Sunday, August 16, 2009

We Need COST-EFFECTIVE Health Care Reform

Shout it from the rooftops!


This posting details the THREE changes we need in US health care to save the money we will need before we expand the system further.

1) Universal digititized patient data, securely accessible by any doctor chosen by the patient. This part should be easy to sell to both political parties and all medical specialties. It has been technically feasible for a decade an it is past time we do it.

2) Tort reform to eliminate high malpractice premiums and defensive medicine with unnecessary tests that add up to 10% to costs. This will be a hard sell to the majority party that is in the pocket of trial lawyers.

3) Outcome-based reimbursement to eliminate costly surgery and medications that do not yield comparative effectiveness based on quality-adjusted life years. This will be a hard sell to the minority party, some of whose members originally proposed it but who have backed away due to the onslaught of opposition based on "pulling the plug on granny".

WARNING: This posting will make you angry no matter which side you are on in the current debate. Please give it a chance because I think it is the best we can do now to control health care costs and get the best "bang for the buck".

1. Universal Digititized Patient Data

This is the easy one.

Every time I go to a new doctor I have to complete a detailed medical history form. Fortunately, my wife has all the major stuff memorized, but I think most people forget some of their medical history and just guess at the dates for past medical procedures if they do remember, so the new doctor does not have complete or correct information. At each doctor visit I have to update my list of pills. Every time I get my blood and other fluids tested along with a record of my blood pressure, weight, temperature and other information, it is done by computerized equipment, but the records are printed out and sent to my doctor in hard-copy form.

All this is error-prone and a waste of time for the patient. Since the data is hand-written and hard-copy the doctor has to paw through pages and pages of paper records. There is no opportunity for a computer to assist him or her in detecting counter-indications for various medications or procedures.

By now, all hospitals and most doctors store at least some of their data on computers, most of which are networked. We buy our prescription medications from large companies that are fully computerized. Even my non-prescription pills are purchased online so there is a computer record of all those transactions.

There is role here for the government to work with a medical industry organization to standardize the format and contents of universal digitized patient medical data. Of course, with universal patient data there is a security issue. We want only doctors and hospitals authorized by the patient to have access to our medical data, and only to that portion of the data that is applicable to the type of medical procedure being performed.

The government has already specified the Real ID drivers license that is being issued by some states. The security aspects of Real ID have been watered down to something called Pass ID, which is unfortunate in my opinion, but even Pass ID will be secure enough for medical record access. Nearly all adults have drivers licenses. Children could be ID'd via their parent's ID and non-licensed adults could be ID'd by their spouses or adult children's or medical proxy's IDs.

Your regular doctors and hospitals would scan your Real ID or Pass ID to access your records. If you change doctors, or go to an emergency medical facility, they would scan your ID card to get secure access to your medical records. Of course, each doctor or hospital would have a specified set of medical specialties and his or her ID card would limit their access to only those parts of your medical records applicable to that specialty. Periodically, doctor and hospital access would expire and require a new ID scan.

All the government needs to do is: 1) Authorize a medical industry organization to set up the data standards, the rules for secure access, and to certify the competing companies that will securely store the data for patients, funded by fees when the data is accessed, 2) Authorize the use of Real ID and Pass ID for secure access, 3) Require all doctors, clinics and hospitals to adopt the new standards within five years and, 4) Where necessary, subsidize computer equipment and software for doctors, clinics, and hospitals in less affluent areas.

It is estimated that at least 10% of Medicade/Medicare funds are stolen by fake or unscrupulous doctors and medical equipment and service providers. A side-benefit of use of Real ID and Pass ID will be a double check that the actual patient has really been serviced. The government and insurance companies will also be able to check the frequency of use of services by any given patient ID number which will help identify unscrupulous providers who claim to have serviced a given individual with unreasonable or conflicting items.

2. Tort Reform and Defensive Medicine

If passed, this will be costly to the trial lawyers (like former Presidential hopeful Senator John Edwards). The current system is a full-employment program for lawyers. They make emotional arguments and parade the sad cases of patients who have had bad outcomes from medical treatments and expect to be reimbursed for both the cost of the care and "pain and suffering".

Medicine is not an exact science and some patients will have bad outcomes no matter how competent their doctors and hospitals. Trial lawyers can always find an "expert" who, for pay, will testify convincingly that "if only" such and such a test had been done, or a different course of treatment had been followed, the patient might have recovered to full health and vigor. This type of "Monday morning quarterbacking" is easy because, after the fact, the actual outcome is known, and the "expert" is free to speculate on what might have been had a different path been chosen with absolutely no way to prove him or her wrong.

