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November 03, 2007
On TVs and Angioplasties
Among the main bones of contention between me and conservative health reformers is that I simply don't believe a majority -- or even hefty fraction -- of patients will ever have information good enough to exert serious control over their health care decisions. Comparing TVs is easy enough, and if you make a mistake, the worst that happens is you're left with a bad TV. Deciding what heart surgeries you need -- particularly going against a doctor's judgment on the subject -- is much dicier.
But I was thinking about the TV comparison at breakfast today, and something else occurred to me. Even in consumer goods, where the information is pretty good, where we can rent the game or listen to the stereo in Best Buy, we recognize that consumer information is still pretty imperfect. For that reason, we allow people to return goods they've already bought, recognizing that amassing more information as to the product's quality or versatility can, and should, overwhelm the previous, less-informed, judgment. Quite obviously, you can't do that with an angioplasty or a lumbar surgery. So not only do you have way less information to start with, but you don't have the ability to act on post-purchase information.
Update: I should probably make my conclusion here a little less implicit. There are basically a limited number of places where micro-level treatment decisions can be made. Insurance companies, but no one wants that. The government, but no one wants that. Patients, and I'm arguing against centering the system on them. And Doctors.
Doctors tend to be my choice. The problem is, their incentives are, at the moment, all mucked up. As Jerry Avorn writes in this month's American Prospect, "what is distinctive about our system is that it provides economic incentives that encourage doing the most expensive thing all of the time to everyone who can pay for it or have it paid for." You can cut that down by making sure fewer people can pay for it, which is the Right's solution, or you can change the incentives governing the professionals who recommend the treatment, which is closer to my solution. There are a variety of policy changes that would help with this, including putting more doctors on salary rather than on fee-for-service structures, financially incentivizing the use of cost-effective treatments, putting much more money into the gathering of evidence on cost-effectiveness, etc. For more on this, Shannon Brownlee's new book, Overtreated, is supposed to be excellent. (I haven't read it yet, but will soon.)
November 3, 2007 in Consumer-Directed Health Care | Permalink
Comments
Ezra, what is your implication then, if a hefty fraction will not have good information to make their choices? Does that mean decisions will be made for them for the collective good? Does that mean those who do have good enough information, or at least think that they do will not be allowed to make these choices? We are trained that as long as patients can understand the risks and benefits of a choice, they are allowed to make what would be a "bad decision" in our eyes. Would you change that?
Posted by: umbrelladoc | Nov 3, 2007 1:26:33 PM
What if people get their doctors to give them the information they need. As far as I can tell your argument is that a) medicine is a body of special knowledge b) consumers can't return medical care.
On the first point, what if patients asked their doctors about the salient characteristics of their treatment options? Maybe they could go so far as to employ an independant doctor who tells them about medicine in general, a "General Practitioner" if you will.
On the second point, because there is a specialist body of knowledge, and utility isn't so much about unknown reactions to the product, as the health product is in a certain sense generic (you don't get a heart bypass with surround sound or not), for a well-specified purpose, and is custom made, there isn't the kind of hidden information problem here.
Posted by: Marcin Tustin | Nov 3, 2007 1:28:21 PM
That it really will, in the end, be doctors who remain the main decision makers here, and we will listen to them. Because of this, it's genuinely critical to make sure doctors have the right incentives, the correct tools, and sufficient evidence to work with
Posted by: Ezra | Nov 3, 2007 1:51:27 PM
Ezra,
A number of things here:
including putting more doctors on salary rather than on fee-for-service structures
This sounds great, but it won't really have the impact you're expecting. Physicians by nature, would prefer on doing too much rather than too little (putting tort reform aside), the fee-for service element is extremely overrated as a driver for unneccessary tests and procedures. See the staff-model HMO movement in the 1980's that aimed at exactly this, and read the stories on what went wrong. Salaried physicians bring slightly different misincentives, but to the same effect. If a diagnosis/treatment is even marginally better than another, doctors flock to the better one-- whether they are FFS or salaried. Harvard Pilgrim Health Care was a leading staff-model HMO in the 80's, read up on that as a good case study.
financially incentivizing the use of cost-effective treatments
Note that the same can be done with patients (i.e. lower co-pays for more cost-effective treatments). If you incentivize the doctor, then when the doctor-patient are going over treatment options, the physicians will be biased towards the more cost-effective option, even if its not in the clinical best interests of the patient. If this is used widespread and patients know this, it potentially harms the doctor-patient relationship. Read up on capitation and impact on doctor-patient relationship from the 90's-- its a very similar solution in terms of financial incentives. Alternatively, if you incentivize the patient, then the doctor can convince the patient when it is in their clinical best interests to use the more expensive procedure (the patient will most frequently default to the cheaper option), and the patient can push back looking for a less expensive option. Incentives are much better aligned. The trick here is to develop a system where a doctor-patient can figure out when a population-based cost-effectiveness assessment doesn't apply to the actual situation for a given patient. The latter does this more effectively, without harming doctor-patient relationships.
putting much more money into the gathering of evidence on cost-effectiveness
Very much agreed. This should be a government role. Just realize this is 20 years away before having significant impact.
