January 2009

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Does competition improve health care quality?

January 30, 2009 in Academic Articles, Health Insurance, Quality, Supply of Medical Services | 3 comments

If economists decided to re-write the Ten Commandments, “Thou shalt love Competition” may make the list.  However, does competition always improve quality?  Even in the case of health care?

A paper by Scanlon et al. (2008) “…found no evidence of a strong and consistent relationship between HMO competition (measured either by the HHI or the number of HMOs) and plans’ scores on the CAHPS and HEDIS measures of health plan performance.”  The authors did find, however, that increased competition can lead to lower health premiums.  

Because price is easily observable and quality is not, it seems sensible that increased competition will push down prices, but may not improve quality.  Further, more competition means more fragmented medical care, which can increase the cost to provide quality health care services. 

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Reference Pricing

January 29, 2009 in Health Insurance, Medicaid/Medicare, Pharmaceuticals | No comments

What percentage of your prescription drug costs should your insurance company cover?  You may say “100%, of course!”  However, if health insurance cover all pharmaceutical costs this will drive up premiums.  

One solution to this problem is reference pricing.  If generics are available for $10 and name brand drugs are available for $100, the insurance company only covers $10 for drugs in this category.  Why would anyone want a $100 drug when a $10 one is available?  The Health Care Blog gives 4 reasons why physicians don’t prescribe more generics:

  1. Many drugs are better known by their often simpler brand names and so physicians routinely write the brand name on the prescription, even if they do not mean that the brand has to be filled.
  2. Physicians do not have any idea what drugs actually cost their patients, because we are “too busy” and because prescription drug pricing transparency might wake us up.
  3. Some physicians believe, against the evidence in double-blind trials, that generics are inferior or less pure than the brand name version.
  4. Some patients are convinced, also against the evidence in double-blind trials, that they do better with the brand than with the generic version and request that their physician specify the brand.

Yet the Wall Street Journal reports that CMS may ban reference pricing.  Authors Dr. Rick Peters and Dr. Karl Luber claim that reference pricing does much good and should not be banned.

I tend to agree with them.  If low cost, safe generics are available, then insurance should only cover the cost of generics.  This will lower costs and convince more people to take generics.  

There is a down-side to reference pricing, however.  By giving less money to the pharmaceutical companies who manufacture the name brand drugs, this may stifle innovation of these drugs in the long run.  However, incentives to innovate could be generated through extending patent lengths or giving prizes to pharmaceutical companies who develop new drugs.  

Reference pricing is a fair way to steer patients and physicians towards more cost-effective use of pharmaceuticals.

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Shortage! Shortage!…Shortage???

January 28, 2009 in Physician Compensation, Specialists, Supply of Medical Services | 3 comments

In the news, you often hear that there are shortages of nurses and physicians.  We need more nurses and physicians, right?  According to an editorial by Laurence Baker in Health Services Review, we should be a little skeptical of calls for more and more healthcare providers.  If supplier-induced demand is a problem, more providers will only increase the amount of medical care provided.  For instance:

  • Bunker (1970) found that in 1967, “there were 39 surgeons per 100,000 persons in the United States, and less than half as many—18 per 100,000—in England and Wales. America, he also found, had a much higher rate of surgery, about 7,400 surgeries performed per 100,000 people in 1965, about twice the 3,770 reported for 1966 in England and Wales.”
  • Fuchs (1978) “estimated that 10 percent increases in the surgeon/population ratio resulted in about a 3 percent increase in per capita utilization of surgeries.”
  • “Sloan and Schwartz (1983) concluded that a 10 percent increase in the supply of physicians would be associated with a 4 percent increase in spending for physician services.”
  • Fisher et al. (2003 a, b) “…argued that in the Medicare program, having more specialists per capita in an area is associated with higher surgery rates and higher procedure rates.”
  • “Baicker and Chandra (2004) showed that states with the more specialists tend to rank lower in quality than states with fewer, and vice versa for generalists.”

Does expanding supply the of physicians unambiguously improve health care quality?  No.  It is likely that increasing the supply of primary care physicians will increase quality and increase cost at a slower rate.  On the other hand, an increase in the supply of specialist may or may not improve quality and will almost certainly increase costs.  Increasing the supply of physicians may improve health care system, but it should not be dogma that this is always the case.

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Cavalcade of Risk is up

January 28, 2009 in Carnivals | No comments

The latest edition of the Cavalcade of Risk has been posted at the Health Business Blog.

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APGAR Score

January 27, 2009 in Quality | No comments

P4P.  Evidence-based medicine.  Insurers and policymakers want to be sure that patient insurance premiums are being used towards high quality medical care.

One example of quality evaluation in practice is the Apgar Score.  In 1952, Dr. Virginia Apgar developed this metric to evaluate the health of newborns.  Newborns receive a 0, 1, or 2 score on 5 different metrics.  Thus, the total score ranges from 0 to 10.  The test is administered at one minute and five minutes after birth, and sometimes also at 10 minutes.

You can see how the Apgar score is actually calculated here.

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Quotation of the day

January 26, 2009 in Current Events | No comments

It’s a truism that people are complicated, multifaceted, contradictory, surprising, but it takes the advent of war or other momentous events to be able to see it.  It is the most fascinating and the most dreadful of spectacles…the most dreadful because it’s so real; you can never pride yourself on truly knowing the sea unless you’ve seen it both calm and in a storm.  Only the person who has observed men and women at times like this…can be said to know them.  And to know themselves.

