July 7th, 2009 by Emergiblog in Better Health Network, True Stories
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Why shouldn’t we have to pay for our health care?
Why….we don’t have that sort of money!!! How dare you even suggest that we should pay!!!!
We manage to buy cigarettes. We manage to buy fast food. Often. We manage to get all the channels we want via cable or satellite television. Some of us even have satellite radio in our cars. And GPS. Our cell phones are really nice, but all that texting costs a pretty penny. We drop a few bucks at Starbucks every week without thinking twice.
And then we roll our eyes when we have to pay for….god forbid…..health care!
*****
Think I’m heartless? Think I’m an elitist?
Think I’m talking about the Medicare patients in my ER who bring in a super-sized number 8 from McDonalds for the entire family and hold out their right arm for a BP while they text rapidly with their left hand?
I could be.
But I’m not.
The patient rolling their eyes at having to pay was me.
*****
Yeah.
Me.
Showed up for a colonoscopy yesterday and the receptionist went over what would and would not be covered by my insurance.
My out-of-pocket payment would be $216.
And my first thought was “why the hell am I paying anything out of pocket for this? I have insurance!”
I was ticked.
*****
But why was I ticked?
Why shouldn’t I have to incur out-of-pocket expenses?
I have insurance. Good insurance. Insurance I don’t pay a single penny for. It’s a benefit I get from my employer for working 24 hours a week.
Did I think I was entitled to full coverage because I was insured?
Entitled?
Me?
*****
Isn’t that term used to describe some patients who get their health care for “free” through a public plan?
Well, I get my coverage for “free”, too, and god help me, the emotion I felt in that office yesterday was “entitlement”.
Now I understand.
And I won’t use that term again.
Ever.
*This blog post was originally published at Emergiblog*
June 28th, 2009 by Happy Hospitalist in Better Health Network, Health Policy
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You may think all is well in Canada. A land where FREE=MORE has been granted a birth right. It has been said many times before: You have three endpoints for which to strive for. Cheap, Quality or Quick. Pick any two. You can not have all three. It seems that Canada has decided to sacrifice Quick. You can always guarantee cheap health care. You simply stop paying for it. That’s called rationing. Getting in line and waiting is a classic form of rationing used by governments all across this land of ours.
In fact, as a resident in training at a VA facility, I saw first hand how rationing of care occurred using waiting as the tool of choice. Schedules blocked at 5-8 patients. Leaving when the clock struck 4. Scheduling dead patients. Yes folks, that actually happened. As an inpatient, technologists would finish their day on their terms. Getting studies after hours was impossible. Patients would wait for days to get an echo or a doppler. I once had an xray technologist refuse to come in, from home, in the middle of the night to take a chest xray on a crashing ventilator patient. The fact that the VA would not staff an overnight xray technologist was simply ridiculous. Try to get anything done on a holiday. Not only impossible but the hoops one had to travel through to attempt it would make Obama cry if he had any idea what the government run care was doing to his Vets.
Wait times is rationing, no matter how you look at it. You can find the link to the Fraser Institute on Canada’s Wait times here at Dr Hal Dall’s blog. I want to thank him for pointing it out. It is a fascinating look into the discrepancies in Canada’s health care, in spite of the equality for all mantra of social solidarity. Here is an excerpt from the research.
Finally, the promise of the Canadian health care system is not being realized. On the contrary, a profusion of research reveals that cardiovascular surgery queues are routinely jumped by the famous and politically-connected, that suburban and rural residents confront barriers to access not encountered by their urban counterparts, and that low-income Canadians have less access to specialists, particularly cardiovascular ones, are less likely to utilize diagnostic imaging, and have lower cardiovascular and cancer survival rates than their higher-income neighbours. This grim portrait is the legacy of a medical system offering low expectations cloaked in lofty rhetoric. Indeed, under the current regime—first-dollar coverage with use limited by waiting, and crucial medical resources priced and allocated by governments— prospects for improvement are dim. Only substantial reform of that regime is likely to alleviate the medical system’s most curable disease—waiting times that are consistently and significantly longer than physicians feel is clinically reasonable.
*This blog post was originally published at A Happy Hospitalist*
June 22nd, 2009 by DrRich in Better Health Network
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Thanks to Dr. Wes for pointing us to a remarkable video of a 20-year old Belgian soccer player having his life saved by an implantable cardiac defibrillator (ICD). DrRich hopes you will view it.
