Thursday, June 18, 2009

What is the "crisis" mean in the phrase "Healthcare Crisis"?

So I recently read a fascinating article in The New Yorker about a specific node of the "healthcare crisis". It's a little old, but apparently its been "required" reading at the White House. If you haven't read it, I really recommend giving it a quick look, because to me, it highlighted a number of the nuances of this "crisis" that we are in without indulging in the blame game that many articles enjoy playing while writing about this problem (feel free to disagree!). I enjoyed that it coupled not only statistical evidence regarding healthcare expenditures, but had clear scenarios and interviews to elucidate the mechanisms through which healthcare expenditures have been rising. To me, it is one of the most fair perspectives on the whole issue that I've read so far.

It made me think: what exactly is in "crisis" with the healthcare system? How we choose to define the problem allows us to prioritize what kinds of changes to need to happen in the future. The first thing that people think about when they think healthcare crisis is "healthcare costs". Obama has stated that this is the single most important threat to the fiscal safety of America: skyrocketing healthcare costs. Even though I claim to study healthcare, there were still many details about healthcare economics and the current state of our healthcare system with which I am unfamiliar. So I decided to do a little mini research project and find out what this healthcare crisis really means.

First, the number often quoted is exactly how much we Americans spend on "healthcare" ($2.2 Trillion, which is about $7,421 per person or 16.2 percent of the nation's Gross Domestic Product, as of 2007. Statistics here.) These numbers are always stated with a tone of extravagance--that clearly the United States is spending "too much" on healthcare. Stating that costs are skyrocketing, and we are spending too much, implies that we have in mind some ideal spending amount, with some ideal distribution. What is that amount? What is too much, and what should we be getting for our dollars?

Some numbers may aid in our decision:

The National Heath Expenditure Accounts estimate (with same data as above) that 31% of this expenditure is in hospital stays, 21% are in physicial/clinical services, 10% in prescription drugs, and 25% other. The other category includes dentist services, other professional services, home health, durable medical products, over-the-counter medicines and sundries, public health, other personal health care, research and structures and equipment. On a closer examination, less than 2% of this expenditure is spent on research for prevention programes and less than 3% of this expenditure is on government public health programes, which include epidemiological services, vaccination and innoculation services, and disease prevention programes. 20% of the healthcare expenditures are in Medicare, 16% in Medicaid, and 54% in private insurance. 94% of expenditures are spent on health services and health supplies purchased through various insurance/reimbursement means, by people. It is also interesting to note that "skyrocketing" costs may be a little bit decieving: change in percentage growth of healthcare expenditures has actually decreased--at 10.5% in the 60s to 6.1% in 2007. Interestingly, a large deceleration in healthcare costs comes from prescription drugs, with a percent change dropping from 8.6 in 2006 to 4.9 in 2007. NHEA states that this is due to an increase in generic drugs and slower growth in prescription drug prices. However, on the other hand, visits to hospitals, physicians, as well as a large increase in use of home health care and nursing homes increased.

Moreover, after disaggregating for age, since as we all know, medical expenses are going to vary by age, because disease varies by age, an average of $14,797 was spent on persons 65 yrs or older in 2004, while $2,650 was spent on children, and $4,511 were spent on those working aged. No doubt, this amount varies by region, socioeconomic status, neighborhood composition, etc. This is also interesting given that the proportion older than 65 is expected to more than double in the next 50 years according to census projections.

So where is the crux of the "cost" crisis? Are we spending "too much" per person, or are we facing an increase of people who just need more care? (By no means am I blaming the elderly for this, but rather trying to say that of course we will face a natural rise in the need for healthcare as the population ages, and we have to prepare for it.) Does the answer to that problem come from cutting back services or reorganizing services? What is too much to spend per person? And what are the right things to be spending on? Is it possible to see a decrease in health dollars spent on hospital and clinic care if we invested more money in preventive care and healthcare education?

The second thing that people think about when they think healthcare crisis is this number: 47 million Americans are uninsured, which is 15.8% of Americans (Census info here). Meanwhile, the number of people possessing any kind of health insurance has stayed the same, while the percentage having employment based insurance has actually decreased. Research then suggests that the reason that we have an increase in the uninsured is due to a drop in employment based insurance. (Urban Institute Findings). Obama has also aimed to address this issue by cutting costs now in order to facilitate some sort of state sponsored insurance plan that will get insurance coverage for everyone. (see fact sheet here).

Therefore, not only is there a crisis in spending too much by the people who already have insurance and can access healthcare supplies and facilities, but there is also a crisis in people not getting the care in the first place. Then, when we do provide insurance to those who lack it, what are the guarantees that this insurance necessarily equals access to the appropriate care? And once we do provide insurance, what's to stop the costs of care from skyrocketing again? As the article in the New Yorker suggests, healthcare costs don't relate to quality care, and sometimes, higher healthcare expenditures can occur in lower income neighborhoods to communities that are more likely to lack health insurance. (An interesting sociology article by Karen Lutfey and Jeremy Freese shows an interesting link: that physicians in low income neighborhoods tend to prescribe aggressive treatments because they are less likely to trust their patients to take care of themselves outside of the clinic, and therefore try to do what is medically necessary while they have the patients in front of them. See article here).

