Healthcare Efficiency

YES!

Thu, 19 Nov 2009 02:55:15 GMT

Always nice when someone agrees with you, particularly when they have never read what you wrote. Washington Post columnist Fred Hiatt did that on 26 Oct. In the second paragraph, he says that if Congress passes a new entitlement (healthcare for the uninsured) without reforms to reduce costs, “it will bankrupt us.” That may be a bit strong, but not by much. Healthcare costs are indeed rising faster than the economy. And since the economy is where we get all that tax money, we’ll be shelling out more for our new healthcare entitlement that we are taking in with new tax revenue.

In a subsequent piece, he again cites the high cost of the current House proposal and the lack of cost controls. He also mentions an article by Ceci Connoly listing unhappiness by various parties over the lack of effective cost controls.

The administration’s approach to cost control seems to be to move from a fee for service system to “a coordinated system that pays doctors and hospitals for doing better.” Huh? Sounds like smoke and mirrors to me. Something put forward by those who don’t want anyone to address the cost of healthcare. Was it Gypsy Rose Lee who said, “Promise them everything, but give them nothing.”

There is mention in several of these pieces about taxing health insurance premiums as a means of controlling cost. Maybe someday, someone will explain to me how that is supposed to work. If you tax my health insurance premiums, that will certainly bring in additional tax revenue, but I fail to see any connection with the cost of healthcare. One thought behind many of these schemes is that if you shift more of the cost to the patient--make healthcare more expensive for patients, they will order less of it. This, despite several studies showing that life doesn’t work that way. Patients who can’t afford healthcare do indeed postpone or defer care. However, they defer necessary care as part of that decision, which makes their ultimate care more expensive. I’ll let you in on a little secret: I hate getting healthcare. Have several times defied recommendations by competent practitioners and done nothing in the face of a disapproving stare. My only regret is not doing that more often. I spent my life in operating rooms, and there is nothing you could say or do to convince me to have another operation if there is any other alternative. OK. Are we clear on that? So making healthcare or health insurance more expensive for me will not change my behavior. I am perhaps unusual in my patient role in that I’m more comfortable with telling the surgeon, “No, I’m not going to do that.”

The central theme of Fred’s piece is that the “public option” will allow politicians to avoid any real cost control within healthcare by pointing with pride to the enhanced competition in the insurance market. Insurance companies have many problems, but they do not control the cost of healthcare. Increasing competition among insurance companies may shave pennies of global healthcare, but it will not bend the curve. If you want to reduce the cost of healthcare, you will have to reduce the cost of healthcare. In fact, inducing more competition among insurance companies might make them worse, if that’s possible. Remember, insurance companies make their money by denying payments. One personal example: my grandson was attacked by thieves in his college dorm room. Guys with guns who broke his jaw but didn’t kill him. The insurance company denied his claim, saying that his broken jaw was a pre-existing condition. Stop laughing. It’s true. And the University of Virginia is still using the insurance company.

Healthcare costs could be reduced by creating competition among providers for individual healthcare services. That’s my story, and I’m sticking to it. The odd thing about this is that everyone would win. Find me an industry where increased competition hasn’t brought better service, improved products, lower prices, and happier employees. This could work in healthcare too.

Have you been following the news lately? A government panel decided that we could save money by not doing as many mammograms. Start at 50, not 40, and every other year. We can also stop at age 75. No one dies of breast cancer after age 75, do they? If you look at the panel members, it’s not clear that any of them has seen a patient in the last 10 years--or ever. They are mph types--good people, but just focused on populations, not individuals. One good thing that may come out of this is to put a nail in the coffin of “comparative effectiveness research” That’s the government panel that will make recommendations on all sorts of healthcare tests and procedures. Like the NICE panel in England, these folks will decide what’s cost effective for patient care, and the insurance companies will adjust their payments accordingly.

Tomorrow, the Senate unveils the Harry Reid plan. I’ll be there.

PERSPECTIVES

Sat, 14 Nov 2009 14:34:25 GMT

We are bombarded with suggestions that the U.S. healthcare system is somehow inferior to just about any other country on a variety of indicators. As has been pointed out here before, many of these “indicators” have nothing to do with healthcare, per se, and more to do with public health issues like clean air, clean water, etc.

