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Healthcare Costs: Under-Thinking Leads To Over-Testing

My mother-in-law just had a CT scan of her head in the Emergency Department of her local hospital. My husband called me to ask if I could “talk to her about her headache.”

Severe headaches in the elderly are indeed worrisome, and I wondered if she had fallen recently – if she might have a bleed in her brain requiring immediate surgery. Of course, she’d need a CT scan to rule that out… I was prepared for the worst. But what I learned by simply talking to Mrs. Zlotkus was unexpectedly revealing – not only about her diagnosis but about our healthcare system in general.

As it turns out, Mrs. Zlotkus had been having severe headaches for about 3 months. She was taking Vicodin daily to “take the edge off.” When I asked her about the location of the pain, she said that it was “just on one side of my head, from the top of my neck to the top of my head.” I asked her if the pain sometimes traveled to the other side, or if it involved her eye. “Never,” was her quick response. She also told me that she’d been seeing a physical therapist for 2.5 months for neck stretching exercises.

Mrs. Zlotkus told me her CT scan was negative, and that her blood tests didn’t show any “temporary arthritis.” (That’s temporal arteritis, I presume.)

“Well,” I said, “There’s only one thing left that I can think of that will give you a headache in the exact area you’re describing – and that’s shingles. Did you notice any scabs or painful bumps on your scalp when the headaches first started?”

“Why, yes!” Said Mrs. Zlotkus. “About 3 months ago I noticed some very painful, crusty scabs on my scalp. I thought for sure it was because my hairdresser used extra strong chemicals on my hair. I scolded her for it. She told me to put tea tree oil on it.”

Oh, boy. There it was – a diagnosis as plain as the nose on her face.

“Um… Well did you tell the ER docs about the scabs?”

“No. They never asked me about it and I didn’t see what my hairdresser’s chemical burn had to do with my severe headaches.”

My mother-in-law’s work up (ER visit, CT scan, several doctor visits, pain medicines), misdiagnosis (neck muscle stiffness), and mistreatment (physical therapy) for shingles probably cost upwards of $10,000. Worse than that, she did not get anti-viral treatment early enough in her outbreak to prevent a long-lasting pain syndrome (called post-herpetic neuralgia). Now that she has this shingles-related headache, it’s very hard to treat. And taking lots of acetaminophen-rich medications (Vicodin) is the last thing her liver needs right now.

So how did the healthcare system fail Mrs. Zlotkus? In my opinion, this is a great example of the “failure of synthesis” that Evan Falchuk discusses on his See First blog. Somehow, the physicians involved in Mrs. Zlotkus’ care didn’t take the time to think about her symptoms, to ask the right questions, and to put all the puzzle pieces together. Instead, they just ruled out the potential emergency issues (a stroke/hemorrhage, or temporal arteritis) and gave her a follow up appointment with a neurologist (who couldn’t fit her in their schedule for 2 months). They didn’t take a full history – they just dumped her in the most likely diagnostic category (neck stiffness) and let some other specialist follow up. Shameful.

I’ve described more egregious examples of hasty medical care on this blog – consider the case of an elderly woman (the mother of a friend of mine) who was misdiagnosed with “end stage dementia” when she really had acute delirium from an overdose of diuretics… Or the case of my girlfriend who was mistaken in the ER for a drug seeker when she was suffering from a kidney stone.

Sometimes I feel as if I have to keep an eye on all my friends and family before they set foot in a hospital, ER, or doctor’s office. I’m afraid that those providing their care will be so rushed and thoughtless that my loved ones will wind up with a huge bill, the wrong diagnosis, and perhaps even a near-death experience. I am seriously afraid for them.

The bottom line is that we have to stop rewarding providers for volume over quality. We have to value the history and physical exam beyond the CT scan and lab tests. We have to give doctors the chance to think about their patients – rather than turn up the speed dial on the clinical treadmills as a means to reduce costs.