As it happens, DrRich will be traveling to Europe imminently at the invitation of Dr. Pedro Brugada, whom some call Belgium’s King of Electrophysiology, and for whom the Brugada Syndrome is namesake. (DrRich is deeply honored to be one of the “masters” at Dr. Brugada’s “Meet the Masters” event, which gives him the opportunity to spend two days with a hand-picked group of top European and American electrophysiology fellows. DrRich will undoubtedly learn a lot from them, and will try very hard not to ruin these fine young physicians before they’ve even started out.) In any case, one must suspect that Dr. Brugada (being, after all, Belgium’s King of EP) must have been somehow responsible for placing the ICD in this young soccer player.
DrRich will be sure to ask him how that young man managed to receive an ICD. Because most high-risk patients, in the U.S. and elsewhere, have to do without.
Despite the fact that ICDs are dramatically effective and dramatically life-saving in people who have dangerous cardiac arrhythmias (please do watch the video to see the drama for yourself), they are still used in only a tiny fraction of the identifiable patients who are at risk for sudden cardiac death. Consequently, in the United States alone, almost 1,000 patients each day die suddenly from cardiac arrhythmias who could have been saved by an ICD.
DrRich has written before about the covert rationing of ICDs, which is done so openly that one is tempted to drop the modifier “covert,” and has even written about how a former government official has admitted that he had no choice but to juggle the statistics of a randomized clinical trial (i.e., to bastardize the science) in order to avoid having to pay for ICD therapy in broader categories of patients. That’s old news, and there’s no reason to beat it to death again here.
Instead, DrRich would like to explore another question – Why are ICDs still so damned expensive?
Having worked closely with ICD manufacturers since the early 1980s (which, DrRich knows, makes him a very bad person), he perhaps more than most appreciates the engineering magic that has gone into making and improving these devices over the years. It is a truly remarkable thing that one can build a tiny implantable device that a) houses a computer that runs an extraordinarily sophisticated heart rhythm analyzer that, from beat to beat, accurately diagnoses the heart rhythm in real time; b) can deliver a tiny electrical pacing impulse to the proper cardiac chamber at the proper time, from beat to beat, to coordinate and optimize cardiac function; c) then, if a fatal arrhythmia develops, to deliver a very big shock to the heart within 10 – 15 seconds, to restore the rhythm to normal (please do see the video); d) wirelessly communicate via the Internet to tell the doctor (and anyone else who needs to know) its own condition and the condition of the patient; e) all the while surviving in a hostile, high-temperature, salt-water environment (i.e., the human body), for 5- 7 years, without (for the most part) corroding, leaking, rusting, blowing up, or otherwise malfunctioning.
Try to get your iphone to do that.
At this point, most of DrRich’s regular readers are likely expecting him to say: No wonder these beasts cost $15,000 to $25,000 apiece. Just look at the sophisticated technology that is built into them!
And it is indeed true that over the past 27 years, hundreds of millions of dollars have been invested in making ICDs smaller, more reliable, longer lasting and safer. It is also true that the companies that make these devices ought to be fairly rewarded for their efforts in this regard. And for many years (DrRich estimates that the “right” number of years was about 18) the high cost of ICDs was easily justifiable, given the steady, remarkable, important and meaningful improvements in technology that took place during that time, improvements that were being funded by the cost of the devices.
But DrRich argues that by the turn of the millenium, ICD technology had become largely mature, and that since that time improvements (while still happening) have been merely incremental. “Gingerbread” might be too strong a term, but nonetheless that’s the term that pops into DrRich’s mind. The fact is that by the year 2000, all ICD manufacturers were building reliable, safe devices that were really good at preventing sudden death, and improvements since then have not altered (or materially improved on) that fact.
Here’s a truth that ICD manufacturers would not like us to know: It only costs them a couple of thousand dollars to build an ICD. DrRich does not know the precise dollar amount (very few people even in ICD companies know these precise amounts) but based on his experience he cannot see how it could be much more than about $3000 per unit. Now, lest you think that the roughly $22,000 difference between the cost to manufacture and selling price is pure profit, it’s not. ICD companies continue incurring expenses as long as an ICD remains in service. These “lifetime” expenditures include monitoring of device function; maintaining expensive, rigorous quality and reliability processes; and backing up every implanted device with a large force of highly-trained and expensive field clinical engineers who are available to electrophysiologists 24/7, anywhere and everywhere, for “troubleshooting” and even for routine follow-up. All this “extra” stuff must be fully accounted for in the initial price of the device.
Still, ICD manufacturers make a very, very nice margin on every device they sell. Few businesses in the world enjoy this kind of price margin.
With all that “room” to play with, one might think market forces would by now have brought the price down for a mature technology like this, especially since over the past few years the growth of the ICD market has flattened, and ICD companies now must compete with each other for more market share if they want to grow their businesses.
But classic market forces usually do not work in healthcare, and that is especially true when it comes to ICDs.
It all begins with Medicare reimbursement, which sets the price for ICDs, and consequently the cost of ICDs is likely to remain at $15,000 – $25,000 forever.