In a 2006 Health Affairs article , Cathy Schoen, et. al. present a National Scorecard with comparisons to other countries on various indicators. In a paragraph about Outcomes, they state that the “goal for the health care system is its capacity to contribute to long, healthy, and productive lives.” While that sounds laudable, I’m not sure the average American physician would have these goals posted in his office. The authors note that the U.S. ranks last on the list of infant mortality whose leaders were Iceland, Japan, and Finland. Note anything odd about the leader board? They are relatively small countries with homogeneous populations. For longevity, the U.S. is tied for last with Portugal, Ireland, Denmark, and the Czech Republic. Something odd here, too. Denmark is frequently cited as having an exemplary healthcare system that the U.S. should emulate. Could it be that longevity has little to do with the healthcare system in the country? Maybe genes, personal habits, and environmental factors play a dominant role.

A December 2009 article in Health Affairs looks at Cancer Screening in the U.S. an Europe, and here, the U.S. does quite well, despite our decentralized system of care. The U.S. average for mammography of over 77% outpaced the average for Europe of 46% and the best of Europe, Austria, at 70%. And others were far behind. Denmark? Try 20%. In the age-based table, it is interesting to note how rapidly the statistics fall off in every country except the U.S. After age 64, breast cancer just isn’t important anymore--except in the U.S. As a further testament to the efficacy of our healthcare system, we have the highest five-year survival and a lower mortality from breast cancer. Because we try. Because our system is designed to do that. Ask if a government run healthcare system would be so interested in the individual patient.

And colon cancer? Well, at 60% (age 65-74) we beat the European average of 26% and edged out their best country (Austria, again) at 57%. Similar statistics hold for PAP smears (55.5% for the home team vs. 48.9% for Europe) and for use of the PSA test for prostate cancer (42% vs. 27%).

Yes, there are some footnotes, and the differences may not always be so dramatic, but in the end, we do well on any screening test you can name and better in taking care of patients who have the disease.

There is also a suggestion that U.S. patients may be “overscreened.” The challenge of any screening test is to avoid negative tests while picking up all the positives. If you have an answer to this, the world is waiting. When I was a kid, there were mobile chest X-ray machines in every shopping mall to look for Tb. Perhaps someday, we will talk about mammography in the same way. But for now, it’s better to live in the U.S.

Because of our aggressive approach to screening, we find more problems and find them earlier. “People living in the U.S. are much more likely than those residing in Europe to receive treatment for or to have been diagnosed with hypertension, high cholesterol, cancer, mental disorders, and diabetes.” Overall, that seems like a good thing, but we need to look harder at preventive measures, especially those that are under the control of the individual. It’s called responsibility.

TwoAtlantics

Sat, 07 Nov 2009 21:02:46 GMT

Just returned from sailing on one Atlantic and reading another, with lessons for healthcare from each.

Cunard is no longer merely driving ships across the Atlantic. There are hotel and entertainment functions in their business that have, in fact, acquired a dominant role. There is certainly a hotel function in hospitals, and some have contracted with hotel chains to operate this aspect of their operation. Entertainment? Think broadly. Do hospital rooms have TVs? How about waiting rooms? Magazines in doctors offices? Do we take advantage of these opportunities to educate and inform as well as amuse? We know the diagnoses of the patients, but how about their families? Some companies pay employees to take personal health surveys. Could we provide that within the healthcare system itself for a captive audience? Think of it as marketing--making prospective customers aware of needs they didn’t know they had.

When you check into a hotel, you get directions with your room key. It’s automatic. “The elevators are behind you.” Do visitors to a clinic or hospital receive such instructions? I once worked in a clinic that had a sign at its main entrance: “Hard hat area. Do not enter.” Now there’s a challenge.

How far is your reach? Cunard arranges transportation to/from NYC airports to its ship. I once visited a large outpatient facility that started a bus line to address problems with no-shows in their clinics.

Is anyone watching? Does anyone care? With multiple stations in the breakfast area, everyone was moving, except my wife. The manager approached her, “Can I find something for you?” In your healthcare setting, is anyone watching the lines or waiting rooms? Fixing problems? To the patient in the recovery room:
“You look like you’re having pain.”
“I am, but how did you know?”
“Because it’s my job to know.”

As we approached the dock to board ship, there was an unloading area for limos and another for taxis. The limo area was empty, but the taxi line stretched back several blocks. Where was the manager when you needed him?

Healthcare afloat. There is a small clinic on the QM-2 with a physician and 3 nurses to care for about 3,000 passengers and 1,500 crew. The Cunard clinic system is accredited by an organization comparable to the JCAHO, but they are also registered to ISO 9000. Why ISO? The physician was a great fan and explained, “I move to another ship every 3 months, and they have the same systems of care everywhere. Same paper work, same procedures. So I can step into any clinic anywhere and feel comfortable. The nursing staff also change, but they all use the same procedures.” The system also has standards of care, so patients receive the same care on every ship in the Cunard system.