My mother-in-law just spent $10,000 of our tax dollars on a diagnosis that could be made in 5 minutes of thoughtful questioning over the telephone. Multiply that cost by the number of other Medicare beneficiaries who are suffering similar misdiagnoses in this country and we’re talking serious money.

Under-thinking leads to over-testing. Has the CBO taken that into consideration in its scoring of various reform plans? I don’t think so. To me, this is yet another reason why we need physicians at the table in healthcare reform – we see the real cost drivers that others might not think of – even if some of us are too busy to diagnose shingles correctly!

Political Victory On Healthcare Reform Trumps Careful Analysis

At healthreform.gov, the Department of Health and Human Services publishes data on the “Health Care Status Quo.”

It reads a bit like what would happen if you took the Dartmouth Atlas of Healthcare and buried it in Stephen King’s Pet Sematary.

The front page of healthreform.gov now has a map of the 50 states where you can click and read about the “current status of health care and the need for reform.”

(I should add that DC is included in the map, too.  But as of the time of posting the link doesn’t seem to work).

It lists a grab-bag of categories of information on each state.  But no matter what the data shows in a state, the HHS report always concludes the same thing.   Fifty times out of fifty:

[Insert state name here] families simply can’t afford the status quo and deserve better. President Obama is committed to working with Congress to pass health reform this year that reduces costs for families, businesses and government; protects people’s choice of doctors, hospitals and health plans; and assures affordable, quality health care for all Americans.

A good example are the reports for Massachusetts and Texas- two very different states with very different data.

  • 25% of Texans are uninsured, while only 2.6% of “Massachusettsans” are.
  • Overall “quality of care” in Texas is “Weak,” while in Massachusetts it is “Strong.”
  • The percentage of people with employer-based coverage in Texas dropped from 57% to 50% from 2000 to 2007, but held steady at 72% in Massachusetts
  • 20% of Texans reported not visiting a doctor due to high costs, but only 7% of Massachusetts residents did, and “this has significantly improved since 2007.”
  • Average premiums for health insurance are about 5% cheaper in Texas, even though the market is described as being less competitive than Massachusetts
  • 27% of middle income Massachusetts families spend more than 10% of their earnings on health care, compared to 17% in Texas

What’s going on?  The HHS doesn’t seem terribly interested in exploring it.  It just says it wants some kind of unspecified health care reform, this year.

I suppose this is the way the political process works.  Make the case there is a serious problem, and seek support to do something – anything – about it, now.  As Secretary Sebelius put it:  “we cannot wait to pass reform that protects what’s good about health care and fixes what’s broken.“  I don’t think anyone really knows what this means, but maybe that’s the point.

It’s a strategy for a political victory, but not for real, needed reform of our system.

http://www.healthreform.gov/index.html

*This blog post was originally published at See First Blog*

Counter Point: A Nurse Who Wants A Single-Payer System

My apologies to James Carville. I plagiarized his tagline because the insurance industry has forgotten about sick people during our national healthcare debate.
I remember when nurses and insurance companies use to get along with each other. Back in the 1960s, these nurses even took time out of their busy schedules to pose for one of their ads. We took care of patients at the bedside, and the insurance companies paid the hospital bill. It was as simple as that, but then things started to change. It began with three little letters—HMO.


Insurance companies are spending a lot of time and money trying to scare people into opposing President Barack Obama’s ideas on health care reform. They are especially working hard to torpedo the public option plan. That plan would allow you to keep your own private health insurance policy or buy affordable health insurance through a public plan. Insurers are going all out to make you hate this idea by making claims that aren’t true. They are saying that the government is going to ration health care by dictating which doctor you can see, and by making you wait weeks to see a specialist. Ironic isn’t it? The insurance industry is already doing these things to patients everyday via their HMOs. We wouldn’t even be having this debate if they were playing fair in the first place.

