Monday, August 10, 2009

A useful summary of issues/bills and a cultural puzzle

Here is a useful summary of some of the issues and a nice graphic that compares and contrasts different provisions of House and Senate bills.

Here is a short article describing two sources of fear: government and private insurance companies. Interestingly, they cite a poll that says 40% of Americans fear government more, 40% fear private insurance companies more, and the rest not sure. I find the fear of government as health care payer to be a bit of a cultural puzzle. Medicare (what you have if you are age 65+*) is a federal government insurance plan that is primarily tax financed. Medicare provides (and always has) absolute choice of doctor and hospital. My private insurance (which is quite good) doesn't even allow me to go to UNC hospitals which is 7 miles from my house (Duke is about 2 miles from my house). I can go to any doctor--so long as they are on the list provided by my insurance company. But, many docs near my house are not on the list. I like my doctor just fine, but he was assigned to me when the docs I kept asking for who were on my private insurance compnay list weren't taking new patients. I finally said to my private insurance company, why don't you just assign me one, and they did. And I like him.

On the issue of denying care. One of the reasons that Medicare is in trouble financially is that it does almost nothing to limit what doctors and patients decide to do in terms of care, so long as it is not experimental. Private insurance typically provides for numerous steps to get care approved. Medicare does set rates of payment for doctors and hospitals, and eventually cutting too much can cause access problems for beneficiaries, and again, leading to cost problems because if you set the payment rate but do nothing to control what is done, this is not conducive to holding down costs, and can actually incentivize a provider to do more.

Finally, the most bizarre aspect of the reform debate are the various pictures/accounts I have seen/read of Medicare beneficiaries saying to keep the government out of Medicare. Just to repeat, if you are a Medicare beneciciary, you are covered by the largest tax financed single payer (aka socialized medicine) in North America. There are more Medicare beneficiaries than Canadians.

*Medicare also covers persons with end stage renal disease (regardless of age); and persons who are permanently disabled.

Sunday, August 9, 2009

A note from a reader

I got several notes from readers who are lawyers. Here is a representative sample of one email.

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.....Perhaps the facts and conclusions that you made in your article are true on a national basis. I have my opinions about that but I honestly do not know the truth. However, I do know the truth concerning the facts regarding what you wrote in your article concerning the medical malpractice system in NC. With all due respect, you could not be more wrong.

I have been a trial lawyer in this state for 31 years. I am not a TV lawyer and I do not advertise my services. All I do is personal injury cases, workers compensation cases and an occasional medical malpractice case. The reason I say occasional is because succeeding with a medical malpractice case is nearly impossible in light of the reforms this state made a number of years ago. The reforms are numerous, but the key one concerns what an expert can testify to regarding the applicable standard of care. It makes it nearly impossible to find an expert who is allowed to testify in our courts because of the foundation that must be laid concerning their knowledge of the standard of care say at [town in NC], where I practice. Of course, it goes without saying that a plaintiff's lawyer must spend 50-100 thousand dollars on experts to ultimately finish a case. Who can handle many cases such as this? There are other reforms that make nearly all attorneys decline a medical malpractice case. In fact, I constantly have clients tell me that they cannot even get a lawyer to listen to them, much less take their case.

The net result of the reforms is that medical malpractice cases have declined as have settlements in this state. I am not handling such a case for the first time in my career. I am on the Board of Trustees at [a large medical organization redacted by me to protect this person's identify] and I likewise have seen a decline in medical malpractice cases. In fact, it is not a major concern at all for us. Why any doctor in NC is really worried about being sued in NC surprises me. Frankly, I do not think the conclusions you make the article are true in NC.

As I noted to you, I handle WC cases. I see doctors constantly pursuing tests, pain management and other medical care that obviously does not need to be done. Clearly their motivation is money. In other words they get paid for all the care that is unnecessary. I understand that I am not a medical doctor. However, when you do the same thing for over 30 years, one learns a lot about the health care system and what motivates doctors.

In my opinion, reducing non economic damages to $250,000 would have zero affect in NC. In fact, it would make no difference to me because the hurdles are already there to prevent any success in helping a person wronged. I know you mean well with your suggestions. However, it also tells me that you do not have an understanding how the medical malpractice system works in NC.

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I will write a bit more tomorrow about the issue of the proposed $250k cap on non economic damages I proposed and what I do and don't think it would accomplish. I hope it came through that I DON'T expect that it will save the system much money.

Saturday, August 8, 2009

Article on French Health System

The Wall Street Journal had a nice article on the French health care system yesterday. The WSJ is a great newspaper. The comments section on their on-line stories are a bit like a ride at Walt Disney World; entertaining if you willingly suspend disbelief....but good reporting, typically.

The upshot is that France is struggling to deal with the cost of the system and that they are trying various reforms, including increasing out of pocket costs (the article fails to mention that France already has some of the highest out of pocket cost sharing in Europe). They essentially have a government insurance scheme and you can get private insurance on top. If you are long term seriously ill, the government scheme will pay virtually all costs, getting rid of the co-pays.

