Dr Roy Poses tells us that plenty can go wrong and has already and will only get worse. See here for his latest commentary of things going wrong when physicians' salaries are dependent on hospitals and other corporations for their livelihood who in turn exists to maximize profits and "quality care" is just a marketing phrase.
This detailed article from the NYT provides more chilling documentation of what can happen and,is happening, as corporate entities practice medicine and physicians become more and more under the control of the corporations' suits.
When there is a conflict between the corporation's bottom line and the individual patient's well being one could only hope that the physician's ethical compass would point in the direction of the patient benefit.However, with the new medical ethics , one could argue that the good of the collective ( the HMO or ACO or hospital or whatever) may well trump the welfare of the individual .
That was not the case with the "old ethic" in which the good of the collective was not mentioned and the physician was considered the fiduciary of the patient.Try and find the word fiduciary in the New Professionalism or in the latest edition of the ethics manual of the American College of Physicians.
When the physician and the corporation have the same interest (corporate bottom line) and the former act in the interests of the latter the published desire of Berwick and Brennan to do away with the [physician - patient ] dyad as a decision making unit will be fulfilled. See here for my earlier comments on the following quote from Berwick's Book entitled New Rules.
"Today, this isolated relationship[ he is speaking of the physician patient relationship]
is no longer tenable or possible… Traditional medical ethics, based
on the doctor-patient dyad must be reformulated to fit the new mold
of the delivery of health care...Regulation must evolve. Regulating
for improved medical care involves designing appropriate rules with
authority...Health care is being rationalized through critical
pathways and guidelines. The primary function of regulation in health care, especially as it affects the quality of medical care, is to constrain decentralized individualized decision making.
In the 17 years since the publication of New Rules,considerable progress has been made in their desired reformulation of ethics and how medicine is practiced and one can surmise that the authors are appropriately gratified. Those of us who hoped that in our hour of medical need we would be attended by physicians who acted in their fiduciary duty to us and not in accordance with a reformulated ethical framework are a bit less sanguine.
Wednesday, December 26, 2012
Friday, December 21, 2012
More revolving door antics with Obamacare
I have commented before about the happy feet of Elizabeth Fowler and her travels in and out of government and in and out of the industries materially affected by the branch of government in which she "served".See here for earlier commentary.
Now a similar tale can be told in regard to a major player in the governmental regulation of the health insurance industry.Steve Larsen's resume is similar to Dr. Fowler. As outlined here he worked with an insurance company and then played a key role in HHS dealing with insurance regulation as regards ACA and now back to insurance, this with a subsidiary of a company who was the beneficiary of a large HHS contract while Larsen was employed by HHS.
Larsen left his position as head of HHS's Center for Consumer Information and Insurance Oversight shortly before SOCTUS ruled Obamacare was constitutional and is now an executive VP with the UHG subsidiary Optum. Mr. Larsen also played a role in one of favorite examples of the social justice brought about by Obamacare,the granting of exemptions to friends of the administration. See here.
Now a similar tale can be told in regard to a major player in the governmental regulation of the health insurance industry.Steve Larsen's resume is similar to Dr. Fowler. As outlined here he worked with an insurance company and then played a key role in HHS dealing with insurance regulation as regards ACA and now back to insurance, this with a subsidiary of a company who was the beneficiary of a large HHS contract while Larsen was employed by HHS.
Larsen left his position as head of HHS's Center for Consumer Information and Insurance Oversight shortly before SOCTUS ruled Obamacare was constitutional and is now an executive VP with the UHG subsidiary Optum. Mr. Larsen also played a role in one of favorite examples of the social justice brought about by Obamacare,the granting of exemptions to friends of the administration. See here.
Tuesday, December 18, 2012
Expose of how big pharma worked on the sausage of Obamacare's social justice
See here for a fascinating, detailed account of the behind the scenes activities in the creation of one part of the Affordable Care Act.
Details of the cahoot activities were gleaned from numerous E-mails studied by the House Energy and Commerce committee.
After an agreement was reached between PhRMA (the lobby group for big pharma) and the white house they donated 150 million for an ad campaign and another 70 million for two front groups to advocate for passage of the bill. Big Pharma was able to block efforts to allow re-importation of medications and to enable CMS to negotiate drug prices for medicare part D.
The WSJ on line article linked above includes this paragraph.
At least PhRMA deserves backhanded credit for the competence of its political operatives—unlike, say, the American Medical Association. A thread running through the emails is a hapless AMA lobbyist importuning Ms. DeParle and Mr. Messina for face-to-face meetings to discuss reforming the Medicare physician payment formula. The AMA supported ObamaCare in return for this "doc fix," which it never got.
If the lobbyists for AMA were hapless, what can you say about the lobbyists for the medical device manufacturing sector? See here for an article indicating that now even liberal Democratic senators seem to belatedly realize that the tax on that sector will cause the loss of jobs .
Perhaps the Obamacare sausage maker who should be singled out for special recognition is Elizabeth Fowler who some (including Max Baucus who should know) have said is the real author of ACA. Another important aspect of the cahooting,crony capitalism,baptist and the bootlegger world of legislation is the revolving door aspect. See here for how flagrant that process can be with a detailed chronology of Dr. Fowler's resume.Here are comments in that regard by Glenn Greenwald,by whom very little gets by:
Ms. Fowler “will receive ample rewards from that same industry as she peddles her influence in government and exploits her experience with its inner workings to work on that industry’s behalf, all of which has been made perfectly legal by the same insular, Versailles-like Washington culture that so lavishly benefits from all of this.”
h/t Dr. G.Keith Smith for reference to House Committee's report
Details of the cahoot activities were gleaned from numerous E-mails studied by the House Energy and Commerce committee.
After an agreement was reached between PhRMA (the lobby group for big pharma) and the white house they donated 150 million for an ad campaign and another 70 million for two front groups to advocate for passage of the bill. Big Pharma was able to block efforts to allow re-importation of medications and to enable CMS to negotiate drug prices for medicare part D.
The WSJ on line article linked above includes this paragraph.
At least PhRMA deserves backhanded credit for the competence of its political operatives—unlike, say, the American Medical Association. A thread running through the emails is a hapless AMA lobbyist importuning Ms. DeParle and Mr. Messina for face-to-face meetings to discuss reforming the Medicare physician payment formula. The AMA supported ObamaCare in return for this "doc fix," which it never got.
If the lobbyists for AMA were hapless, what can you say about the lobbyists for the medical device manufacturing sector? See here for an article indicating that now even liberal Democratic senators seem to belatedly realize that the tax on that sector will cause the loss of jobs .
Perhaps the Obamacare sausage maker who should be singled out for special recognition is Elizabeth Fowler who some (including Max Baucus who should know) have said is the real author of ACA. Another important aspect of the cahooting,crony capitalism,baptist and the bootlegger world of legislation is the revolving door aspect. See here for how flagrant that process can be with a detailed chronology of Dr. Fowler's resume.Here are comments in that regard by Glenn Greenwald,by whom very little gets by:
Ms. Fowler “will receive ample rewards from that same industry as she peddles her influence in government and exploits her experience with its inner workings to work on that industry’s behalf, all of which has been made perfectly legal by the same insular, Versailles-like Washington culture that so lavishly benefits from all of this.”
h/t Dr. G.Keith Smith for reference to House Committee's report
Sunday, December 16, 2012
Affordable Care Act as a monumental Baptist and Bootlegger morality tale
"We are pattern-seeking,story-telling animals".
