« Speaking of Pop Culture | Main | "She Changed Our Thinking..." »
September 19, 2007
Hazardous Morals
Moral hazard is a pretty simple idea: The less you bear the consequences of your actions, the more reckless you'll be. And it's often applied to health care: The less it costs, the more you'll consume. That's why conservatives tend to want you to pay for everything out of pocket, and see universal coverage plans as surefire ways to send costs skyrocketing. If you're paying more for care, you'll be able to afford less of it. But it's a bit bizarre of a theory.
Currently, if I want a bar of precious, precious gold, I have to pay a lot of money for it. If someone let me into Fort Knox and said the gold was on them, however, I'd take as much as I could possibly carry. I like gold! The more the better. That's not really the case with colonoscopies, or triple-bypasses. Now, you could make it so I can't afford colonoscopies, in which case I can't get them, but making it so I can have an unlimited number won't compel me to make them a weekly event.
Indeed, the reason people get medical care -- in particular expensive medical care -- is because their doctors tell them to. I have never in my life sat up in bed and thought, "huh, I should really get some laparoscopic surgery." If I get a surgery, it's because my doctor told me to. And if I can't afford it, I have to ignore his diagnosis.
For that reason, if you want to safely cut back on care patients buy, you need to get doctors to stop recommending so much wasted care. You can do that in a few ways: Put them on salary rather than on fee-for-service deals, so they don't make more money when they recommend treatment. Create new research institutions that test the cost effectiveness of care so they have a better idea of which treatments are worth recommending. Offer bonuses for using proven therapies. Etc, etc. But this idea that the way to better run medical care is to rejigger the financial incentives so patients have to ignore their doctor's advice is really quite bizarre.
September 19, 2007 in Health Care | Permalink
Comments
Yup.
Posted by: Petey | Sep 19, 2007 10:32:18 AM
How many times have we said this? It's the simplest, most logical way to approach the problem, but those who oppose universal coverage - whether they specify "single payer" or some other name - aren't going to be convinced of it.
They'll just ignore it, or bring up some anecdote. The problem is that those people who actually buy into that line of argument are apparently too dim to think logically, and those who don't really buy into it - probably the majority of those who employ it - have other reasons for opposing universal healthcare and so won't be won over by shooting wholes in their red herring argument anyway.
Posted by: Stephen | Sep 19, 2007 10:35:26 AM
The conservative healthcare pundit class must be full of hypochondriacs who enjoy spending a lot of time in doctors' offices and hospitals getting various tests and treatments and so assume that everyone else is the same way.
Posted by: KCinDC | Sep 19, 2007 10:40:11 AM
The problem is when the insurance company is paying we demand healthcare up to or beyond the point where the marginal value of the last treatment is $0.
The medical people mostly assume that a longer but less enjoyable live is best for everyone. So what if I am diagnosed with a form of cancer that is expensive and debilitating to treat and say 10 percent of the people who receive that treatment will live another year and only 1 percent of the people not receiving the treatment would live another year but the treatment makes me sick for 6 months. Without the treatment I will live 6 good months before declining. Well I might choose to go to Hawaii and live it up for the last 6 months of my life or I might try the treatment. If I am paying myself I am more likely to take the trip to Hawaii. If the insurance company is paying I am more likely to take the treatment. If I forgo treatment the insurance company benefits and if they would share that benefit with me I might go to Hawaii (I might also go to Apollo healthcare in India and Hawaii).
Another example:
If government is spending the money they could spend x dollars to treat a certain illness and extend the life of the average American by maybe 10 days but they could maybe spend the money on making the roads safer and extended life 20 days.
How about universal coverage with a deductible equal to the your last years adjusted income minus the poverty level. Or that is a function your last years adjusted income minus the poverty level. I would prefer that the deductible start at $300.00 for those at or below the poverty level and rise faster than income, because the richer people are the more capable and responsible they should be. Perhaps you could cap the deductible at about $200,000 to discourage people from buying insurance for to cover the deductible. Thus encouraging price sensitivity among the most capable and responsible people.
It get very complicated.
Start tongue in cheek:
Ban the motorcycle. You would save many person years of life!
End tongue in cheek:
Posted by: Floccina | Sep 19, 2007 10:47:44 AM
I don't want to disagree with you, but I think you oversimplify the moral hazard argument as applied to health care.
