POLICY/POLITICS: New York Times, dogs, pustilent sores, licking of.

After the previous three times, I don’t think I can bear it.  This time David Leonhart has written a NYT article saying that the reason we spend more here is because of American culture. This may be the most moronic sentence of the whole series of articles:


We Americans” are somehow are magically controlling the spending, apparently over the objections of  “insurance companies, the government, doctors and the pharmaceutical industry”

He’s supposed to be the economist. Does he have no idea who controls health policy and health care spending in this country?  For chrissake, the government here more or less represents the “insurance companies, the government, doctors and the pharmaceutical industry” and their interest is in spending more, not less. “We Americans” did not get a seat at that table, unless you count patient groups that also have an interest in higher spending and are co-opted by industry. Any high school senior doing a basic political science class  who read the cliff notes on Stigler’s theory of capture can tell you how that works. But apparently you get to miss that class, or Econ 101 if you want to write on health care for the NY Times.

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  1. So I think we agree that there are multiple factors and not just an “American Attitude” involved. Mostly there are the wrong incentives – for demanding more expensive treatments, ordering unnecessary tests, for raising insurance premiums, for suing, for not making safety a priority. Changing the incentives is the challenge and I think most physicians would rather be paid on the right incentives that just financial or defensive ones. Being paid for outcomes would be the right incentive once we figure out how to do that. Regional differences need to end.

  2. I have been lurking for a while and wish to gain some insight into the statstics presented by Michael Watson. How accurate are the numbers presented? 190,000 deaths from Hospital related errors and 1.5 million injuries from medication errors. From my own experience most medication errors go unreported and or not recognized. Could these numbers be grossly understated?

  3. Jack,
    “Tom, I couldn’t agree with you more that MedMal is a distraction. Insurance companies are increasing premiums because they can, and they need to in order to make up losses in other segments of their market. Malpractice costs have remained at .5% of overall health care spending.”
    See comment #10 in this thread for a doctor’s perspective. For the record, comments from “BC” are mine.


  5. First, my thanks go to Michael Townes Watson for proving again that the quality of information found in books isn’t necessarily better than that found on the internet.
    Second, the whole MedMal thing is a distraction. Premiums amount to 2% of the spend. We have bigger fish to fry. Like coming up with better insurance contracts regardless of who pays the premium.

  6. Jack — The shades of grey would be where the specialized courts earn their keep. If I’m a doc going about the daily business of practicing medicine, it would make a huge cultural difference, I believe, if I can be confident that any dispute I become involved in will get an honest, fair and objective hearing by judges with expertise in this area of the law with input from neutral medical experts hired by the court as compared to a slick tongued plaintiff’s lawyer trying a case in a judicial hellhole before an ignorant jury whose emotions can be manipulated to make an outlandish monetary award for what is often sound medical practice that happened to produce an adverse outcome. If the doc has confidence that the system will treat him or her fairly, the need for defensive medicine in the form of redundant and unnecessary tests should be reduced significantly, in my opinion.

  7. Jack,
    I absolutely agree that this decision would fare better under a specialized health court system without juries. In the case of my example, the question for the panel would be: Was the doc’s decision based on sound, reasonable and prudent medical practice which should explicitly include consideration of costs vs benefits from a system standpoint and not just the individual patient standpoint. It also makes a big difference when we are talking about allocating society’s finite resources financed by all taxpayers vs an individual choosing to spend his or her own money. Just because some people can afford to pay for such a test out of pocket and some can’t should make no difference in this context.

  8. I probably would disagree that he would forego the test if a family member was at risk, though he might if he were paying the $1000. But I just don’t know how you are going to set limits under any scenario. Reasonableness to one person is surely different for another (as you and I have found out). But I think this scenario would fare better under a three-physician medmal board as opposed to a 12 man jury. Thus one would have to wonder whether physicians would take more or less chances in their ordering.

