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Posted by on Oct 20, 2009 in Health | 28 comments

This American Life Explains Part Of The Health Care Crisis

Is it due to doctors, patients, lawyers or insurance companies? This American Life says, “Yes.”

In an absolutely wonderful episode, they really highlight some key causes of the health care crisis and shatter some misconceptions. They even changed my mind about a few things.

For example, it’s commonly claimed that we have a supply problem, and if only there were medical professionals then that would drive down costs. They point out that historically this has proven incorrect: increasing the number of medical professionals quickened the rise of health care costs, and they explain why. I have always thought that the calls for tort reform were mostly a red herring, as the amounts involved in lawsuits make up a trivial amount of total health care costs. They definitely hammer home that this isn’t entirely accurate, because it completely changes doctor behavior and leads to an excess of diagnoses and provided care.

Plus it doesn’t help that patients demand to have everything, then complain when it costs too much. Or that perception is often more important than results for both doctors and patients.

I strongly encourage everyone to listen to the episode as it really takes a step back and looks at some of the institutional factors that must be addressed if we are ever going to address the problem.

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Copyright 2009 The Moderate Voice
  • vey9

    And they followed it up this past weekend with another excellent episode on the same topic.
    where they give the history of hospitals in search of patients starting Blue Cross, and compare Pet Health Insurance to people’s.

  • tidbits

    Mikkel –

    You get at a critical point. Seriously addressing health care costs, means jobs. While malpractice claims are less than 0.5% of costs, defensive medicine is estimated to $60-100 billion/yr. Eliminating defensive medicine, with its significant savings, means labs and technicians with a reduced work load, i.e. layoffs. The same is true in other areas. With standard insurance form processing and online access to patient records, one FTE per physician’s office, perhaps more in multi-doctor clinics, becomes expendable. The list goes on with medical equipment, having to amortize equipment that is less used, expendability of operating technicians and other hospital staffing.

    With unemployment already at double digits, and healthcare one of the few “growth industries”, it is little wonder that there is a lack of political courage for cost cutting measures in the health care reform now working its way through congress.

    • mikkel

      I agree and think your point is true more generally. In any top heavy society, wages will disconnect with prices and lead to the problem where there is wage deflation in real terms — both in individual value and collective workforce value. The natural response is then to become more efficient, which further drives down wages and exacerbates the problem.

      For my part, I am sympathetic to the idea that the bulk of the problem is due to inflationary policy and the necessity for asset values to keep rising. I also think that saying we should be inefficient to preserve jobs hurts us in the long term, and that the issue is that we have massive misallocation of resources. If we had invested more in emerging technologies and developed new industries, instead of putting it in financial wizardry, perhaps we would have created enough new jobs we would have as much of a problem.

      Of course while that’s good in theory, it still means that millions of people that are too old to start a new career lose their jobs…I have no idea how to address that. I’ve thought about this issue a lot because I’m currently developing several products that if successful will obsolete many high paying jobs and — while I don’t want to get too carried away assuming I will succeed — I’ve started contemplating how to react to that if I am.

      • TheMagicalSkyFather

        I think this is why it is being pushed off until 2013 to take effect. I do not think it is a budget trick but an attempt to save jobs until the economy has a chance to recover.

        As far as people that are “too old to re-train” we lacked those concerns about auto workers and steel workers so I have little pity on that topic since that is the way our economy currently works. No industry is truly safe from it, the best we can do is mitigate the losses until the job losses can be absorbed by a recovering market but of course as usual will be winners and will be losers and the losers will scream VERY loud as per the norm. Honestly though this is the way the job market has increasingly worked for everyone else since the late 80’s. I think a whole new group of people will begin to hate the term “market wage” though.

    • rudi

      Your point seesm to be that medical administration is inefficient. What happened to the “market” forcing reform and making a doctors office more efficient. The auto companies are heavy into automation and computers, yet they’re dieing in the US. Robots, PLCs, rfid tags/chips and noncontact measurement/adjustment make auto companies more productive…

      Rfid and computerized records are suppose to be the future of medical record, but will that happen without a government handout?

  • DLS

    Usually, that show (which is broadcast on NPR) is the antithesis of its name (and features a man whose pronunciation is irritating). Very rarely is it good (the Victor mouse trap-family episode was amusing).

    I’m glad he’s actually to look at something that is conventional and truly mainstream and commonplace.

    He’s right about the problems with medicine. Readers on this site have never been precluded from doing their own research, checking for themselves — have you ever asked the providers what they think and how they feel about this, that, or government health care as a solution? Many are willing to relent (if they were opposed in the past) and accept what hopefully can be a less complicated and troublesome situation, at least in theory, than they face today? And what bothers them and where is reform needed? Answer: “Lawyers and insurance companies.”

  • CStanley

    The part about supply is interesting, but it seems that they’re too broad in asserting that conclusion. For one thing, it would depend on where you are on the supply curve, and currently we do have a shortage in most areas of primary care physicians (also of some support staff and equipment in some cases.)

    In addition to that, I imagine you’d have to implement other changes in the system to make consumers more price conscious. If insurance companies will pay for unlimited visits, then sure, doctors will schedule more visits and patients will comply. If the patient has to pay out of pocket though, more often than not they’ll ask how much it costs and discuss with the doctor whether or not the extra visit is really necessary.

