Doctor Self-Referrals Part of Health-Care Cost Trend

Via Dean Baker, who had two good things to say about Washington Post articles today. Surely the Second Coming is at hand.

Doctor Self-Referrals Part of Health-Care Cost Trend

Doctors Reap Benefits By Doing Own Tests
By Shankar Vedantam
Washington Post Staff Writer
Friday, July 31, 2009

In August 2005, doctors at Urological Associates, a medical practice on the Iowa-Illinois border, ordered nine CT scans for patients covered by Wellmark Blue Cross and Blue Shield insurance. In September that year, they ordered eight. But then the numbers rose steeply. The urologists ordered 35 scans in October, 41 in November and 55 in December. Within seven months, they were ordering scans at a rate that had climbed more than 700 percent.

The increase came in the months after the urologists bought their own CT scanner, according to documents obtained by The Washington Post. Instead of referring patients to radiologists, the doctors started conducting their own imaging — and drawing insurance reimbursements for each of those patients.

In focusing on health-care reform this year, President Obama pledged that a revamped system would hold down exploding costs. But none of the players — Congress, the administration or the array of interests involved in the process — has offered a clear path to that goal. And efforts to control medical practices that have driven up expenses, including physician “self-referrals,” underscore how difficult it is to alter entrenched patterns.

A host of studies and reports by academics and the federal government shows that physicians who own scanners order many more scans than those who do not. As a result, Americans pay billions of dollars in extra taxes and insurance premiums.

Government panels have found that, across several areas of medicine, ordering more procedures does not improve health outcomes. In the case of medical scans, unnecessary imaging also creates a health risk — as many as 1 percent of all cancers in the United States appear to be caused by radiation from medical imaging, according to Amy Berrington de Gonzalez, a radiation epidemiologist at the National Cancer Institute.

A ‘Common Sense’ American Health Reform Plan – Economix Blog – NYTimes.com

Uwe E. Reinhardt is an economics professor at Princeton. There’s more at the link.

20narc-190.jpgA ‘Common Sense’ American Health Reform Plan

The All-American Wish List for Health Reform

1. Only patients and their own doctors should decide what clinical response is appropriate for a given medical condition, even if that response involves unproven clinical procedures or technology.

2. Neither government bureaucrats nor private insurance bureaucrats should ever refuse to pay for whatever patients and their doctors have decided to do in response to a given medical condition. An insurer’s refusal to pay for a medical procedure is tantamount to rationing health care.

3. Rationing health care is un-American.

4. Cost-effectiveness analysis should never be the basis of any coverage decision by public or private third-party payers in health care, for to do so would put a price on human life — which, in America, unlike everywhere else, is priceless.

5. Government should not require individuals to purchase health insurance. Such a mandate would violate the constitutional rights of freedom-loving Americans.

6. Americans have a moral right to life-saving and potentially highly expensive medical care, should they fall critically ill, even if they are uninsured and could not possibly pay for that care with their own financial resources. (Why else would God have created hospitals and their emergency rooms?)

7. Government should stay out of health care. Specifically, government should not control health care prices, nor should it increase its spending on health care, which is out of control.

8. Even small reductions to the future growth of Medicare spending — called “cuts” in Washington parlance — unfairly burden the elderly, along with the doctors and hospitals that serve them and the manufacturers of health products, lest the pace of technical innovation be impaired.

Why markets can’t cure healthcare

There’s more, of course; this is the last graf.

Paul Krugman: Why markets can’t cure healthcare

… All of this doesn’t necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number of successful health-care systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.

Why We Must Ration Health Care

Peter Singer, always interesting, on rationing health care (long).

Why We Must Ration Health Care

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You have advanced kidney cancer. It will kill you, probably in the next year or two. A drug called Sutent slows the spread of the cancer and may give you an extra six months, but at a cost of $54,000. Is a few more months worth that much?