We already have caps on "pain and suffering" awards in some states. This helps the medical malpractice insurance companies a bit. Unfortunately, when a doctor is accused of malpractice his or her time is not compensated, nor is the inner turmoil he or she feels, even if the accusation is baseless and the plaintiff's case fails. I would like to see our legal system more in line with other countries that require the losing side to pay the reasonable legal costs of the winner as a way to discourage frivolous cases.

We need a professional review system that prevents cases from being filed unless the accuser can show not just that he or she has had a bad outcome -all too often juries will award big damages out of sympathy for a seriously ill plaintiff- but that the doctor or hospital has willfully ignored the normal standards of care. A review board should determine if there is probable serious malpractice and not simply a misdiagnosis within the limits of professional practice or ordinary human error. The review board should have the power to dismiss the case or offer some reasonable compromise.

Our current system has doctors ordering unnecessary tests as a form of defensive medicine that adds upwards of 10% to medical costs while inconveniencing the patients.

Medical malpractice is a full employment program for lawyers. Will we get tort reform? Probably not, since trial lawyers control one of the major parties and most of the senators and representatives of the other are also lawyers.

3. Outcome-Based Reimbursement

This should have bi-partisan support. Unfortunately, some of the more extreme conservative talk-radio hosts and opinion writers have blown it out of proportion "pull the plug on granny?" On the other side, proponents of the congressional bills have been ordered not to use the words "rationing" of health care - in other words be dishonest. We need an honest discussion here, so, please, check you emotions at the door for the next few paragraphs.

The main reason health care costs have gone up so much faster than inflation is that health care technology is advancing rapidly. We can now save people with medical conditions that would have been considered terminal only a decade or two ago. That is great news for those people who can be restored to high quality, healthy and productive lives. The problem is that this new technology can also extend the low quality lives of people who will have to be connected to machines for the rest of their lives or be bedridden or undergo expensive periodic medical procedures or take high cost medications, or all of the above.

Last April President Obama gave an interview to the New Your Times Magazine (reported here by Blooomberg) where he said some important things that I agree with.

Some opponents say the Congressional health bill limits expenditures for the elderly. They have been accused of raising "fishy" issues and talking about "rationing health care". But they are correct when they say Pres. Obama has recently favored such limitations.

Obama's opinion is (or was as of last April) that we should limit major cost surgeries for the aged and chronically or terminally ill, BUT, if they have the money or their children or grandchildren are rich (like Obama) it is OK to pay for major cost items with private money! I AGREE!

He said it is NOT a "sustainable model" if paid for out of public money because, in Obama's words “The chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total healh-care bill out here.”

Now, I assume Obama got that 80% number from some expert on health care. He is not an expert and would not have just made it up. I have heard that the current number is around 50% which means, on average, half of the money that will ever be spent on your health care is likely to be spent in the last year of your life! Of course, that is an average of those people who have very little spent on medical during the last year of their lives, the majority of people who have a moderate amount spent, and the relatively few people who have hundreds of thousands of dollars spent during that period. Perhaps the experts are projecting that, as health care technology advances further to the point where we can extend life indefinitely, the costs of care for the chronically and terminally ill will grow to 80% of the total. We should be spending our limited resources on preventitive care for the young, and on care that will restore health and vigor.

Regarding hip replacement for his terminally ill grandmother, Obama said “I would have paid out of pocket for that hip replacement just because she’s my grandmother.” (Obama's grandmother had her hip replacement mere WEEKS before she passed away - tragically just a couple days before her grandson won election to the highest office in the land).

Based on his statement that major expenditures for the chronically and terminally ill are not a "sustainable model" and that these costs could grow to 80% of the total, it would appear Obama favors some level of rationing of public-funded health care for those who are near the end of their lives.


For some reason, Obama and the proponents of the Congressional health care bills -and both the conservative and liberal press- have been absolutely silent on two key concepts:

  • Comparative Effectiveness Research (CER), and

  • Quality-Adjusted Life Years (QALY)

Have you heard either term and, if so, do you know what they mean?