The Other Atlantic http://www.theAtlantic.com published a special report in their September issue about healthcare. The article begins with the needless death of the author’s father, and extends to a perceptive analysis of the U.S. healthcare system. He wonders rhetorically, why a hospital with state-of-the art equipment uses “less sophisticated information technology than my local sushi bar.” Why does an environment that should be concerned about cleanliness allow trash to flow “onto the floor of a patient’s room.” At one point, he blames the perverse incentives that “favor complexity and discourage transparent competition on price or quality.”

If you want to pick one thought from this work to transmit to our leaders, it would be: “To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy.” That’s it. My translation would be, “If you want to provide healthcare for all at a price we can afford, healthcare will have to be run like any other business.” That means an open market, with competition among providers on individual healthcare services.

This simple thought has the potential to solve all the problems in our system, if you follow the ramifications. On health insurance: “is the primary payment mechanism not just for expenses that are unexpected and large, but for nearly all healthcare related expenses.”
“Physician supply begets patient demand.” Numerous studies have confirmed this--the more doctors per capita, the more tests and procedures get ordered. Perhaps we could lower costs by closing a few medical schools, as dentists did after fluoride conquered most cavities. He goes on to analyze other aspects of our healthcare system and offer suggestions for correction of obvious errors.

The payment system is, of course, absurd. A White House paper pointed this out before I was in medical school, with the comment, “One person orders the care; another delivers it; another receives it, and yet another entity pays for it.” Even then, this was recognized as a problem. Perhaps the fact that nothing has been done indicates that nothing will ever be done to solve it. Of course, not everyone sees this as a problem or desires a solution. Just look at who benefits from the current system.

Goldhill makes an interesting observation that “The average insured American and the average uninsured American spend very similar amounts of their own money on health care each year.” And he goes on to make the point that the balance is paid by everyone, thru insurance premiums, or taxes, or reduced wages to pay for the employer portion of the insurance premium.

One of the problems, as he points out, is that our healthcare industry is not competitive, in spite of the large profits made by drug companies, insurers, and large providers (like the Mayo Clinic). Generally, high profits would inspire more entrants to the industry. But without competition, there is no way to acquire market share. No basis on which to compete. Indeed, as Gawande pointed out for McAllen, TX, the bill to the taxpayers is limited only by the ability of providers to convince patients to undergo tests and procedures. The price is fixed.

It is not possible to summarize this thorough and thoughtful article. The depressing fact, however, is that the obvious remedies presented will never be enacted, because doing so would require action by Congress. The primary goal of every Senator an every Representative is to get re-elected. Doing so requires money and votes, both of which come from constituents. Prominent among these constituents are representatives of the healthcare industry who would not take kindly to any change in the way they do business. It thus seems that we are doomed to incremental and meaningless “reforms.”

The current health reform legislation being voted on in Congress contains nothing that would reduce the cost of individual healthcare services.

Us vs. Them

Sun, 18 Oct 2009 21:00:34 GMT

It’s a popular sport these days to look for a model for a new U.S. healthcare system. Well, any “system” would be new, but that’s not the issue. Some look to Canada, but European countries are popular targets. Interesting that no one has proposed Mexico or Puerto Rico tho these are popular medical tourism destinations.

It’s fairly easy to make the U.S. look bad by choosing your metrics and then tout your personal preference for a perfect system. When evaluating such articles, it’s important to look carefully at the metric and ask first if this has anything to do with the healthcare system. Infant mortality, for example, has more to do with whether the mother receives care in the first trimester, at all, and less to do with the type of care she receives. Or just take life expectancy in general. Largely determined by genes, personal habits, and environmental factors. Cardiac care has some impact, but the rest of healthcare can be ignored. One technique for evaluating these statements is to look at the company we’re in. On life expectancy at age 60, for example, we rank near the bottom, with Portugal, Ireland, and Denmark. Denmark? The Danes are frequently cited as having an ideal healthcare system.

Another question for the thoughtful reader is to ask if they have a national healthcare system. That would explain why the comparison country (Sweden, Denmark, UK, Finland) has an electronic healthcare record system. Some bureaucrat issued an edict, and presto! In the U.S. electronic records have to make economic sense, and that case has yet to be made except in closed panel HMO systems.