  9. Jack,
    I think you missed part of my point on the culture of defensive medicine, probably, because I didn’t explain it very well. In the case of the MRI where the physician has no financial stake, assume his assessment is that there is only a one in 10,000 chance that the test will show a serious problem (like cancer), and all the other test results will be normal. The test cost $1,000 each. If insurance (or taxpayers) pays for it all, that means we would spend $10 million to catch one cancer early rather than late. The doc knows implicitly that this is a poor return on investment and would not recommend it for his own family member if he were paying the bill. Due to the culture of defensive medicine, however, the bias is to do the test. There is nothing to prevent a risk averse patient from digesting this information and deciding to pay for the test himself out of pocket. However, in a world of finite resources, society has to set some limits, and the culture of defensive medicine is not helpful in that effort.

  10. In the example of a physician ordering an MRI in which he has no financial stake, but doing so “just in case,” I don’t have a problem with that, Barry, because physicians never know until the results come back whether the test he ordered was necessary or not. I only have a problem when physicians set up expensive testing facilities in their clinics and use them as cash cows. There is absolutely zero reason why physicians cannot refer their patients for testing in hospitals and labs in which they have no financial interest. As we’ve discussed before, unnecessary testing is not just costly, it can also be dangerous to the patient. If physicians are going to order a test I want it to be because it is prudent, not profitable.
    Thus the issue is not the ordering of the test, it’s whether there is a built-in conflict of interest.
    As I’ve stated above, we are in full agreement on special health courts. I also believe that if there are any punitive damages over and above the patient’s out-of-pocket costs, they should go into the health care fund and not the plaintiff’s and attorney’s pockets. Your concern about the trial lawyer lobby is valid, and one of the many reasons I favor publicly funded elections.
    I too would me interested in hearing from the medical side on this issue.

  11. Putting aside the debate between a single payer system, a taxpayer funded premium support or voucher model, and the current employer / Medicare /Medicaid / individual insurance market model with 15% of the population uninsured, there are several issues that impact on the ability of “the system” to reduce utilization.
    First, our current payment system does, for the most part, reward doing more tests and procedures. However, pay for performance metrics are still not very good, and there are huge parts of medical care that just don’t lend itself to it, at least not yet.
    I’m afraid that defensive medicine has a deeply ingrained cultural aspect to it that will be difficult to change or will at least take a long time to alter. Take medical imaging as an example, which is now about a $100 billion per year industry in the U.S.. Assume for a moment that the doc will not benefit from ordering the test and is also financially indifferent to whether he orders the more expensive MRI or the cheaper X-Ray, but he knows the MRI may provide more information or at least clearer images.
    In his gut, he senses that the test is probably unnecessary, and he would not order it if the patient were a member of his own family and he were paying the bill himself. If he does order it, he knows that the bill will be largely covered by insurance. However, if the one in a thousand or one in ten thousand result comes back that the patient has cancer, for example, and he didn’t order it, he is afraid he will be sued when the cancer is discovered later at a more advanced stage. In other words, even though the chances of being wrong are low, the consequences for being wrong are potentially severe. So, his response is to protect against even a small probability of an adverse consequence.
    The combination of patients wanting, demanding, or expecting the most sophisticated treatment and our litigious society drives him to order tests that he really thinks are unnecessary. The fault for this lies with patients’ expectations and our unpredictable malpractice litigation system. If the doc benefits financially, that, of course, drives the system even more toward overutilization. Patients’ expectations and inclination to sue under similar circumstances may be radically different in Europe and Canada. I just don’t know.
    I am not convinced that a staff model with salaried doctors is the answer. If it were, Kaiser would be replicated all over the country in response to customer demand for it. Part of our high expectations includes wide choice of providers and not having to drive too far to get treatment.
    I think if the malpractice system we have now could be replaced with specialized health courts that could bring some fairness and consistency to resolving medical disputes and doctors perceived it as such, it could mitigate their perceived necessity to order the unnecessary or marginally useful test or procedure. Of course, the power of the trial lawyer lobby, especially its influence over Democrats, many of whom are lawyers themselves, will make this fight a long uphill slog.
    I would be interested to hear the doctor perspective on this.