If you can afford it, you probably would pay that much, or more, to live longer, even if your quality of life wasn’t going to be good. But suppose it’s not you with the cancer but a stranger covered by your health-insurance fund. If the insurer provides this man — and everyone else like him — with Sutent, your premiums will increase. Do you still think the drug is a good value? Suppose the treatment cost a million dollars. Would it be worth it then? Ten million? Is there any limit to how much you would want your insurer to pay for a drug that adds six months to someone’s life? If there is any point at which you say, “No, an extra six months isn’t worth that much,” then you think that health care should be rationed.

One final comment. It is common for opponents of health care rationing to point to Canada and Britain as examples of where we might end up if we get “socialized medicine.” On a blog on Fox News earlier this year, the conservative writer John Lott wrote, “Americans should ask Canadians and Brits — people who have long suffered from rationing — how happy they are with central government decisions on eliminating ‘unnecessary’ health care.” There is no particular reason that the United States should copy the British or Canadian forms of universal coverage, rather than one of the different arrangements that have developed in other industrialized nations, some of which may be better. But as it happens, last year the Gallup organization did ask Canadians and Brits, and people in many different countries, if they have confidence in “health care or medical systems” in their country. In Canada, 73 percent answered this question affirmatively. Coincidentally, an identical percentage of Britons gave the same answer. In the United States, despite spending much more, per person, on health care, the figure was only 56 percent.

The $1 Trillion Health Care Bill: Approximately Half of the Cost of the Iraq War

Not to mention ½ of 1% of GDP.

The $1 Trillion Health Care Bill: Approximately Half of the Cost of the Iraq War

USA Today listed several items that gave readers a basis for assessing the size of the $1 trillion health care bill being debated in the House. It would have been useful to compare the cost to projected GDP over the decade.

GDP is projected to be approximately $190 trillion over the next decade. This means that the cost will be approximately 0.5 percent of projected GDP. By contrast, the combined cost of the Iraq and Afghan wars have been close to 1.0 percent of GDP. This means that the health care bill will cost approximately half as much as the Iraq War.

—Dean Baker

Coffee reverses Alzheimer’s?

In 55 mice, anyway. Maybe.

Coffee ‘may reverse Alzheimer’s’

Drinking five cups of coffee a day could reverse memory problems seen in Alzheimer’s disease, US scientists say.

The Florida research, carried out on mice, also suggested caffeine hampered the production of the protein plaques which are the hallmark of the disease.

Previous research has also suggested a protective effect from caffeine. …

That’s two cups of actual coffee, though:

… The mice were given the equivalent of five 8 oz (227 grams) cups of coffee a day — about 500 milligrams of caffeine.

The researchers say this is the same as is found in two cups of “specialty” coffees such as lattes or cappuccinos from coffee shops, 14 cups of tea, or 20 soft drinks.

When the mice were tested again after two months, those who were given the caffeine performed much better on tests measuring their memory and thinking skills and performed as well as mice of the same age without dementia.
Those drinking plain water continued to do poorly on the tests.

In addition, the brains of the mice given caffeine showed nearly a 50% reduction in levels of the beta amyloid protein, which forms destructive clumps in the brains of dementia patients. …

BBC via Brad Delong

An Interview With Atul Gawande

In an interview with Ezra Klein, Atul Gawande discusses reaction to his article on disparate health care costs, and suggests a few simple things to help bring costs in line.

You’ve gotten some pushback on your article about McAllen, Texas. Today, in fact, some doctors from the area held a press conference rebutting your claims, and you published a blog post re-rebutting theirs. What have you found to be the most convincing counterarguments against your piece?

The three lines of criticism were ones I anticipated or even talked about. The idea that these people in McAllen are unhealthier. The idea that it’s all malpractice. The one point I didn’t get into was the snowbirds [retirees from colder areas who summer in Texas], but they’re not in the spending calculations anyway because Medicare counts them in their home area.

The criticisms I’d been hearing and seeing but that hadn’t been going away was pointing out that McAllen is the poorest county in the country. They’d say you couldn’t compare it to Mayo. But I didn’t. El Paso, which I did compare it to, was the sixth poorest in the United States. They’re very closely similar in poverty, in immigration, in physician supply, in rates of disease, and so forth.

Krugman: Live long and prosper

Paul Krugman, with a concise response to the idea that we shouldn’t be comparing health outcomes in other countries with our own.

Live long and prosper

Via Andrew Gelman, Greg Mankiw describes the use of international comparisons of life expectancy as part of the argument for reform as “schlocky.”

Grrr. Not many serious advocates of reform use the life expectancy differences to argue that health care is clearly better in other advanced countries than it is in the United States; when it comes to care, the general assessment seems to be that it’s comparable, with no advanced country having a clear advantage. The reform argument actually goes like this:

1. Every other advanced country has universal coverage, protecting its citizens from the financial risks of uninsurance as well as ensuring that everyone gets basic care.

2. They do this while spending far less on health care than we do.

3. Yet they don’t seem to do worse in overall health results.

So Greg suggests that maybe it’s all because we have an unhealthier lifestyle — what Ezra Klein calls the well-we-eat-more-cheeseburgers argument.

Three things. First, surely the burden of proof here is on Greg. I mean, we’re spending 6 or 7 percent of GDP more on health care than other countries — call it a trillion dollars a year — without any clear advantage. That’s not the sort of thing you wave away with a casual suggestion that maybe we have bad habits.

Second: you know, people have thought about this — and tried hard to measure it. For example, the huge McKinsey Research Institute study on the cost of US healthcare tried to quantify the costs of lifestyle-related issues — and found that it didn’t explain much.

Third, read Atul Gawande!

Bottom line: this is the most important domestic policy issue we face. It deserves more than casual just-so stories about how the kids American health care might, despite all appearances, be alright.

The most hypocritical thing?

I dunno; there’s an awful lot of competition for the title. Maybe.

Paul Krugman: Taking the Hypocritical Oath

I know it’s a tough competition, but this just might be the most hypocritical thing I’ve seen in the past year:

On Monday, Sens. Jon Kyl (R-AZ), Mitch McConnell (R-KY), and Pat Roberts (R-KS) introduced the “Preserving Access to Targeted, Individualized, and Effective New Treatments and Services (PATIENTS) Act of 2009,” a new bill prohibiting Medicare or Medicaid from using “comparative effectiveness research to deny coverage.”

How bad is it? Let me count the ways.

1. Politicians who rail against wasteful government spending are taking action to prevent the government from reining in … wasteful spending.

2. Politicians who warn that the burden of entitlements is killing the federal budget are stepping in to block … the single most painless route to reducing the growth of entitlements.

3. They’re doing it in the name of avoiding “rationing of health care” … but they’re specifically addressing taxpayer-funded care. If you want to go out and buy a medically useless treatment, Medicare won’t stop you.

4. These same politicians are, of course, opposed to efforts to expand coverage. In other words, it’s evil for government to “ration care” by only paying for things that work; it is, however, perfectly OK, indeed virtuous, to ration care by refusing to pay for any care at all.

I’m already socialized?

Ezra Klein continues his Health Care Reform for Beginners series this week with Health Care Reform for Beginners: The Many Flavors of the Public Plan and Health Reform for Beginners: The Difference Between Socialized Medicine, Single-Payer Health Care, and What We’ll Be Getting.

You’ll want to read them both, but here I want to focus on the pretty pictures.

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On the evidence, the correct answer is “better”, but let’s move to the fun one. 30% of Americans polled think that I’m already getting socialized medicine (Blue Shield HMO, as it happens):

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Klein writes,

You’re reading that right. About 30 percent of Americans think HMOs are socialized medicine. Which implies a couple things. First, the term “socialized medicine” has been diluted beyond all meaning. Second, it’s no longer considered a terrifying outcome. And third, nothing that’s this amorphous — and actually preferred by a plurality of the population — is likely to prove a terribly effective attack against health reform. Socialized medicine has become such a stand-in for “not this system of medicine” that it’s begun to look good in comparison.

Obama reads Pragmatos

Well, he reads some of what Pragmatos reads, anyway.

The NY Times reports that Obama has taken notice of the Atul Gawande’s article on regional health-care-cost disparities across the US.

President Obama recently summoned aides to the Oval Office to discuss a magazine article investigating why the border town of McAllen, Tex., was the country’s most expensive place for health care. The article became required reading in the White House, with Mr. Obama even citing it at a meeting last week with two dozen Democratic senators.

“He came into the meeting with that article having affected his thinking dramatically,” said Senator Ron Wyden, Democrat of Oregon. “He, in effect, took that article and put it in front of a big group of senators and said, ‘This is what we’ve got to fix.’ ”

There’s pushback, of course.

[Dr. Michael L. Langberg, senior vice president of Cedars-Sinai Medical Center] endorsed the goal of covering the uninsured, but said, “We do not believe that rushing to make large cuts in Medicare payments to hospitals is the right way to fund that coverage.” The Dartmouth team has cited Cedars-Sinai as having very high Medicare spending per beneficiary.

If you haven’t read Gawande’s piece, now’s the time.

Milton Friedman on radical reform

This nice quote from Milton Friedman (in the context of overhauling the Federal Reserve, as it happens) was recently quoted in the context of health care reform, specifically in support of considering single-payer systems. I’d add democratic reforms such as proportional representation to the list.

… it is worth discussing radical changes, not in the expectation that they will be adopted promptly but for two other reasons. One is to construct an ideal goal, so that incremental changes can be judged by whether they move the institutional structure toward or away from that ideal. The other reason is very different. It is so that if a crisis requiring or facilitating radical change does arise, alternatives will be available that have been carefully developed and fully explored.

Cheaper, better health care

Read this fascinating (and rather encouraging, if anyone pays attention [somebody did; see update below]) article by Atul Gawande on, among other things, the enormous difference in health care costs from community to community. Oddly, many communities with the best care also have the lowest costs, and not just by a few percent. Why?

THE COST CONUNDRUM
What a Texas town can teach us about health care.
by Atul Gawande

… When you look across the spectrum from Grand Junction to McAllen—and the almost threefold difference in the costs of care—you come to realize that we are witnessing a battle for the soul of American medicine. Somewhere in the United States at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And the damning question we have to ask is whether the doctor is set up to meet the needs of the patient, first and foremost, or to maximize revenue.

There is no insurance system that will make the two aims match perfectly. But having a system that does so much to misalign them has proved disastrous. As economists have often pointed out, we pay doctors for quantity, not quality. As they point out less often, we also pay them as individuals, rather than as members of a team working together for their patients. Both practices have made for serious problems. …

Or is it discouraging? Gawande concludes:

Something even more worrisome is going on as well. In the war over the culture of medicine—the war over whether our country’s anchor model will be Mayo or McAllen—the Mayo model is losing. In the sharpest economic downturn that our health system has faced in half a century, many people in medicine don’t see why they should do the hard work of organizing themselves in ways that reduce waste and improve quality if it means sacrificing revenue.

In El Paso, the for-profit health-care executive told me, a few leading physicians recently followed McAllen’s lead and opened their own centers for surgery and imaging. When I was in Tulsa a few months ago, a fellow-surgeon explained how he had made up for lost revenue by shifting his operations for well-insured patients to a specialty hospital that he partially owned while keeping his poor and uninsured patients at a nonprofit hospital in town. Even in Grand Junction, Michael Pramenko told me, “some of the doctors are beginning to complain about ‘leaving money on the table.’ ”

As America struggles to extend health-care coverage while curbing health-care costs, we face a decision that is more important than whether we have a public-insurance option, more important than whether we will have a single-payer system in the long run or a mixture of public and private insurance, as we do now. The decision is whether we are going to reward the leaders who are trying to build a new generation of Mayos and Grand Junctions. If we don’t, McAllen won’t be an outlier. It will be our future.

Update: The NY Times reports that Obama has taken notice of this piece (Gawande’s, presumably, not mine).

President Obama recently summoned aides to the Oval Office to discuss a magazine article investigating why the border town of McAllen, Tex., was the country’s most expensive place for health care. The article became required reading in the White House, with Mr. Obama even citing it at a meeting last week with two dozen Democratic senators.

“He came into the meeting with that article having affected his thinking dramatically,” said Senator Ron Wyden, Democrat of Oregon. “He, in effect, took that article and put it in front of a big group of senators and said, ‘This is what we’ve got to fix.’”

There’s pushback, of course.

[Dr. Michael L. Langberg, senior vice president of Cedars-Sinai Medical Center] endorsed the goal of covering the uninsured, but said, “We do not believe that rushing to make large cuts in Medicare payments to hospitals is the right way to fund that coverage.” The Dartmouth team has cited Cedars-Sinai as having very high Medicare spending per beneficiary.

The Crisis and How to Deal with It

NYRB (longish).

The Crisis and How to Deal with It

Following are excerpts from a symposium on the economic crisis presented by The New York Review of Books and PEN World Voices at the Metropolitan Museum of Art on April 30. The participants were former senator Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, and Robin Wells, with Jeff Madrick as moderator.

—The Editors

A bit of Krugman:

… As I’ve written, we need a boring banking sector again. All of this high finance has turned out to be just destructive, and that’s partly a matter of regulation. But in the political economy there was also a vicious circle. Because as the financial sector got increasingly bloated its political clout also grew. So, in fact, deregulation bred bloated finance, which bred more deregulation, which bred this monster that ate the world economy.

The other thing not to miss is the importance of a strong social safety net. By most accounts, most projections say that the European Union is going to have a somewhat deeper recession this year than the United States. So in terms of macromanagement, they’re actually doing a poor job, and there are various reasons for that: the European Central Bank is too conservative, Europeans have been too slow to do fiscal stimulus. But the human suffering is going to be much greater on this side of the Atlantic because Europeans don’t lose their health care when they lose their jobs. They don’t find themselves with essentially no support once their trivial unemployment check has fallen off. We have nothing underneath. When Americans lose their jobs, they fall into the abyss. That does not happen in other advanced countries, it does not happen, I want to say, in civilized countries.

And there are people who say we should not be worrying about things like universal health care in the crisis, we need to solve the crisis. But this is exactly the time when the importance of having a decent social safety net is driven home to everybody, which makes it a very good time to actually move ahead on these other things. …

The Only Sure Way to Fund Universal Health Care

Tax employee health benefits, says Robert Reich.

The Only Sure Way to Fund Universal Health Care

… But, face it, it’s become a crazy system. You’re not eligible for these benefits when you and your family are likely to need them most – when you lose your job and your income plummets. And these days, as we’re witnessing, no job is safe. The system also distorts the labor market. It prevents lots of people from changing jobs for fear they’ll lose their health insurance, or won’t get the benefits they do now. And it invites employers to game the system by seeking young, healthy employees who pose low risks of ill health and will therefore keep insurance costs low, while rejecting older ones who are likely to have more costly health needs. The system also encourages employers to try to push married employees onto their spouses’s health insurance plan so that the spouse’s employer bears the cost. …

Consumers and Health Care

Matthew Yglesias, commenting on Ramesh Ponnuru’s assertion that individuals should be shopping for health coverage. Go to the source for links and such.