A2006 Health Affairs article states that “59% of children needing mental health care receive treatment.” OK. Who says so? Who defines “need,” and what bad things happened to the other 41%? Actually, I think all children over the age of 12 years need mental health care, so maybe that figure came from someone like me.

That same cynical skepticism can also be applied to any discussion of “quality” of care. Quality is always a risky value judgement. There are some tests or procedures that everyone recognizes as generally beneficial (mammograms, colonoscopy) and some that are disease specific (blood pressure in hypertension, FBS in diabetes). Others are controversial (PSA for prostate CA),and it’s not always clear who’s job it is to talk to the patient about the need for this or that. Is this family medicine or do we need a “medical home?”

Here’s a URL for you: www.healthpowerhouse.com. This started as an effort to measure the quality of healthcare in different parts of Sweden and spread to include all of Europe. The focus began with consumer interests, but the index now includes data on almost every aspect of every healthcare system in Europe. Included are data on supply of physicians, cost per citizen, expenditures as % of GDP, life expectancy, etc. The U.S. doesn’t contribute, but Canada does. And for the record, Canada compares “reasonable well” with Europe on outcomes, average on generosity, and “at the absolute bottom” on waiting times, availability of pharmaceuticals, and a “bang-for-the-buck” index. (Luxembourg is the champ in this latter category.) Denmark is best overall and scores well in almost every category. Their life expectancy is 76 (male)/81 (female)vs. comparable figures for the U.S. of 75/80. DK spends 9.5% of GDP on healthcare vs. 15.3 for the U.S. Since the U.S. doesn’t contribute, the figures for the U.S. are derived from other sources.

Cost per citizen range from $400 (Albania) to over $4,000 (Norway). The comparable figure for the U.S. is just over $7,000. Trivia question: What country in the world has the highest per capita income? (Hint, it isn’t the U.S. Another hint: it was named in the first sentence here.)

Two other interesting sources of comparative data: The World Health Organization (www.who.int) and the Organization for Economic Cooperation and Development (www.oecd.org). Some U.S. data are listed on these sites, especially for later years. For example, we have 2.43 physicians per 1,000 population (2007). This compares to 1.96 for Mexico, and 3.17 for Denmark. One factor that is not obvious in these data is the amount of healthcare by non-physician providers. Sorting countries by number of physicians per 1,000 doesn’t produce a list of where you’d want to go for healthcare. More physicians doesn’t equal better healthcare. There’s probably a minimum, but more isn’t better. And judging from the company we keep on this factor, our healthcare would not improve if we had more doctors. But it would probably get more expensive. One of the themes of the Dartmouth Atlas is that healthcare is supplier driven. More providers means more healthcare, and consequently more money spent on healthcare.

So where do we look for a model for healthcare reform? Like so many things, it depends on where you want to go. If you want to limit expenditure, Albania is your model. Actually, any system where the government owns all the hospitals and all the providers are employees of the government is pretty good at limiting costs. They also limit services, so a shift in that direction would be difficult politically in this country. We do have examples of such systems here: the Veterans’ administration and the Indian Health Service. Both have their virtues. The VA, for example, is the poster child for patient safety in hospitals. The IHS does well at providing comprehensive care in remote locations. And neither involves any insurance companies. We also have models where the means of production are entirely owned by a single entity--closed panel HMO’s, such as Kaiser and Mayo. Mixed results, tho there are some virtues here. Kaiser is an option in the Federal Employees Health Benefits plans, and not everyone chooses it. That’s a message.

None of the systems or countries mentioned employs any system to encourage efficiency in the provision of healthcare services. The current situation in the U.S. is perhaps the most wasteful, tho there are some arguments to the contrary. At least, most agree that we could do better. But “better” at what? Remember, we started talking about reform with two goals in mind:
healthcare for everyone
reduce the total amount spent, particularly for Medicare.

Congress hasn’t yet embraced either of these goals.

Are We There Yet?

Thu, 15 Oct 2009 01:53:40 GMT

Are we there yet?

The answer depends on who you ask and how you define “there.” A bill did pass the Senate yesterday. And it does some of the things some people wanted done. Before that becomes reality, however, it must be reconciled with the House version, and that’s where the interest groups are focusing.

Even before the Senate vote, the insurance industry indicated their dislike for the current version by releasing a report that said insurance costs would go up if the bill passed. That, of course, is a no-brainer and unrelated to any specific bill. Costs are going to go up, regardless of what the law looks like.

For one thing, there is strong indication that the feds will tax insurance premiums by taking them out of after tax income. That means you will pay tax on the money before you pay your insurance premiums. Some may even be forced into a higher tax bracket by this added income, which they never see. Oh well.