You're right that people would not demand unnecessary colonoscopies (and lots of other health services) with discount pricing but there is a booming array of health services and products that are more discretionary, from therapy to prescription drugs. And those health care products are not just recommended by doctors as you suggest, they are heavily advertised directly to consumers, who then go to their doctors seeking such products.
I still think the benefits of universal access to affordable health care far outweigh the problems posed by this "moral hazard" argument (and there are other ways of addressing the problems than pricing people out of health care), but I think you unfairly gloss over some real issues.
Posted by: Joseph Hovsep | Sep 19, 2007 10:49:23 AM
Generally and overall, this post is right on.
It may not work as well for prescription drugs with pleasant side-effects, for non-doctor-directed treatment like chiropractic, and for lifestyle medical treatment like cosmetic surgery or fertility treatments.
Posted by: SamChevre | Sep 19, 2007 10:57:19 AM
Ezra, there is going to be a segment of the population who would, hypothetically, opt for lots of colonoscopies and MRIs. Hypochondriacs, etc. We do need to come up with policies in place to deal with the 80/20 issue-- 20% of the people wil no doubt be responsible for 80% of the costs and will doubtlessly serve to drive costs up.
Just because hardly any of us are in that group doesn't mean that they shouldn't be taken into account when formulating health care policy.
Posted by: Tyro | Sep 19, 2007 11:00:24 AM
To know if I should get colonoscopies or take the money I need to know how much the colonoscopy cost and what is the average benefit in life extension and improvement. Now a person could rationally rather take the money. What if he government said we will pay for a colonoscopy for you and on average colonoscopies have this benefit in life improvement and in life extension and btw it is a pain in the [you know what] or we will give you the money that it would have cost?
Posted by: Floccina | Sep 19, 2007 11:01:54 AM
"I have never in my life sat up in bed and thought, "huh, I should really get some laparoscopic surgery.""
But people do ask themselves should I get back surgery and sometimes get it against doctors recommendations.
"Create new research institutions that test the cost effectiveness of care so they have a better idea of which treatments are worth recommending. "
Thus the move to evidence based medicine but Doctors tell me that the patients will not stand for it (nor the courts) because it does nothing for them.
Posted by: Floccina | Sep 19, 2007 11:07:17 AM
I've also heard that some of the unnecessary medicine is "cover your ass" medicine - doctors do something that they know has a 99% chance of being unnecessary, because they don't want to be sued by 1% of their patients for not doing it.
I'm not suggesting shielding genuine malpractice, but maybe we really do need some malpractice reform so that judgment calls aren't open to second-guessing in court. Unless commonly accepted medical practice clearly dictates that a doctor must do X, maybe it should be difficult or impossible to sue them for not doing it. Then we'd see less ass-covering medicine and more judgment by doctors (the ones trained to determine which care is really necessary).
Posted by: Chris | Sep 19, 2007 11:11:50 AM
It is an individual preference to choose longer life with less money/fun or shorter life with more money. It is like the choice to ride a motorcycle or to drive a Volvo never above 60 MPH. The individual should decide some things. We let people motorcycles why not let benefit from skipping the colonoscopy or even declining cancer treatment? I am guessing that it is much safer for the average person to decline colonoscopies and cancer treatment than to drive a motorcycle regularly (or drink, or smoke etc.).
Posted by: Floccina | Sep 19, 2007 11:14:24 AM
Moral Hazard is a very meaningless term anyway, as it implies some sort of morality involved, when all we're talking about is people acting very rationally.
Getting out of the health care field, often times (usually) moral hazard is brought up in cases of welfare or other similar entitlements. The idea is that we're "rewarding" people for not working. And for some reason, the solutions for these problems are always punative, and never actually positive..
Wonder why.
But in that case, the reality is that for some people, after taking things such as transit costs, child care costs, clothing costs, etc, working a job for minimum wage doesn't make much sense. That's the "moral hazard". Actually, it should just be called "fucked-up system". Sounds better and is more accurate.
No, REAL moral hazard is...profit. When companies are rewarded for bad behavior, then they have no reason to stop. If a health care company makes more money, and their workers get bonuses (or keep their jobs) for denying valid claims...guess what happens?
That's REAL moral hazard. Anybody who wants to start talking about morality, should start and stop there.
Posted by: Karmakin | Sep 19, 2007 11:15:39 AM
BTW Talk to some old people many would like to decline life extending healthcare even though someone else is paying. IMO if they where paying they might want to declien even more healthcare.