Insurance companies make their money a couple of different ways. They rack in the bucks by not insuring people who are sick, a practice known as cherry picking, and by not paying out claims. They also make money by cutting out competition. This is the real reason why insurers are trying to muscle Uncle Sam out of the insurance business. Medicare administrative costs are equal to about 2 percent of what it pays out to providers. For private insurers the ratio over expenses to payments is typically over 15 percent. Why the big difference? Insurance companies have high overhead. Their CEOs take home mega-million dollar paychecks, they have to take care of their shareholders, and they have to pay for fancy ads that convince consumers that they will have health coverage when they really need it. They need those fancy ads. Insurance companies are always looking for ways to deny our claims, but I digress. Competition between private companies and a public plan would hit insurance companies right where it hurts—in their wallets. Fewer customers in private plans means less profits, and less profits, up to 20 to 30 percent by some estimates, means fewer martini lunches for those at the top of the corporate food chain. To make matters worse, those greedy folks who make money by NOT paying for care would have to lower their profit margin on the customers they do keep in order to compete with the government.

I’ll never forget the day that I learned about HMOs. I came into work and found red dots on the side of a few patient charts. My head nurse told me that the dots were put there to prompt doctors to discharge patients as soon as possible so that the hospital and the insurance company could make more money. That was twenty-five years ago and the system has been in freefall ever since. Year after year, nurses are voted as the most trusted profession in America in Gallup’s annual survey of professions for their honesty and ethical standards. We are patient advocates, and we never put anything above what’s best for our patients. That’s why I’m putting my seal of approval on President Obama’s public health insurance plan, and so are the American Nurses Association (ANA) and the SEIU. The insurance companies want your money. Nurses want to take care of their patients. We want all Americans to have affordable, high-quality healthcare.

*This blog post was originally published at Nurse Ratched's Place*

Why Medicare-For-All Would Not Reduce Costs

[This post was written by Charlie Baker, President and CEO of Harvard Pilgrim Health Care, Inc., one of New England’s leading non-profit health plans.]

I heard this idea promoted at a luncheon I was at last week — that the best way to fix health care in the U.S. would be to move to a “Medicare-For-All” system.  Needless to say, I find this odd — since I think many of the things people hate most about our existing system — too procedure driven, doesn’t support primary care and prevention, favors technology over face-to-face interaction, doesn’t support multi-disciplinary approaches to care delivery, etc. — derive from the rules of the game set up and enforced by…Medicare!!!  Yikes!

But aside from that, the two things I always hear about why it’s a good idea are — Medicare has lower Administrative costs than private health plans and they’re a ”better” payer than the private plans.  Hmmm…Let’s take the first one.  What I’ve heard before is that Medicare only spends 4% of its money on a per beneficiary basis on administration, while the plans spend 14% per member on administration — a big difference.  This is interesting, but misleading.

Medicare beneficiaries are over the age of 65.  They spend almost three times as much money on health care as a typical private plan member — most of whom are under the age of 65.  If the Medicare member typically spends $800 per month on health care, and 4% of that is spent on administration, that’s $32  a month on administration.  If the private health plan member typically spends $300 per month on health care, and 14% of that is spent on administration, that’s $42 a month — a much smaller difference.  But we’re not done yet.  Medicare is part of the federal government, so its capital costs (buildings, IT, etc.) and benefit costs (health insurance for its employees and retirees (!), pension benefits, etc.) are funded somewhere else in the federal budget, not in the Medicare administrative budget.

Private plans have to pay for these items themselves.  That’s worth about $5-6 per member per month, and needs to come out of the health plan number for a fair comparison.  Now we’re almost even.  And finally, Medicare doesn’t actually process and pay claims for all of its beneficiaries.  It contracts with health plans around the country to do much of this for them.  That’s not in their administrative number, either — and it is, needless to say, in the private health plan number.

People push and pull these numbers all the time, and there may be “some” difference between Medicare and the private health plans on administrative spending as a percent of total spending.  But it’s not huge, if you try to compare apples to apples.

