Why Even Good Hospitals And Doctors Are An Obstacle To Better, Cheaper Healthcare

from the perverse-incentives dept

Tue, May 21st 2013 3:33am — Glyn Moody

As we noted in the context of antibiotics, it's well recognized that financial incentives cause the pharmaceutical industry to engage in research that tends to maximize profits rather than maximizing the health of the public. But a widely-circulated article in the Washington Post reveals another kind of bias that may stop us from adopting better ways of keeping people healthy that would also reduce healthcare costs.

This flows from the fact that countries with advanced healthcare systems are no longer dealing mainly with infectious diseases like turberculosis, as they once did, but with chronic ones like heart disease, diabetes, AIDS and many cancers. The key here is how best to manage the disease, particularly among elderly patients, and for that, doctors in hospitals aren't necessarily the best way:

Medicine has been so focused on what doctors can do in the hospital that it has barely even begun to figure out what can be done in the home. But the home is where elderly patients spend most of their time. It's where they take their medicine and eat their meals, and it's where they fall into funks and trip over the corner of the carpet. It's where a trained medical professional can see a bad turn before it turns into a catastrophe. Medicine, however, has been reluctant to intrude into homes.

One company, Health Quality Partners, has focused on doing precisely that: The program enrolls Medicare patients with at least one chronic illness and one hospitalization in the past year. It then sends a trained nurse to see them every week, or every month, whether they're healthy or sick. It sounds simple and, in a way, it is. But simple things can be revolutionary.
The results certainly are: According to an independent analysis by the consulting firm Mathematica, HQP has reduced hospitalizations by 33 percent and cut Medicare costs by 22 percent.
And yet Medicare is planning to shelve this pilot program, citing various bureaucratic reasons why it can't continue. Although some supporters of the home-based system maintain that it would be possible to overcome these problems, there remains a more fundamental obstacle to rolling out the Health Quality Partners approach more widely: Hospitals make money when they do more to patients. They lose money when their beds are empty. Put simply, Health Quality Partners makes hospitals lose money.
So again we seem to be confronted by perverse incentives at the heart of our current healthcare. The better and cheaper way would mean scaling back key parts of the system by instituting regular home visits by nurses, thus reducing the number people sent into hospitals to be treated by physicians. That implies taking on very profitable and thus very powerful business interests, including the doctors themselves. Given that resistance, and Medicare's apparent reluctance to force change by backing the Health Quality Partners system, it seems likely that we will be stuck with an inferior, more costly approach to treating chronic diseases despite knowing what looks like a much better way to do it. Some might call that pretty sick.

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Filed Under: economics, healthcare, incentives

26 Comments

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Zakida Paul (profile), 21 May 2013 @ 3:43am

The best way to keep people healthy and reduce healthcare costs is greater emphasis on preventative care. One thing countries like the UK and US have in common on healthcare is that it is too reactive. We treat people when they become ill instead of educating them as to how they can avoid illness.

Yes, there are illnesses and diseases that cannot be prevented; but lifestyle illnesses are easily preventable with effort.

Big pharma would never allow this, though, because they make too much under the current reactive healthcare systems.
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artp (profile), 21 May 2013 @ 5:00am

Wrong target. Medicare is insurance
So, once again, it is the insurance companies that are holding back better health care.

Isn't Medicare an insurance program?
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Anonymous Coward, 21 May 2013 @ 5:03am

Christ you don't have home care in the US??

Another reason the NHS is far superior toy our crog of shite!

We not only have home care provided by the local councils but we also have sets of nurses whose sole job it is too look after people in the community.
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Anonymous Coward, 21 May 2013 @ 5:06am

Re:
In mainland europe prevention is written into laws and a complex bureaucracy is ccontrolling that it happens satisfyingly. Since mainland europe is as big a market as it is, especially the US incentive-problems (UKs problems are not fundamental) are less severe for the worldwide development. Patents and their funnelling of incentives are still the main problem worldwide.
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Anonymous Coward, 21 May 2013 @ 5:07am

I have rheumatoid arthritis however since I am on a massive dose of methadone "because I'm a druggie" it's not something that causes me a great deal of pain "yet".

I'd probably be hurting pretty bad without it though lol.
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Anonymous Coward, 21 May 2013 @ 5:46am

And hospitals make more money when they screw up
Another problem, I read an article about surgery stays in hospitals, and it said that hospitals make much more money when they screw up during a surgery. Since a screw up adds an average 14 days in the hospital for the patient.

That was most definitely NOT something I wanted to read when I have open heart surgery scheduled next month.
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PopeRatzo (profile), 21 May 2013 @ 5:51am

Re: Wrong target. Medicare is insurance
You answered your own question. You said, "...it is the insurance companies that are holding back better health care", then you followed with "Isn't Medicare an insurance program?"