Posted by: Floccina | Sep 19, 2007 11:17:54 AM
For some reason we never talk about the moral hazard involved in selling insurance (including health insurance), which among other things includes the temptation to collect the premiums and investment income but never pay out on legitimate claims.
Cranky
Posted by: Cranky Observer | Sep 19, 2007 11:34:17 AM
KC, when you can name someone in this mythical "conservative healthcare pundit class", let me know. So far what I see are mostly unicorns... and the usual suspects, who are hardly experts. Conservatives really need a knowledgeable healthcare person to work their side... funny how everyone who studies the issues seems to wind up coming down on the notion that something - not the same thing, but certainly some thing - needs to be done to change our healthcare system. As for the post, I agree, this is about changing how doctors practice, which is not simple. But educating patients to ask questions isn't such a bad thing, either - doctors will have more encouragement to change their practicing ways when we give them less reverence as all knowing, godlike experts.
And, I'm not sure everyone would be opposed to the whole weekly colonoscopy thing... they give impressive painkillers for that thing. ;)
Posted by: weboy | Sep 19, 2007 11:35:01 AM
Karmakin and Cranky Observer I think that those who study the real problems in this country’s healthcare would agree with that the insurance companies not paying is rarely a problem the bigger problem is that they often pay for care that does not yield a net benefit and they pass the costs on in premiums. France pays about a ¼ what the USA pays for healthcare and yet their outcomes are almost as good. As the post alluded to, the biggest potential benefit of Universal coverage is to reduce costs by cutting out un-net-beneficial care.
Posted by: Floccina | Sep 19, 2007 11:51:57 AM
Ezra,
There's a lot of truth in what you wrote, but its oversimplified a bit too much.
You can do that in a few ways: Put them on salary rather than on fee-for-service deals, so they don't make more money when they recommend treatment.
A big misperception about physician incentives. Fee-for-service does have some effect, but its very overrated. The staff-model HMOs of the 80's (where docs are employees on a flat salary) aimed at exactly this thinking and were not successful. Why? Because the real driver of this unnecessary care is classic human behavior-- doing something must be better than not doing something. Those in the medical profession joke that surgeons just look for excuses to "cut." It isn't meant literally, of course, but it does point to their mentality-- that's why they DO, so that's their solution. Its true for all specialties, they're all human.
Create new research institutions that test the cost effectiveness of care so they have a better idea of which treatments are worth recommending.
I've said this before-- we are a good 15 to 20 years before this can be effectively used broadly as a policy tool and that's assuming that a Clinton-style comparative effectiveness institute was put in place today.
We still don't have good data on the clinical effectiveness of treatments, without even bringing in the complexity of costs. Then when you factor in the relatively undeveloped methods of evaluating costs against benefits (e.g. how do you value the benefit of hip replacement versus walking around in pain? what is that worth?). NICE does a great job in the UK with the data and methodologies that exists today, I'm not sure most people would actually feel comfortable with it if they really understood the level of incompleteness that exists.
But this idea that the way to better run medical care is to rejigger the financial incentives so patients have to ignore their doctor's advice is really quite bizarre.
Put the financial piece aside for a moment. Patients do need to be more involved in their care. You get worse care when you don't.
The doctor as the all-knowing "expert" sounds good, but the reality is that medicine is an evolving field, and once you get that diploma, what you've learned starts immediately becoming obsolete. Once that diploma is 10, 15, 20, 30 years old, 30-70% of what docs have learned is no longer correct. If you don't keep up with best practice (few community physicians do, HRC is actually addressing this in her plan to some degree) and instead you practice what you know, you end up with the divergence that's been demonstrated between actual practice and best practice. We all can't go to a 40 year old doctor that's probably the sweet spot between recent training and experience. (And this all can't be addressed by P4P bonuses.)
Yes doctors have the training and most people don't. But physicians need to keep current on hundreds of diagnoses and thousands of treatment options. Most people have 1 or 2 or 3 diseases. If we had better information out there, patients could better understand their options and receive better care.
In the cacophony of partisan bickering on this issue-- an important point has been lost. A good health policy would encourage and facilitate people becoming more informed consumers-- its good for quality of care received and it will have benefits on cost control. Of the three plans put out by the big Dems, Obama is really the only one who has embraced this issue with a focus on data transparency- price and quality. Its something that's less emphasized in the others and it should be more emphasized as part of a comprehensive policy plan.
