Malpractice and Defensive Medicine
Here is where I complain about doctors being unreasonable, and not doing a better job for patients.
Unfortunately, doctors make mistakes. Modern health care is complex, the treatments are more and more dangerous, and we are practicing on older and sicker patients who all expect to cheat death until they are 100.
If you look at a the chart of a 90 year old patient, who spent the last 2 months of her life in the ICU (all too common these days), I can just about guarantee you will find that preventable mistakes were made. It would be nice if no mistakes ever were made. The reality is that 100,000 or more patients die each year in America, sooner than they should have, because of these mistakes. We need to do better.
The threat of lawsuits haunts us doctors, and is a constant incentive to try and do better. Lawyers deserve credit for keeping us on our toes.
The cost of legal defense for malpractice is really only about $2 billion yearly. This is a drop in the health care cost bucket. Doctors shout for Tort reform, but Tort reform has never been shown to lower health care costs in states where it is in effect. It also makes adversaries of doctors and lawyers who both work for their respective patients and clients.
The real cost to the system, is the cost of defensive medicine. These are the unnecessary tests and procedures physicians do, mostly, if not wholly, to be able to say we were very thorough, should a bad outcome occur. This is the result of juries, who take a very dim view of any doctor who didn't do everything possible to diagnose and treat an ailment, that went on to cause a bad outcome. The same jury will acquit a doctor who over-treats a patient, leading to a serious complication. This is the well known psychology of the jury, and even in this age of information, it greatly affects the practice of medicine.
The cost of treating and testing unnecessarily is huge. Some would put it in the range of $200+ billion yearly. Since tests are part of the Stuff that is the root cause of health care inflation, it needs to be tamed. So how do we do this?
The reality is that most doctors follow certain standard of care protocols, but will do more than those protocols suggest frequently, because they will suffer the consequences if the protocol fails. And it will fail very infrequently, but you don't want to be the doctor treating the patient when it does fail.
The solution is to make a deal with the lawyers. Let's follow the very best data we have, for treatment of the presenting problem. If the protocol says an expensive test isn't necessary, then it won't be done. But if the outcome is bad, even though the protocol was followed, the doctor will be held harmless.
Now the lawyers will not like this. But we can give them an even better offer, because the savings from not doing all of those tests, will result in a giant pool of money, far greater than the $2 billion malpractice business which now exists. In fact, you could create a hypothetical " bad outcomes pool" of $10-20 billion, which is 10x the typical amount of yearly malpractice costs, and still save 10x more than that because of all those tests that weren't done. That's real money!
So take the $200 billion in savings on testing, and give $10-20 billion to the lawyers, and put them in charge of compensating patients and their families for bad outcomes. After all, compensation for loss is tricky business, best left to the lawyers. It takes skill and expertise that certainly most doctors do not possess, and lawyers deserve fair compensation for such service.
The real win is for the consumer, because turning back all of that unnecessary testing should lower costs. Also, it is a statistical fact that doctors will be delivering better care, with fewer bad outcomes. And that will bear out over time. Then we can focus on improving the process to continue to reduce the bad outcomes. Everybody wins right? Well sort of.
So who will lose under this scheme? Of course it is the makers of the Stuff. And they will do their very best to make sure such a sensible alliance between doctors and lawyers for the public good, never happens. You can bank on that.
Tuesday, February 12, 2013
The Stuff
By now you must be wondering what is the cause of this massive healthcare inflation we have seen over the last 30 + years. After all it was so easy and convenient to point fingers at the doctors. But doctors care about patients, and what they want most, is simply to get their patients what they need. That's what doctors do.
To fully understand this health care cost crisis, it important that you know about the "Stuff". The Stuff, is my shorthand for all of the collective new and expensive drugs and medical technologies. This includes drugs, tests, implants, surgeries and surgical equipment, testing equipment, and medical treatment equipment necessary for various therapies. For the most part, these are tangible things that are made and sold by various companies domestic and foreign. They almost universally require FDA approval in the US.
The best studies done to date, regarding heath care cost inflation, show that it is the cost of the Stuff, that drives this inflation. (kff.org/insurance/7670.cfm ) Think about it. Thirty years ago we didn't have all of the Stuff, that we have now. That's why health care costs made up half as much of the economy then, as it does now. So what we all really need to be asking ourselves is: "Why does the Stuff have to cost so much"?
That is a very good question indeed, particularly when that same Stuff, and sometimes even better Stuff, can be gotten in other countries for significantly less. Hey, we all know it is true. Millions of Americans get drugs and treatments outside of the US every year, at a fraction of the cost. And technically speaking, it is generally illegal to do so. So why can't we just get that Stuff right here, for less, and not have to break the law? It really is that simple, despite what you hear. Well almost anyway.