The operative word is "companies". There was a time at least in US history, when almost all medicine was non-profit. Of course, doctors did well, made good middle-class incomes, but all hospitals were non-profit.

You can trace the collapse of US health care to the Reagan Era, when health care insurance was deregulated and insurance companies started buying up hospitals. This "free market" innovation did nothing but cause prices to shoot skyward. Reagan always hated Medicare (which until then was keeping costs down) and sought the deregulation in order to destroy it. Instead, the whole system metastasized.
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Niall (profile), 21 May 2013 @ 6:21am

Dr LaPierre calling...
You really have an f***ed up system there. Why not take a leaf out of the NRA playbook and arm all doctors and nurses too, so they keep a steady supply of 'customers'? Maybe the medical industry is bankrolling the NRA?

While they're at it, they can keep pushing AGW denialism, so more extreme weather will harm more people too. I'm just surprised the Big Medicine conspiracy isn't pushing Romneycare so that more people can 'afford' their tender mercies?

AS usual, I am thankful for living in my 'socialist heaven' that is the Tory wasteland I inhabit.
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Anonymous Coward, 21 May 2013 @ 6:35am

Setting the record straight.
Actually, Obamacare makes it an even bigger road block because it makes the auditing system a ton more complex than it needs to be. Companies like HMS/Permidian already have a system in place for insurance fraud recoup and recovery that's fast, efficient, and accurate. The less the doctor incorrectly fills out insurance forms the more money he can make because he will get fined. Under Obamacare, the system is much less efficient and more complex because it covers audits for all insurance companies in stead of the ones that our tax paying goes toward...Medicare and Medicade fraud won't be checked on.

One might think that this one size fits all deal is great, but one has to look at the full story behind the recent IRS scandal to see it doesn't work.
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Anonymous Coward, 21 May 2013 @ 6:52am

Re: Re: Wrong target. Medicare is insurance
Neither Medicare (Federal) and Medicade (State) nor corporate insurance companies should be the target. It's hospitals that purposefully incorrectly fill out the insurance forms that raise the deductible of those on such programs.

The reason why the cost is so high is that Doctors have to pay the safety measures of runnning nuclear equipment, malpractice insurance, not buying packets of medications in bulk (mainly because each order is custom made for a patient's matabolism and specific body chemistry), and for generally the inherent risk of working in a hospital...which includes but is not limited to Biogazzard risks, potential radiation exposure ove time, the doctor has to cover the malpractice insurance based on the staff in his charge...so yeah the expense is very justified.
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Anonymous Coward, 21 May 2013 @ 7:03am

Re:
"The best way to keep people healthy and reduce healthcare costs is greater emphasis on preventative care. One thing countries like the UK and US have in common on healthcare is that it is too reactive. We treat people when they become ill instead of educating them as to how they can avoid illness."

I guess we should all be able to treat our own gun shot wounds, automatically know what it means and how to treat a disease when it involves coughing up blood (Tuberculosis for those who don't know), diagnose and self medicate.

The reason why humans need educated doctors to tell us what's going on is that it prevents bias and generally helps us treat ourselves on our own in general. We here in the US and UK usually visit a doctor when a cold or flu starts becoming painful, or when it lasts for 3 weeks. So I'm sorry that some of you from other countries don't understand the danger of self diagnosis.
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quill (profile), 21 May 2013 @ 7:20am

The notion that hospitals have the power to shoot down something like this is misleading. Their representative bodies (here in CT its the CT Hospital Association) have been weakened by the trend to for-profit hospitals, in that their members, now a mix of non-profit and for-profits, are no longer all on the same page with the various issues, which severely reduces the lobbying effectiveness of said bodies. The health insurance industry and pharma are calling the shots, being the deep pockets that speak with one voice. Hospitals, doctors and the AARP are shouting from the sidelines. I actually see the insurance industry supporting this if they become convinced by the data. But unless Medicare starts paying for it first it will be a tough sell.
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Zakida Paul (profile), 21 May 2013 @ 7:23am

Re: Re:
Lifestyle illnesses are easily preventable. Do you know what that means? Your prattling on about gunshot wounds and self diagnosis is meaningless.
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Chris Rhodes (profile), 21 May 2013 @ 7:30am

Re: Re: Wrong target. Medicare is insurance
Ha, yes. Healthcare was "deregulated". No regulation there! Total free market!