  12. Michael, your points are well taken. We need a medical malpractice system that is fair to the patient – but also fair to the physician and society – and I believe that a qualified three-judge panel should replace the unqualified 12-man jury (in medical malpractice cases only) who most often make their decisions on the basis of who’s the best actor rather than who’s right.
    Barry, I’d believe the defensive medicine argument if it weren’t for the fact that all of these tests done to protect their ass weren’t also profitable as hell. Doctors get paid not only on the basis of how many patients they see, but also on how many tests they order and surgeries they perform. That’s our free market system at work. Defensive medicine is profitable.
    Andrew, we Americans only distrust single payers if they withhold treatments that are physician recommended. I’ve seen little of that in the Medicare system, but even then the patient can pay outside of the system.

  13. I don’t think Canadians are demanding less. But the system there forces better utilization by doctors and government. There are limited resources determined by budgets so medical triage and good practice determines need (or attempts to) rather than financial triage used here. Patients don’t have to go through a government bureaucrat to approve treatment. It’s a constant fight, as all things are, to balance care with spending. We all know that people want the moon when they don’t pay the ticket, so what system seems better able to allocate scarce resources that benefit the most people while controling costs, I’ll take the Canadian system anytime.

  14. As one of those “insurance” people, in “utilization”-I have to say that what I see all day, every day is people driven by the their sense of entitlement to any and all things that are available. It’s not appropriate. It’s wasteful. Just because it’s available does not make it a requirement, nor does it make it any better than standard, less expensive, or even no treatment at all. Does anyone ever think about overuse in general? All things in moderation….antibiotic resistance ring a bell?

  15. “So, the best way to curb utilization is by having only one payer.”
    I disagree. Congress could change the law to specifically allow Medicare to take cost into account in deciding whether or not to pay for a particular drug, service or procedure. If it did so, private insurers would be on solid ground if they opted to not pay for it either. Of course, they could offer policies at higher premiums that would continue to pay for them. For that matter, so could Medicare.
    In addition, CMS could be much more aggressive in trying to get people, especially the elderly, to execute living wills and advance medical directives. There is no question that there needs to be more focus on reducing utilization. At the very least, we must draw attention to the fact that differences between American heatlhcare attitudes and expectations and those of our friends in Europe and Canada, have a lot to do with our higher costs. If we want to close the cost gap, we should expect to take more responsibility for closing the attitude and expectations gap.

  16. I gotta point out that not all you swamis are describing the same elephant.
    And that is also a part of the problem, is it not?

  17. Eric has a point – doctors are not safe to restrict or reduce care – so they don’t.
    But the “fight the supply side” crowd does offer suggestions on how to curb utilization – don’t leave it up to the market! Given the choice, patients will usually think more care is better care. Payers that have to compete for enrollees don’t want the reputation of overly restricting care, and doctors get sued if they “under treat” and something goes wrong.
    So, the best way to curb utilization is by having only one payer. Will “we Americans” be able to trust a single payer, no matter how insulated it is from politics?

  18. Matthew– you missed it.
    Here is the most important sentence in the article
    While there is a very real ‘supply’ side issue, the problem comes with a real demand for treatments.
    The health policy wonks who do not understand this fundamental piece of Americans attitudes about health care are missing a key piece of any real reform— reducing utilization.
    We, in the US, demand much more- and, if we do not get it, we sue. We sue for interpreters, we sue for drugs, and catheters, and transportation, and nursing care, and nearly everything else under the sun. And, often, even usually, we win.
    The ‘fight the supply side’ crowd never offers any real suggestion about how to curb utilization and protect the decision makers (ie doctors) if they follow some as-yet-not developed guidelines.