From chapter 1 , Macroeconomic Patterns and Stories, Edward E. Leamer
In a 1983 article in the journal Regulation, the economist Bruce Yandle introduced the concept of the Baptist and the Bootlegger (B+B). It refers to the situation in which a given legislation or regulatory action is supported by some group on high moral grounds as in denouncing the evils of alcohol.Support also comes another group who stand to get economic gain from that legislation such as bootleggers would if alcohol sales were banned. The Mafia rule of "follow the money" is useful in seeking out who might be the bootleggers in a given situation.See here for some classic examples of the B+B pattern including the acid rain story and the tale of spotted owl.
After I became aware of the B+B pattern I seem to see it in many places, even in the Affordable Care Act.So here is the story.
I can see the medical progressives as the Baptists. Medical progressives believe (many of them sincerely) that health care or medical care is too complex,complicated and important to be left to the individual patient and his physician.Rather it should be determined by the elite who using a utilitarian ethic with the tools of cost effectiveness research will be able to find practices that will benefit society as a whole.But control is not the what the medical progressives explicitly argue for in their advocacy but rather it is the furtherance of the social justice that will be fulfilled as millions will now have access to health care and health care inequality will be greatly diminished. No, not all physicians who supported ACA fall into that category.There are many sincere physicians who believe the statute is the way to obtain health care for millions who are now under served and who are not part of the progressive medical elite but typically it is not their voice we hear from the pulpit.
I can see a coalition of bootleggers at work in the formulation of the many pages of dense, self referential legal prose that comprises ACA. The Mafia rule works well here.
Who would gain from millions of new clients with health care insurance?
Easy answers. The hospitals would gain simply as there would be many more clients to be able to seek out and pay for their services. Similarly the big health insurance companies would welcome millions of more clients who are forced to pay for their product.Big Pharma would be in the position of more customers who could buy their products with other people's money. Information technology companies would relish the legislation to force or nudge physicians to buy and maintain computers systems.
But there is more.While the Baptists were singing hymns of praise for social justice,equality,elimination of waste, and the millions of uninsured Americans,the bootleggers and their lobbyists were busy working with the movers and deciders on the hill (eg. Max Baucus and his adviser, Elizabeth " revolving door" Fowler) to work out the important details. Big Pharma was able to get restrictions on the re importation of generic drugs,big hospital was able to be exempted from the actions of IPAB until 2020 and big health insurance was able to keep the public option from being included in the statute.
Of course, metaphors and other figures of speech only can go so far,the reality flows over the cup.What about the medical professional organizations such as AMA, ACP, AAFP, etc.Many of these talked the talk of the preachers.Yet some had something to gain. The AMA gathers more cash flow from its monopoly on coding than from the decreasing number of members' dues and coding will only increase as more patients are seen by physicians.Why did ACP and AAFP and others advocate for passage of Obamacare? Did they have anything to gain or were they merely dedicated preachers? Maybe the metaphor does not allow for much moral ambiguity.
The preacher who is pure in heart and sincere in belief gains only the satisfaction of doing the right thing.Preachers rarely have part time jobs as bootleggers or renounce the cloth and become a full time dealer in illegal sales of a prohibited substance.
Folks with MD degrees who advocate for universal health care and alterations in medical ethics favorable to third party payers who either before or after that advocacy hold executive positions in major health insurance companies might gain more than self satisfaction. Maybe some people can really do well by doing good and that would be true in this instance if in fact passage of ACA is considered a good thing. Sometimes it is hard to tell the Baptists from the Bootleggers .
From chapter 1 , Macroeconomic Patterns and Stories, Edward E. Leamer
In a 1983 article in the journal Regulation, the economist Bruce Yandle introduced the concept of the Baptist and the Bootlegger (B+B). It refers to the situation in which a given legislation or regulatory action is supported by some group on high moral grounds as in denouncing the evils of alcohol.Support also comes another group who stand to get economic gain from that legislation such as bootleggers would if alcohol sales were banned. The Mafia rule of "follow the money" is useful in seeking out who might be the bootleggers in a given situation.See here for some classic examples of the B+B pattern including the acid rain story and the tale of spotted owl.
After I became aware of the B+B pattern I seem to see it in many places, even in the Affordable Care Act.So here is the story.
I can see the medical progressives as the Baptists. Medical progressives believe (many of them sincerely) that health care or medical care is too complex,complicated and important to be left to the individual patient and his physician.Rather it should be determined by the elite who using a utilitarian ethic with the tools of cost effectiveness research will be able to find practices that will benefit society as a whole.But control is not the what the medical progressives explicitly argue for in their advocacy but rather it is the furtherance of the social justice that will be fulfilled as millions will now have access to health care and health care inequality will be greatly diminished. No, not all physicians who supported ACA fall into that category.There are many sincere physicians who believe the statute is the way to obtain health care for millions who are now under served and who are not part of the progressive medical elite but typically it is not their voice we hear from the pulpit.
I can see a coalition of bootleggers at work in the formulation of the many pages of dense, self referential legal prose that comprises ACA. The Mafia rule works well here.
Who would gain from millions of new clients with health care insurance?
Easy answers. The hospitals would gain simply as there would be many more clients to be able to seek out and pay for their services. Similarly the big health insurance companies would welcome millions of more clients who are forced to pay for their product.Big Pharma would be in the position of more customers who could buy their products with other people's money. Information technology companies would relish the legislation to force or nudge physicians to buy and maintain computers systems.
But there is more.While the Baptists were singing hymns of praise for social justice,equality,elimination of waste, and the millions of uninsured Americans,the bootleggers and their lobbyists were busy working with the movers and deciders on the hill (eg. Max Baucus and his adviser, Elizabeth " revolving door" Fowler) to work out the important details. Big Pharma was able to get restrictions on the re importation of generic drugs,big hospital was able to be exempted from the actions of IPAB until 2020 and big health insurance was able to keep the public option from being included in the statute.
Of course, metaphors and other figures of speech only can go so far,the reality flows over the cup.What about the medical professional organizations such as AMA, ACP, AAFP, etc.Many of these talked the talk of the preachers.Yet some had something to gain. The AMA gathers more cash flow from its monopoly on coding than from the decreasing number of members' dues and coding will only increase as more patients are seen by physicians.Why did ACP and AAFP and others advocate for passage of Obamacare? Did they have anything to gain or were they merely dedicated preachers? Maybe the metaphor does not allow for much moral ambiguity.
The preacher who is pure in heart and sincere in belief gains only the satisfaction of doing the right thing.Preachers rarely have part time jobs as bootleggers or renounce the cloth and become a full time dealer in illegal sales of a prohibited substance.
Folks with MD degrees who advocate for universal health care and alterations in medical ethics favorable to third party payers who either before or after that advocacy hold executive positions in major health insurance companies might gain more than self satisfaction. Maybe some people can really do well by doing good and that would be true in this instance if in fact passage of ACA is considered a good thing. Sometimes it is hard to tell the Baptists from the Bootleggers .
Thursday, December 13, 2012
More social justice bubbles up from the magic Obamacare fountain
There is so much social justice being dispensed from ACA that I can't really keep up. Here is one more instance,one that is imminent, ( Jan 1, 2013) the capping of health saving accounts at $ 2,500 down from 5,000 see here for Forbes article.
Twenty per cent of workers have HSAs.Meanwhile premiums rise on health insurance. So ACA forces folks to spend more on their health insurance and "nudging" them to spend less at their own discretion.
