Wednesday, December 29, 2010

More and more to come on the concept of "value" in medical care

I have commented about this general topic before . See here.

The December 23, 2010 issue of NEJM has two articles on this topic. The first is from a member of the faculty of the Harvard Business School, M. E Porter and the second by T.H Lee. Dr. Lee is one of the NEJM editors and is also the network President for the Partners Health System.

Dr. Porter (Phd,Harvard,Business economics) is a widely published and widely quoted author.Concepts that he has popularized include: the Five Forces,the Value chain and the National Diamond model. In 2006 he co-authored a book with Elizabeth Teisberg entitled Redefining Health Care: Creating Value based Competition On Results.


Porter defines value as outcome achieved per dollar spent or value = outcome/cost. He has stated that health care should be restructured to consist of interdisciplinary teams to provide the outcome with the best value across "the full spectrum of health care". Having said that I am puzzled when he says that value is not an abstract ideal.To me that certainty sounds like an abstract idea because as pointed out in the second article in a understatement :

"No one should expect the value framework to be easy to implement.The measurement of outcomes and costs,the organization of clinicians into teams focused on improving care for patient populations,the evolution of a payments system that rewards providers who are more effective in improving the value of their care-they are all formidable tasks."

Formidable indeed. A reorganization of much or most of the medical system to one that conforms with Dr. Porter's conception of how it should be would be required.

I cannot help but be reminded of Will Roger's prescription for fixing the German U-boat problem -boil the oceans. Supposedly, when pressed for details he replied, in typical consultant fashion, he was an idea man and the engineers would have to work out the details. With the value framework model many details would have to worked out and then we could see how it would work and compare real world stuff with academic theorizing. We need to do it to see how it works.I've heard that somewhere before. Is there somewhere in the value framework some input from how much the patient values the service?

Thursday, December 23, 2010

Waiting times in Canada for doctors-getting worse

During the last half of 2010 both my wife and I developed some ocular symptoms at different times. I developed more floaters and flashing lights and my wife developed some wavy lines in her visual fields. She called around 10Am to a local Eye group and was seen that day about 4PM by a retinal specialist-Diagnosis ocular migraine. When I called at 8am to the same group I was able to see a retinal specialist at 2PM-diagnosis posterior vitreous detachment with no signs of retinal detachment. Both were not actually emergencies but we were both glad we could be seen so soon and reassured.

Granted we live in a large metropolitan area with no shortage of medical specialists but even so the ease of seeing not just an eye doctor but retinal specialists was impressive.

It is an interesting contrast with recent data published by the Frazier Institute in Canada regarding wait times there to see medical specialists. See here.

Much data is presented and the entire report can be accessed. Here are some samples.
Wait time varies by specialist. For orthopedic procedures there was 35.6 week wait but happily "only" a 4.9 week wait before getting oncology treatment started. There was some good news the wait for psychiatry consultation nominally decreased from 16.8 weeks to a prompt 16 week wait.

h/t to the blog westandfirm

Monday, December 13, 2010

Does Obama care mean Medicaid type care for most-except the rich,

Tyler Cowen, economist from George Mason University,gives his views in this commentary which describes the effects of different payment schemes for medical services.


"Wealthy people will always be able to buy most of what they want. But for everyone else, if we stay on the current course, the lines are likely to get longer and longer.The underlying problem is that doctors are reimbursed at different rates, depending on whether they see a patient with private insurance, Medicare or Medicaid. As demand increases relative to supply, many doctors are likely to turn away patients whose coverage would pay the lower rates.


Since private insurance pays more per service than Medicare which pays more than Medicaid, physicians will increasingly attempt to structure their practices so that they can see more of the higher paying patients and less of the lower paying ones. This trend will increase with the pressures on demand for medical services brought about by ACA. Millions more patients will have insurance cards, more on Medicaid and more receiving cards from the insurance pools but there cannot be a corresponding increase in the number of physicians available to treat the new patients.

Simply put, more docs will restrict the number of Medicare patients they will treat. In fact, as the numbers of Medicare patients in a given internists practice increases the less viable is his practice from an economic viewpoint.I can illustrate that point with an anecdote from personal ( well second hand) experience.

My brother, also a retired doc, was recently told by his internist ( who also is approaching retirement ) that one of his partners "has to retire" because his Medicare patient load in his practice has reached the level at which he can no longer meet the income volume requirements of the practice. This, according to the back of the envelope calculations for that particular practice setting, is 42%.A recent survey by Merritt Hawkins quoted here, reports that 87% of physicians surveyed indicated that they will close or restrict the number of Medicare patients in their practice with a slightly higher number reported in regard to Medicaid patients.

Cowen continues saying:

Most people would end up with low, Medicaid-like reimbursement rates, and would endure long waits and low-quality service. But wealthier people could jump the line by paying more. Think of “Medicaid for everyone” but the rich.

Someone described Obama care as "robbing Peter to pay Paul" with Medicare patients playing Peter and Paul being the previously uninsured who gain insurance cards from the legislation. But with the effects of the looming shortage of primary care physicians it looks like both Peter and Paul can look forward to longer lines and poorer quality care. So while Peter gets robbed, Paul is paid little or nothing.

Wednesday, December 01, 2010

Price Controls in Medicine-Reality tends to support theory

What is the theory? Answer-price controls tend to 1)cause shortages,2) decrease the quality of the good or service controlled 3) increase demand and 4) encourage the development of black markets,bribes and other "work-arounds"

I am aware of all but number 4 happening in regard to Medicare in the U.S. Now we have apparent examples of black markets (or at least bribes) happening in the setting of the price control health care in Canada. See here for a discussion by Canada born economist, David R. Henderson writing at the blog Econolog.

The news story in the Montreal Gazette describes OB docs in Canada taking side money to guarantee that they will be available at the time of the delivery.

One commenter to the blog entry wondered if U.S. patients, after Obama Care really gets going,will be able to go to Canada to offer side payments to get their treatments there sooner than they could here due to the long lines that will develop when millions of more insurance card carrying patients compete for what will be a vastly too small supply of primary care docs. Actually the problem is already worse as seniors struggle in some areas to see physicians. See here for comments regarding that.