Among the main bones of contention between me and conservative health reformers...You can cut that down by making sure fewer people can pay for it
Two points here, the first I've made before. If you just want to make a political argument that Republicans don't have a good health care solution, just do that without completing distorting CDHC. I acknowledge that Republicans in the political sphere, have solely focused on cost in the CDHC proposals. But you need to separate that from the concept of CDHC itself, because its less clear to readers (I'm not actually clear if you really understand this yourself) that there is much to CDHC that increasing financial exposure via HDHPs.
Second point on the bulk of what you're missing with CDHC. At the end of the day, we need to encourage cost-effective, high quality medicine. We don't even practice the high quality part yet as a whole, so before even getting to the more complex question of when its appropriate to trade off quality for cost (the essence of cost-effectiveness) lets acknowledge that getting physicians to practice quality medicine would be the first big step. So how do you that? You can espouse for better financial incentives based on practicing evidence-based medicine, but realistically physicians are never going to agree to a compensation model that would put enough of their income contingent on these incentives to really make a big difference in influencing their behavior. So how else to get them to improve their quality? They need to compete on it. We need transparency to consumers so they can choose better doctors. This doesn't mean that you'll have consumers wading through medical data to figure out what's best-- that part is left to the experts. (Via public or private means, I could see advantages to both.) But to let consumers know how physicians perform on a number of key measures, but consolidated into a simple scoring system/grade/consumer reports bubble, would be a very effective means of pushing doctors to do better.
You only focus on the cost elements of CDHC, and I think you would do yourself a favor to really understand what the CDHC movement is about-- in a non-partisan, health policy focused manner.
That it really will, in the end, be doctors who remain the main decision makers here, and we will listen to them.
Recognize that this statement becomes less and less true each day. The trends are clear. Patients know more about their diseases than they ever have in the past, with a exponential increase during the last ten years due to the internet. Physicians, on the other hand, know less and less each year, as the whole field of medicine continues to expand in knowledge that is simply impossible for physicians to keep up. Put them together and the relative knowledge gap between patients and physicians continues to shrink each year. That isn't to say that patients can do this on their own, but the "doctor-knows-all" that is implicit in your thinking is outdated. Patients do want to know more about their own health (see any number of news articles discussing the increased use of the internet, I think now approaching 75% of people in the US) and we should reform our system to ensure that people can find the right information on their diseases and one that encourages patients and doctors to be partners in making the right decisions about their health.
This is what CDHC is about.
Posted by: wisewon | Nov 3, 2007 3:49:11 PM
See the staff-model HMO movement in the 1980's that aimed at exactly this, and read the stories on what went wrong.
Staff model HMOs were competing in a FFS marketplace. And what went wrong was largely the vast disparity in compensation. Staff model HMOs couldn't afford to hire the good doctors.
Doctors are rational economic beings too.
See The Permanente Medical Group as a counter example.
Salaried physicians bring slightly different misincentives, but to the same effect. If a diagnosis/treatment is even marginally better than another, doctors flock to the better one--
Ezra's point exactly. The "better one" is the one you want to incentivize doctors towards, not "the most remunerative one".
Posted by: flory | Nov 3, 2007 4:16:58 PM
They need to compete on it. We need transparency to consumers so they can choose better doctors.
How does this conflict with anything Ezra's said? You could have a universal, single payor healthcare system run by Medicare and still let consumers choose their own physicians based on any number of standardized measures of "quality" or "cost effectiveness".
If you're going to chastize Ezra for politicizing his arguments, you need to leave the Republican frame that universal healthcare=no choice of doctor behind.
Posted by: flory | Nov 3, 2007 4:21:40 PM
And why the hell can't I get rid of the slanties?
Posted by: flory | Nov 3, 2007 4:22:26 PM
Italics removed.
If you're going to chastize Ezra for politicizing his arguments, you need to leave the Republican frame that universal healthcare=no choice of doctor behind.
Flory,
Read my post and Ezra's carefully. I didn't say anything about universal health care, single payer or the rest-- this was solely about consumers' role in health care. As you suggest, you could have a consumer-directed, single-payer, universal health system. Nothing I've said has anything to do with universal health care or single-payer.
What this does have to do with is how you drive system change. As Ezra wrote above, he thinks doctors are the primary change agent. I very much disagree, and believe the power of consumer can work effectively in driving health care system improvements.
How does this conflict with anything Ezra's said?
Ezra is saying that we can best change medical practice for the better by directly influencing physician behavior. I am saying that this would have less impact than empowering consumer to choose the best doctors with quality/cost information, which in turn will give doctors the best reason to compete on cost and quality. That is a very different view.
Posted by: wisewon | Nov 3, 2007 5:42:22 PM
Medical care is a service, not a manufactured product. The right analogy wrt customer choice is: what does the average, middle-class, never-in-trouble person do if he is arrested? i.e., how exactly do you comparison-shop for a lawyer when the clock is ticking, arraignment in a couple of days?