It turns out that the Stuff is more than just things. It also refers to the manipulation of all of these things by politicians, and other interested parties, even including companies from other countries. Yes it goes that far. It's the reason that the Stuff costs so much more in America than everywhere else in the world.
Companies around the world are inventing new medical treatments of all sorts too. These new treatments then get American patents, and FDA approval, even though they may be only marginal improvements, or not even as effective as what is already available off-patent. This is particularly true for drugs. Because congress forbids Medicare and Medicaid from negotiating lower prices on FDA approved treatments, they can advertise and sell in the US market at far higher prices than they can in all other markets or their own market. Americans pay much higher prices than anywhere else in the world. In effect, Americans are subsidizing new treatments for people all over the world, and we are also the cash cow for foreign companies who make the Stuff too. Is it any wonder we're going broke over health care?
Now politicians and makers of the Stuff, really don't want you to know about this, so they try hard to convince the public that the problem is all of those greedy doctors. And they would be right about a very, very, tiny number of doctors who actually do make millions of dollars helping companies sell their expensive Stuff. But the vast majority of doctors do not engage in helping these companies sell their Stuff. In reality, your doctor really wants the stuff to cost much less too. If for no other reason, it's so they don't have to constantly hear their patients complain about the high cost of the Stuff!
You know in all of my years in medicine, no salesman selling Stuff for his company, ever ever asked me how much I thought that Stuff should cost. Further, I have asked hundreds of doctors personally, whether they were ever asked to weigh in on the cost of any of the Stuff, that these salesmen wanted us to recommend for our patients. Not a one said they ever had any input about the cost, nor were they ever even asked.
So there you have my very unscientific take on physician participation, in deciding about the cost of the Stuff. But just ask your doctor if he has ever heard a complaint about the high cost of the Stuff? Undoubtedly he will tell you that he hears about it every day......
By now you must be wondering what is the cause of this massive healthcare inflation we have seen over the last 30 + years. After all it was so easy and convenient to point fingers at the doctors. But doctors care about patients, and what they want most, is simply to get their patients what they need. That's what doctors do.
To fully understand this health care cost crisis, it important that you know about the "Stuff". The Stuff, is my shorthand for all of the collective new and expensive drugs and medical technologies. This includes drugs, tests, implants, surgeries and surgical equipment, testing equipment, and medical treatment equipment necessary for various therapies. For the most part, these are tangible things that are made and sold by various companies domestic and foreign. They almost universally require FDA approval in the US.
The best studies done to date, regarding heath care cost inflation, show that it is the cost of the Stuff, that drives this inflation. (kff.org/insurance/7670.cfm ) Think about it. Thirty years ago we didn't have all of the Stuff, that we have now. That's why health care costs made up half as much of the economy then, as it does now. So what we all really need to be asking ourselves is: "Why does the Stuff have to cost so much"?
That is a very good question indeed, particularly when that same Stuff, and sometimes even better Stuff, can be gotten in other countries for significantly less. Hey, we all know it is true. Millions of Americans get drugs and treatments outside of the US every year, at a fraction of the cost. And technically speaking, it is generally illegal to do so. So why can't we just get that Stuff right here, for less, and not have to break the law? It really is that simple, despite what you hear. Well almost anyway.
It turns out that the Stuff is more than just things. It also refers to the manipulation of all of these things by politicians, and other interested parties, even including companies from other countries. Yes it goes that far. It's the reason that the Stuff costs so much more in America than everywhere else in the world.
Companies around the world are inventing new medical treatments of all sorts too. These new treatments then get American patents, and FDA approval, even though they may be only marginal improvements, or not even as effective as what is already available off-patent. This is particularly true for drugs. Because congress forbids Medicare and Medicaid from negotiating lower prices on FDA approved treatments, they can advertise and sell in the US market at far higher prices than they can in all other markets or their own market. Americans pay much higher prices than anywhere else in the world. In effect, Americans are subsidizing new treatments for people all over the world, and we are also the cash cow for foreign companies who make the Stuff too. Is it any wonder we're going broke over health care?
Now politicians and makers of the Stuff, really don't want you to know about this, so they try hard to convince the public that the problem is all of those greedy doctors. And they would be right about a very, very, tiny number of doctors who actually do make millions of dollars helping companies sell their expensive Stuff. But the vast majority of doctors do not engage in helping these companies sell their Stuff. In reality, your doctor really wants the stuff to cost much less too. If for no other reason, it's so they don't have to constantly hear their patients complain about the high cost of the Stuff!
You know in all of my years in medicine, no salesman selling Stuff for his company, ever ever asked me how much I thought that Stuff should cost. Further, I have asked hundreds of doctors personally, whether they were ever asked to weigh in on the cost of any of the Stuff, that these salesmen wanted us to recommend for our patients. Not a one said they ever had any input about the cost, nor were they ever even asked.