They are discussed in a 2007 report from the Congressional Budget Office (during the Bush administration, so I am not making points againt the current administration):

Here are some key quotes from that report [emphasis added]:

More generally, the relative cost-effectiveness of treatment
options is clear when a less expensive treatment yields
comparable or superior health gains. In other cases, however,
determining whether the additional medical benefits
of a more expensive treatment warrant their added costs
is complex.
Typically, the benefits of different treatments
are summarized as an increase in life expectancy or, more
commonly, as an increase in quality-adjusted life years
(QALYs) to account for effects on morbidity as well as
That calculation reflects estimates of how
much people value improving their health or avoiding
various side effects, which are combined to create a single
metric. By convention, cost-effectiveness analyses report
results as the cost per QALY gained
, so a lower dollar
amount indicates a more cost-effective service. If that
metric is used to determine whether specific health procedures
are covered by an insurance program, choosing a
cost-effectiveness threshold can be a controversial
endeavor—but that need not be the manner in which
such research is applied.

A variety of evidence suggests that opportunities exist to
constrain health care costs both in the public programs
and in the rest of the health system without adverse
health consequences. Perhaps the most compelling evidence
of those opportunities involves the substantial geographic
differences in spending on health care—both
among countries and within the United States—which
do not translate into higher life expectancy or measured
improvements in other health statistics in the higherspending
regions. For example, Medicare’s costs per beneficiary
vary significantly among different regions of the
country, but much of the variation cannot be explained
by differences in the population, and the higher-spending
regions perform no better on available measures of average
health outcomes than the lower-spending regions do.

As applied in the health care sector, an analysis of comparative
effectiveness is simply a rigorous evaluation of
the impact of different options that are available for treating
a given medical condition for a particular set of
Such a study may compare similar treatments,
such as competing drugs, or it may analyze very different
approaches, such as surgery and drug therapy. The analysis
may focus only on the relative medical benefits and
risks of each option, or it may also weigh both the costs
and the benefits of those options. In some cases, a given
treatment may prove to be more effective clinically or
more cost-effective for a broad range of patients, but frequently
a key issue is determining which specific types of
patients would benefit most from it. Related terms
include cost–benefit analysis, technology assessment, and
evidence-based medicine, although the latter concepts do
not ordinarily take costs into account.

Just last month President Obama gave a hint of his thinking when he said on ABC:

"What I've proposed is that we have a panel of medical experts that are making determinations about what protocols are appropriate for what diseases. There's going to be some disagreement, but if there's broad agreement that, in this situation the blue pill works better than the red pill, and it turns out the blue pills are half as expensive as the red pill, then we want to make sure that doctors and patients have that information available to them."

It is a pity Obama took the easiest case. The blue pill costs half as much and works better than the red pill. That is a "no-brainer" - use the less expensive AND more effective blue pill. But, what if the blue pill is only 90% as effective as the red pill but it costs 50% less? On the basis of CER and QALY, you would use the blue pill even if it is a bit less effective because, based on cost per QALY, the blue pill is much more cost-effective.

What do you think?

Ira Glickstein

PS: Yes, that is me pictured on the roof of our house. A couple days ago I screwed up the courage to go up and clear out some rain gutters that were full of leaves from the live oak tree in front of our home. This was the first time I've been on a roof in at least six years. In my younger days I was more happy using a ladder, going up on the roof of our two-story NY home many times. Of course, the hardest part is getting off the ladder onto the roof and, especially, off the roof and back onto the ladder. My dad, even in his senior years, had no trouble with ladders. I would watch in amazement and envy as he climbed them as if they were a set of stairs. He would step off and onto the ladder with absolutely no hesitation.


Howard Pattee said...


You sound like a New England Liberal. The New England Journal of Medicine recently published two articles that you would agree with. One is on Cost Control, the other is on Tort Reform.

We live in a small, one building, retirement community (unlike the Villages) so we know every resident. I run a discussion group and one topic was end-of-life care. We have several residents in their 90s who are mentally sharp and in as good health as they should expect. They all agree that too much money is spent on their “emergencies” that send them by ambulance to the hospital. They believe in Hospice Care, but you can’t get it unless you are terminally ill. Ironically, Medicare does not consider “old age” as terminal. You have to have cancer or some other "diagnosable" problem.


Ira Glickstein said...

Thanks Howard - I AM a LIBERAL in the CLASSIC definition. The term has garnered "bad breath" due to its hijacking by socialists.

You have provided two excellent links everyone interested in this topic should read. Both of your links mention "Comparative Effectivenes Research" (CER) which is the keystone for limiting cost increases by spending health care resources most wisely. Neither link mentions "Quality-Adjusted Life Years" (QALY) which is how CER is measured. QALY is how public funding should be allocated.