Now, to be sure, the government does not directly determine what companies get paid for ICDs. Rather, they indirectly determine the price by deciding what hospitals and physicians will be reimbursed for implanting ICDs. Those reimbursement rates apparently vary substantially from region to region and hospital to hospital (who knows how the government determines these things?), and the rates are not publicly available to DrRich’s knowledge. But ICD manufacturers, at worst, can impute the reimbursement rates by figuring out the top price specific hospitals are willing to pay for ICDs (hence the range in prices).
Having determined the top price they can possibly get paid for ICDs, the only logical strategy for manufacturers is to figure out how they can always get paid that top price for every device they sell. They do this by making ICDs specifically aimed at keeping the decision makers happy. And the decision makers, by and large, are the electrophysiologists.
Electrophysiologists decide who gets ICDs, and they decide which ICDs to implant. So, to keep prices at the highest possible level, ICD companies must cater to the wants and needs of electrophysiologists (their true customers), and so must produce a steady stream of new, improved ICDs whose novel features are requested by these very high-end, high-maintenance physicians.
Electrophysiologists have a clear agenda in this regard. Their “demands” on ICD companies, expressed in rigorously conducted marketing surveys and focus groups, inexorably lead to ever more complex devices. This complexity helps electrophysiologists (a small community whose growth is tightly controlled) to maintain a professional stranglehold over the implantation and management of ICDs.
It’s a matter of turf protection.
Since ICDs are already exceedingly complex devices, and grow more complex with each succeeding generation, then “obviously” one must be a high-end specialist like an electrophysiologist to understand and manage all their nuances. (In real life, ICDs have become so complex that not even a majority of electrophysiologists can keep up with them any more, thus necessitating armies of “clinical engineers” in the employ of ICD companies who can do troubleshooting in the field.)
All the ICD manufacturer needs (and wants) to know is: what gingerbread do I need to add to my next generation of ICDs to make them even more stupefyingly complex, so as to maintain the loyalty of my electrophysiologist customers? If they can answer this question manufacturers will continue to be paid top dollar for their product (again, as determined by regional reimbursement rates set by the government).
And this is why, despite the fact that ICD technology has been fully mature (says DrRich) for most of a decade now, which in a functional market would cause the price to plummet, the cost of ICDs remains so high. Whatever has developed in the complex interplay between ICD manufacturers, electrophysiologists, hospitals and the government, it’s not a functional market.
Among other things, this dysfunctional economic model (if that’s what it is) utterly precludes ICDs ever becoming available to a large proportion of individuals whose lives could be saved by them. They’re simply too expensive and complex for widespread usage.
Covert rationing, of course, thrives on opacity, obfuscation, confusion, inefficiency and complexity, and the convoluted ICD “business model” provides many, many avenues for covert rationing. So while the price remains high, relatively few ICDs actually end up being implanted (compared to the number of patients who have clear, FDA-approved indications for ICDs). In fact, the growth curve for ICD implantation has been successfully flattened for almost five years now (despite projections earlier this decade for 20% annual growth for years and years) – and it is likely to stay flat.
If we were to have a system of fully transparent, open rationing, then the ICD business model would rapidly be seen as the travesty of confusion that it is. Furthermore, a system of open rationing would quickly goad ICD manufacturers away from catering to the turf-based requests for more complexity by electrophysiologists. They would quickly develop ICDs that are simple, reliable, effective, easy to implant, long-lasting and cheap, and which could be safely implanted and managed by non-electrophysiologists.
The technology to do that exists today.
This is an example, DrRich believes, where open rationing would ultimately lead to more usage of a life-saving technology, by driving industry to put their development efforts into reducing the cost and increasing the simplicity and reliability of their products, and thus making them more cost effective, rather than striving to make them more attractive to high-end-physician decision makers. If they did this, then videos like the one Dr. Wes has shown us would no longer merit mention on blogs or on any other form of media, as ICD rescues would become very common.
DrRich has been telling all this to ICD companies for many years to no measurable effect. Of course, it has been well documented that DrRich is more than willing to tell his clients stuff they may not particularly want to hear. (It’s truly amazing that he can still make a living as a consultant.)
In any case, here’s DrRich’s investment advice for this week: The growth of the ICD market is destined to remain flat as long as high-priced, gingerbread-laden ICDs that only an electrophysiologist can love remain the norm. Avoid companies whose growth depends on these devices. On the other hand, the ICD market is ripe for a major disruption, if one of these outfits ever figures it out.
DrRich will now fade into quietude here for a week or so, as he entertains those nice people in Europe with his crazy ideas about healthcare.
*This blog post was originally published at The Covert Rationing Blog*