For another, there is agreement among thinking folks that Medicare Advantage is a rip-off. So the feds will stop subsidizing care for that part of the insurance industry. If you’re currently in a Medicare Advantage program, expect to pay more.

True enough, there is nothing in the bill to address the costs of healthcare. The Congressional Budget Office would not offer an opinion as to the financial implications of the bill, saying it is to complex to evaluate at present.

Much was made of the lone Republican vote for the bill from Sen Olivia Snowe (R-ME). However, the vote was 14 to 9, so they didn’t need her. And Republicans were vehement in their condemnation of the bill. So no hint of a bipartisan effort here. the President’s assessment: “. . . not perfect.” And later, “We’re not there yet.” Maybe it’s a good sign that this is a bill that no one likes.

There is, in fact, a competing bill that emerged from the Senate health committee, and the task for the Democrats now is to merge the two while maintaining enough support to pass the result.

There is a mandate that everyone must have health insurance. If not provided by your employer, you must purchase it. That’s where the insurance exchanges come in. Maybe. There is, however, no mandate that employers must provide coverage--something for unions to hate.

The effort to cover everyone is behind a big expansion of Medicaid--something for states to hate.

And what about tort reform? Not much for anyone to like, except for the things that weren’t there. Some thoughts of creating panels to review cases before they go to trial, but the plaintiff doesn’t have to accept the panel decision and can come back and sue anyway. And, most important, nothing to fix the problem. In our review of uh-oh’s, we consider three questions:

Was what happened OK?
If not, what should have happened?
What must we do to make this happen next time and every time?

The tort reform provisions in this bill do not answer any of these and do nothing to prevent the same undesirable outcome from happening again. It’s still a matter of “how much must I pay you and your lawyer to shut up and go away?”

In the end, however, it’s mostly symbolic. Malpractice--including “defensive medicine”--plays a miniscule role in healthcare finance. Still, it would be nice to do the right thing.

“Are we there yet” isn’t really the right question. We should be asking “Will we ever get there?” And maybe, “Where is there, anyway?”

Getting it Right

Mon, 28 Sep 2009 03:20:24 GMT

In William Brody's first sentence, he nails the issue with healthcare in the U.S. "the escalating cost of care." He also identifies the biggest obstacle to fixing it: Congress. Lawmakers are much too vulnerable to lobbyists to make intelligent decisions. They value re-election above all else, and see campaign contributions as the key to that goal. I asked a Congressman directly last week if he would support price competition for healthcare services, as Medicare had tried to do for medical devices. He quickly pointed out that the previous effort by Medicare had disadvantaged a firm in his district, so he didn't want to try that again. Hard to tell a Congressman to do something that would cause him to lose both money and votes. That would require both leadership and courage. Next time you see those two traits together on Capital Hill, call me. Brody talks briefly about drug costs and how generic drugs would be cheaper, if only Congress would allow Medicare to promote their use. And also about how Medicare patients are falling behind the curve as healthcare costs rise faster than Medicare reimbursements. One result is that practitioners increasingly refuse to accept Medicare patients (or any other insurance, but that's another story). His remedy for this is, of course, to take Congress out of the decision-making arm. Let them appropriate money, but appoint another federal agency to make the tough decisions about how it is spent. He compares his idea to a Federal Reserve System for healthcare. Certainly, the failure of most city hospitals has come because the city fathers couldn't keep their hands off the tiller and out of the till. So, handing of management responsibility has some appeal. But somehow, I just don't see Congress agreeing to this. Not quite sure what the problem would be, but, you know, all that money, so close, . . . . And then some constituent would call to complain that they weren't getting enough reimbursement. Actually, Congress isn't all that good at appropriating money either. They still haven't passed a budget for the government this year, so things will run on a series of continuing resolutions for awhile. The more serious problem in the long run is that Congress would just cut the appropriations for healthcare as a way to save money. That's what the Canadian government does, and then leaves it to local governments to run the healthcare system. In the end, tho, he's absolutely right. "We must provide ways to effectively manage the costs of care." He might even be able to get wide agreement on that statement. Unfortunately, there is no agreement yet on how to bend that curve.