So there you have my very unscientific take on physician participation, in deciding about the cost of the Stuff. But just ask your doctor if he has ever heard a complaint about the high cost of the Stuff? Undoubtedly he will tell you that he hears about it every day......
Sunday, February 10, 2013
The Health Care Cost Crisis
American health care is at a crossroads of sorts. We all know it. But do we know how we got here and who is responsible? Probably not. I have talked to some of the brightest minds in the health care industry over my 25+ years as a physician and surgeon, and I remain bemused and befuddled by the things I hear, and the so-called experts whom I hear it from.
First off, we do not have a health care crisis. We have a health care "cost" crisis. There is a big difference. If we were, as a nation, spending 9% of GDP on health care like we did in 1980, then it wouldn't be destroying the national budget. Instead we are now spending and astounding 18% of GDP! It cannot go on. If we could get it back to 10% or less of GDP, the economists, who know about this kind of stuff, say that level is ""sustainable" over time. The savings from bringing health care costs back to 1980 levels, would balance the budget. Imagine no budget deficit. Wow! What would politicians have to argue about? Suffice it to say that health care costs are wrecking our economy. And Congress has more or less finally agreed to this fact. When one sector of the economy doubles its percentage of that economy, in a generation, something has got to give.
Now if we assume that health care is our primary economic issue, then who is to blame? This is where things get tricky. The preponderance of opinion on the matter, is that most of the blame falls squarely on the doctors. Why is that you may ask? Well as I said before, roughly 90% of that spending requires the authorization of your doctor in one way or another, so it's easy to lay blame there. But of course, that is pure propaganda and misdirection from the real truth of the matter. The fact is that the medical industrial complex wants you to believe that doctors are the problem. They also want you to believe that doctors are wealthy and arrogant, and that the only way to control health care costs is to own them, and control them to their own advantage. The thing is, the public is buying into that propaganda. So lets explore this assertion.
First, lets really look at how much doctors get out of that 18% of GDP pie. You may be surprised to find that the physician piece of it is shrinking steadily. One trick of accounting is that they love to lump all of the doctors in with the rest of the "providers". But doctors take the blame, so let's look closely at the numbers, but just for doctors. There are about 800,000 MD's and DO's (full time equivalents) practicing in America today. These are the "real doctors" you hear about. You know, the Mercedes driving, golf clubs in the trunk, Country Club going types you always hear about. This gang makes (on average) $200,000 in gross wages, and $50,000 in benefits yearly. If you multiply $250,000 by 800,000, you see that all of the real doctors garner about $200 billion. Not bad, but when you divide that by the $2.7 trillion in total health care spending annually, you find that it amounts to a whopping 7.4 pennies on the dollar. That's right, less than 7.5 cents of your health care dollar goes to the real doctors. And, it is less and less every year. Physician wages are a deflationary part of the overall health care cost crisis, so in that sense, we are already doing our part to solve the problem.
The next thing you hear about, is that doctors practice in a way that over-treats patients. The data for this is based on regional variations in the numbers and types of expensive tests and procedures. But that data is extremely biased and flawed because it is based on availability, not on the validity of the treatment. If you have an arthritic hip, and a good hip replacement surgeon is available locally, you are more likely to have it done, rather than continue to take pain medicine. It's a quality of life decision. It doesn't mean the treatment is inappropriate. Besides, it's the patient that makes the decision. The doctor just offers the treatment. So who is to blame?
I've heard it said again and again, that doctors should not be paid fee-for-service. Fine, but will that make any difference in costs over time? No. Back in 1980 the vast majority of doctors were paid fee-for-service and, as noted, health care costs were half of what they are now, as a percentage of GDP. Also, if you look at a mature managed care system like Kaiser Permanente, where the physicians are paid a salary, and there is no incentive whatsoever for them to treat, or test patients excessively, you will find that their insurance premium costs are no lower than the competition. Further, they do it with the lowest administrative fees of any health care organization in the country, spending only 5% of the premium dollar on paperwork, and 95% on actual health care for their members. If putting all of your doctors on salary led to lower utilization and lower costs, the entire health care system would be one big Kaiser Permanente by now, because nobody would be able to compete. Obviously this has not happened, and that is because what you are hearing about doctors being the culprits, simply isn't true.
Doctors are the scapegoats in all of this, and we also are the target of a smear campaign by the true perpetrators of this economic disaster that is the US health care system. Doctors put patients ahead of politics, and try to rise above vitriol. It is more from the lack of guidance by physicians, that we are in the situation we are in. If you want to fault the physicians, fault them for being silent for too long, and for allowing themselves to be gagged by signing employment contracts that won't let them speak out about the real cause of runaway health care cost inflation.