While this latest wrinkle is only a relatively small cog in the mammoth ACA legislation the progressive medical elite can savor it as it is one more move to limit the individual's choice in medical care which is the operational arm of their dominant theme which is "medical care is too important and complicated to be left to individual patient and his physician."
Twenty per cent of workers have HSAs.Meanwhile premiums rise on health insurance. So ACA forces folks to spend more on their health insurance and "nudging" them to spend less at their own discretion.
While this latest wrinkle is only a relatively small cog in the mammoth ACA legislation the progressive medical elite can savor it as it is one more move to limit the individual's choice in medical care which is the operational arm of their dominant theme which is "medical care is too important and complicated to be left to individual patient and his physician."
Friday, November 30, 2012
Will states opting out of insurance exchanges unravel Obamacare?
Michale Cannon of Cato seems to argue that.See here.
Michigan is the latest state to say no thanks to the insurance exchange deal.Cannon has argued that while the federal government can establish an exchange it cannot have the subsidies that were to be part of the state exchanges. The IRS has issued a ruling that claims the opposite. Cannon and his co authors argue that both the legislative history and the statutory language make it clear that ACA did not authorize the subsidies to the federal run exchanges.
The key thing seems to be how the courts rule regarding the federal established exchanges legal authority to issue subsidies .Ultimately if the issue reaches SCOTUS , will Justice Roberts act in a way to redeem himself in the eyes of his former conservative supporters or will he once again dazzle us with innovative legal reasoning? My pessimistic prediction is for more bedazzlement.
Even if the IRS ruling holds as Dr. Scott W. Atlas of Hoover Institute argues here ,Obamacare may prove to be unworkable as costs rise and access to health care actually decreases (insurance cards do not magically generate physician) and the public or interests groups and politicians clamor for a solution we may well face the single payer option. Some have argued that was the plan all along even though that assumes greater wisdom in those who planned ACA than I think they likely possess.
Michigan is the latest state to say no thanks to the insurance exchange deal.Cannon has argued that while the federal government can establish an exchange it cannot have the subsidies that were to be part of the state exchanges. The IRS has issued a ruling that claims the opposite. Cannon and his co authors argue that both the legislative history and the statutory language make it clear that ACA did not authorize the subsidies to the federal run exchanges.
The key thing seems to be how the courts rule regarding the federal established exchanges legal authority to issue subsidies .Ultimately if the issue reaches SCOTUS , will Justice Roberts act in a way to redeem himself in the eyes of his former conservative supporters or will he once again dazzle us with innovative legal reasoning? My pessimistic prediction is for more bedazzlement.
Even if the IRS ruling holds as Dr. Scott W. Atlas of Hoover Institute argues here ,Obamacare may prove to be unworkable as costs rise and access to health care actually decreases (insurance cards do not magically generate physician) and the public or interests groups and politicians clamor for a solution we may well face the single payer option. Some have argued that was the plan all along even though that assumes greater wisdom in those who planned ACA than I think they likely possess.
Thursday, November 29, 2012
More aspects of Obamacare being challenged in court
Some states are still refusing to set up the insurance exchanges contained in ACA.Subsidies are an important part of the exchanges.The IRS claims that when the federal government sets up an exchange when an individual state refuses to it can offer the same subsidies.However the claim underlying another challenge to ACA is that there is no statutory authority to do so.
See here for details.
Also the Liberty University litigation has been resurrected by the the Supreme Court. See here for details.The dogs keep barking but the pessimists believe the caravan has moved on and will not be recalled.
See here for details.
Also the Liberty University litigation has been resurrected by the the Supreme Court. See here for details.The dogs keep barking but the pessimists believe the caravan has moved on and will not be recalled.
Monday, November 26, 2012
How Medicare CMS payment schemes push physicians to be employees
The health care economist John Goodman explains one more incentive for the private practice doctor to become an employee of a hospital or some other vertically integrated health care corporation and for the vector that is pointing in the direction of increased health care costs.
Differential price controls benefit some and harm others. See here for how much more CMS pays for the same procedure based on where it is provided.Wonder which group has the more effective rent seeking mechanisms-hospitals or private practice physicians.
In regard to the differential payments,Cui bono.Obviously the hospitals- but why would CMS adopt that tactic? I suggest it is in the interest of all third party payers not just CMS to eliminate the private practice of medicine by thousands of small, individual physician practices.If the goal is control of how physicians practice medicine, then to nudge them to become employees of a medical collective would appear to be a good tactic.
More on the movement away from small medical practices to hospitals can be found here in the discussion on the effect of ACA (Bronco care) on that issue.
Differential price controls benefit some and harm others. See here for how much more CMS pays for the same procedure based on where it is provided.Wonder which group has the more effective rent seeking mechanisms-hospitals or private practice physicians.
In regard to the differential payments,Cui bono.Obviously the hospitals- but why would CMS adopt that tactic? I suggest it is in the interest of all third party payers not just CMS to eliminate the private practice of medicine by thousands of small, individual physician practices.If the goal is control of how physicians practice medicine, then to nudge them to become employees of a medical collective would appear to be a good tactic.
More on the movement away from small medical practices to hospitals can be found here in the discussion on the effect of ACA (Bronco care) on that issue.
Wednesday, November 21, 2012
U.S. health care needs more regulation,bureaucratic oversight and expert panels
Fortunately, that is exactly what is on the way thanks to ACA also known as Bronco care-formerly Obamacare. Efficiency and innovation will be forced from the top down with new regulations,more price controls sprinkled with the fairy dust of accountable care organizations,medical homes and high value care all of which will also preserve the medical commons. Wise central planners will shape a system of rational health care thankfully cleansed of the short sighted, selfish collaboration of the archaic physician patient dyad which for so long impeded the effective,cost efficient, culturally competent health care for all which social justice demands.
We can see from scrutiny of the historical record how those techniques were successful in generating cheaper,better quality goods and services and general public admiration in the following areas : Amtrak,the US post Office, public school education, airline regulation, DMVs, and the TSA- just to name a few of the more successful instances.
Again we are fortunate that the nameless planners,bureaucrats,politicians,lobbyists for the various rent seekers and the self-less, advice-giving intellectuals wisely ignored the frivolous advice of FA Hayek . " It is the curious task of economics to demonstrate to men how little they really know about what they imagine they can design." Obstructionist pontification like that serves only to hamper progress.
With the "wise leaders with ideas" at the helm of health care one can be confident that we can rationalize health care while avoiding some of the inconvenient truths about the central planning of Canadian health care as described here.
Further,we should be grateful that the archaic impediment to the new health care nirvana,namely the restrictive and shortsighted notion of there being a fiduciary duty of the physician to the individual patient,has been corrected by the new medical ethics and professionalism.
We can see from scrutiny of the historical record how those techniques were successful in generating cheaper,better quality goods and services and general public admiration in the following areas : Amtrak,the US post Office, public school education, airline regulation, DMVs, and the TSA- just to name a few of the more successful instances.
Again we are fortunate that the nameless planners,bureaucrats,politicians,lobbyists for the various rent seekers and the self-less, advice-giving intellectuals wisely ignored the frivolous advice of FA Hayek . " It is the curious task of economics to demonstrate to men how little they really know about what they imagine they can design." Obstructionist pontification like that serves only to hamper progress.
With the "wise leaders with ideas" at the helm of health care one can be confident that we can rationalize health care while avoiding some of the inconvenient truths about the central planning of Canadian health care as described here.
Further,we should be grateful that the archaic impediment to the new health care nirvana,namely the restrictive and shortsighted notion of there being a fiduciary duty of the physician to the individual patient,has been corrected by the new medical ethics and professionalism.