On the payment issue, the numbers I’ve seen suggest that nationwide, private plans — on average — pay somewhere between 120 and 125 percent of what Medicare pays for hospital and physician services.  In other words, private plans pay MORE than Medicare pays, not less!  If people want Medicare For All, they need to be prepared to either dramatically raise Medicare rates and payment — and therefore, Medicare costs — by a lot of money — 20 to 25% by this estimate — or kick the bejeebers out of the physician and hospital communities and make them eat the difference.

Medicare-For-All is not as simple as it seems.

*This blog post was originally featured at the Let’s Talk Healthcare blog.*

What Do Orthopaedic Surgeons Think About Healthcare Reform?

[Dr. Jim Herndon is a past president of the American Academy of Orthopaedic Surgeons, and chair emeritus of the department of orthopaedic surgery at Partners Healthcare]

***

The challenges of health care reform are enormous. To expect that the vast array of problems that exist today will be corrected or solved in a couple of months is totally unrealistic. Witness the moving target of announced changes and options occurring daily in the press and media in general. And add to the confusion…these changes are being developed at the top (Congress and the White House)…not from the bottom up (from doctors, nurses and other health care providers, and importantly, patients). In their place are the powerful lobbyists…the health insurance industry, the hospital industry, the drug industry and even organized medicine (AMA)…who wield their influence over our policy makers by all sorts of tangible (financial donations) and intangible (spouses of leaders on corporate boards) pressures.

I must admit, although occasionally said without real meaning…I don’t hear an outburst of support for the essential mission/purpose of health care…the health of our citizens…”the patient comes first”. Where is the patient…who is supposed to come first…in this national debate?

Everyone knows that health care is expensive. In 1970 health care spending consumed 7% of the Gross Domestic Product. In 2009 health care spending is consuming 16% or more of our Gross Domestic Product. It is increasing more rapidly than inflation. Yet, as a nation, we have not…in all these years…had a serious conversation about Americans’ health. Where is it in our list of priorities? I don’t think we know. From recent events we do know it is lower than the need to remove Saddam Hussein from power…it is lower than bailing out investment companies and banks…it is lower than stabilizing the mortgage market…and it is lower than bailing out two automobile manufacturers. I am not knowledgeable enough to question the priority of the bailouts of banks and financial institutions or the mortgage companies…but I do question the priority of removing another country’s dictator or bailing out two automobile manufacturers instead of allowing them to proceed through bankruptcy in our court system…over health care reform.

Too often in my lifetime I have seen the importance of health care reform pushed down the list of priorities over other needed programs…to wait for another day. How important is the patient, the health of Americans today? How far are we going to push the profession of medicine from “a calling”…a profession, as President Obama states to “a business”. It is known that patients trust their doctors, but not our health care system. When will patients begin to trust their own doctors less? It will happen if and when they believe doctors are more “concerned with the pulse of commerce” rather than the “pulse of their patients”. I submit we are getting very close to this tipping point…in losing the trust of our patients and society in general.

There is no unanimity of opinion regarding the health care reform debate…amongst Democrats, amongst Republication…amongst the public…amongst physicians in general…and orthopaedic surgeons specifically. I asked a few young physicians in an orthopaedic residency program their opinions about the health care reform debate. All believed that every American should have basic health care insurance coverage. Obvious to them, it would include coverage for care of patients with acute fractures or patients with severe pain or loss of function. They admit not knowing much about the “public option” and the swirling politics going on. They also were not comfortable with defining what situations or problems would not be covered by insurance…although they agreed that some restrictions above “basic care” would have to be implemented.

Their responses reminded me that in 1990, when I was in graduate school for an MBA…we had a class debate about whether health care was a right or not of all citizens? Although the discussion was lively and some felt health care was a privilege, the class conceded that health care was a right of all citizens…admitting historically it was considered a privilege for the few who could afford it, but then (1990 or earlier?) health care had become a right for all in the US. I then asked a few of my colleagues who enjoy leadership positions in the field of orthopaedic surgery their opinions regarding health care reform. They also could not agree on the issues of this debate.