How do we solve these two "crises"? Are they separate problems or part of the same overarching problem?

The reality is, when people refer to the "crisis" in healthcare, we are not talking about absolute dollars spent, we are talking about fundamentally different perspectives on HOW dollars should be spent, and WHO should be benefiting from these dollars. Furthermore, we are also in disagreement as to who can judge who gets the care, and how they should get the care. (Should the AMA be the final decision maker, or Congress? What about patient/consumer rights organizations?) Not only that, but we have to add in a dimension of time--who benefits now, and who gets to benefit in the future. Can we sacrifice dollars spent on "curative" care now, to invest in "preventive" care now, in order to benefit those in the future? If we add insurance coverage (covered by private insurers, the government, some hybrid mix, it doesn't matter) where do people then go for access to care, and what guarantees that quality of care?

It is a crisis that is not reducible to the dollar amounts that we spend in healthcare. Indeed the trends in spending, as well as the trends in insurance coverage, are signs to what is wrong with our healthcare system. But these are just specific manifestations of a much larger crisis: what is the role of healthcare in our modern lives? Is healthcare merely a commodity that we consume? Therefore, the physicians in McAllen are just taking advantage of the market nature of this turn of events. On one side, the free-market paradigm of healthcare seems to promote patient choice in care, but on the flip side, it also means that patients then offer up their bodies and the price of their well-being to be determined by the mechanical (if you believe in the invisible hand so to speak) forces of market dynamics. Guwande's example hits it straight on the head with this conversation:

We tried to imagine the scenario. A cardiologist tells an elderly woman that she needs bypass surgery and has Dr. Dyke see her. They discuss the blockages in her heart, the operation, the risks. And now they’re supposed to haggle over the price as if he were selling a rug in a souk? “I’ll do three vessels for thirty thousand, but if you take four I’ll throw in an extra night in the I.C.U.”—that sort of thing? Dyke shook his head. “Who comes up with this stuff?” he asked. “Any plan that relies on the sheep to negotiate with the wolves is doomed to failure.”

It is pretty ridiculous to imagine that a patient and a physician can negotiate and bargain over goods and prices. Sometimes it just seems a little silly to take compromises when it comes to health, no?

On the other hand is healthcare a consulting service? Are the consequences of this service to be judged by healthcare economists, actuaries, the state, medical opinions about the quality of life and mortality statistics, insurance companies, or patient advocates? It seems in this article, that some of the best models out there were actually physician-self run community groups that held a common goal of patients first in their group. (This is interesting because many believe that once physicians get together and control the healthcare giving system, it will only result in market domination, physician control of prices, and skyrocketing healthcare expenditures. such were the arguments agains the Fee for Service system. Interesting that this is not necessarily true). But the extreme end of this argument also largely promotes a medical hegemony, where whatever medical advice is offered should be taken as truth.

Therefore, what is in crisis are the fundamental views regarding healthcare in America. WHO gets to get healthcare? WHAT kinds of healthcare should they receive? WHO gets to decide what is "enough" healthcare and "enough" spending? And HOW should the balance between spending and quality be justified and delivered?

How would you answer those questions?

1 comment:

Dan said...

As much as it's a cliche, I think the answer to your last question has to be... Comparatively! One of the article's great strengths was the shadow comparison to a closely matched community (same state, same demographic profile, radically different healthcare costs). I think similar tricks could be used at other levels of analysis, and could aid in constructing policy as well as analyzing where things are going wrong. For example, Canada and Europe are both aging as well, and Europe faster than we are (right?). And their costs are rising (I think), but they aren't spending as much as we are...

On the other hand, there are some arguments (and I don't have a clue how valid they are - maybe you do?) that the US's extravagant health care spending, in part, subsidizes the rest of the world. Drug companies sell lots of expensive drugs here, letting them do enough R&D to make new drugs, surgeons test new procedures, etc. I don't imagine that these costs actually account for most of the gap (as compared to the sorts of things discussed in the article, e.g. overly expensive and overly aggressive treatment based on the logic of profits not best practices).

More broadly though, what's interesting about this whole set of questions to me is that they get at the core of the paradox of liberal (in the old sense), enlightenment thinking: we want to make decisions for ourself, and imagine that's possible and good. And yet, as Polanyi so nicely puts it, we live in a "complex society" filled with interdependence and we have to make decisions relying on the expert knowledge of others. For this reason, Polanyi rejects both communism and the free market as utopic - both imagine a world without power, where individuals make freely unconstrained decisions. Instead, P argues that we have to ask ourselves, what does freedom mean in a complex society?

Or as one blogger put it (approx): we have a choice between rationing care poorly and rationing care well. There's no choice that doesn't involve some kind of rationing. Our current system pretends as if no one has to make allocative decisions except individual doctors and patients, but that can't hold. Just asking these questions, and forcing actors at each level to think about them, is an important start.