Consumers and Health Care

… And when it comes to health insurance, the subjective is really really really unimportant. Whether or not I “want” prostate cancer screening has just about nothing to do with anything. There are tables one could draw about age and other risk factors and the reasonableness of performing such-and-such a test. And this is integral to our understanding of what a medical interaction should be like. Visiting the doctor is not like visiting a car salesman, where he’s working on commission trying to upsell you and you’re trying to be on guard and strike a good bargain. That would be terrible. This is why we make doctors take oaths and so forth. And it’s true, of course, that the doctor-patient falls far short, in practice, of the ideal of a commerce-free trust between a healer and a patient. But this is a problem. As is the commercial nature of the interaction between a health insurance company and a person trying to get medical care. Someone really does need to tell you that certain procedures are unnecessary or unduly speculative. But should that person be a representative of the interests of a profit-maximizing firm? Not really. Which is why we wind up having all these regulations.

It’s true that deregulating the insurance market would make it more “efficient” according to one technical sense of efficiency. It’d be more like the market for cheeseburgers or sneakers. And everyone would, by definition, wind up with the insurance package they want. But it wouldn’t produce good health outcomes, or efficiently allocate dollars toward health-maximizing ends.

Ignorance is bliss

Krugman.

Ignorance is bliss

This is really unbelievable:

The drug and medical-device industries are mobilizing to gut a provision in the stimulus bill that would spend $1.1 billion on research comparing medical treatments, portraying it as the first step to government rationing.

Because freedom is all about laying out vast sums on medical treatments without knowing whether they’re actually doing any good. …

Update, also Krugman:

Good news: Congress has defied the efforts of drug companies and medical-device producers to strip comparative effectiveness research from the stimulus bill. One small victory for sanity and justice.

Had your vitamin C today?

That’s Vitamin Coffee, bub.

Coffee reduces Alzheimer’s risk: study

Middle-aged people who drink moderate amounts of coffee significantly reduce their risk of developing Alzheimer’s disease, a study by Finnish and Swedish researchers showed Thursday.

“Middle-aged people who drank between three and five cups of coffee a day lowered their risk of developing dementia and Alzheimer’s disease by between 60 and 65 per cent later in life,” said lead researcher on the project, Miia Kivipelto, a professor at the University of Kuopio in Finland and at the Karolinska Institute in Stockholm.

The study, which was also conducted in cooperation with the National Public Health Institute in Helsinki and which was published in the Journal of Alzheimer’s Disease this month, was based on repeated interviews with 1,409 people in Finland over more than two decades. …

“Middle-aged” here means “in their 50s”. No dementia for me!

AARiP-Off: Group Rakes in Funds from Medicare Prescription Drug Plans

James Ridgeway.

AARiP-Off: Group Rakes in Funds from Medicare Prescription Drug Plans


As the main lobby representing the 37 million Americans over 65 (12 percent of the population), AARP ought to be leading the charge against a program that puts corporate profits before its members’ health. Instead, its efforts have focused on reaping a large share of those profits itself.

Now, Bloomberg news has reported that AARP “collects hundreds of millions of dollars annually from insurers who pay for AARP’s endorsement of their policies…The insurance companies build the cost of these so-called royalties and fees, which amounted to $497.6 million in 2007, into the premiums they charge AARP members, according to AARP’s consolidated financial statement for that year.” Critics say that the AARP-sponsored policies often sell at inflated prices, and don’t offer the best coverage for the money.

A study released last week by the Center for Economic and Policy Research found that three years into the program, “most seniors experienced no reductions in their health care spending as a result of the Medicare Drug benefit.”

“Free-Market” Self-Delusion

Noah Pollak begins well: “I am far from knowledgeable about health care…”, but really should have stopped there. The rest of the post is roughly the usual “We’re #1 and don’t give me all those stats about the godless commies in Europe”. The loony conclusion:

But this controversy really isn’t about health care. It’s about the need for people who support the dramatic expansion of government to minimize, obfuscate, or render illusory the trade-offs inherent in such expansion.

Sheesh.

Ezra Klein is on the case.

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Here’s an earlier post on the subject of the prostate cancer stats that Pollak trots out.