Posted by: wisewon | Sep 19, 2007 12:03:46 PM
I meant to cover Chris' point above-- its a good one and also needs serious consideration as part of a comprehensive policy proposal.
Posted by: wisewon | Sep 19, 2007 12:23:14 PM
Malcolm Gladwell Nailed this one:
The Moral Hazard Myth
http://www.gladwell.com/2005/2005_08_29_a_hazard.html
mp3 interview:
http://www.wnyc.org/shows/lopate/episodes/2005/08/24/segments/50807
Posted by: chris | Sep 19, 2007 12:33:58 PM
I am a 37 year old male, and I had been confined to my house from December to May. I had diarrhea, and blood. So much blood was in my stool that the toilet water was red.
I went to a GI in May. He was pretty mad at me, and said that anytime you see blood in your stool, you should goto a doctor. He scheduled a colonoscopy for me, and ended up putting me on some drugs for ulcerative colitis.
So, is this what I should have done? Should I have gone earlier? Later?
I'm willing to hear what you so-called experts here think.
Actually I'm not. I think your heads are full of marshmellows. Maybe you ought to see a doctor about that.
Posted by: stm177 | Sep 19, 2007 12:49:53 PM
My problem with the moral hazard argument applied to health care is that it always seemsin the end to boil down to "If they are to die, let them do so quickly so as to reduce the surplus population." (props to C. Dickens)
Posted by: justawriter | Sep 19, 2007 12:50:24 PM
Doctors would pay more attention to costs if they were being borne by their patients rather than by insurance.
Posted by: James B. Shearer | Sep 19, 2007 12:52:39 PM
I was so taken by this:
'Moral hazard is a pretty simple idea: The less you bear the consequences of your actions,
the more reckless you'll be.', that I wrote myself a reminder squib on accountability.
Then, skipping about on the internets in almost the same moment this:
-U.K. regulator urged action ahead of bank crisis
Financial Services Authority wanted central bank to relax lending standards-
http://www.marketwatch.com/news/story/uk-regulator-urged-action-ahead/story.aspx?
guid=%7BEBFF8901-E897-4CFF-9EA9-B40C35311D4F%7D&dist=MostTopHome
"But the Bank of England reportedly argued that relaxing its standards
would create a so-called "moral hazard" because bailing out banks
without them paying any penalty would encourage the banks to take similar risks in the future."'
Funny how that works.
Posted by: has_te | Sep 19, 2007 1:01:49 PM
People who talk about making health care more expensive to keep costs down don't believe what they're saying anymore than they do when they tell you that supply side economics exists or that we will stand down when they stand up. These are sophist arguments aimed at the dumbest part of our lizard brains and only serve to derail the discussion and further the class war.
There I go again, bringing class into it.
Posted by: eRobin | Sep 19, 2007 1:13:32 PM
The potential physical consequences ordinarily suffice to minimize moral hazard. If the prospect of dying horribly doesn't deter you from smoking, why should the prospect of dying horribly and expensively?
Posted by: rea | Sep 19, 2007 1:17:52 PM
True enough. I'm not looking forward to performing colonoscopies, much less receiving them. But Ezra's example is still misleading. Some health care is discretionary. And even if it's not, costs are still contained when patients shop around for the best value.
Take prescription drugs. The doctor says I need them. If the insurance company (or the government) is paying the full price, I might as well ignore generics and go straight for the name brand. What incentive do I have to shop around?
Ezra's solution is to have the government set the price (he might also stop drug advertising). But then where's the incentive to make the drugs in the first place?
Posted by: Alejandro Gonzalez | Sep 19, 2007 1:27:47 PM
Chris said:
I'm not suggesting shielding genuine malpractice, but maybe we really do need some malpractice reform so that judgment calls aren't open to second-guessing in court. Unless commonly accepted medical practice clearly dictates that a doctor must do X, maybe it should be difficult or impossible to sue them for not doing it. Then we'd see less ass-covering medicine and more judgment by doctors (the ones trained to determine which care is really necessary).
The standard you propose is already the law.
There's already been a wave of tort "reform" that's spread through state legislatures. In Texas, for instance, we've enacted "tort reform," "son of tort reform," and "grandson of tort reform." We've now long passed the point where judgment calls aren't being second-guessed and are far into the zone where genuine malpractice is being shielded. Med mal cases are notoriously difficult and expensive to try, and given the hurdles that have been erected to even legitimate cases being tried, it's simply not cost-effective any more to take a med mal case unless the patient has suffered damages of at least mid-six figures. I know several med mal lawyers who have given up the practice and moved to other areas because they can no longer cost-effectively try cases for people who've been injured by garden-variety malpractice.
