Unbiased Analysis of Today's Healthcare Issues

US Health Care Spending in 2013

Written By: Jason Shafrin - Dec• 03•14

What is happening with US healthcare spending? A recent Health Affairs article from the National Health Expenditures Accounts Team summarizes the latest trends.

In 2013 US health care spending increased 3.6 percent to $2.9 trillion, or $9,255 per person. The share of gross domestic product devoted to health care spending has remained at 17.4 percent since 2009. Health care spending decelerated 0.5 percentage point in 2013, compared to 2012, as a result of slower growth in private health insurance and Medicare spending. Slower growth in spending for hospital care, investments in medical structures and equipment, and spending for physician and clinical care also contributed to the low overall increase.

Jason Millman of WonkBlog has a nice graphic providing a breakdown by spending category.

2013spending

What is causing the deceleration of health care spending. The Health Affairs article notes that there has been a large increase in the share of insured patients who are covered by high-deductible health plans (HDHP). These plans likely incentivize patients to use fewer services. Medicare spending cuts (e.g., last year’s budget sequester and the Affordable Care Act) and limits on insurer profits may also have slowed spending.

(more…)

Quotation of the Day

Written By: Jason Shafrin - Dec• 03•14

He disdained anyone who dismissed an issue as trivial. “Life is made up of a whole concentration of trivial matters,” he once said. “Certainly a computer is nothing but a huge concentration of trivial matters.”

  • J. Presper Eckhert regarding his thoughts on building Electronic Numerical Integrator and Computer (ENIAC), widely considered to be the first computer.
  • An excerpt from The Innovators by Walter Isaacson.

The downside of EMRs

Written By: Jason Shafrin - Dec• 01•14

…is the potential for data breaches. Experian’s 2015 industry data breach forecast notes the following:

We expect healthcare breaches will increase — both due to potential economic gain and digitization of records. Increased movement to electronic medical records (EMRs), and the introduction of wearable technologies introduced millions of individuals into the healthcare system, and, in return increased, the potential for data breaches.

Accessing an individual’s medical information (as well as billing information) has the potential to be very lucrative. Although large insurers and provider networks may have the capacity to safeguard EMRs, will small physician practices, clinics and hospitals also have the capital and know how to protect patient information?

Further, there is an even easier way to “hack” a person’s identity.

An individual’s Medicare card — often carried in wallets for doctors’ visits — contains
valuable information like a person’s Social Security number (SSN) that can be used for fraud if in the wrong hands.

EMRs offer the promise of seamlessly communicating patient information across providers. However, the easier it is for providers to share information across networks, the easier it will be for hackers to access this data as well. EMRs benefits likely still outweigh these cost, but providers should not embark on an EMR strategy without taking into account how to address the security of these data.

The end of urgent care?

Written By: Jason Shafrin - Nov• 30•14

A recent trend where urgent care centers are being converted to free-standing emergency rooms has hit the Midwest. The Milwaukee Journal Sentinel reports that “Froedtert Health proposing to convert its urgent care clinic in New Berlin to a free-standing emergency department.”

Why would they do that?  Conventional wisdom holds that EDs are money losers. Although this is true for hospitals that serve large numbers of uninsured and Medicaid patients, for insured patients, the ED is very lucrative. Thus, this move is likely profit driven. Reimbursement rates are higher for emergency room care than urgent center care.  In addition, if Froedert sets up an ER, patients are more likely to be funneled to their hospital, further increasing reimbursements.

Is this the best way to improve access to emergency care?  According to the article:

Critics of free-standing emergency departments contend there are less costly — though less lucrative — ways to lessen the demands on emergency departments, such as opening urgent care clinics with extended hours.

Improving access to care is a good thing. However, it is unclear whether more emergency rooms are the best way to increase access.

 

 

Why isn’t there more consumer med tech?

Written By: Jason Shafrin - Nov• 23•14

Robert Pearl’s MedX keynote address gives some reasons.

  1. Many New Technologies Don’t Address The Real Problem.  Tech entrepreneurs often take a backward approach to invention. They start by discovering a nifty technology. Later, they figure out how people can use it…Alan Cooper, considered by many to be the father of modern user experience design (UXD), said the ideal approach is “goal directed.”  Meaning, innovators should start with the goals of the end-user. The solutions come next. When the order is reversed, the results usually disappoint.
  2. No one wants to pay for it.  Having a cool technology isn’t enough.  It must produce value in terms of lower cost or higher quality.  Even if it lowers cost, some providers (e.g., physicians) may not want it if it decreases how much they can bill (e.g., fewer physician visits).
  3. Physicians Are Reluctant to Show Patients Their Medical Information.  Conventional wisdom holds that docs held the key to a patient’s medical chart, since they worried that the information could be harmful to patients if they saw it. In the age of EMRs, however, this can change.  “Some doctors are flipping their computers around and using the health data on screen to educate patients.  This transparency ensures the information is accurate. It invites patients to participate more closely in their own treatment plans.”
  4. Technology Slows Down Many Physicians. Entering data into an EMR takes longer than a paper record. Period.
  5. Many Physicians See Technology As Impersonal. As medical knowledge advances, the perceived rift between “high tech” and “high touch” is becoming a relic of the past. Telling a patient he has cancer requires time, compassion and well-honed interpersonal skill…figuring out the exact cancer treatment – given dozens of alternatives, the patient’s unique genetics and the many sub-types of each cancer – is more a matter of technology and science. Increasingly, treatment possibilities exceed the human mind.

In summary:

Across history, it often has been the next generation that figures out how best to use new technology. Health care may be no different.

But if hungry entrepreneurs don’t want to wait 10 or 15 years for the demographics to change, they would be smart to provide solutions that use currently available technology to solve patient’s problems in the simplest and least expensive ways.