One area where they did agree was that academic medical centers are not well positioned for the future…especially those that depend on state funding. We have already witnessed this in Massachusetts where apparently the state has decreased funding to some teaching hospitals that traditionally have cared for a large number of uninsured. Now that most citizens have insurance, they are seeking their care in other hospital emergency departments. My colleagues also agree that physicians will receive lower payments for specific treatments or participate in “bundled” payments to the entire healthcare team/facility for comprehensive care of the patient.

Otherwise my colleagues disagreed. On the one side some support the public option and universal coverage…although “the devil is in the details”. For this group they have become tired…like so many American physicians…with the convoluted way we finance health care and the associated paper trail/documentation overload. The system has made some patient conditions profitable and others not profitable…described by one as “perverted incentives”. These physicians (me included) are angry at the loss of our professionalism as hospitals and physicians chase dollars and not the health needs of each patient and the public. On the other side (against public option), my colleagues have some agreements…most orthopaedic surgeons are supportive of care of the uninsured and underinsured, especially for patients presenting with acute problems to hospitals’ emergency departments. Most also agree that there needs to be a serious realignment of incentives and improved collaboration of hospitals and doctors.

But they have many disagreements…including the provision of elective care. They argue…with good reasons…that with continued rising costs to practice medicine (rent, electronic records, employee wages and benefits, malpractice insurance, increased personnel requirements for the administration/paperwork overload) and continued reductions in reimbursement (Medicare, for example, pays an orthopaedic surgeon today approximately 50% of the reimbursement it paid for a total hip replacement in 1990)…it is becoming increasingly problematic to provide elective care for the underinsured and uninsured. They commonly ask…”How can you provide care that costs more than any receipts”?

Other disagreements include: the single payor system…they don’t believe it will work; although well-intended, they believe these reforms will result in overall lower quality of care for patients; that emergency departments will still be used by those with insurance because patients can see a physician at the patients’ convenience and avoid long delays to see a doctor in his/her office…for example there is a 40-day wait to see an orthopaedist in his/her office in Boston; the continued tremendous demands by American patients to have the latest technology, the latest treatment…even if evidence for its use is unknown; skepticism about the prevention of disorders that have a genetic basis, i.e. osteoarthritis…in the foreseeable future; the simple fact that to reduce errors and overuse/misuse of tests by an electronic medical record and computer physician-order system will cost enormous amounts of increased spending in the short term…before cost savings are eventually realized… and to draw attention to one specific unsolved problem area…Workers’ Compensation…where orthopaedists, daily, see ineffective treatments being used and large numbers of patients on disability.

Briefly, the follow are factors that have led to increased and inefficient health care in the US: high administrative costs; overuse of services and new technology; an increased prevalence of chronic disease; tremendous geographic variations in care; increased payments not resulting in improved quality; a continually high number of medical errors and complications; a broken professional liability system; a shift in costs from the uninsured to the insured; a predominant third-party payer system; overuse and misuse of care; focus changing from the patient to the pocketbook; insurance company abuses (cherry-picking healthy patients, denying care of patients with chronic disease, deliberately lowering the normal of “usual and customary” fees…to name a few); and continued issues of fraud and abuse, especially in the Medicare and Medicaid programs.

Finally I would like to close with the official position of the American Academy of Orthopaedic Surgeons (AAOS) on health care reform: “Any changes to the health care financing and delivery system…the well-being of the patient must be the highest priority. The AAOS strongly supports reform measures…that provide individuals with patient-centered, timely, unencumbered, affordable and appropriate health care and universal coverage while maintaining physicians as an integral component to providing the highest quality treatment”.

The AAOS is opposed to a single-payer health system or even a federal health care authority. The AAOS suggests “a number of tax initiatives…that will level the playing field and make health care coverage more affordable”. There should be “adoption of policies that restore equity and enhance market competition”. The AAOS also “strongly believes that patient empowerment and individual responsibility are necessary components of health care reform. Health choices should be recognized and preventive care should be promoted”.

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