But doctors don't know this; instead, they listen to outdated and mythic anecdotes spread by insurance companies who have zero interest in improving the practice of medicine and every interest in increasing malpractice premiums while reducing malpractice judgments. So I agree that defensive medicine may be a problem (though I think its effect is often overstated). I don't think, however, that enacting great-grandson of tort reform is the solution.
Posted by: Kenneth Fair | Sep 19, 2007 1:59:02 PM
Great post, Ezra! This should be required reading for every journalist who reports on this issue.
Posted by: Father Figure | Sep 19, 2007 2:02:20 PM
Ezra isn't tempted to get lots of medical care because Ezra isn't sick. Can we get somebody who gets up every morning to face chronic pain, or life-threatening asthmatic attacks, or progressive worsening of their vision which will end in blindness, or medication which causes horrible nausea, to say to us, "I'd never wake up in the morning and consider a costly surgery that is unlikely to work, but has some chance of curing me or improving my life? Particularly if the 'costly' part is irrevelent to me."
And, look, I'm not saying that those people shouldn't get their costly surgeries done, or that the present system should be retained. But Ezra's periodic feature where he says, "I'm a healthy 20-something and I don't like going to the doctor's office, therefor it's ridiculous to imagine that anyone else could possibly ever be tempted to consume a lot of healthcare" is facile bullshit.
Posted by: Michael B Sullivan | Sep 19, 2007 2:27:16 PM
Yeah, I have to agree with Micheal Sullivan here. Ironically, I'm also in my 20s and pretty damn healthy, but I have lower back problems. My problems are pretty minor as far as back problems go, but they piss me off b/c I don't like the idea of being limited physically at all. I have tried a couple of different things to address the problem and I have found that physical therapy by a good physical therapist is really effective. I go to the office, they do a special massage to release tension in the right, difficult to reach muscles and then they take me through a series of exercises and stretches to improve those muscles. Some of it I could do on my own. But the assistance helps.
Now my problem is that I'll strain my back occasionally, which will force me to stay at home on my back for a day or two and prevent vigorous physical activity for about a week. But normally I don't have much pain at all. From my perspective, this is a real problem. In comparison to more dramatic problems , it is nothing. Physical therapy sessions cost $100-$200/session and they cost me personally b/c the good therapist in my area is not in network. So I saw them for a while to get an improvement, but then stopped for financial reasons. I would probably still be going if it weren't for the cost.
The multiple of anecdotes is not data. Eventually we will have to find a way to control costs. My preferred method is to provide a bare minimum plan (lets call it the French plan) that costs less than our current healthcare. Then people also have the option of buying more expensive healthcare as they desire. The healthcare 'market' will always be a crappy and inefficient market, but as long as the critical stuff is covered, I think it would be an okay solution.
Posted by: mpowell | Sep 19, 2007 2:59:26 PM
"I think that those who study the real problems in this country’s healthcare would agree with that the insurance companies not paying is rarely a problem"
Wow. Just... wow. I represented insurance companies for the better part of a decade, many times in health insurance cases. Trust me, the problem of insurance companies not paying when they should is anything but rare. Sometimes there are innocuous reasons for it, sometimes not (I presume--I never saw those documents). But it is a huge problem. It's what happens when you compensate claims handlers and claims departments based on how well they "manage" (i.e., deny and reduce) claims.
Also, this idea that there is no defense against consumers asking for unnecessary medication/treatment is laughable on its face. Already, in our current system, insurers cut average per birth compensation for hospitals/doctors who have a disproportionate number of C-sections (which are more expensive and often unnecessary). There is no reason that they (or whatever government entity takes their place) couldn't do the same with MRIs or X-rays or whatever. The usual rate for MRIs offered by a particular insurer might be $400, but if Dr. Johnson consistently orders twice as many MRIs as his similarly-situated physicians, then he is only going to get $250 for them.
Posted by: Joe | Sep 19, 2007 4:23:32 PM
If you think people in this country aren't looking to consume healthcare resources for the hell of it, I suggest you get involved with some of the worker's compensations claims in our system and tell me if you have the same feeling.
Posted by: Dingo | Sep 19, 2007 5:39:53 PM
Okay Joe, it may be true that there are things that can be done about people asking for unnecessary medical treatments with a universal health care system. But that doesn't mean its appropriate to write so blithely about how it could never be a problem in the first place.