Friday links

Written By: Jason Shafrin - Nov• 21•14

HWR: Turkey Edition

Written By: Jason Shafrin - Nov• 20•14

David Harlow has posted a most excellent Health Wonk Review: The Turkey Edition at HealthBlawg – great substantive content and fun, too! Even a video of Gruber Gate is there if you’re interested.

 

Does International Development Work?

Written By: Jason Shafrin - Nov• 18•14

In a well thought out piece in the New Republic, Michael Hobbes argues the answer isn’t ‘yes’ or ‘no’, but the expectations for aid programs to completely reinvigorate an economy or improve health care dramatically are often overestimated.  Consider the case of a program that distributes food to individuals who are malnurished.

In Udaipur, India, a survey found that poor people had enough money to increase their food spending by as much as 30 percent, but they chose to spend it on alcohol, tobacco, and festivals instead. Duflo and Banerjee interviewed an out-of-work Indonesian agricultural worker who had been under the food-poverty line for years, but had a TV in his house.

You don’t need a Ph.D. to understand the underlying dynamic here: Cheap food is boring. In many developing countries, Duflo and Banerjee found that even the poorest people could afford more than 2,000 calories of staple foods every day. But given the choice between the fourth bowl of rice in one day and the first cigarette, many people opt for the latter.

Development projects often focus on a single goal (e.g., school attendence, calories consumed, quality of life), but in reality, the individuals receiving the aid have a utility function that depends on multiple factors.
The article is interesting throughout.

Medicaid Expansion States

Written By: Jason Shafrin - Nov• 17•14

Which states have decided to receive additional federal funds to expand the share of people they cover under Medicaid?  The Kaiser Family Foundation has the answer.

  • Alabama Not Moving Forward at this Time
  • Alaska  Not Moving Forward at this Time
  • Arizona Implementing the Medicaid Expansion 
  • Arkansas Implementing the Medicaid Expansion
  • California  Implementing the Medicaid Expansion
  • Colorado Implementing the Medicaid Expansion
  • Connecticut Implementing the Medicaid Expansion
  • Delaware Implementing the Medicaid Expansion
  • District of Columbia Implementing the Medicaid Expansion
  • Florida Not Moving Forward at this Time
  • Georgia Not Moving Forward at this Time
  • Hawaii Implementing the Medicaid Expansion
  • Idaho Not Moving Forward at this Time
  • Illinois Implementing the Medicaid Expansion
  • Indiana Open Debate
  • Iowa Implementing the Medicaid Expansion
  • Kansas Not Moving Forward at this Time
  • Kentucky Implementing the Medicaid Expansion
  • Louisiana Not Moving Forward at this Time
  • Maine Not Moving Forward at this Time
  • Maryland Implementing the Medicaid Expansion
  • Massachusetts Implementing the Medicaid Expansion
  • Michigan Implementing the Medicaid Expansion
  • Minnesota Implementing the Medicaid Expansion
  • Mississippi Not Moving Forward at this Time
  • Missouri Not Moving Forward at this Time
  • Montana Not Moving Forward at this Time
  • Nebraska Not Moving Forward at this Time
  • Nevada Implementing the Medicaid Expansion
  • New Hampshire Implementing the Medicaid Expansion
  • New Jersey Implementing the Medicaid Expansion
  • New Mexico Implementing the Medicaid Expansion
  • New York Implementing the Medicaid Expansion
  • North Carolina Not Moving Forward at this Time
  • North Dakota Implementing the Medicaid Expansion
  • Ohio Implementing the Medicaid Expansion
  • Oklahoma Not Moving Forward at this Time
  • Oregon Implementing the Medicaid Expansion
  • Pennsylvania Implementing the Medicaid Expansion
  • Rhode Island Implementing the Medicaid Expansion
  • South Carolina Not Moving Forward at this Time
  • South Dakota Not Moving Forward at this Time
  • Tennessee Not Moving Forward at this Time
  • Texas Not Moving Forward at this Time
  • Utah Open Debate
  • Vermont Implementing the Medicaid Expansion
  • Virginia Not Moving Forward at this Time
  • Washington Implementing the Medicaid Expansion
  • West Virginia Implementing the Medicaid Expansion
  • Wisconsin Not Moving Forward at this Time
  • Wyoming Not Moving Forward at this Time

Psych Boarding in the ER

Written By: Jason Shafrin - Nov• 16•14

The president of the American College of Emergency Physicians, Michael Gerardi, was recently interviewed about his plans for the organization.  One of his key initiatives will be to stop the practice of housing psychiatric patients in the ER. According to Dr. Gerardi:

It is inhumane that a lot of patients, especially adolescent patients, sometimes live in an emergency department for days. We have stories of patients in the emergency department waiting for a bed, a patient bed, for over a week.

That’s got to stop.

In fact, there are models out there now where you can take a person in a mental health crisis to a separate screening and treatment center, not an emergency department, and you have the same outcomes with safety and more humane treatment. In fact, their length of stay are dramatically shorter in these — it’s called the Alameda model — outpatient centers.

How much of Dr. Gerardi’s objective is focused on what is best for psychiatric patients and how much is motiviated by helping ER docs and ER providers to get out of the (likely less profitable) business of treating mental illness.

Monica Oss of Open Minds makes an important point, that even if the status quo is suboptimal, banning psychiatric ER boarding may not be welfare improving if there are no alternatives available to patients with serious mental illness.

My concern is that psychiatric boarding will be “banned” without formal alternatives developed for these consumers. In an era of parity and expanded health care coverage, there should be funding for these alternatives. But monitoring whether the “ban” increases rates of homelessness and incarceration is critical to assuring we don’t repeat past policy mistakes.

An interesting topic that the Healthcare Economist will be monitoring.