The article has the following sentence, "The result: As Congress fights over whether America should be more like France, the French government is trying to borrow U.S. tactics." This is a bit over the top and designed for maximum angst in the comments section of the WSJ, but there is a basic truth (or several) about comparing health systems embedded in the sentence.

When I teach my class in comparative health systems, I give them the following guidance about comparing systems.
*No nation can copy another system, because each system is born and exists in a political and cultural context and at a point in time.
*All the high income nations face fairly similar health problems (heart disease, cancer, stroke, dementia, etc.) and have different ways of addressing these.
*It is worthwhile to look at other systems to get ideas of what is done elsewhere, what has worked, what has not, etc. But, in the end, the U.S. has to figure out a system that works for the U.S.
*It is useful to compare actual per capita expenditures across nations and then to compare outcomes, it gives a sense of whether the U.S. or any other nation gets its moneys worth. I argue no for the U.S. I also note in that link that the percent of GDP spent on health is not as meaningful as it represents a societal value judgment about the relative importance of health spending versus other stuff.
*Every health system is desperately struggling to be able to afford their system. The U.K. National Health Service is about the most bare bones system in the high income world. They spend less than $3,000 per capita and the U.S. spends about $7,500 per capita and the politicians there are desperately worried if they can afford it or not. One note from the graph in the French story a few folks emailed me about, the rate of cost growth in the U.K. is up there with the U.S. the last decade or so. The Blair government set as a policy goal in mid-1990s to INCREASE per capita expenditures on health to try and get them to the OECD median. The biggest knock on the NHS is underinvestment on secondary (specialty) services which leads to waiting lists...so they have been trying to shorten these.
*There are only so many ways to skin a cat. Each nation puts them together in different ways but here are some of the big choices.

Providers: could be civil servants or private practioners who bill insurance whether it is gov't or private insurance. The UK NHS has specialists who are essentially salaried civil servants, but this is atypical. Just about all the systems have lots of public payers with private provision of care.

Insurance: Gov't or private is the big choice. U.S. has big role for private insurance as does Switzerland and Netherlands. There are lots of divergences about private insurance in other nations. In Canada and Japan, private insurance is essentially illegal for something covered by the government insurance or gov't organized sickness funds in the case of Japan. This is similar in Germany, but they allow persons in (roughly) the top 10% of the income distribution to opt out and purchase private insurance. But, if you go out, you are out...you can't wait and get sick and jump back in the public system. France has private insurance sitting atop the public insurance scheme, similar to Medigap insurance in the U.S. The U.K. has private insurance (about 15% of the population) but this is essentially que-jumping insurance. Meaning, private insurance doesn't typically cover GP care. Private insurance kicks in when you are referred for specialty care in the U.K. and then private will finance you to go outside of the U.K. and to avoid (or at least greatly lessen) any waits for care. Interestingly, this is viewed not negatively, but often as taking some heat off the public system. I guess if you have a Queen you are in touch with social stratification and not that surprised by it.

Taxes: Every nation uses taxes to finance health care and there are several choices. Payroll taxes are simple, hard to cheat on, and get everyone to pitch in at least something (they are typically viewed as regressive; this is the negative statement of the positive that everyone pitches in something because they are first dollar taxes). Japan and Germany use these very heavily, the U.K. doesn't use these for health care, the U.S. uses these for Part A of Medicare, etc. Income taxes are progressive, meaning lower income are not taxed. U.K. uses this almost totally, U.S. uses this to help finance Part B of Medicare, Canada uses these in mixed fashion with payroll and other taxes.

Consumption taxes: Sales, VAT, sin taxes, etc. are uses by all nations to fill in the blanks...some Canadian provinces use these heavily to raise the provincial contribution for Canadian system (which has been risking over time...federal mandate, provinces work out most of the financing).

Co-pays/point of service fees: Most nations use some of these. The U.K. NHS uses these the least. They have had a organizing statement since 1947: 'free at the point of service, resources distributed based on need.' There are a few examples of fees being brought in at various times and there is a nominal fee for prescription drugs with some groups exempted. Other nations use them heavily such as Japan, where you can pay about 25-30% up to a cap if you are less than 70 (after 70 almost no cost sharing). France has out of pocket fees, Canada has differences across provinces, the U.S. obviously uses these, even in Medicare with a hospital deductible, and cost sharing for both part A and B financed services.

That is more than I meant to write.

Friday, August 7, 2009

Column in Today's News and Observer

Today's column in the News and Observer is on malpractice reform, and its role in helping develop a consensus reform plan. I focus not only on some policies related to malpractice, but the fact that I see this issue as key to get doctors on board and engaged in a changed system that has a hope of reducing cost inflation. Some additional reading resources if you are interested:

*My colleagues from Duke, Frank Sloan and Lindsey Chepke have a book Medical Malpractice, published in 2008 by MIT Press. Very detailed discussion of the policy options regarding dealing with malpractice.

*Several key papers that form the background of what is in the article, much of it published by David Studdert, Michelle Mello and Troyen Brennan.

**2006 paper in New England Journal of Medicine that is the source of the finding that 4 in 10 lawsuits filed did not have an error in care provided.