Posted by: mpowell | Sep 19, 2007 6:33:16 PM
Moral hazard is a pretty simple idea: The less you bear the consequences of your actions, the more reckless you'll be.
When I first read that sentence I thought you were starting an essay on the moral failings of the Republican party when it comes to accepting responsibility for their failures.
Posted by: Chris Andersen | Sep 19, 2007 6:35:15 PM
Well, the fact is that Republicans are the most likely to consume unneeded health care. I'm sure that even today wealthy morphine addicts get admitted to private hospitals for "pancratitis", which is treated with generous IV morphine. Rich people buy face lifts, tummy tucks, implanted false teeth, and a world of goodies making them look and feel better than people without money.
I started nursing about 25 years ago and even then rich alcoholics were being admitted for a little detox on the QT, and I've even seen people get admitted just so they could have the fine nursing service. And truly, if you were treated the way wealthy people are treated, you would certainly like going to the doctor a bunch more than you probably do.
Yes, doctors like to refer rich people to each other for "one more opinion", but believe it, they don't thank each other for referring patients on Medicare.
So, judging from the behavior of Republicans, this whole "moral hazard" thing is a problem, but in terms of ordinary Americans, not so much.
Posted by: serial catowner | Sep 19, 2007 7:39:16 PM
I would have responded to this sooner, but the day job interferes horribly with my blog reading.
My last patient this morning was a young woman who had just had a positive home pregnancy test. She came in to my office requesting another pregnancy test. She had her 3 year old with her, but had had a miscarriage at the beginning of this year. She wanted a quantitative beta-HCG and a progesterone level today, a repeat beta in 2 days, and a repeat progesterone in 1 week. In a healthy early pregnancy the beta will double in 48-72 hours and the progesterone will rise a little more slowly. She planned on asking for progesterone suppositories (she had used them during the pregnancy that miscarried), if the progesterone wasn't rising.
I did my best to gently explain to her that there was no need for these tests. Either the pregnancy is going to go or it isn't. If the beta fails to rise, then she'll have a miscarriage/"late period" in a few days, if it does rise, she still might have a miscarriage somewhere down the road. It's been shown several times that progesterone has no benefit (*) in preventing miscarriage in early pregnancies. I explained that the progesterone level wouldn't be useful. I explained that while sad, miscarriages are common and almost all women who want to, go on to have successful pregnancies.
As part of my explanation I used an analogy about colds and antibiotics and she said, "But the antibiotics make you feel better, don't they?" She still wanted the tests, so I wasted $150 of my employer's money (she was an HMO patient) and ordered them rather than anger her. Call me a bad doctor. The answer is "Yes" -- people want excess medical care. I'm sure that everyone here is too sophisticated to request unnecessary tests, but I see non-blog readers on a daily basis who request (even demand) all kinds of unnecessary medical care.
(*) Progesterone is the same hormone in "Plan B", the "morning after pill". It neither prevents miscarriage nor causes it.
Posted by: J Bean | Sep 19, 2007 8:33:57 PM
wisewon wrote, If you don't keep up with best practice (few community physicians do, HRC is actually addressing this in her plan to some degree) and instead you practice what you know, you end up with the divergence that's been demonstrated between actual practice and best practice. We all can't go to a 40 year old doctor that's probably the sweet spot between recent training and experience. (And this all can't be addressed by P4P bonuses.)
Yes, but it clearly can be addressed by expert systems.
I tend to be pretty skeptical of computer-driven solutions, but the medical system grotesquely underutilizes information technology.
My theory is that MDs don't want to move in that direction, because a rational system would involve less physician autonomy than the current one does.
Posted by: liberal | Sep 19, 2007 10:26:03 PM
J Bean wrote, The answer is "Yes" -- people want excess medical care. I'm sure that everyone here is too sophisticated to request unnecessary tests, but I see non-blog readers on a daily basis who request (even demand) all kinds of unnecessary medical care.
And yes, the solution is to create a system of rationing which denies such requests unless they're fully paid out-of-pocket.
Posted by: liberal | Sep 19, 2007 10:29:39 PM
Michael B. Sullivan wrote, Can we get somebody who gets up every morning to face chronic pain, or life-threatening asthmatic attacks, or progressive worsening of their vision which will end in blindness, or medication which causes horrible nausea, to say to us...
But the key is that no one is consistently managing the care of such chronically ill people.