Or say you start you car, put it into drive, but at the end of the driveway you press the brake pedal, which then goes all the way to the floor without affecting the motion of your car. Of course you grab the emergency brake, but then what? Most likely you are at the mercy of whoever tows your car to their garage (probably the guy with the largest ad in the Yellow Pages), who will charge you at least a hundred just to look at it.
These are the right analogies, not buying a freaking XBox.
Posted by: kth | Nov 3, 2007 6:09:05 PM
Ezra is saying that we can best change medical practice for the better by directly influencing physician behavior. I am saying that this would have less impact than empowering consumer to choose the best doctors with quality/cost information, which in turn will give doctors the best reason to compete on cost and quality. That is a very different view.
I don't see the two as mutually exclusive.
Posted by: flory | Nov 3, 2007 8:28:48 PM
Maybe they could go so far as to employ an independant doctor who tells them about medicine in general, a "General Practitioner" if you will.
I believe Ezra's latest Prospect article addresses the issue of general practice, though it doesn't touch on the underlying problem -- i.e. big loans to repay? become a specialist.
Patients do want to know more about their own health (see any number of news articles discussing the increased use of the internet, I think now approaching 75% of people in the US)
And those studies also point out that it's a fairly murky area. You have papers (designed for a professional readership), forums (as good as their contributors), general health sites, and then the commercial information and the snake-oil.
My problem with your position, wisewon, is that it seems predicated upon a naive view of a friction-free market, where it's somehow self-evidently in the best interest of providers to offer "just the facts, ma'am" to consumers. See, I'm not too bothered about information asymmetry in the electronic doodah market. I am bothered about it in the healthcare market.
Let's start with things as they are: DTC advertising, the massive shadow of snake-oil non-FDA-regulated marketing, tchotchke-laden drug reps touring doctors' offices. How, exactly, are you going to get from this environment to your cool-reason world in which everything is properly tabulated and the individual suitably empowered?
Posted by: pseudonymous in nc | Nov 4, 2007 1:38:14 AM
My problem with your position, wisewon, is that it seems predicated upon a naive view of a friction-free market, where it's somehow self-evidently in the best interest of providers to offer "just the facts, ma'am" to consumers. See, I'm not too bothered about information asymmetry in the electronic doodah market. I am bothered about it in the healthcare market.
No illusions here of a friction-free market, it'll never be perfect. But the information asymmetry is the reason we have widespread poor quality care and no focus on costs. What is the impact on a provider who doesn't provide high-quality care?
Patient satisfcation surveys continually show that their evaluation of physicians is currently based on the quality of the physician-patient interaction, quality of the facilities, availability of parking (!)-- but not really the actual care.
In today's system, there simply is little incentive to provide high quality care. Giving physicians nominal financial incentives in place isn't going to drive improvement that is needed.
somehow self-evidently in the best interest of providers to offer "just the facts, ma'am" to consumers
An important point on why the political reality of a consumer-driven model is also preferred.
As I wrote earlier, its not realistic for anyone to think that physicians (i.e. the AMA) will ever allow their compensation model to be so heavily-based on at-risk, contingent performace-based incentives. They'll talk the "my patients are different/sicker, so that isn't fair, you are going to harm the profession" and politicians will get nowhere with this model. Now if Medicare/government wants to start offering new bonuses on top of existing compensation (this is what is actually happening), that's a different story. But that will never really give docs the incentive to change behavior significantly. If you can get 90% of your salary (which is $150K or up) without the onerous tasks of keeping up with changes in medical practices, evidence-based medicine (i.e. several additional hours of study each week), why bother yourself with the burden? You're already making a nice living. My point is, Ezra's plain wrong in thinking that financial incentives will change physician behavior.
Alternatively, the consumer model. Now, as you noted in you quote excerpted above, it isn't self-evident to physicians that this is a good model for them. In fact, they will be as opposed to giving consumers the facts as they are about changes to compensation. The difference is, this is a political battle that can be one-- can the AMA really claim that its in the best interests for patients to not know information about their doctors? It won't fly. This political battle, unlike the compensation model Ezra espouses, can be won.
are you going to get from this environment to your cool-reason world in which everything is properly tabulated and the individual suitably empowered
You trying to push me to extremes, everything won't be properly tabulated.
I'm looking for three things for a consumer model:
1) Scoring of physicians, hospitals and other health care providers on quality
2) Differential co-pays based on quality of providers (i.e. better doctor, cheaper co-pay)
3) Higher co-pays for targeted treatments that are known to be driving health care costs and are cost-ineffective compared to other options
#1 and #2 are fully consumer-driven, i.e. choose the right doctors. #3 will encourage better patient-doctor discussion on cost-effectiveness of treatment options.
Ezra, Psuedo and others are overestimating the complexity to consumers of a good CDHC system, and woefully underestimating the impact.
Posted by: wisewon | Nov 4, 2007 7:00:56 AM
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