolled high bp, uncontrolled diabetes and extreme overweight. Lots of their patients are Medicare or Medicaid, so it's not like treatment isn't available. But all the pills in the world don't help with a medical condition if you aren't compliant with treatment.

My own mother is probably close to 100 lbs overweight and takes 3 kinds of bp pills. Her doctor raises 40 kinds of hell every time he sees her, but she refuses to work on the weight. She is 82, so while the excess weight didn't cause an early death, it's certainly affected the quality of her life.

I wonder how the U.S. costs would stack up to other countries if you could somehow remove the obesity factor. If the U.S. had the same obesity rate as say Switzerland from the above referenced chart, how would $ spent on health care change?

 

[ziggy29]

It's pretty clear there's increasingly a "war" on fat people going on today, and increased public funding exposure to health issues will only make that worse. I think fat people and smokers are the only two classes of people against whom bigotry and discrimination are still socially acceptable.

 

[MichaelB]

Things that make our US healthcare so expensive

lifestyle (obesity, smoking, drugs)
high cost and profit for intermediaries (insurance)
excessive profit for some product and service providers
administrative burden (millions of microplans)
high charges for specialized services
forced use of expensive specialized facilities for routine medical needs (emergency room)
multiple regulations around the country
punitive legal awards
diagnostic overuse (expensive tests even for routine matters)
treatment overuse (especially end of life)
excessive unproductive labor vs technology

Our current dysfunctional approach to healthcare has evolved over decades, driven by a unique combination of medical and financial motivations. It is both quite good and quite bad.

“Comprehensive healthcare reform” is going to take a long time. The ideological and financial interests today are well entrenched. Starting with high upfront costs in the midst of a recession – well, it’s a hard sell. The version they’re considering now makes more sense.

 

[Maurice]

(Qualifing Dr. Frist is ex-senate majority leader Repblican, and a heart surgeon.)

Not to mention a pioneer in video diagnostics.

 

[Maurice]

Given that we eat too much, and don't exercise enough, are we going to see a system that forces diet and exercise?

While this may seem far fetched to some, I don't think it is. We already have laws on the books that are justified by 'We all may have to pay if you are in an accident and don't have a seat belt on'. The same logic is used to support helmet laws and a slew of OSHA regulations. So it does not seem too far fetched that we will see lawmakers crafting some form of tax or law for the good of us all.

After all if you are over weight 'We all have to pay your bill'.

I'd bet untold sums we'll see this within 10 years. Probably in the form of a 'sin tax', for example on refined sugars (or something like that).

Even without any change to the status quo in health care, much of the obesity problem already hits the public purse through medicare and medicaid. I suppose many would consider our obesity epidemic an externality of the processed food industry.

 

[bubba]

It's pretty clear there's increasingly a "war" on fat people going on today, and increased public funding exposure to health issues will only make that worse. I think fat people and smokers are the only two classes of people against whom bigotry and discrimination are still socially acceptable.

I'm sorry you feel like a war has been declared on "fat" people and smokers. Truly I am. But I have to wonder why do you think pointing out the health risks of obesity and smoking is bigotry and discrimination? Those behaviors are risky to one's health.

Not exactly the same thing (but close), but as a woman who is 6' tall, I've never met anyone who didn't have something to say about my height, and have heard "wow, you're tall" (like I didn't know that.....) or "how's the weather up there" more times than I can count. It's amazing to me that people look you straight in the face and say these things. Maybe I'm a victim of some kind of discrimination, seriously. But I've made up my mind that the next time some old fat dude looks at me and says "wow, you're tall", I'm going to look right at his big gut and say "wow, you're fat". Wonder how that will go over?

 

[Maurice]

But I've made up my mind that the next time some old fat dude looks at me and says "wow, you're tall", I'm going to look right at his big gut and say "wow, you're fat". Wonder how that will go over?

That's awesome, bubba. Please tell us about it when you do.

 

[ziggy29]

I'm sorry you feel like a war has been declared on "fat" people and smokers. Truly I am. But I have to wonder why do you think pointing out the health risks of obesity and smoking is bigotry and discrimination? Those behaviors are risky to one's health.