Monday, November 12, 2012
With the presidential election settled Obamacare is free to pour forth its bountiful social justice
Opponents of ACA had hoped that SCOTUS would find the act unconstitutional and failing that that the 2012 election would give republicans the legislative power and occupancy of the White House to find way to defang the statute. But no,Obamacare is now unfettered to benefit the citizens of the country with unbounded instances of social justice. Here are just a few.
Health insurance premiums are set to rise probably everywhere but so far we have published evidence regarding the degree to which they will rise in one state,Ohio,see here for details
The social justice fairy will likely bring more part time jobs at the expense of full time jobs.See here.
When HHS determined that various methods of birth control would be covered by insurance companies at no extra cost to anyone,not only was a bold step for justice taken but by outlawing the there is no free lunch dictum the gates opened for endless more justice- effortless accomplished by a stroke of the HHS secretary's pen.See here.
With Obamacare seemingly immune from repeal or significant alteration the particularly compassionate and just aspect of ACA ,the granting of waivers from certain aspects by the secretary of HHS can continue unabated. "The secretary shall determine".
Part of Obamacare is the Medical Device Tax.See here how some medical device companies are adjusting by eliminating some jobs.At least some of those employee may have well "Liked their doctor" but they will not be able to keep them as promised prior to the passage of the statute.Strange sometimes how that justice thing works out.
In fairness it should be noted that the social justice will cost a little bit more than the slightly less than one trillion dollar number that was contrived to facilitate passage of the bill. See here.Nevertheless a bargain at nearly twice the projected cost.
Health insurance premiums are set to rise probably everywhere but so far we have published evidence regarding the degree to which they will rise in one state,Ohio,see here for details
The social justice fairy will likely bring more part time jobs at the expense of full time jobs.See here.
When HHS determined that various methods of birth control would be covered by insurance companies at no extra cost to anyone,not only was a bold step for justice taken but by outlawing the there is no free lunch dictum the gates opened for endless more justice- effortless accomplished by a stroke of the HHS secretary's pen.See here.
With Obamacare seemingly immune from repeal or significant alteration the particularly compassionate and just aspect of ACA ,the granting of waivers from certain aspects by the secretary of HHS can continue unabated. "The secretary shall determine".
Part of Obamacare is the Medical Device Tax.See here how some medical device companies are adjusting by eliminating some jobs.At least some of those employee may have well "Liked their doctor" but they will not be able to keep them as promised prior to the passage of the statute.Strange sometimes how that justice thing works out.
In fairness it should be noted that the social justice will cost a little bit more than the slightly less than one trillion dollar number that was contrived to facilitate passage of the bill. See here.Nevertheless a bargain at nearly twice the projected cost.
Monday, November 05, 2012
Is the term "medical commons" a useful analogy to US health care or a lame figure of speech
In the Animal kingdom,the rule is eat or be eaten;in the human kingdom,define or be defined. Thomas Szasz
A recurrent meme in the discourse of medical policy is the notion of the "medical commons". This term can be traced back to the phrase " the tragedy of the commons" which was a term introduced in a 1968 article by Garrett Hardin.
Tragedy of the Commons refers to the situation in which a shared resource is depleted by individuals acting in their own short term interest to the detriment of the group.Typical stylized examples are herders overgrazing their sheep on a common field not allowing grass to regrow or fishermen overfishing an area of the ocean depleting the fish population thereby damaging all in the long run.A characteristic of these commons is that the property is unowned or is considered to be common property.In other words there is lack of strong property rights.
The earliest reference I could find for the notion of medical commons (MC) was in a 1975 NEJM special article entitled Protecting the Medical Commons:Who is responsible? by Dr. Howard H. Hiatt.(NEJM 1975;293:235-241,July 31,1975).
Dr. Hiatt made the following gratuitous assertion that medical resources in the country can be viewed as analogous to the grazing area problem.I say gratuitous because Hiatt does not elaborate of how the two phenomena are alike in significant ways.
"The total resources available for medical care can be viewed as analogous to the grazing areas on Hardin's common."An analogy is a type of comparison in which one likens one thing to another in circumstances in which the two things have useful similarities such that knowledge of the one thing can aid in understanding the other. For example one could consider the human heart to be analogous to a pump.From our understanding of a pump we gain some insight into the mechanics of the heart.
The problem I have with the medical commons analogy is that health care or health care resources share no essential features with the notion of a commons.
For example, the common field or patch of ocean is owned by no one ( or every one,which in some regards is the same thing ) whereas medical resources are owned by numerous entities in particular. Hospital X is owned by someone or some real economic entity,a corporation or perhaps a local government or the federal government. The MRI units and the physical therapy units and the commercial labs are all owned by someone or other. Ownership involves the right to use one's property,to dispose of one's property and to exclude others from the property. In the commons all can use the property but do not enjoy the other elements of property ownership.
In the commons,all are allowed to bring in the sheep to feed but every patient cannot simply go to any of the numerous health care facilities and partake of their offering for free and ad lib.
The "tragedy" in the tragedy of the commons is that overuse leads to resource depletion but does overuse (how ever defined) of health care resources deplete those resource. I argue just the opposite .
As the demand for health care resources increases often so does the supply. As demand for hip replacements goes up more facilities have become available for orthopedic surgery, the same for cardiac caths and for MRI etc etc.Increasing demand and use of medical resources does not deplete them but can lead to their increase.No one is using up the MRI exams.
The issue is not the depletion of resources as one might think using the flawed medical commons analogy, rather it is the expenditure for using those resources about which alarms have been sounded. Even here though, money spend on a MRI or surgery or whatever is not money hurled down a black hold- it is simply redistributed . But could not that money have been better spent by for example preschool tutoring for under privileged inner city youth? Maybe, but there will always be some other use for money that is spent on any thing. So is the resource that is being "depleted" in the medical commons money or more accurately other people's money or the perception that it is other people's money.
If the medical common analogy is thought to be appropriate and valid why would not the following be equally so; the home construction commons,the food supply commons, the hair care commons,the automobile manufacturing commons. Why do we not hear alarms being sounded about spoiling of the home construction industry by overbuilding or too many customers spoiling the food supply commons?After all money spent on burgers cannot be spent on housing for the poor. Hint: Much of medical care is paid for using someone else's money.
While a grassy field for the villager's sheep to graze can be defined by a specific surveyor description, the "medical commons" is a extremely large amorphous array,the elements of which defy enumeration, and is every changing, with some elements growing ,others contracting and rearrangements cropping up constantly. Various entities own various elements of this array-society owns none even though various government entities own some but the government is not society.
The skills,and knowledge of thousands of physicians are aggregated and then allocated as if somehow society own them.There is no easily defined entity called "medical resources". Rather,it is an amorphous abstraction.Further, to speak of allocation means some one or some elite group will be the "allocator in chief ".
If there is societal allocation decisions will not be made by thousands of individual physician-patient pairs.
Dr. Hiatt is a very accomplished medical scientist with a distinguished career .His article in my opinion was an attempt to call attention to what he believed was the need for "society to find ways to govern access and control of the use of the medical commons" and the role that physicians would have in those decisions. In that regard the use of the idea of medical commons was a rhetorical device to imply that medical resources are in some meaningful sense owned collectively and that society should decide important allocation questions. Governing access and control are the operative words.