Thanks also for relating the comments of some of your 90 year old co-residents regarding Hospice. When my mother's cancer rared up after a year of radiation and chemo, she chose to cease medical care. My wife and I went out to San Francisco to say goodbye to her in person and we spoke to her by phone nightly till the day before she passed. My father received wonderful help from Hospice. They provided a hospital bed and morphine so she could be in relative comfort in their apartment, rather than being poked and prodded by nurses and doctors. A few days a week, a Hospice worker came in for a few hours to allow my dad to go out for a walk and do the grocery shopping. Here in The Villages (FL) our synagogue co-sponsors fund raising events for Hospice. Several of our friends have passed away under Hospice care, either at home if relatives could care for them or at the Hospice house.

Perhaps Hospice could expand care to aging people who, while not formally "terminal" in the coming six months, desire only palliative care to control pain in their own homes in a dignified way even if the drugs may shorten their lives a bit.

Ira Glickstein

JohnS said...

I just spent the last couple of hours rebutting your healthcare blog and after a page and a half of rebuttal; I decided the heck with it. You are covering too much in this single blog. Future blogs on healthcare could be better used by confining the discussion to a single topic and exploring it more fully. Your first topic Universal Digititized Patient Data I agree with however as I have discussed in past blogs I would be concerned with the security of the information.
The second topic Tort Reform and Defensive Medicine is a much larger topic than you allow time. Most agree that tort reform is an important part of reducing the cost of health care. However, the mechanics are much more complex than appears on the surface. Who is going to judge complaints? How will the judicial procedure work? I am not sure a better system can be designed although I agree that the current system is inadequate
The third topic Outcome-Based Reimbursement is difficult. I don’t understand the phrase outcome based reimbursement. I read the discussion but it did not clarify the phrase, rather it seemed to wandered into a discussion of health care for the elderly. If I try to define the term outcome based reimbursement I would say it is a measure of whether the cost of my treatment is sufficiently beneficial to the nation to justify payment by the healthcare system, if not I am on my own. This would be true regardless of my age. Also, I do not believe that either 80% or 50% of health costs occur in the last year of a person’s life. It is unreasonable and illogical.
With that said I think healthcare is an important topic and hope we continue discussion.

Ira Glickstein said...

Thanks JohnS for joining this discussion and for your basic agreement with my first two items (with understandable reservations about the exact details).

Please feel free to post your "page and a half of rebuttal" in one or more Comments - I want to hear your views!

The reason you are confused about "outcome based reimbursement" is that YOU HAVE BEEN PAYING ATTENTION!

Both sides have a common strategy - confuse the issue with mischaracterizations and even outright lies.

For the opposition, it comes down to "pulling the plug on granny". For proponents it comes down to never saying the words "rationing" or even "quality-adjusted life years" (QALY).

You are close when you write: " If I try to define the term outcome based reimbursement I would say it is a measure of whether the cost of my treatment is sufficiently beneficial to the nation to justify payment by the healthcare system, if not I am on my own." I would add, after "sufficiently beneficial to the nation ...", "AND THE PATIENT ..."

I am no expert on QALY but, after reading parts of the CBO report I linked to, here is how I think it works:

1) Quality of life is quantified. It may seem crass to put a percentage number of life quality of a human, but it is done all the time. For example, if you have an accident and lose sight in one eye, there are guidelines and precedents for how much that is worth in your claim against liability insurance. Loss of sight in both eyes is much worse, and there are guidelines for loss of one limb, etc., etc. Also, Social Security Disability and nursing homes have scales for judging qualification such as: Can you dress yourself?, Prepare your own breakfast?, Go to the bathroom yourself? Bathe yourself? Are you bedridden? Wheelchair bound? Do you know what day it is? Who is the President? Etc., etc. Using these guidelines, the quality of an additional year in a person's life can be quantified, for example as a percentage value compared to a person in vigorous good physical and mental health.

2) Alternative treatments are considered and quantified There are a range of alternative treatments, from doing nothing but palliative pain control, up to and including "heroic" treatments such as a heart transplant, with many others in between, such as relatively minor surgery or drugs. Each treatment alternative comes with a cost and an estimate of how many years it will most likely add to a person's life.

3) QALY is calculated This is simply the life expectancy of the patient (including the number of added years due to a given treatment option) multiplied by the percentage quality of life, given that the person has that given treatment.

4) Cost per QALY is calculated For each alternative treatment, this is the cost of that treatment divided by the calculated QALY. Any treatment that has a cost per QALY greater than some national threshold, such as $30,000, is rejected. The patient, with consultation by his or her doctor and family, may choose whichever alternatives remain on the table.

You question 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? Do you agree with me that, as medical technology continues its incredible advance, and we can keep people alive for indefinite periods, the percentage of health care costs for that purpose will increase?

Ira Glickstein