Sure, they are. No quarrel at all with that. But in my experience, usually in terms of discussing public policy it's less about genuine concern about health and more about "you're costing me money" or "I'm subsidizing you." (I'm not saying that's you, but it's common in discourse about public health. The post you replied to was directly after yours but it wasn't yours in particular I was aiming at. Hope that's clear.)

The thing is, the bean counters who rip into smokers and the overweight for "costing them more" in health care almost never account for the fact that on average, they live several years less -- and therefore collect several years less from Social Security and Medicare. So from a pure bean-counter standpoint, it would be intellectually dishonest to only look at the added public health care costs of smoking and obesity while ignoring the cost savings in Social Security (and perhaps Medicare in the long run).

Smokers and the obese could just as easily say they are subsidizing Social Security for the physically fit.

And as far as your being a tall woman, I think a short guy like me can relate. At least people don't say you have a "Napoleon complex" or "short man's syndrome." For what it's worth, my wife is 5' 9" and more than an inch taller than me.

I'm neither obese nor a smoker, but that's beside the point.

 

[ziggy29]

Not exactly the same thing (but close), but as a woman who is 6' tall, I've never met anyone who didn't have something to say about my height, and have heard ... "how's the weather up there" more times than I can count.

By the way: When someone asks you that, the proper response is to spit on them and tell them it's raining.

 

[bubba]

By the way: When someone asks you that, the proper response is to spit on them and tell them it's raining.

Excellent! I'll do that next time. Thanks

 

[Independent]

Have you compared prescription drug prices? The U.S. is, to some degree, subsidizing the rest of the world for the R&D for new drugs.

I think this is a factor. I don't know if it's 1% or 5%. Either way, I think "health care reform" should include a provision that the US gov't isn't going to pay any more for prescription drugs than the average of other rich countries. There's no reason for us to pay for the whole world's pharma R&D.

 

[Midpack]

Things that make our US healthcare so expensive

lifestyle (obesity, smoking, drugs)
high cost and profit for intermediaries (insurance)
excessive profit for some product and service providers
administrative burden (millions of microplans)
high charges for specialized services
forced use of expensive specialized facilities for routine medical needs (emergency room)
multiple regulations around the country
punitive legal awards
diagnostic overuse (expensive tests even for routine matters)
treatment overuse (especially end of life)
excessive unproductive labor vs technology

All true, plus significantly/ironically, excessive usage by those who have health care insurance. My MegaCorp provides great benefits and most of our employees overuse them because they pay so little of the cost. Just a few examples:

• going to the ER when not necessary with colds, flu, nosebleed, etc.
• purely elective procedures that we should not pay for, but are covered.
• some of them also stay out on medical leave (much) longer than necessary because most doctors ask them when they want to return to work instead of recommending when - I have seen it over and over again.

 

[Independent]

Things that make our US healthcare so expensive

lifestyle (obesity, smoking, drugs)
high cost and profit for intermediaries (insurance)
excessive profit for some product and service providers
administrative burden (millions of microplans)
high charges for specialized services
forced use of expensive specialized facilities for routine medical needs (emergency room)
multiple regulations around the country
punitive legal awards
diagnostic overuse (expensive tests even for routine matters)
treatment overuse (especially end of life)
excessive unproductive labor vs technology

Our current dysfunctional approach to healthcare has evolved over decades, driven by a unique combination of medical and financial motivations. It is both quite good and quite bad.

“Comprehensive healthcare reform” is going to take a long time. The ideological and financial interests today are well entrenched. Starting with high upfront costs in the midst of a recession – well, it’s a hard sell. The version they’re considering now makes more sense.

Excellent list.

Googling a little, I get a number of references for end-of-life care as 10-12% of total medical spending. This includes all the expenses in the last 12 months of life, regardless of the prognosis at the time (i.e. some of this money was spent on people who the doctor expected would live). If you focus on just Medicare, it's more like 25%. I don't have a comparable number for other countries.

I think that "treatment overuse" is prevelant in other situations. Someone with a painful knee and insurance in the US can get an MRI within a day or two. Maybe the MRI doesn't turn up anything, the knee would have recovered on its own, and the MRI was "wasted". I've had physical therapy for injuries a couple times in the last two years. In both cases, the first session was the most important as I found out what was wrong and got some DIY exercises. Later sessions probably helped it heal sooner, but they cost fellow-insured's a chunk of money.