IIRC there's been studies showing that inner city kids with asthma problems aren't having their care managed on a planned basis.
Not to mention the ungodly number of people with diabetes in this country who aren't having their care managed properly.
Posted by: liberal | Sep 19, 2007 10:38:27 PM
Kenneth Fair wrote, So I agree that defensive medicine may be a problem (though I think its effect is often overstated). I don't think, however, that enacting great-grandson of tort reform is the solution.
Yup.
The solution is obvious: replace the crazy tort system with a regulated system.
Doctors are human, so their practice won't be perfect, and they'll even (gasp!) make mistakes.
In a rational system, physician performance would be monitored, and physicians who perform badly ("badly" means weighted by difficulty of cases, and in an average sense) would lose the right to practice medicine.
Again, I don't think physicians as a class would like such a system, because it would require them forgoing a great deal of autonomy.
Posted by: liberal | Sep 19, 2007 10:45:04 PM
"If you think people in this country aren't looking to consume healthcare resources for the hell of it, I suggest you get involved with some of the worker's compensations claims in our system and tell me if you have the same feeling."
I don't think it is the consumption of health care you are criticizing, but the consumption of worker's compensation benefits after an alleged injury. Health care consumption is the means to that end. Those who game this system are not thinking "boy I can go to the doctor on the State's dime!" It's that they are thinking "I can get Worker's Comp to pay me benefits so I won't have to work."
Posted by: jmack | Sep 20, 2007 6:46:23 AM
"These are sophist arguments aimed at the dumbest part of our lizard brains and only serve to derail the discussion and further the class war."
To see what the "moral" bit of "moral hazard" really means for some conservatives, go read john holbo's brilliant post from a few years back on "dark satanic millian liberalism". Quoting directly from Frum's book "Dead Right":
""The great, overwhelming fact of a capitalist economy is risk. Everyone is at constant risk of the loss of his job, or of the destruction of his business by a competitor, or of the crash of his investment portfolio. Risk makes people circumspect. It disciplines them and teaches them self-control. Without a safety net, people won’t try to vault across the big top. Social security, student loans, and other government programs make it far less catastrophic than it used to be for middle-class people to dissolve their families. Without welfare and food stamps, poor people would cling harder to working-class respectability than they do not.”"
The real moral hazard in universal coverage, for some conservatives, isn't the potential of skyrocketing costs (which no doubt is a concern for many others); it's that it might remove one factor encouraging "disclipline" and "self-control" (for various values of those words). Think what possible motivations there might be in continuing a system where health coverage is dependent on employment, despite it being wildly unpopular (and inefficient) for both employee and increasingly employer? For those who tend towards social conservatism, UHC would seem to risk increasing the threatening masses of - to reach back a few centuries - masterless men, not bound by traditional constraints, or even by the chains of cautious conformity; for economic conservatives, UHC would seem to risk reducing the pool of no-surplus/on-the-edge, risk-adverse, gnawingly-worried, circumspect and properly disciplined employees. Which is not to say that this is a deliberate (smoke-filled room full of prosperous men laughing evil laughs) plan, not necessarily a carefully thought-out scheme; I think, rather, to quote Holbo, in most cases, "at the heart of it is a sort of proto-cognitive itch; a sensibility, or feeling, or subconscious reflex . . . Meanwhile Frum is clean out in the cold. He doesn’t disapprove of the welfare state on economic grounds, so he will not be a participant in these rational debates about costs and benefits. He wants to abolish the welfare state on pretty-pretty arty crafty aesthetic grounds. (Stretching a point, these might be moral grounds. But they are largely aesthetic, I think.)"
I'd actually disagree that aesthetics and morals (and politics) are actually different things, here, but that's beside the point (and go read the post to see why he thinks Frum's opposition to the welfare state is all pretty-pretty arty-crafty . . .)