Once one accepts the notion that the medical resources are collectively owned then it is a short step to the idea that individual physicians and patients should not be selfishly decide how things are allocated, the allocation must be done for the collective good based on sound, cost effective, utilitarian considerations.Although the discussions speak of a medical commons implying everyone in the country, operationally what we would be dealing with are smaller commons such as that found in and HMO or the current HMO oid entity the ACO which is the panacea flavor of the month.
When someone speaks of society making a decision be wary because there is no one named society and society decides nothing.The medical commons concept is more than a very flawed analogy . It is a rhetorical tool for the listener or reader to passively accept the notion that health care should be collectivized. Advocates of that may say society decides and society demands but basically some (most ?) of the advocates of that view believe that the medical intellectual elite with the power of the government should make those decisions . They believe that medical care is too complex,too complicated and costs too much to be left in the hands of the individual physician and patient.Drs. Donald Berwick and Troynen Brennan clearly expressed the view that the doctor patient decision making "dyad" in their book New Rules should be eliminated.
Here are two quotes expressing the desire to do away with the traditional physician patient relationship , the first from Berwick's New Rules, the second from a 1998 Annals of Internal Medicine article by Dr. Robert Berenson and Hall :
"Traditional medical ethics, based on the doctor-patient dyad must be reformulated to fit the new mold of the delivery of health care."
and
"we propose that the devotion to the best interests of each individual be replaced with an ethic of devotion to the best interests of the group for which the physician is personally responsible."
Of course everyone using the medical commons figure of speech is not an advocate of the new medical ethics or of collectivization of medical care, but once a phrase is used often enough it becomes part of the common discourse sometimes (often?) without concern about what it might really mean to some.
If we want to make progress in solving or at least mitigating some of the problems with US health care I suggest referring to a meaningless analogy is not useful except to those whose agenda involves destruction of the old time medical ethics.You might remember the one that emphasized the primary fiduciary duty of the physician to the patient.
The medical commons meme is often invoked in polemics admonishing physician to not order unnecessary testing.Such comments as "spoiling the commons" appear. I suggest that advocates of prudent medical testing need not invoke collectivist views of medical resources or reference to non existent medical commons.Physicians already have a firm ethical basis for not ordering unnecessary tests and procedures. Two well known,long standing, stalwart precepts cover that very well;beneficence and do no harm.
Ordering unnecessary tests and procedures bump up against both. The harm of doing a test that is not necessary should be evident to a physician before he finishes medical school let alone residency training. The patient is harmed by the cost of the test (even if she only pays a fraction of the cost),by the anxiety of a false positive result and the inevitable cascade of further testing and possible invasive procedures that commonly occur after a false positive result.
Simply put- a physician who orders tests that are not in the interest of the patient is harming his patient and not living up to his fiduciary duty.The problem is not harm to the medical commons,there is no such thing.
It is not an oversight that advocates of the new medical professionalism which posits a co-duty of the physician to the patient and to society conveniently leave the term fiduciary duty out of their discussions and admonitions regarding medical professionalism.The fiduciary duty of the physician to her patients has been nudged out of the definition of a ethical physician and quietly replaced by physician as steward of society's resources.
Friday, November 02, 2012
Naturalistic Decision Making,phronesis and the making of an expert
A recent blog posting by Dr Robert Centor, see here, introduced me to the term "naturalistic decision making" which seems to be one aspect of the broader area of the study of cognitive reasoning, or how we make decisions. In this regard one focus is on decisions in which there are high stakes, time pressure and complex situations as is common in emergent clinical situations.
Basically faced with that type of situation,such as the challenging chest pain case described in Dr. Centor's article, expert clinicians typically rapidly categorize the situation based on a pattern recognition ( as described by Kahneman as a System 1,fast and unconscious mental act) and then move on to use a deliberate,analytic System 2 approach involving,in part, a search for missing data and for discrepancies and then a simulation of what might occur next if the first plan based on the first impression were carried out.
The Nobel prize winning work of Kahneman and others working to elucidate how people think in have apparently fleshed out possible mechanisms of some of what Aristotle referred to as Phronesis.
Aristotle spoke of the virtues of the mind as including:
sophia (wisdom of first principles),
episteme (emperical knowledge,
techne (technical knowledge)
nous (intuition) and
phronesis (practical wisdom or prudence).
Evidence based medicine with its emphatic focus on techne and episteme may foster the illusion that good clinical practice can be encapsulated in guidelines and pathways and that quality lies in obedience to them but it is the blending of those elements of science and technique with practical wisdom that makes good practice. Treatment guidelines or algorithms come into play only after a diagnosis has been reached and in all but the most trivial cases a bit of phronesis might help.
In Kathryn Montgomery's 2006 book, How Doctors Think, we find the following quote which sounds a lot like what we learn from the field of Naturalistic decision making:
"Clinical judgment done well is the intuitive and iterative negotiation of the patient's narrative of illness...This focus come with experience"
And for that I don't believe there is an algorithm.
Basically faced with that type of situation,such as the challenging chest pain case described in Dr. Centor's article, expert clinicians typically rapidly categorize the situation based on a pattern recognition ( as described by Kahneman as a System 1,fast and unconscious mental act) and then move on to use a deliberate,analytic System 2 approach involving,in part, a search for missing data and for discrepancies and then a simulation of what might occur next if the first plan based on the first impression were carried out.
The Nobel prize winning work of Kahneman and others working to elucidate how people think in have apparently fleshed out possible mechanisms of some of what Aristotle referred to as Phronesis.
Aristotle spoke of the virtues of the mind as including:
sophia (wisdom of first principles),
episteme (emperical knowledge,
techne (technical knowledge)
nous (intuition) and
phronesis (practical wisdom or prudence).
Evidence based medicine with its emphatic focus on techne and episteme may foster the illusion that good clinical practice can be encapsulated in guidelines and pathways and that quality lies in obedience to them but it is the blending of those elements of science and technique with practical wisdom that makes good practice. Treatment guidelines or algorithms come into play only after a diagnosis has been reached and in all but the most trivial cases a bit of phronesis might help.
In Kathryn Montgomery's 2006 book, How Doctors Think, we find the following quote which sounds a lot like what we learn from the field of Naturalistic decision making:
"Clinical judgment done well is the intuitive and iterative negotiation of the patient's narrative of illness...This focus come with experience"
And for that I don't believe there is an algorithm.
Tuesday, October 23, 2012
More on the "seen and the unseen" related to Obamacare
Bastiat's "seen and the unseen" and Thomas Sowell's "and then what" express the same basic notion. That notion is part of what the economist Russ Robert calls the economic way of thinking.
See here for a commentary on one of the many "and then whats" of ACA.Part time workers are excluded from the employer mandate to provide insurance or face a fine.So the definition of Part time worker become important. The latest government edict on that stipulates than the cut point is 30 hours a week whereas previously the definition was less than 35 hours per week. So there is now a substantial financial incentive for employers to limit part time workers to less than 30 hours per week. The result is more part time employees will work less;more of the marvelous social justice that ACA is bringing to the middle class and those lower than that on the income spectrum and beating them over the head with it.
I quote from the above referenced article:
Bastiat:
"In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them."
See here for a commentary on one of the many "and then whats" of ACA.Part time workers are excluded from the employer mandate to provide insurance or face a fine.So the definition of Part time worker become important. The latest government edict on that stipulates than the cut point is 30 hours a week whereas previously the definition was less than 35 hours per week. So there is now a substantial financial incentive for employers to limit part time workers to less than 30 hours per week. The result is more part time employees will work less;more of the marvelous social justice that ACA is bringing to the middle class and those lower than that on the income spectrum and beating them over the head with it.