I think the reason we don't attack most of the things on the list is that most Americans don't know how much they are spending for medical care. Some say "The insurance company pays for it". Others think a little further and say "My employer pays for it", and never stop to think that this is money that could/should have been in their paycheck. For others "The gov't pays for it". We do a great job of hiding the cost of gov't programs. Most workers can see the Medicare tax of 1.45% of wages. They don't realize that's only 25% of the total taxpayer subsidy of Medicare. So the actual cost 4 times what they see.

If I were doing healthcare reform, I'd push to make sure that people can see the full cost of medical care. Make sure that all Federal funding comes from a single, visible, named tax. Eliminate the tax deduction for employer-paid health insurance. I think the only way we will make good decisions on medical expenses is if people can see both sides of the cost/benefit decision.

 

[DblDoc]

Excellent list.

Googling a little, I get a number of references for end-of-life care as 10-12% of total medical spending. This includes all the expenses in the last 12 months of life, regardless of the prognosis at the time (i.e. some of this money was spent on people who the doctor expected would live). If you focus on just Medicare, it's more like 25%. I don't have a comparable number for other countries.

I think that "treatment overuse" is prevelant in other situations. Someone with a painful knee and insurance in the US can get an MRI within a day or two. Maybe the MRI doesn't turn up anything, the knee would have recovered on its own, and the MRI was "wasted". I've had physical therapy for injuries a couple times in the last two years. In both cases, the first session was the most important as I found out what was wrong and got some DIY exercises. Later sessions probably helped it heal sooner, but they cost fellow-insured's a chunk of money.

I think the reason we don't attack most of the things on the list is that most Americans don't know how much they are spending for medical care. Some say "The insurance company pays for it". Others think a little further and say "My employer pays for it", and never stop to think that this is money that could/should have been in their paycheck. For others "The gov't pays for it". We do a great job of hiding the cost of gov't programs. Most workers can see the Medicare tax of 1.45% of wages. They don't realize that's only 25% of the total taxpayer subsidy of Medicare. So the actual cost 4 times what they see.

If I were doing healthcare reform, I'd push to make sure that people can see the full cost of medical care. Make sure that all Federal funding comes from a single, visible, named tax. Eliminate the tax deduction for employer-paid health insurance. I think the only way we will make good decisions on medical expenses is if people can see both sides of the cost/benefit decision.

I'd take it a step further. You need to see it and be on the hook for part of it. I'd say on a good day less then 25% of the patients I see in the ED need to be seen and evaluated there. Without a financial penalty to be there they will continue to over utilize the ED.

DD

 

[Rustic23]

I have always thought that one of the problems i.e. things that cost more, is the number of Hospitals that compete for business. Now normally you would think competition would lower cost, but with every hospital 'having' to have all the modern equipment and them under using it, cost goes up. I guess a way to look at it is there is some very expensive equipment siting idle and not making money.

 

[Gone4Good]

Something I haven't seen addressed here is how the plans taking shape in Washington will effect those of us without subsidized health insurance who plan to retire early, or who have already retired early. The various plans seem to include a few basic principals 1) Mandates that every individual buy insurance 2) No "pre-existing condition" exclusions 3) subsidies for lower income families.

At least one consequence of these provisions seems pretty obvious to me. Areas of the country where individual health insurance is currently cheap may become much more expensive because of the requirement to insure "pre-existing conditions". Some of that increase may be offset by the individual mandate, but my guess is we'll see rates in cheap areas rise and rates in expensive areas fall.

Anyone currently enjoying individual coverage that only costs a couple grand a year may want to start budgeting for more. Maybe a lot more.

 

[DblDoc]

I have always thought that one of the problems i.e. things that cost more, is the number of Hospitals that compete for business. Now normally you would think competition would lower cost, but with every hospital 'having' to have all the modern equipment and them under using it, cost goes up. I guess a way to look at it is there is some very expensive equipment siting idle and not making money.

There has been a lot of competition at the hospital level, and many have closed. As an example many HMO's have realized that it is cheaper to contract with a hospital for hospital based care then try to run their own hospital. One facility where I work has contracts with 2 local HMO's, one of which just closed its last hospital several months ago. They pit the local hospitals against each other to get the cheapest contract they can. They pay nothing for ED care for patients we admit and a minimal flat rate for those we discharge - regardless of how many tests, time etc they take. The hospital hopes to make up for this by getting paid for the hospital based care that is provided for the admitted patients.