  19. I think Matt is right on target. Maybe some of you just haven’t gotten sick recently to understand how our system works. A perfect example is the new Cyberknife treatment for tumors.
    The CyberKnife® System is the world’s first and only intelligent robotic radiosurgery system designed to treat tumors anywhere in the body.
    Advantages of the CyberKnife system include:
    *Treats tumors anywhere in the body
    *Continuously tracks, detects and corrects for tumor and patient movement throughout the treatment
    *Delivers treatments with sub-millimeter accuracy, minimizing damage to surrounding healthy tissue
    *Utilizes the skeletal structure of the body as a reference, eliminating the need for bone fiducials or invasive frames typically used with traditional radiosurgery systems
    *An option for inoperable or surgically complex tumors
    *Successfully treats patients in single or multiple fractions
    *Provides unsurpassed linac maneuverability and complete access and coverage for any tumor volume
    Enables superior flexibility in treatment planning:
    *forward or inverse treatment planning
    *isocentric or non-isocentric treatment plans
    *simultaneous treatment of multiple tumors
    Allows for the flexible scheduling of treatments
    According to the NY Times, someone with an inoperable tumor should just roll over and die when they get denied coverage for this life saving treatment.
    Others who can’t spend 8 weeks recovering from an open surgery and continue to pay their health insurance premiums and not starve to death should just learn to live on crackers for 8 weeks and keep quiet.
    The other option is to quit your job, stop paying your bills and try to qualify for Medicare, then you would be covered. Then you could enjoy your golden years in the poorhouse eating crackers but living to tell about it.
    If anything, a doctor trying to upsell is trying to make a decent living and provide a benefit to their patient because the greedy insurance company year after year dictates his income if he likes it or not. Then when they are bled dry, they can’t care for their patients because the patient is also being bled dry so that the health insurance CEO can retire with 1.6 Billion in back dated stock options.
    And exactly what other countries is NY Times talking about. I went to a hospital in Sicily once and thought people were joking when they said they had to bring their own toilet paper at checkin. Boy was I in for a shock.

  20. I wonder how much of the “up-selling,” especially overuse of sophisticated imaging technology, is really defensive medicine. I doubt that most MRI’s yield a direct financial benefit to the doc who orders them. Generic drugs already account for over 50% of prescriptions and both the PBM’s and the large retail drug chains do a good job of substituting generics for brands whenever possible and appropriate because they have an economic incentive to do so. With respect to conditions where there may be both a surgical and non-surgical option, I suspect if you consult with a surgeon, his bias is toward surgery whereas a non-surgeon may have a different bias.

  21. Insurance executives, owners of an industry worth 7 trillion dollars per year, are keeping more and more of the income, but paying less and less to the people who lose life, limb or property. That’s becuase insurance profits can be set by the insurance companies, without anti-trust regulation; and because state legislatures and Congress have taken away the civil justice system as the equalizer between large insurance companies and people who are hurt by their insureds. This phenomenon is apparent not only in the Katrina injustices, but in all areas of insurance remediation. My biggest beef is with the medical malpractice insurers, who are supposed to be there for those who are injured by the medical profession. More than 190,000 people are killed each year by hospital error and over 1.5 million people are injured by medication errors every year, yet insurance companies are still trying to take away the civil justice system from those injured and the families of those killed. They have succeeded in doing so in many states, and are still on their mission to accomplish it everywhere. Michael Townes Watson, author of America’s Tunnel Vision–How Insurance Companies’ Propaganda Is Corrupting Medicine and Law.

  22. Matt,
    I know what you’re saying, but I’ll try to say it more clearly to those who don’t get it: that portion of American health spending that is in excess of other nations is predominately the result of suppy-side market forces that essentially “up-sell” the consumer. 3-D body scan instead of X-ray; brand name drug instead of equivalent generic; surgical procedure over non-surgical treatment with similar long-term outcomes; disease management instead of health promotion, etc.
    It is true that Americans expect heroic measures without an understanding of the costs, but so much of our expectations are set by providers, particularly physicians. The “consumer” is spectacularly ill-informed about best-practices and the industry is far too often unmotivated to find them because efficiency reduces payments.

  23. No. He’s saying we demand it, and that the industry just supplies it and if anything tries to stop supplying it. (That’s the really moronic part)
    In fact as real economists have shown, and anyone who’s met a doctor knows, this is an entirely supply driven industry.

  24. I’m afraid I don’t quite understand your objection to the article. In my opinion, Leonhart was saying that we as consumers, are all-to-ready to consume the available services, no matter what the cost and no matter what the benefit of return is.
    Can you tell me why you think that’s wrong?

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