I quote from the above referenced article:
"So there’s a balancing act: preserving jobs vs. providing insurance. The problem isn’t small. In September, 34 million workers, about a quarter of total workers, were part-time, reports the Bureau of Labor Statistics. But the bureau defines part time as less than 35 hours a week; Obamacare’s 30 hours a week was presumably adopted to expand insurance coverage. There are now 10 million workers averaging between 30 and 34 hours a week. To the bureau, they are part-time; under Obamacare, they’re full-time."There are advocates of ACA ,including some in leadership role at major physician organizations, who seem unconcerned or at least silent about the unprecedented power given to federal bureaucrats (this time the IRS) to put words to paper and influence the lives of millions of people seeing only that we have moved further to universal coverage somehow believing the fairy tale than given millions more people Medicaid cards will translate into those people actually getting care.
Bastiat:
1.1
"In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them."
Monday, October 15, 2012
The corporate physician - he is not your father's doctor
Dr. Roy Poses has tirelessly written about the loss of professionalism in the medical profession.Here is the link for a recent commentary by Dr. Poses about the rise and likely consequences of the corporate physician.
There was a time when the AMA vigorously opposed the corporate practice of medicine and a number of states outlawed it.But now times have changed and few states have strong statutes limiting it.
Texas still has a residual- but significantly watered down- corporate practice of Medicine statute. See here for a history of the corporate practice of medicine idea with emphasis on the exceptions even in Texas which has one of the strongest prohibitions against the corporate practice.In Texas the most widely used exception is the situation in which a "non-profit health corporation"-so certified according to defined statutory criteria-can hire physicians.See here for a discussion of what is referred to as a 501(a) entity.The rational of the original opposition to corporate practice was simply that the business entity would control the doctor's practice and profit-not the patients best interest would be controlling.There is much to suggest that the same objection is valid today but few voices are heard in that regard.It should be noted that the "non-profit health corporations" included the "not for profit hospitals". As is obvious Non-profit as well as successful for profit hospitals annually have revenue greater than cost;otherwise they would not be able to keep expanding with more and more branch offices and purchasing physician practices let alone keep operating.
Recently, I attended a seminar sponsored by the local medical society labelled as eligible for CME credit under the ethics category of required annual CME credit in Texas.The topic was how to promote your medical practice and , of course, advertizing was one way recommended.
There are at least two negative consequences of physician being employed by hospitals or large medical aggregations ( that includes the latest incarnation, the highly touted ACO):
1)Increased costs to the patient
2)decreased quality of care
Poses give illustrative examples of how the same procedure can cost more when ordered by or performed by a physician working for the hospital versus a free standing doctor not compensated by the hospital. Read Dr. Poses's posting referenced above for details about these negative consequences.
People respond to incentives.Physicians employed by health care corporation inevitably will face the situation in which the incentives generated by corporate goals and targets with which the docs will be tasked will conflict with the primary directive ( or what used to be the prime directive ) of a physician namely doing what is right for the individual patient.I am afraid that the physician's role as a patient advocate in the corporate health care organization may go the way of the AMA's prohibition against physicians advertizing,a quaint historical artifact.Once the physician accepts the new ethics position that they are responsible for the health of the collective ( the ACO may be the collective ),then the greater good for the greatest number will just happen to coincide with the financial health of the organization.
There was a time when the AMA vigorously opposed the corporate practice of medicine and a number of states outlawed it.But now times have changed and few states have strong statutes limiting it.
Texas still has a residual- but significantly watered down- corporate practice of Medicine statute. See here for a history of the corporate practice of medicine idea with emphasis on the exceptions even in Texas which has one of the strongest prohibitions against the corporate practice.In Texas the most widely used exception is the situation in which a "non-profit health corporation"-so certified according to defined statutory criteria-can hire physicians.See here for a discussion of what is referred to as a 501(a) entity.The rational of the original opposition to corporate practice was simply that the business entity would control the doctor's practice and profit-not the patients best interest would be controlling.There is much to suggest that the same objection is valid today but few voices are heard in that regard.It should be noted that the "non-profit health corporations" included the "not for profit hospitals". As is obvious Non-profit as well as successful for profit hospitals annually have revenue greater than cost;otherwise they would not be able to keep expanding with more and more branch offices and purchasing physician practices let alone keep operating.
Recently, I attended a seminar sponsored by the local medical society labelled as eligible for CME credit under the ethics category of required annual CME credit in Texas.The topic was how to promote your medical practice and , of course, advertizing was one way recommended.
There are at least two negative consequences of physician being employed by hospitals or large medical aggregations ( that includes the latest incarnation, the highly touted ACO):
1)Increased costs to the patient
2)decreased quality of care
Poses give illustrative examples of how the same procedure can cost more when ordered by or performed by a physician working for the hospital versus a free standing doctor not compensated by the hospital. Read Dr. Poses's posting referenced above for details about these negative consequences.
People respond to incentives.Physicians employed by health care corporation inevitably will face the situation in which the incentives generated by corporate goals and targets with which the docs will be tasked will conflict with the primary directive ( or what used to be the prime directive ) of a physician namely doing what is right for the individual patient.I am afraid that the physician's role as a patient advocate in the corporate health care organization may go the way of the AMA's prohibition against physicians advertizing,a quaint historical artifact.Once the physician accepts the new ethics position that they are responsible for the health of the collective ( the ACO may be the collective ),then the greater good for the greatest number will just happen to coincide with the financial health of the organization.
Thursday, October 11, 2012
Will ACA turn full time jobs into part time jobs?
See here for comments from economist Garrett Jones.
If Obamacare increases the cost of hiring full time employees versus part time workers it would seem that a as shift to part timers would make sense for some employers.This may well apply to the hotel and restaurant sectors and at at least one large restaurant company is going that way.See here for what Red Lobster is planning. Who would have thought that people respond to incentives?
If something costs more ( like having full time employees ) people will do less of the something.Again Milton Friedman's two principles of economics are on target. To review: there is no free lunch and demand curves slope downward. Thomas Sowell said a good economist always asks "and then what" which is a similar thought to Bastiat's "seen and unseen". With Obamacare, the "and then whats" just keep on coming.
If Obamacare increases the cost of hiring full time employees versus part time workers it would seem that a as shift to part timers would make sense for some employers.This may well apply to the hotel and restaurant sectors and at at least one large restaurant company is going that way.See here for what Red Lobster is planning. Who would have thought that people respond to incentives?
If something costs more ( like having full time employees ) people will do less of the something.Again Milton Friedman's two principles of economics are on target. To review: there is no free lunch and demand curves slope downward. Thomas Sowell said a good economist always asks "and then what" which is a similar thought to Bastiat's "seen and unseen". With Obamacare, the "and then whats" just keep on coming.
Tuesday, October 09, 2012
The locus of medical decisions will shift evenmore with Obamacare
Thomas Sowell said the following as a good summary of the second half of his book Knowledge and Decisions:
Even within democratic nations,the locus of decision making has drifted away from the individual,the family, and voluntary associations of various sorts and toward government.And within government, it has moved away from elected officials subject to voter feed-back, and toward more insulated governmental institutions, such as bureaucracies and the appointed judiciary.
Think about the role of IPAB, the binding pronouncements of USPSTF, and the astounding power of the Secretary of HHS under ACA.All of these and other aspects of Obamacare point to the observation that there has never been a larger shift in the locus of medical decision making in U.S. history.
and in the absence of its repeal the likelihood of a shift back approaches zero.