No, physicians are not blameless, but their shrinking piece of the action speaks volumes about whom is really profiting from all of this.
American health care is at a crossroads of sorts. We all know it. But do we know how we got here and who is responsible? Probably not. I have talked to some of the brightest minds in the health care industry over my 25+ years as a physician and surgeon, and I remain bemused and befuddled by the things I hear, and the so-called experts whom I hear it from.
First off, we do not have a health care crisis. We have a health care "cost" crisis. There is a big difference. If we were, as a nation, spending 9% of GDP on health care like we did in 1980, then it wouldn't be destroying the national budget. Instead we are now spending and astounding 18% of GDP! It cannot go on. If we could get it back to 10% or less of GDP, the economists, who know about this kind of stuff, say that level is ""sustainable" over time. The savings from bringing health care costs back to 1980 levels, would balance the budget. Imagine no budget deficit. Wow! What would politicians have to argue about? Suffice it to say that health care costs are wrecking our economy. And Congress has more or less finally agreed to this fact. When one sector of the economy doubles its percentage of that economy, in a generation, something has got to give.
Now if we assume that health care is our primary economic issue, then who is to blame? This is where things get tricky. The preponderance of opinion on the matter, is that most of the blame falls squarely on the doctors. Why is that you may ask? Well as I said before, roughly 90% of that spending requires the authorization of your doctor in one way or another, so it's easy to lay blame there. But of course, that is pure propaganda and misdirection from the real truth of the matter. The fact is that the medical industrial complex wants you to believe that doctors are the problem. They also want you to believe that doctors are wealthy and arrogant, and that the only way to control health care costs is to own them, and control them to their own advantage. The thing is, the public is buying into that propaganda. So lets explore this assertion.
First, lets really look at how much doctors get out of that 18% of GDP pie. You may be surprised to find that the physician piece of it is shrinking steadily. One trick of accounting is that they love to lump all of the doctors in with the rest of the "providers". But doctors take the blame, so let's look closely at the numbers, but just for doctors. There are about 800,000 MD's and DO's (full time equivalents) practicing in America today. These are the "real doctors" you hear about. You know, the Mercedes driving, golf clubs in the trunk, Country Club going types you always hear about. This gang makes (on average) $200,000 in gross wages, and $50,000 in benefits yearly. If you multiply $250,000 by 800,000, you see that all of the real doctors garner about $200 billion. Not bad, but when you divide that by the $2.7 trillion in total health care spending annually, you find that it amounts to a whopping 7.4 pennies on the dollar. That's right, less than 7.5 cents of your health care dollar goes to the real doctors. And, it is less and less every year. Physician wages are a deflationary part of the overall health care cost crisis, so in that sense, we are already doing our part to solve the problem.
The next thing you hear about, is that doctors practice in a way that over-treats patients. The data for this is based on regional variations in the numbers and types of expensive tests and procedures. But that data is extremely biased and flawed because it is based on availability, not on the validity of the treatment. If you have an arthritic hip, and a good hip replacement surgeon is available locally, you are more likely to have it done, rather than continue to take pain medicine. It's a quality of life decision. It doesn't mean the treatment is inappropriate. Besides, it's the patient that makes the decision. The doctor just offers the treatment. So who is to blame?
I've heard it said again and again, that doctors should not be paid fee-for-service. Fine, but will that make any difference in costs over time? No. Back in 1980 the vast majority of doctors were paid fee-for-service and, as noted, health care costs were half of what they are now, as a percentage of GDP. Also, if you look at a mature managed care system like Kaiser Permanente, where the physicians are paid a salary, and there is no incentive whatsoever for them to treat, or test patients excessively, you will find that their insurance premium costs are no lower than the competition. Further, they do it with the lowest administrative fees of any health care organization in the country, spending only 5% of the premium dollar on paperwork, and 95% on actual health care for their members. If putting all of your doctors on salary led to lower utilization and lower costs, the entire health care system would be one big Kaiser Permanente by now, because nobody would be able to compete. Obviously this has not happened, and that is because what you are hearing about doctors being the culprits, simply isn't true.
Doctors are the scapegoats in all of this, and we also are the target of a smear campaign by the true perpetrators of this economic disaster that is the US health care system. Doctors put patients ahead of politics, and try to rise above vitriol. It is more from the lack of guidance by physicians, that we are in the situation we are in. If you want to fault the physicians, fault them for being silent for too long, and for allowing themselves to be gagged by signing employment contracts that won't let them speak out about the real cause of runaway health care cost inflation.
No, physicians are not blameless, but their shrinking piece of the action speaks volumes about whom is really profiting from all of this.
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