/boggle
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Zakida Paul (profile), 21 May 2013 @ 7:38am

Re:
It's a pity this government has begun selling off chunks of the NHS to American private health care companies. The best part? Mainstream media outlets like the BBC are silent on the issue.
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Anonymous Coward, 21 May 2013 @ 7:57am

Re: Re: Re:
You prattled on about lifestyle illnesses. A phrase usually meant to be used by those who think AIDS is a lifestyle disease that only certain people get...of course on the non extreme side of things you could be saying that the flu and cold are preventable when in reality they really aren't.
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Anonymous Coward, 21 May 2013 @ 8:09am

Much of the problem is that in order for you to see a specialist, by law, you often need to see a generalist first and the generalist needs to refer you to the specialist. In many circumstances the generalist must be separately licensed to refer you to a specialist and those licenses need to be periodically renewed (more fees they must pay).

See, for instance, Dr. Phil being unable to even refer you to a specialist because he's not licensed and so you can't see a specialist without first going to a licensed generalist. You can't even see a physical therapist without first getting a referral by a general practitioner and when your physical therapy session is up and you want to see the physical therapist again you must get another referral and pay even more money.

Lets not forget the fact that, here in the U.S., most everything is under prescription and so you need a prescription for so many drugs that are over the counter in other countries. This makes access to basic medications much more expensive.
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Wally (profile), 21 May 2013 @ 8:12am

Re: Re: Re:
Certain types of flu are preventable by vaccination. The common cold virus is a tough one because it mutates very quickly from carrier to carrier. The Mythbusters did a really great experiment as to why colds spread so easily using a consistent drip mechanism to simulate nasal drip with the dripping end just below Adam Savage's nasal cavities. Through non toxic liquids that shared the consistency of snot, and a non toxic flourescent dye, they discovered and demonstrated that its not about the sneezing but not touching anything, even with a hanky.

So here's the thing. When you are talking about Lifestyle diseases....it makes you sound like a sort of jerk to those of us in the US and UK. A lot of very discriminating very biased people use that term to define AIDS as if it were a lifestyle choice to get it. It is assassinated with homophobia or a coplete lack of knowledge in the basic medical knowledge other countries and their citizens have compared to the US and UK...and trust me...we aren't going to the doctor unless it is persistent and feels abnormal.
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mhab, 21 May 2013 @ 11:03am

Re:
I cant argue with you there... in my personal opinion the only way we can really fix this perverted system here in the US is for there to be a single payer national healthcare system like there is in england... while the NHS isnt perfect by any means, its certainly a vast improvement to the completely cold, profit driven system we currently have. Unfortunately the far right and the paranoid politicians of this current congress make that virtually impossible
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Anonymous Coward, 21 May 2013 @ 2:28pm

Protip: Home Health Aides are a popular alternative to nursing homes in the US. It is commonly used for elderly patients who don't want to leave their homes, or can't afford a nursing home. Don't talk about homecare it like its something new, its not.

Source: Myself, I support these Aides.
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Sheogorath (profile), 21 May 2013 @ 2:37pm

The issue here is overprescription
When an American goes to the doctor with certain symptoms, the doctor puts them on antibiotics 'as a precaution' because they make more money from it, whereas in the UK, doctors are paid the same amount by the NHS regardless of what they prescribe. That's why there are fewer cases of MRSA over here in contrast to a similarly segment of the US population.
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Sheogorath (profile), 21 May 2013 @ 2:39pm

Re: The issue here is overprescription
That should read, "similarly sized segment". D'oh!
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Anonymous Coward, 21 May 2013 @ 2:56pm

Re: The issue here is overprescription
Yup...Doctors are actually being paid by us to do their jobs...UK doctors actually get paid either way. Maybe that type of incentive isn't so bad....oh and there is no such thing as precautionary when you're prescribed Moxicilin because if that happens here in the US, it usually means you need it so that something doesn't kill you. Pneumonia is something in particular that Moxicilin is used for...and since pneumonia is life threatening, I would say the US doctor is only doing what he (or she) feels is best for their patient. The thing is that they don't gain an insurance incentive for prescribing medications...it's only for proper filing and diagnosis.
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Anonymous Coward, 21 May 2013 @ 3:04pm

Re: Wrong target. Medicare is insurance
It's the hospitals causing the Medicare Fraud that raises one's deductible....so the block is hospitals. The thing is that under Obamacare, the recoup and recovery of funding for Medicare and Medicaide programs becomes more complex due to the fact that all insurance companies with humongous varieties of policies added to the auditing services. The reason it is much easier to audit the gvt funded programs without Obamacare is that Medicare and Medicade are UNIVERSALLY STANDARDIZED in policy.
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Anonymous Coward, 22 May 2013 @ 9:54am

Re: Re: Re: Re:
You could have just said no, I don't know what that means. It would have been much more concise.
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Sheogorath (profile), 22 May 2013 @ 7:18pm

Re: Re: The issue here is overprescription
Who ever claimed US doctors gain insurance incentives for prescribing? Have you never wondered why pharmaceutical companies spend three times more on 'marketing' than on research and development?
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