Getting Naked

January 26, 2009 in Medical Studies | No comments

The physician-patient interaction can be a strange one.  Patients leave their most important possession–themselves–in the hand of strangers.  Typically conservative women will bare their naked bodies to physicians.   Although rare, the possibility exists for the physician to take advantage of this situation.  

In the U.S. “4 percent of the disciplinary order that state medical boards issue against physicians are for sex-related offenses…Seventy two percent of females medical students and twenty nine percent of male medical sudents have been victors of patient initiated sexual behavoir.”  I know of patients who slap cute medical assistants’ behind.  Physicians and patients can both act inappropriately.

How do physicians establish trust with their patients?

Atul Gawande gives some examples from around the world in Better: A Surgeon’s Notes on Performance.

  • Afghanistan: When a male physician examines a female patient, they are separated by an opaque screen with a two-inch circle cut into the screen. “Behind it, the woman is covered from head to toe by her burka. The two do not talk directly to each other. The patient’s young son serves as the go-between.” S
  • Iraq: Family members are present in the exam room whenever there is a male physician examining a female patient.
  • Venezuela: A nurse chaperone is present any time there is a breast or pelvic exam.  The exam will not take place without the presence of the chaperone.
  • England: A nurse chaperone is present any time a patient undergoes a breast, pelvic or abdominal exam.
  • Ukraine: A nurse chaperone or family member is rarely present in the examine room, but cultural mores help to maintain a professional tone.  Patients always address the physician as Dr. ____, and the physician addresses the patient as Mr. or Mrs. _____.

Gawande, Atul (2007) Better: A Surgeon’s Notes on Performance, Metropolitan Books, 288 pages.

Gawande A (2005) “Naked” NEJM, 353:645-648.

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Why do we die?

January 23, 2009 in Medical Studies | No comments

What factors predict how long we live?  What are the best ways to forestall death?

The determinants of premature death are 40% behavoiral, 30% genetic, but only 10% medical care.  It is important to remember that medical care and health are far from synonomous.

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The birth of the N.H.S.

January 23, 2009 in International Health Care Systems, Public Policy | 3 comments

Why did the British decide to have the government pay for health care?  Are they socialists by nature?  Were they just ahead of their time?  Did some lobbyist win the favor of government?

Actually, it was done out of practicality.  World War II shifted the provision of health care from the private to the public sector.  As Atul Gawande explains in the New Yorker:

“ …in the days before war was declared, the British government oversaw an immense evacuation; three and a half million people moved out of the cities and into the countryside. The government had to arrange transport and lodging for those in need, along with supervision, food, and schooling for hundreds of thousands of children whose parents had stayed behind to join in the war effort. It also had to insure that medical services were in place—both in the receiving regions, whose populations had exploded, and in the cities, where up to two million war-injured civilians and returning servicemen were anticipated.

As a matter of wartime necessity, the government began a national Emergency Medical Service to supplement the local services. Within a period of months, sometimes weeks, it built or expanded hundreds of hospitals. It conducted a survey of the existing hospitals and discovered that essential services were either missing or severely inadequate—laboratories, X-ray facilities, ambulances, care for fractures and burns and head injuries. The Ministry of Health was forced to upgrade and, ultimately, to operate these services itself.”

Like many “temporary” government programs, this one had sticking power.  

“By 1945, when the National Health Service was proposed, it had become evident that a national system of health coverage was not only necessary but also largely already in place—with nationally run hospitals, salaried doctors, and free care for everyone. So, while the ideal of universal coverage was spurred by those horror stories, the particular system that emerged in Britain was not the product of socialist ideology or a deliberate policy process in which all the theoretical options were weighed. It was, instead, an almost conservative creation: a program that built on a tested, practical means of providing adequate health care for everyone, while protecting the existing services that people depended upon every day. No other major country has adopted the British system—not because it didn’t work but because other countries came to universalize health care under entirely different circumstances.”

Based on this evidence, Dr. Gawande gives a profound insight.  Any health care reform necessarily will be built out of the existing health infrastructure.  This is true both for individuals who want more or less government involvement.  The U.S. has significant experience with private health insurance and expanding private health insurance would not be difficult.  Expanding public insurance would also be feasible through expansions of the V.A., Medicare, or Medicaid systems.  

Whatever reform path we choose, we must take into account the capabilities and infrastructure already in place when we propose these reforms.  

No country designs their health care system from scratch.

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The biggest clinical innovation in 30 years is…

January 22, 2009 in Current Events | No comments

a checklist?

According to The Independent (‘Right patient? right limb?‘), “Surgeons in England and Wales will be ordered today to carry out a safety checklist before every operation they perform, after a study showed it cut surgical deaths and complications by a third….Surgeons and nurses run through a series of basic safety checks before each operation, similar to those made by pilots before take-off. The checks include asking: Is this the right patient? Is this the right limb? Has the patient had the right drugs?”

Atul Gawande states why he believes these checklists are so important.  

“When I talk to clinicians, they say: ‘we already do this stuff.’ The answer is: we are good at doing it most of the time, but we are not good at doing it all the time. We found some members of the team felt they were such low agents, they only felt responsible for their corner. Being allowed to say who they were [one item on the checklist] and hear the surgeon say what he expected made them feel part of the team. When you are not given a voice you turn your brain off.”

This techniques may also be implemented on the other side of the Atlantic.  On CNN, I recently saw an interview with an executive at MachOne Leadership.  This firm translates aviation Crew Resource Management (CRM) techniques, tools, and skills for the healthcare field.  Aviation techniques may be useful in the surgical setting because both are complex, high-stress environments, lead by type-A personalities who don’t like to compromise.

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