**2004 paper in the New England Journal of Medicine that provides a comprehensive overview of the literature, including the finding that only 2% of all true negligence results in a lawsuit.

**2003 paper in the New England Journal of Medicine that has a nice historical discussion of the cyclical nature of the malpractice insurance premium crisis, including the factors that have nothing to do with actual claims experience.

*Institute of Medicine report from 1999 To Err is Human, altered the discussion away from only being on focused on a malpractice crisis, and to there being a patient safety/quality crisis. This report estimated that 44,000-98,000 persons died of medical errors annually, which would make it the 7th leading cause of death in the U.S. Update of this report from May, 2009 is here, published by the Safe Patient Project, an effort of the Consumers Union. Here is someone saying the IOM overstated deaths due to errors. Even if they were off by a factor of 10, then that is still about 25 people per day dying due to medical errors in the US.

*The Harvard Medical Practice Study has produced many papers over the past 17 or 18 years on the topic of malpractice. This is a key study because it had completely overlapping data on the legal system and the medical system. Probably the most important paper from this study is here (original source of 2% of negligence resulting in a claim) with a reprint of it here. There are many others.

Thursday, August 6, 2009

On the home front

Health care costs are rising faster for Duke employees this year than in any year in recent history, up 9-13% from this time last year, or about quadruple inflation.

What if the umpire is wrong?

When I was about 10, I had a vivid experience in Little league baseball that I can remember like it was yesterday. I got called out on strikes, and I argued with the umpire, telling him the last pitch was not strike 3, that it was a ball. After listening to me for a bit he said something I will never forget. "Son, it is nothing until I call it. Go sit down."

Doug Elmendorf, Director of the Congressional Budget Office (CBO) is the umpire for health care reform. There needs to be an umpire in Washington for these sorts of things, and CBO has a pretty good track record and is typically fairly conservative (and both Democrats and Republicans eventually get angry with CBO for not seeing things their way).

Steven Parente, a Professor at the University of Minnesota, who was a health policy advisor of Senator McCain's has an op-ed on scoring of health reform proposals here. Basically, he (and his consulting company, HSI) has his own 'scoring' model and he says that his is better than CBOs model, because it incorporates more recent data on the uptake of high deductible health plans in the private market that have become more common over the past 5 years or so. Now, there is nothing academics like better than dueling models (mine is better than yours/is not/is so) and they typically end in something like 'your mama.' As they say, when the stakes are low, the politics are vicious. But, the stakes are really high for this, because the CBO scoring of congressional bills has been very consequential in changing the debate. If you recall, when the Senate HELP committee bill came out mid-June, the CBO scoring estimate was devastating, and showed on a modest increase in insured persons of around 20 Million folks. Back to the drawing board they went.

Well, Parente's model said the HELP bill would insure about 47 Million people, or about 99% covered. In other words, if CBO used his model, then the headline if June would have been 'US on the Cusp of Insuring Everyone.'

His op-ed focuses on the cost of all the bills....meaning, he notes that cost estimates for the Democractic reform bills are much higher than CBO says, but that is primarily because he says they will cover many more people. He doesn't make this clear in his op-ed, which is an omission, I think. It makes it seem as though the Dem bills will just cost more to cover same number of people, but his models say they will cost more because they will cover many more people.

Of interest for folks in NC, he has a new score of the Patients' Choice Act, co-sponsored by Senator Burr (R-NC) which says that it will cover about 34 Million folks. Now, CBO hasn't scored this Act yet, so we can't compare CBO score vs. the HSI score. He also has a recent re-score of the House Tri Committee bill, that he says will cover about 40 Million people, many more than CBOs estimate.

It is clear that the HSI scoring model has much more behavioral action (insuring uninsured persons) than the CBO model. Which is correct? I have no idea. But, Parente notes that his model outperformed CBO in forecasting uptake of high deductible plans over the past few years...so he really is saying his model is better.

Here is a list of peer review papers that Parente and colleagues have published, many focused on health savings accounts and high deductible health insurance plans, which is their thing. Macro forecasting is not my thing, so I am not sure what to make of the differences between Parente's model and CBO, but they are big differences.

Research and Policy

Everyone says they are for evidence based policy, but it can be tricky because sometimes it goes against the accepted consensus. The New York Times has a story about vertebroplasty, a procedure that fills small cracks in the spine with cement. It has been widely used, but never subjected to a clinical trial--whereby people are randomly assigned to get the treatment and a placebo. This trial found that people getting the procedure were no different from those getting placebo in terms of pain and function. Medicare has long covered such procedures, with doctors and patients deciding whether to use the procedure or not. There are calls for no research...in fact, it was hard to do the study in the first place because many people just assumed the procedure worked, so were not willing to sign up for a clinical trial in which they could be randomly assigned to placebo.

Physicians have an obvious incentive to keep doing this as they get paid to do so. And apparently many patients swear it helps them. That benefit just couldn't be documented in the gold standard way in which medical science operates. For the time being, Medicare will continue paying and private insurance will follow the lead of Medicare. A case study of how hard it will be to actually use evidence based medicine to inform treatment coverage decisions....and also how it is the only way we have a chance of controlling health care costs.