The Freakonomics podcast just did a piece on how to improve health care. One of the discussion points is how to cut down on “super users” – the frequent flyers who present to the ED and get admitted multiple times per year. A lot of it sounds a lot like what has been working here at the DOC!
On reason commonly blamed for driving up health care costs (for better or worse) is the “moral hazard” problem created by health insurance. If someone else (your insurance company) is paying your bills, then you have no incentive to be a smart shopping a pick out low-cost, high-quality care. This is especially apparent by looking at the other side of the coin – cosmetic surgery, where people DO pay out of pocket, and costs have NOT gone up! Fascinating article!
“If cosmetic procedures were covered by insurance, Medicare and Medicaid, what would have happened to their prices over time? Basic economics tell us that those prices would have most likely risen at about the same 88.5% increase in the prices of medical services between 1998 and 2014.”
Hat tip to Kevin Shah
I was not familiar with the health care system in China. This NEJM article provides a basic overview, highlighting a few places where government policy and economic/market forces have intersected:
“The government kept its hand in one major aspect of health care: pricing. Presumably to ensure access to basic care, it limited the prices charged for certain services, such as physicians’ and nurses’ time. However, it allowed much more generous prices for drugs and technical services, such as advanced imaging. The predictable result: hospitals and health care professionals greatly increased their use of drugs and high-end technical services, driving up costs of care, compromising quality, and reducing access for an uninsured citizenry.”
Screening can save lives, but it is also very expensive; the idea that we will save money over the long term through investing in preventive care is a popular myth. As an example, a new report on the staggering costs of mammography and the false-positives it generates:
“This translates to a national cost of $4 billion each year. The costs associated with false-positive mammograms and breast cancer overdiagnoses appear to be much higher than previously documented.”
One popular idea to reform the fee-for-service payment model, and also hopefully increase health care quality and lower costs over the long term, is “pay for performance.” The idea there is to link doctors’ attention to certain quality measures to a significant portion of their salary, to incentivize them to take good care of patients. The problem, as new research shows, is that this might not actually go very far in making us increase the quality of our care: