12 June 2009

Missing the point

Ezra opines a bit on the role of doctors in health care with the strangely misleading headline: Listen to Atul Gawande: Insurers Aren't the Problem in Health Care

This wasn't Gawande's point at all, and is something quite tangential to Klein's point:
The reason most Americans hate insurers is because they say "no" to things. "No" to insurance coverage, "no" to a test, "no" to a treatment.   But whatever the problems with saying "no," what makes our health-care system costly is all the times when we say "yes." And insurers are virtually never the ones behind a "yes." They don't prescribe you treatments. They don't push you towards MRIs or angioplasties. Doctors are behind those questions, and if you want a cheaper health-care system, you're going to have to focus on their behavior.
Yes, doctors are a driver -- one of many -- in the exponentially increasing cost of health care.  Utilization is uneven, not linked to quality or outcomes in many cases, and may often be driven by physicians' personal economic interests.  All of this is not news, though certainly Atul Gawande wove it together masterfully in his recent New Yorker article.  (I'm assuming you've all read it -- If not, then stop reading this drivel and go read it immediately.) Nobody disputes that doctors' behavior (and ideally their reimbursement formula) need to change if effective cost control will be brought to bear on the system.

But it's completely off-base to claim that insurers aren't one of the problems in the current system.  There are two crises unfolding in American health care -- a fiscal crisis and an access crisis.  I would argue that insurers are less significant as a driver of cost than they are as a barrier to access.  Overall, insurers have, I think, only a marginal effect on cost growth, largely due to the friction they introduce to the system -- paperwork, hassles & redundancy and internal costs such as executive compensation, advertising and profits.  It would be great if this could be reduced, but it wouldn't fix the escalation in costs, only defer the crisis for a few years until cost growth caught up to today's level.  In the wonk parlance, it wouldn't "bend the cost curve," just step it down a bit.

But as for access to care, insurers are the biggest problem.  It's not their "fault" per se in that they are simply rational actors in the system as it's currently designed.  Denying care, rescinding policies, aggressive underwriting and cost-shifting are the logical responses of profit-making organizations to the market and its regulatory structure. Fixing this broken insurance system will not contain costs, but it will begin to address the human cost of the 47 million people whose only access to health care is to come to see me in the ER.


  1. I think the take-home message is that doctors are economically rational, legally prudent, and products of their environment. The private insurance industry and Medicare are dysfunctional systems that don't reward outcomes, don't reward efficiency, and don't reward skill. Meanwhile, the current tort system scares doctors into practicing excessively expensive, specialist-happy, massive test-ordering, no-evidence based medicine.

    The onus shouldn't placed solely -- or even mostly -- on doctors. It's the practice environment, stupid.

    To quote a different Dartmouth professor not Elliot Fischer:

    "Every system is perfectly designed to get the results it gets." -Paul Batalden.

    To change the way doctors practice and the way people receive health care, we need to revamp everything top to bottom.


  2. I'm a pharmacist on the dispensing end of physician's prescribing habits & I can attest that physicians are not economically rational AT ALL. They are definitely products of their environment since they prescribe the most costly medications when older, less expensive alternatives will do just fine.

    Physicians don't have a clue how much medications actually cost (yes - how much I pay), how much is billed to a third party, how much is paid by a third party & how much the patient pays.

    We've had Medicare Part D now for 4 years & still physicians have no clue how it works.

    Hah! No - I don't trust physicians to make health care decisions in my best economic interest. I will trust them to make decisions in my best medical interest, but fortunately, I have the knowledge to question when their economics get in the way of my medical care. Surprisingly, it happens more often than one would think.

  3. Slight misunderstanding. When I mean "economically rational" I don't mean that they are always acting to minimize costs. What I mean is that their decisions are consistent with economic principles (ie. doctors can be incentivized by money). In the example of prescribing brand name drugs over generics, for example, there is no incentive for them to really chose generics, which is why they don't. To better frame my original point: there is incentive for doctors paid of a fee-for-service basis to utilize more and more services, because that's how they make more money. In that sense, it's in their rational economic interest to drive up costs.


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