May 2010

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In the past, I have commented on an article by Phillip Longman describing the quality of care at the VA.  Mr. Longman recently wrote a book titled The Best Care Anywhere.  The book claims that “the long-maligned Veterans Health Administration has become the highest-quality healthcare provider in the United States.”

Gooznews interviews Mr. Longman.  Below are some excerpts:

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Reading is human contact, and the range of our human contacts is what makes us what we are. Just imagine you live the life of a long-distance trucker.  The books that you read are like the travellers you take into your cab.  If you give lifts to people who are cultured and profound, you’ll learn a lot from them. If you pick up fools, you’ll turn into a fool yourself.”

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Michelle Obama’s is deeply involved in her recently involved in fight against childhood obesity.  Eating healthy and exercising more is a laudable goal.  But do we want the government operatives taking the role of a Biggest Loser Drill Sergent?  Could government weight monitoring become a reality?

Maybe. In an interview with Marv Albert, President Barack Obama had a question for Charles Barkley:

I know you say you’re not a role model, but the first lady has been working on this childhood obesity thing and she wants to know if you are setting a good example by getting your exercise and eating right.  If you could give an honest response, because I have ways of checking up. I’ve got a lot of intelligence operations around. We’ve got hidden cameras everywhere. Let us know, are you, in fact, sticking to your diet?

Although the President’s comments should be taken lightheartedly, the government does face a conundrum.  Obesity reduction efforts that implore individuals to lose weight likely won’t have any teeth (pun-intended).  Just saying ‘pretty please’ or trying to make people feel guilty about being fat will only have a moderate effect on weight loss and could even increase the incidence of eating disorders.  On the other hand, the government could impose penalties (e.g., higher premiums) for overweight individuals who receive government-run healthcare (e.g., Medicare and Medicaid).

In this case, the President’s threats may not be a laughing matter.

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David Williams of the Health Business Blog posts the latest edition of the Health Wonk Review.

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Kolstad and Kowalski (2010) examine how the Massachusetts individual mandate affected uninsurance rates, hospital and outpatient utilization, and preventive care:

Among the population discharged from the hospital in Massachusetts, the reform decreased uninsurance by 28% relative to its initial level. Increased coverage affected utilization patterns by decreasing length of stay and the number of inpatient admissions originating from the emergency room. We also find evidence that outpatient care reduced hospitalizations for preventable conditions. At the same time we find no evidence that the cost of hospital care increased.

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How does the price of health insurance affect the probability that a firm will offer health insurance to their workers?  A previous post provides a variety of estimates of the elasticity of firm health insurance offering with respect to premiums.  A more recent article by Gruber and Lettau (2004) needs to be added to this mix.

This paper uses data from the 1983-1995 National Compensation Surveys to determine that “there is a moderately sized elasticity of insurance offering with respect to after-tax prices (-0.25), and a larger elasticity of insurance spending (-0.7). We also find that the elasticities are driven primarily by small firms, for whom the elasticity is larger.” Additionally, the authors claim that if the tax subsidy to employer-provided health insurance were eliminated, 15 million fewer workers would be offered health insurance.

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Rand Paul is the the son of libertarian Senator Ron Paul and is currently running for Senate in the state of Kentucky.  Although Dr. Paul (an ophthalmologist) recently won the primary in his state, he’s gotten in some hot water for some comments he made.  For instance, he’s stated opposition to some parts of the civil rights act.

Today, however, I’d like to discuss his comment that the government’s treatment of BP–the oil company whose rig spilled millions of gallons of oil into the ocean–was “un-American.”  Referring to President Obama, Dr. Paul stated:

I think that sounds really un-American in his criticism of business. I’ve heard nothing from BP about not paying for the spill. And I think it’s part of this sort of blame-game society in the sense that it’s always got to be someone’s fault instead of the fact that sometimes accidents happen.

I think Dr. Paul’s comments have a lot of truth.  BP did not want the oil spill to occur.  Although oil companies are often seen as greedy and corrupt, no oil company would want to lose millions of gallons of its most important asset: oil.  The popular media seems to demonize BP as if this were an intentional act.

Let me be clear, BP is at fault here and must pay the damages.  However, the fault was careless, but not intentional.  At your own job, however, I doubt you perform every task perfectly so no one should expect BP to do the same.

In an ideal libertarian world, there would be no regulation of the oil companies.  However, when a spill like this occurs, those affected could sue BP and be compensated for their losses.  BP is willing to pay our large settlement sums.

As we know, however, this is not a perfect world.  BP is a large company with significant resources to pay for lawyers.  The people hurt by the oil spill include the tourism industry, fisherman, and others.  Brining these all these smaller, disparate individuals and firms together may be difficult.  Further, the poorest people affected by the oil spill may not have the time or resources to participate in the lawsuit.  Thus, there may be a need for some regulation.  However, will government regulators know about oil rig safety more than BP engineers?  I doubt it.

The point of this fairly rambling post is that Dr. Paul’s comments do not align with conventional wisdom, but they are far from unreasonable.

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Until their most recent quality stumbles, Toyota’s production techniques were the darlings of the management consulting world.  The Toyota process is embodied by the concept of kaizen, a Japanese notion of continuous improvement. The latest gurus have even applied the production techniques to the health care arena (see Designed to Adapt). A Health Affairs article by John Toussaint (2009) shows how Wisconsin has used Toyota-style production techniques to improve quality.

Some of the problems an improved production process could solve include:

  • A large fraction of steps in the health care process have no apparent value for the patient.  Touissaint estimates that this figure is currently 90%-95%.
  • A lack of trust of less-qualified peers.  Cardiologists often do not trust ED physicians to accurately diagnose a heart attack, resulting in a repetitious diagnosis process.
  • Most physicians are “…more loyal to their specialty than to the team with whom they work every day.”

Some of the solutions the Toyota production system offers include:

  • Decreasing wasted time can increase quality.  ”In 2002, for instance, our morality rate for coronary bypass surgery was nearly 4 percent.  After several kaizen projects in this area, typically removing 40 percent of the waste each time, mortality dropped to 1.4 percent in 2008 and has been 0 percent through six months of 2009.”
  • Making medical care more collaborative can improve care. For instance, in one hospital’s Collaborative Care wing, the nurse owns the care process. “The nurse remains in contact with the doctor but does not wait for instruction. Often, it is the nurse who instructs the physicians about a needed step or a critical time in the patient’s care.”

This quality improvements are sound good on paper, but take serious efforts to implement in practice.  In addition, current insurance payment schemes are not conducive to collaborative care.  Touissaint claims that Medicare pays $2,000 less per patient on average in Collaborative Care than in a traditional medical wing.

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