Definition 1: Outcome based Reimbursement is a measure of whether the cost of treatment is sufficiently beneficial to the nation and the patient to justify payment by the healthcare system, if not the patient must seek his own treatment.
This definition has conflicting priorities - the nation and the patient. I’m sure in a patient’s view any treatment regardless of cost is justifiable as long as a reasonable quality of life is retained and should be paid by the health care system; on the other hand the nation, having many uses for its funds is most interested in optimizing the use of its funds therefore it must weigh the future value of the patient to the nation against the cost of treatment.
I agree that it is not in the best interest of a nation to treat its people cavalierly, still the further remote the decision making is from the patient and his doctor the more likely the decision will be made in favor of conserving funds. Therefore, a national government supervised (controlled) healthcare system is apt to make decisions based on precedence, standards and by rote. Thus, definition 2 seems to be a more probable definition of how Outcome based Reimbursement will be applied.
Definition 2: Outcome based Reimbursement is a measure of whether the cost of treatment is sufficiently beneficial to the nation to justify payment by the healthcare system, if not the patient must seek his own treatment.
If we accept definition 2 as the more probable result, each of us will be assigned a Quality-Adjusted Life Years (QALY) value based on certain criteria that will change over time as we age. How and at what level will this QALY value be defined and assigned? If done at a lower level, by the doctor or the hospital the result would not be much different from the present. However, if the doctor or hospital makes the decision will they be reimbursed by the health care system? Today, Medicare requires doctors to assign a code identifying the procedure performed. Medicare reimburses the doctor based upon this code. If they perform a procedure not covered, they are not reimbursed and must collect from either the patient or his insurance company. Insurance companies in turn normally reimburse the doctor or hospital only if Medicare authorizes the procedure. Thus, Medicare can be considered as a form of Outcome based Reimbursement.
The probability is very high that under OBR we will have a system very similar to Medicare with the exception that the QALY value will be combined with the Medicare code to determine whether the procedure will be reimbursed. Almost certainly, the QALY value will be determined at some national level as are the Medicare codes. Thus to be reimbursed my doctor will choose to perform the procedure not based on need but on a nationally published set of criteria or standards. The patient is only an artifact or a machine to be fixed or junked depending on his value to the nation.
The counter argument that if the system turns me down I can still seek treatment depending upon my net worth is spurious. If I my net worth just exceeds some arbitrary level then the healthcare system disavows me. All my assets may be needed as well as those of my family to obtain treatment or if I exceed that arbitrary level I will have to seek insurance while those just below that level obtain free treatment. Now the decision to perform a procedure and receive reimbursement from the health care system depends upon three factors, Medicare codes, my QALY and my net worth. Bah Humbug!
Lastly I was asked to address “the idea that end-of-life care costs an average of 50% (a number I read for the last year of life under the current system in the US), or could cost as much as 80% (according to President Obama). What do you think the actual number is?”
The objection I have is twofold the first is “the last year of life”. Let me address this first. I will admit that the examples are anecdotal in that they are based on my direct personal experience and not the part of a scientific study. However, they are diverse in their life experience and financial standings. Some poor, some middle class, some male some female. They lived in Minnesota, Texas, Arizona, Oregon, Illinois and Florida.
- A lady dies at 100, I am not sure of the cause. She lived and died at home using a walker and meals on wheels. There was no hospitalization in the last year of her life.
- A man in his nineties, caught phenomena, was hospitalized for about a week and died in the hospital. He was not hospitalized otherwise over the last year of his life.
- A man in his seventies became ill, was treated on an outpatient basis until he had to be placed under hospice care for a week or so before he died.
- A lady in her eighties died in her home of a heart attack. She had not been hospitalized over the previous year.
- A man in his sixties, suffering from several heart related problems has been hospitalized on and off over several years. The combined costs of that hospitalization will certain exceed the cost of his last year of life.
- A lady in her sixties had cancer and was treated, as an outpatient. The cancer went into remission for over a year. When it returned she chose no treatment and ended in an oncology ward for slightly more than a week.
- A lady in her nineties was in a private nursing home when she broke her hip; she died after a short stay in a hospital.
- A man in his seventies died of a heart attack while at home. He was undergoing no treatment at the time.
- A man in his seventies, receiving outpatient treatment was in Hospice care when he died.
- A man in his forties, a farmer, died while at work. He was not undergoing any treatment.
- A lady in her forties died of a heart attack while at home. She was not undergoing any treatment.
With the exception of one man mentioned above, none of these people was receiving extensive treatment in the last year of their life. They are a diverse group of people. I cannot believe that they are exceptions but rather the norm. In their cases, where did the 80% of the cost of health care go?
It is a reasonable assumption that seniors require more health care than the average. We are at the end of our life. We are wearing out and require more care to extend our quality of life. I am not questioning that. Still let’s examine it from another direction. In the paper today, an article stated that the average life span for a male was 78 years and a woman 81 years. Thus, the life span as a senior is from 65 to 80 years of age– fifteen years. If you want to quibble 55 to 80 years of age – twenty-five years. On the other hand, the non-senior life span is 0 to 55 or 65 years of age. To state it differently, a person lives 55 to 65 years of his life as a non senior exposed to work hazards, accidents, birthing, childhood diseases, flu, other adult diseases, etc and then in his last 15 to 25 years to failing health. Considering 55 to 65 years of a lifetime is exposed to the natural hazards of life and 15 to 25 years as a senior, I believe a more reasonable figure for the cost of senior care over 15 to 25 years would be in the range of fifty percent.