Posted by: Dan S. | Sep 20, 2007 7:59:12 AM
Evidence of Moral Hazard:
http://www.annals.org/cgi/content/full/138/4/273
“Results: Average baseline health status of cohort members was similar across regions of differing spending levels, but patients in higher-spending regions received approximately 60% more care. The increased utilization was explained by more frequent physician visits, especially in the inpatient setting (rate ratios in the highest vs. the lowest quintile of hospital referral regions were 2.13 [95% CI, 2.12 to 2.14] for inpatient visits and 2.36 [CI, 2.33 to 2.39] for new inpatient consultations), more frequent tests and minor (but not major) procedures, and increased use of specialists and hospitals (rate ratio in the highest vs. the lowest quintile was 1.52 [CI, 1.50 to 1.54] for inpatient days and 1.55 [CI, 1.50 to 1.60] for intensive care unit days). Quality of care in higher-spending regions was no better on most measures and was worse for several preventive care measures. Access to care in higher-spending regions was also no better or worse. “
http://healthcare-economist.com/2007/06/08/end-stage-renal-disease-an-international-comparison/
“How do medical expenditures affect mortality for end-stage renal disease (ESRD) patients? Avi Dor, Mark Pauly, Margaret Eichleay and Philip Held try to answer this question with data from 12 developed countries (”ESRD and Economic Incentives“). The authors end up finding that increased expenditures on ESRD have no statistically significant affect on mortality. The correlation coefficient estimates indicates that increased medical spending actually increases mortality (again, not in a statistically significant manner). The authors note, however, that richer countries–those who are likely to spend more money on medical care for all disease–have a higher percentage of individuals with ESRD.”
Posted by: Floccina | Sep 20, 2007 9:32:11 AM
healtchare-economist ref is useless. Of course end-stage-renal-disease patients die. That's why it's called "end-stage."
Posted by: x | Sep 21, 2007 4:12:28 PM
liberal writes, "But the key is that no one is consistently managing the care of such chronically ill people."
No, that's not "they key." Ezra was writing about moral hazard. He was saying that, when it comes to healthcare, moral hazard does not exist. He didn't say, "it exists, but that's okay because other advantages of socialized medicine outweigh it." He said, "I have never in my life sat up in bed and thought, 'huh, I should really get some laparoscopic surgery.'"
I am responding to Ezra's post, not attempting to have a broad conversation on the general merits and flaws of universal healthcare. This specific conversation is about moral hazard, not about the number of people in the country with chronic conditions who are receiving inconsistent care.
Posted by: Michael B Sullivan | Sep 21, 2007 4:23:33 PM
I don't see the question as whether or not moral hazard exists. The point most people miss is that MOST health care is "consumed" (as much as I hate that expression) out of need. Moral hazard as an element of human psychology does not account for the excessive health care costs we incur in this country. The argument gets to universal health care because a flawed, anecdotal use of the moral hazard concept is a common argument against universal health care, and that argument misrepresents the facts.
The fact is: people forgo necessary care more than they forgo unnecessary care when financial barriers are placed in the way of obtaining care. Forgoing necessary care leads to worsening chronic disease and ultimately much higher health care costs. Removing financial barriers to care encourages people to get care earlier, when it is both less expensive and more effective. The economic facts have long refuted the notion that moral hazard would bankrupt our healthcare system by over-running it with people seeking unnecessary care.
And proponents of this moral hazard argument have only, like Dr. J Bean, offered anecdotes of patients who ask for health services that have little value. If Dr Bean had spent 5 more minutes with his or her patient, (s)he may well have helped her to feel more comfortable not getting the test. And even if she couldn't do that, so what? For every one example like that I can offer 10 examples of people who suffered, or even died, because they refused necessary care based on financial concerns.
Posted by: countrydoc | Sep 21, 2007 10:26:10 PM
Countrydoc: I actually am no fan of the moral hazard argument. However, you absolutely can not make the claim that no one wants to consume extra health care. I'm sure that you are a much more skilled physician that I am and have no trouble jawboning pregnant women out of unnecessary tests. I'm also sure that you never ever order any screening tests that aren't blessed by the U.S. Preventive Services Task Force, however, with my single data point, I've proved that there are people who, unlike Ezra, do want excessive testing and treatments. I spend all day long talking people out of unneeded things. Since I don't have your skill, I sometimes fail. I do my best, but without your bedside manner, I have to pick my battles and sometimes it isn't worth the energy and sometimes I just chalk it up to "patient satisfaction".
It's popular on these blogs to make the claim that excessive medical care it ordered by doctors to put extra money in their own pockets or because they don't have EMRs. The truth of the matter is that most of us don't have your skill and order tests for a whole variety of reasons: training, habit, desire to avoid missing rare diagnoses, laziness, saving your own time, saving your patient's time, malpractice CYA, "community standards", patient reassurance, patient satisfaction, mistakes, misunderstandings, and even to make an extra buck.
Posted by: J Bean | Sep 22, 2007 1:34:09 AM
