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Posts Tagged ‘insurance’

Health care costs continue to spiral upward. This can’t go on forever.  Health care reform measures that give the government more power to keep health care costs down is one approach, but another word for this is rationing.  Are we ready for that?  Maybe.

The alternative is to for patients to get more involved in paying for and controlling health care costs.  Are we ready for that?  We have to realize there is no free lunch.  We can’t expect to everyone to get all the health care they can use and not have to pay for it somehow.

I’ve written a lot about how we need to use incentives to control our health care costs, focusing primarily on how insurance takes away patients’ incentives to be mindful of the cost of care.

But financial incentives undoubtedly affect physician behavior, too.  A new study found that physicians who own their own practices are more likely to order patient tests that will make the physician practice more money when compared with physicians who are on a salary (Hollingsworth JM, Birkmeyer JD, Zhang YS, Zhang L, Hollenbeck BK. Imaging Use Among Employed and Self-Employed Urologists. J Urol. 2010 Oct 16).  The study used nationally representative data collected by the Federal government and found that self-employed urologists ordered more imaging tests on their patients than did salaried urologists.

I don’t know what the right amount of testing is, but it is clear from high school economics and confirmed by this study that financial incentives affect the way people — including doctors — behave.  Combine these two ingredients:

  1. Financial incentives for doctors to increase use of care, and
  2. The removal of incentives from patients to conserve on the cost of care.

What do you get?  A recipe for a high cost disaster — unless we are willing to cede to insurance companies or government regulators the control to ration our care, a less palatable solution.

To bring down the cost of health care, we need to make sure our incentives are set up to give people high quality medical care at affordable prices.

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Novartis AG announced a new multiple sclerosis (MS) drug, Gilenya.  MS is a terrible neurologic disease, and a pill to treat the disease is most welcome.  But the cost?  The cost?  Approximately $48,000 per year for an individual patient!  Wow.  I wonder how they justify that.

In a world in which the insurer is paying for the drug, why would a patient say no to this?  We need some kind of system to control drug costs.  Having the government do it is a possibility — if we’re willing to accept rationing. Having the insurance companies do it is a possibility, if we’re willing to accept letting them make our health care decisions for us.

Or, we can change the system so that patients bear more responsible for the cost of their care. I think that would keep pharmaceutical companies from charging prices like these.

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A National Psoriasis Foundation survey reports that one in three people with psoriasis do not receive proper treatment for their disease due to health insurance issues. There are modern medical miracles to be had, but one of the biggest problems we face today is simply accessing them.

Here are some things to keep in mind:

  • If the insurer says no to paying for a certain treatment, appeal.
  • If they still say no, consider contacting a patient advocacy group (we have a list on the home page of DrScore.com, just scroll down to the bottom). In the case of psoriasis, it would be the National Psoriasis Foundation. You could also contact your state insurance commissioner. I suspect that if the treatment really is appropriate, most times the insurer will cover the product on appeal.
  • Also, look into patient assistance programs. My personal experience is that there are some generous programs out there designed for people who can’t afford the medication or even the copay. You can start at http://www.pparx.org/.

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A Jan. 5 New York Times article reported that health care spending grew in 2008 at the slowest pace in 48 years, only up 4.4 percent from the previous year (down from an average increase of 7 percent a year in the decade from 1998 to 2008). A Feb. 4 Washington Post article reported that health care spending in the United States grew by 1.1 percent in 2009 compared with 2008. While the slowing of health care costs growth may seem somewhat promising, it is shocking that health care expenses continued to increase despite the rest of the economy shrinking. Health care costs are gradually approaching 20 percent of the overall economy.

The idea that health care spending should take up 20 percent of the economy seems totally out of proportion and unsustainable (although one uncle of mine suggested that spending on health care may be money better spent than using that money for weapons). The costs continue to grow, while the number of uninsured continues to increase. The idea that government is going to take over health care is already here, at least in terms of paying for much of it.

The last presidential election and subsequent elections seem to have made clear that there needs to be an open consensus process on how to solve the problem. There is a growing minority of people who have poor access to care, and everyone agrees that the problem needs to be fixed. There is a shrinking majority who are paying heavily for access. Their costs continue to grow, and everyone agrees that that problem needs to be fixed, too.

The hard part is coming to a uniform consensus about what needs to be done. The solution will need to consider that there are no free lunches to fixing the problem. Patients can’t have unfettered access to any treatment at any price paid for by some third party — whether it is government or a private payer — if we’re going to reign in the cost of care. We’ll need to come to a consensus about which is the lesser evil: continued explosive growth in health care costs, rationing the health care options patients have, or making patients themselves more responsible for the costs of their health care decisions.

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I’m back from a trip to the American Academy of Dermatology’s annual meeting where Dr. James Leyden was given one of the Academy’s highest awards, the Livingood Lectureship. Leyden’s talk was about health care reform and how insurance was the problem, not the solution. Mirroring a lot of the things I’ve been thinking, Leyden pointed out the problems of having health care paid by a third party. The lack of accountability warps the market and leads to uncontrollable cost. 

Leyden had many specific analogies. One of my favorites was that we now have a health insurance system that would be like having auto insurance that paid for oil changes and gasoline. It isn’t efficient, and it doesn’t make sense.

Instead of demonizing insurers or drug companies, attorneys or anyone else, let’s focus on the real problem, accountability for cost. Who will be accountable? Do we want the insurers to tell us what drugs we can or can’t have?  Do we want the government to do it?  If not, we need to take responsibility ourselves. 

For more details on my thoughts, see my article in the last issue of the North Carolina Medical Journal (http://www.ncmedicaljournal.com/Jan-Feb-10/ReadersForum.pdf).

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