DD

 

[FUEGO]

Something I haven't seen addressed here is how the plans taking shape in Washington will effect those of us without subsidized health insurance who plan to retire early, or who have already retired early. The various plans seem to include a few basic principals 1) Mandates that every individual buy insurance 2) No "pre-existing condition" exclusions 3) subsidies for lower income families.

Subsidies for lower income families might work out really well for many FIRE'd folks that have low incomes. But if asset testing (similar to medicaid) is brought into the subsidy equation, we are screwed. Maybe they will exclude retirement accounts like IRAs and 401ks from the calculations. And there could be an age above which assets won't count against you (like 55) where you are essentially getting income tested medicare at 55 instead of 65.

Any idea if the income limit of $66,000 for a family of 4 results in a family receiving the full subsidy or is the subsidy likely to be phased out as income increases up to $66,000 for a family of 4?

 

[alvarezg]

Something I've never understood is why all these megacorps who allegedly are so crippled by employee health insurance, haven't made use of their lobbyists over the years to change to promote a government system and get themselves out of the health insurance business.

 

[Bikerdude]

At least one consequence of these provisions seems pretty obvious to me. Areas of the country where individual health insurance is currently cheap may become much more expensive because of the requirement to insure "pre-existing conditions". Some of that increase may be offset by the individual mandate, but my guess is we'll see rates in cheap areas rise and rates in expensive areas fall.

I would think rates will be kept in check by requiring young, healthy people to buy insurance.

 

[MichaelB]

Interesting article in the WSJ this morning A Doctor’s View of Obama’s Healthcare Plans - WSJ.com

There are many similarities between our national financial problems and health care. Both are the result of years - or decades - of living with bad habits, being aware and well forewarned of the consequences, but continuing to live with excess until being forced to take action. They represent the two biggest financial challenges to the US in over a generation. We will all pay for the solution, and those that did not abuse, lived within their mean and followed the most healthful lifestyles will pay nonetheless even thought they incur no "personal cost" - in the financial mess or health care.

At some point, those of us that live careful and thoughtful lives should be able to reap the benefit and not continually pay for the disregard and thoughtlessness of others. Doesn't look like it's going to happen anytime soon, though.

 

[Independent]

Interesting article. I think this is the key section:

.... health care costs in McAllen are twice that of comparable cities while health outcomes are no different. The reasons are complex but probably because good physicians are ordering lots of tests, calling in lots of consultants, making good use of the equipment they own and the imaging centers they might have a stake in (and yes, they think they can be objective in ordering an MRI or CAT scan that sends the patient to their own facility); it has to do with hospitals competing with each other for the kinds of patients with conditions that are reimbursed well, and wooing patients, wooing high-volume physicians (some of whom are invited to invest in the hospital) to make full use of their PET scan, their gamma knife, their robotic-surgery facility, their cancer center, their birthing center. That was Atul Gawande’s conclusion, and I would concur.

But I’d like to officially let McAllen off the hook and say that having practiced in five states, including 15 years in the great state of Texas, we are all complicit in practicing just that kind of medicine if you look hard enough and if you looked at us individually. Conflicts of interest are rife; they are almost the rule. So is the ability to wear blinders so we are (mostly) oblivious to our conflict.

Here's another good section:

Now you can reduce the probability of a heart attack by swallowing a statin, and it will make good sense for you personally, especially if you have other risk factors (male sex, smoking etc).. But if you are treating a population, keep in mind that you may have to treat several hundred people to prevent one heart attack. Using a statin costs about $150,000 for every year of life it saves in men, and even more in women (since their heart-attack risk is lower)—I don’t see the savings there

Even without conflicts of interest, doctors will want to "do what's right for the patient in front of me, regardless of the cost". And patients will always want to have any procedure/test/drug the doctor recommends. We need to embed a cost-conciousness into the system some way, because there are so many different ways for costs to expand.

 

[Independent]

I'd take it a step further. You need to see it and be on the hook for part of it. I'd say on a good day less then 25% of the patients I see in the ED need to be seen and evaluated there. Without a financial penalty to be there they will continue to over utilize the ED.

DD

Thanks for the addition.