Even within democratic nations,the locus of decision making has drifted away from the individual,the family, and voluntary associations of various sorts and toward government.And within government, it has moved away from elected officials subject to voter feed-back, and toward more insulated governmental institutions, such as bureaucracies and the appointed judiciary.
Think about the role of IPAB, the binding pronouncements of USPSTF, and the astounding power of the Secretary of HHS under ACA.All of these and other aspects of Obamacare point to the observation that there has never been a larger shift in the locus of medical decision making in U.S. history.
and in the absence of its repeal the likelihood of a shift back approaches zero.
Monday, October 08, 2012
If you give up Medicare Part A you loose your social security benefits-WTF
The headline is correct .See here for background on this agency ruling that makes the headline true.
See here for my earlier posting of what a federal judge considered a "mandatory entitlement".
The absurdity of this situation has been challenged in court and lost in the trial court and in the appeal but now efforts are underway to put the issue to the Supreme Court.
I have blogged about this before and thought the issue was settled but thanks to folks at Cato the fight goes on.
See here for my earlier posting of what a federal judge considered a "mandatory entitlement".
The absurdity of this situation has been challenged in court and lost in the trial court and in the appeal but now efforts are underway to put the issue to the Supreme Court.
I have blogged about this before and thought the issue was settled but thanks to folks at Cato the fight goes on.
Thursday, October 04, 2012
Electronic Health Records-follow the money
Promoted as a means of not only improving health care quality but saving money ( the often quoted $ 77.8 Billion that computers would save in medical care costs) the mandate and subsidy to physicians to adopt electronic health records (EHRs) did not randomly appear in the 787 pages of the 2009 stimulus bill also known as American Recovery and Reinvestment Act (ARRA)
Application of the "follow the money rule" is interesting this regard.
See here for an article from the Washington Post that gives some interesting back story to the HITECH Act which had been waiting in the legislative wings for some time without much congressional support until the 2007-2008 recession and then its insertion into ARRA. Nothing like a good crisis to get stuff done. See here for another important commentary by InformaticsMD (aka Dr. Scot M. Silverstein) who writes regularly at the blog "Health Care Renewal " and writes tirelessly about the major problems with medical IT as it is being sold ( and mandated) to the medical profession.The initial $36.5 billion for computerization of medical records is just the first of a gift that keeps on giving to the IT industry. There will be a income stream as software will need updating as will hardware and system malfunctions will need continuing maintenance and a headache stream for the docs who bought in to this Trojan Horse.
HITECH provided subsidies and a very firm nudge to physicians to acquire computer systems to make operational EHRs in their practices.Further a number of hoops have to be jumped through to receive further monetary rewards and as time goes on to avoid penalties.The term "meaningful use" refers to some of the hoops which in part obligate physicians to report on certain metrics that are allegedly measures of the quality of the care they provide to their patients but really are techniques to force savings.
Application of the "follow the money rule" is interesting this regard.
See here for an article from the Washington Post that gives some interesting back story to the HITECH Act which had been waiting in the legislative wings for some time without much congressional support until the 2007-2008 recession and then its insertion into ARRA. Nothing like a good crisis to get stuff done. See here for another important commentary by InformaticsMD (aka Dr. Scot M. Silverstein) who writes regularly at the blog "Health Care Renewal " and writes tirelessly about the major problems with medical IT as it is being sold ( and mandated) to the medical profession.The initial $36.5 billion for computerization of medical records is just the first of a gift that keeps on giving to the IT industry. There will be a income stream as software will need updating as will hardware and system malfunctions will need continuing maintenance and a headache stream for the docs who bought in to this Trojan Horse.
HITECH provided subsidies and a very firm nudge to physicians to acquire computer systems to make operational EHRs in their practices.Further a number of hoops have to be jumped through to receive further monetary rewards and as time goes on to avoid penalties.The term "meaningful use" refers to some of the hoops which in part obligate physicians to report on certain metrics that are allegedly measures of the quality of the care they provide to their patients but really are techniques to force savings.
Wednesday, October 03, 2012
fee for service in primary health care-what you get when you mess with prices
In regard to consumer goods markets most economists accept the superiority of the market versus central planning.Almost all believe the invisible hand works to channel private interest into broad cooperation with gains from trade and from innovation.. (OK, Joe Stiglitz and Paul Krugman might not) and that the price mechanism can coordinate production and consumption and provide the feedback of profit and loss. In most of the consumer markets there is a fee for service or fee for a product arrangement (FFS). Paying the plumber,furnace repair man,car mechanic or barber on a per encounter fee are all routine transactions the propriety or desirability of which are seldom the subject of serious commentary. I realize that there also service contracts in some instances so that every encounter may not generate a separate charge.
Yet the fee for service arrangement is the target for criticism in regard to health care ( mainly in regard to primary care) and often depicted as one of the reasons for escalating health care costs and decreasing quality.
Some argue that FFA cannot work in health care because of the marked information asymmetry between physician and patient. But that cannot be a sufficient reason to wish to do away with FFS in medical care as there are many situations in a modern western economy where large information gaps exist. That became an issue probably as soon as property rights and trade allowed for the division of labor. Getting advice regarding estate planning and tax avoidance is just one. Your furnace repairman tells you the something or other needs replacement and in doing so she knows a lot more about furnace anatomy and physiology than the home owner.
It has been argued that since the physician is paid on a episode or encounter based FFS that he will tend to do more than is necessary for good health outcomes because of his incentive to make more money. Certainly that is the direction that the cost vector points just as in a capitulated system the physician has an incentive to limit care to avoid financial loss. Is one method categorically better than the other?And the incentives for more financial gain argument would seem to apply equally well to many other instances of market transactions.The incentive argument and the information asymmetry argument do not clearly distinguish medical care from other economic transactions based on FFS about which we hear no hue and cry or concerted campaigns for its abolition.
But wait, don't we see primary care docs rushing through a 12 minute patient counter to cram 5 patients into a hour?, Is not FFS in primary patient care rotten or worse and a major reason for deteriorating quality and increasing costs? Is it really FFS or is it a pretense of FFS or a poorly function remnant of a FFS system that once existed and worked pretty well.To be clear,the objection seems to be aimed at primary care FSF.
Is there something different about FFS in health care?Yes, FFS in health care and other consumer products or services FFS are as alike as a warm puppy and a hot dog.They sorta sound alike but there are not.
There are at least two reasons why the nominal fee for service (FFS) payment method in health care differs from FFS in most other retail transactions regarding goods and services
1) Much of the payment for health care services is with some one else's money2) There are price controls on the fees in the FFS in Medicare and Medicaid.
Much of health care expenditures is paid for by third party payers, either CMS which includes Medicare and Medicaid or health care insurers.In this circumstance patients are buying things with either someone's else's money or the perception that they are paying with someone else's money.
Milton Freedman explains how things are different when one is spending his own money than when he is spending with other people's money. This is such a obvious common sense observation that most of us have verified that nugget of conventional wisdom by observing multiple instances of that circumstance so that a formal econometric study would not be necessary.Just think of eating out on an expense account.See here for Freeman describing how this works.
But such a formal study was done by MIT economist Amy Finkelstein who demonstrated that health care expenditures increased markedly after senior citizens in the US were enrolled in the Medicare program which in effect made the price the paid for their health care much lower.When things are cheaper people buy more. Milton Freedman said that one of the two major principles of economics was that demand curves slope downward,an economist's way of saying that people tend to buy more stuff when it is cheaper..See here for my earlier comments on the Finkelstein paper.