Distractions

Tue, 22 Sep 2009 02:46:22 GMT

As the health reform debate moves to the final round, it's important to remain focused on the goal. There are numerous other issues seeking to divert our attention from the key goals of the effort. There were two:

1. Healthcare for the uninsured.

2. Reduce expenditures for healthcare in the U.S.

Clarifications:
1. Many decry the fact that there are uninsured people in this country. In our culture, healthcare equates to health insurance, so those without insurance have trouble getting care. With all that we have, surely we could provide healthcare/health insurance for everyone. So for a variety of reasons, one goal of health reform is healthcare (insurance) for everyone.

2. For a perspective on the expenditure problem, reference Peter Orzag's work, particularly his writing about Medicare. Given the current trajectory, Medicare will consume all of the discretionary spending of the federal government in the foreseeable future. Not good, so this is a worthy goal.

Unfortunately, there are many distractions on the way to reform. Some are peripheral issues that are indeed important but not related to the key goals, above. Some are created by opponents of any reform who seek to delay the process by offering distractions that divert attention from the key goals. Here is a partial list:

1. Abortion. Sorry, this was never on the agenda. It's a legal part of healthcare and doesn't consume large amounts of money. Forget it.

2. "Lies." Sorry, the current legislative proposals do contain wording to prevent reform money from being used to provide healthcare for illegals. Reasonable people might argue that there are no provisions for enforcement, but reasonable people don't shout insults in a public meeting. Besides, the rules for enforcement are typically written by the Secretary of the relevant bureau (in this case, HHS) after the legislation has passed. And that usually after a period for public comment. Besides, there are some compelling arguments that illegals should have healthcare. These are the folks who wash dishes in the restaurant where you ate last nite or drove the taxi you took from the airport. Don't you want to know if they have Tb?

3. Technology. viewed by some as a key to paying for reform. Buzzer! Last time I looked, IT cost money. Big money. Many advantages to electronic records, but if it were truly cost effective, everyone would be doing it already. Lots of clever and convenient tricks, but saving money is not one of them. My history with IT goes back to mainframes and Hollerith cards, and I love it. Don't oversell it.

4. Insurance. A complex issue here. Insurance reform will be part of any solution, but it is NOT the problem. Yes, insurance executives do some pretty egregious things (I hear they can't shave in front of a mirror), but insurance, per se, tends to mimic costs of healthcare. And that's the problem. Healthcare costs too much. Bring down the cost of individual healthcare services, and you should see the costs of insurance fall, particularly if we allow competition across state lines.

5. Prevention. Nice idea. I'm all for it, but it doesn't save money. Some still think it might in the long run. Maybe. One current idea is targeted surveillance--only do the tests in high-risk groups. Anyone for genetic testing here? With a family history of colon cancer, you may rate a colonoscopy. Otherwise, fecal occult blood will do. Yes, we'll miss a few, but that's statistics for you. From a population health standpoint, it doesn't pay to test everyone. However, if you have enough money, you may want a colonoscopy every 10 years and be willing to pay for it yourself.

6. Bundled care. Your views on the package deal approach depend on where you where you sit. Those in closed panel HMO's (like Mayo or Kaiser) love the idea. They are better able to take advantage of it, since they own the whole production line. Otherwise, it's a hard sell. Will it save money? Not clear. Mayo and Kaiser will try to make sure that doesn't happen. Possibly a partial solution in some local areas, but not an easy fix for the system.

7. Disparities. The idea here is to take the Dartmouth atlas and make every community look like the low cost areas they have identified. What they don't say is that the unit cost of healthcare services doesn't vary that much. Some areas just provide more care than others. Gawande's article drew attention to McAllen, TX as a high cost area, and yes, the cost per resident is very high. But the utilization is also very high. The unit cost is reasonable; they just do a lot more healthcare in McAllen, TX. Reducing the amount of healthcare provided would certainly reduce the total expenditures. That's what rationing is all about. This is what HMO's did in their early years. Certificate of Need laws were based on this philosophy--rationing resources. They didn't work and have been abandoned in most places. CON laws are anti-competitive and thus subject to graft and corruption. Some countries limit the number of providers. A U.S. physician can't just move to another country and set up practice. We might try closing a few medical schools or limiting the number of residency slots in surgical specialties. Those would be popular ideas.

8. Disease management. Another in the list of promising ideas that sounds as if it should work. I was sold. The thought is to teach patients how to manage their own chronic disease (diabetes, asthma) and do this with low cost providers. The needs for expensive healthcare services would thus be minimized and costs would go down. But they didn't. Maybe we're just doing it wrong. At any rate, it's not a magic bullet.

There are others, and I may revise this posting from time to time.

Looks like nothing works! What can we do! Well, if I were King, . . . . no, you wouldn't like it. No one would. That's what makes reform difficult.