This verification of the obvious was incredibly heralded by fellow economists as a major change in thinking about health care spending.Apparently previously no one had noticed that the elderly were spending more on health care now that they had to pay less nor that such a finding would be expected.The American Enterprise Institute economist,Joseph Antos said of the Finkelstein paper that it was path breaking.MIT's Johnathan Gruber,one of the architects of Romney care, said that the report changed the landscape of health care economics.
CMS's price controls came about as the number of medical goods and services that increased over the last twenty or so years ( more diagnostic tests,more medications,etc) met up with the increasing demand brought about mainly by the other people's money factor and reaching some tipping point in which the government moved into an effort to control costs.
Economics 101 texts tell us that price ceilings create shortages,degradation of quality,wasted time and cost of waiting in lines and mis-allocations of resources.
Advocates of a single payer and central planning in medical care sometimes conflate FFS and the market economy. One cannot deny that the current FFS situation in primary care medicine has much to be desired but it is because the market has been distorted by price controls and the fact that for a large segment of the patient population folks are paying for care with other people's money. Neither of those factors is likely to go away in this country any time soon..Actually both will likely increase.
But there can be a workaround.
Fortunately, at least for now, people can still operate to some degree outside of this system and contract with physicians for primary care with a retainer payment arrangement.Here there is no price control and the patient is not spending other people's money.
The fee for service in primary care medicine is not your father's or grandfather's fee for service.It is not the case that fee for service cannot work with medical care even now. Cases in point are cosmetic surgery and refractive eye surgery and more recently the growing market for retainer medicine.are example of FFSs in regard to medical care working out reasonably well.
If price controls were placed on retainer medicine retainer fees we would see the same negatives that we see now with primary care with price controls. It's the price controls, stupid.
The economist Russ Roberts of the Hoover Institute said the following in his novel, The Price of Everything.A parable of Possibility and Prosperity :
Yet the fee for service arrangement is the target for criticism in regard to health care ( mainly in regard to primary care) and often depicted as one of the reasons for escalating health care costs and decreasing quality.
Some argue that FFA cannot work in health care because of the marked information asymmetry between physician and patient. But that cannot be a sufficient reason to wish to do away with FFS in medical care as there are many situations in a modern western economy where large information gaps exist. That became an issue probably as soon as property rights and trade allowed for the division of labor. Getting advice regarding estate planning and tax avoidance is just one. Your furnace repairman tells you the something or other needs replacement and in doing so she knows a lot more about furnace anatomy and physiology than the home owner.
It has been argued that since the physician is paid on a episode or encounter based FFS that he will tend to do more than is necessary for good health outcomes because of his incentive to make more money. Certainly that is the direction that the cost vector points just as in a capitulated system the physician has an incentive to limit care to avoid financial loss. Is one method categorically better than the other?And the incentives for more financial gain argument would seem to apply equally well to many other instances of market transactions.The incentive argument and the information asymmetry argument do not clearly distinguish medical care from other economic transactions based on FFS about which we hear no hue and cry or concerted campaigns for its abolition.
But wait, don't we see primary care docs rushing through a 12 minute patient counter to cram 5 patients into a hour?, Is not FFS in primary patient care rotten or worse and a major reason for deteriorating quality and increasing costs? Is it really FFS or is it a pretense of FFS or a poorly function remnant of a FFS system that once existed and worked pretty well.To be clear,the objection seems to be aimed at primary care FSF.
Is there something different about FFS in health care?Yes, FFS in health care and other consumer products or services FFS are as alike as a warm puppy and a hot dog.They sorta sound alike but there are not.
There are at least two reasons why the nominal fee for service (FFS) payment method in health care differs from FFS in most other retail transactions regarding goods and services
1) Much of the payment for health care services is with some one else's money2) There are price controls on the fees in the FFS in Medicare and Medicaid.
Much of health care expenditures is paid for by third party payers, either CMS which includes Medicare and Medicaid or health care insurers.In this circumstance patients are buying things with either someone's else's money or the perception that they are paying with someone else's money.
Milton Freedman explains how things are different when one is spending his own money than when he is spending with other people's money. This is such a obvious common sense observation that most of us have verified that nugget of conventional wisdom by observing multiple instances of that circumstance so that a formal econometric study would not be necessary.Just think of eating out on an expense account.See here for Freeman describing how this works.
But such a formal study was done by MIT economist Amy Finkelstein who demonstrated that health care expenditures increased markedly after senior citizens in the US were enrolled in the Medicare program which in effect made the price the paid for their health care much lower.When things are cheaper people buy more. Milton Freedman said that one of the two major principles of economics was that demand curves slope downward,an economist's way of saying that people tend to buy more stuff when it is cheaper..See here for my earlier comments on the Finkelstein paper.
This verification of the obvious was incredibly heralded by fellow economists as a major change in thinking about health care spending.Apparently previously no one had noticed that the elderly were spending more on health care now that they had to pay less nor that such a finding would be expected.The American Enterprise Institute economist,Joseph Antos said of the Finkelstein paper that it was path breaking.MIT's Johnathan Gruber,one of the architects of Romney care, said that the report changed the landscape of health care economics.
CMS's price controls came about as the number of medical goods and services that increased over the last twenty or so years ( more diagnostic tests,more medications,etc) met up with the increasing demand brought about mainly by the other people's money factor and reaching some tipping point in which the government moved into an effort to control costs.
Economics 101 texts tell us that price ceilings create shortages,degradation of quality,wasted time and cost of waiting in lines and mis-allocations of resources.
Advocates of a single payer and central planning in medical care sometimes conflate FFS and the market economy. One cannot deny that the current FFS situation in primary care medicine has much to be desired but it is because the market has been distorted by price controls and the fact that for a large segment of the patient population folks are paying for care with other people's money. Neither of those factors is likely to go away in this country any time soon..Actually both will likely increase.
But there can be a workaround.
Fortunately, at least for now, people can still operate to some degree outside of this system and contract with physicians for primary care with a retainer payment arrangement.Here there is no price control and the patient is not spending other people's money.
The fee for service in primary care medicine is not your father's or grandfather's fee for service.It is not the case that fee for service cannot work with medical care even now. Cases in point are cosmetic surgery and refractive eye surgery and more recently the growing market for retainer medicine.are example of FFSs in regard to medical care working out reasonably well.
If price controls were placed on retainer medicine retainer fees we would see the same negatives that we see now with primary care with price controls. It's the price controls, stupid.
The economist Russ Roberts of the Hoover Institute said the following in his novel, The Price of Everything.A parable of Possibility and Prosperity :
"Know that there is no free lunch. Play with prices and you will bring disorder.You will loose the benefits of the flow of knowledge and resources that prices choreograph without a choreographer."
Monday, October 01, 2012
When you urge coercion by the government,don't be shocked if you get coerced as well
The following quote explains the title.See here for further details
All people have the moral obligation to care for those who are less fortunate. But replacing morality with legality is the first step in replacing church, religion and conscience with government, politics and majority vote. Coercing people to feed the poor simply substitutes moral poverty for material poverty.Dancing with the devil is dangerous business.
The bishops dance with the devil when they invite government to use its coercive power on their behalf, and there’s no clearer example than the Affordable Care Act. They happily joined their moral authority to the government’s legal authority by supporting mandatory health insurance. They should not have been surprised when the government used its reinforced power to require Catholic institutions to pay for insurance plans that cover abortions and birth control.
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