    • mikkel

      Well yes, they didn’t bring up that they assume inelastic demand (which they implicitly do). It’s like we’ve talked about in basically every other topic…it’s the inelasticity that is causing many problems, and the latter two segments inadvertently say that too. This is why I the article I linked to a few months back that suggested non-profit (probably government run) catastrophic insurance coupled with out of pocket costs for everything else seemed spot on. Of course I think there is still the need for for-profit donut insurance in that case.

  • shannonlee

    The supply problem is easy to fix…relax the regulations and testing of doctors coming from countries with solid medical education systems. I know a number of fully qualified european doctors that would come to the states if they didn’t have to retake a bunch of tests. Why do they want to come…$$$$$.

    • vey9

      There really isn’t a supply problem. That’s what Mikkel menat when he said, “For example, it’s commonly claimed that we have a supply problem, and if only there were medical professionals then that would drive down costs. They point out that historically this has proven incorrect: increasing the number of medical professionals quickened the rise of health care costs,”

      In the show, they explain why. In shorthand, it’s because when there are more doctors, then the bar for certain non-life saving procedures is lowered. Once again, this is because if “someone else” is paying, doctors and patients are more likely to say “Why not”? as well as the fact that the doctors have the time to do procedures that they would put off if they were busier.

      • shannonlee

        In certain fields there is a serious supply problem. The heart problems we are going to be facing 10-20 years from now will require that we start outsourcing our patients to other countries or bringing doctors in.

        • vey9

          “In certain fields there is a serious supply problem.”Define “serious.” Furthermore, don’t think that because there are a lot of doctors in one place that things are much better, either for cost or for quality of treatment. That was the theory when Cuban doctors fled Castro and were handed Florida licenses when they showed up here. Didn’t work out.I grew up in a place where doctors were few, so I was used to the idea of waiting a few weeks to see a doctor.I lived for a while in South Florida where there are way too many doctors. Seriously, you could call a doctor’s office asking to make an appointment and be in and seen within an hour. I was shocked to find that out. Specialists like heart doctors were tripping over themselves for patients. Some even advertised, “Bad Ticker? We will See You Quicker!” (please excuse the exaggeration.) Just like plastic surgeons advertise breast enlargements and hospitals advertise for patients “[Clock on a billboard] Don’t let time run out on you, come to us and get a ECG for $35” That is not an exaggeration and is on a billboard now.Yet, Medicare payments for certain procedures are twice what they cost in less populated places like where I grew up. So convenience-wise, things are swell, but cost wise, not so hot.

  • Some problems are so large that they need to be attacked from multiple angles. There is no one solution to the health care crisis. It’s going to take action (and probably sacrifice) on the part of all or most involved parties.

  • DLS

    “I think this is why it is being pushed off until 2013 to take effect. I do not think it is a budget trick but an attempt to save jobs until the economy has a chance to recover.”

    It is a political trick. It defers the unpleasant consequences of the decisions being made, intentionally, until after the 2010 or the 2012 elections. It has an advantage in that it can be presumed to be most effective among Democratic and Democratic-leaning voters (who then can respond primarily as a short-term measure to the good parts of what is sought, the gratification from which so many of them wouldn’t want to defer or view critically, at any rate).

    • TheMagicalSkyFather

      If that is their plot though and they plan on making a horrible bill that they must hide they will still be out in 2014 and 2016 just like Bush and his Repubs and I do not think they assume they are immune. Hiding the budget costs makes sense as does creating the infrastructure and offsetting the job losses but hiding a bad bill that will just hit later rather than sooner does not sound like a realistic reason to me.

  • DLS

    “just like Bush and his Repubs and I do not think they assume they are immune”

    They’re much more activist and flirting with extremism (as anyone honest and healthy will tell you or will admit, even if he or she dislikes it), and they’re so arrogant (or breathtaking sometimes with their level of ineptitude and being out of touch with everyone and everything) that they may actually assume they are immune to public disapprobation and election losses. However, the scope and extremity of some at least of what they are seeking has got to make them aware they can’t get away with it and still get re-elected (even with traditional Democratic vote-total boosts of various illicit kinds), and to be safe they must defer at least some of the blatantly worse effects of what they are seeking for us. They hope to fool the easily fooled by presenting them in 2010 and 2012 with mainly “good” things, or at least to reduce the bad things they can expect to encounter. Some will, no doubt, find this convincing or satisfying, and vote Dem again.

    Compounding this is the ineptitude as well as increasing mainsteam opposition to the shift leftward by the Dems in Washington. They are currently fractured and dysfunctional with health care “reform” (their attempt to have the federal government take over health care incrementally) and they need to recover their purposefulness (albeit for bad and wrong reasons, mainly) if they want to make [“]progress[“] again.

  • ksb43

    I sit here exhausted from a long day at the hospital, so haven’t had time to listen to the story, but I will try and get to it in the next couple of days.

    As a medical professional, I can tell you what I see every day: everyone wanting Cadillac care with a Pinto payment. There are people in our hospital system who are eating up dollars to the extent that you could just go outside and burn them, and get about the same results. People who are not even US nationals, or who may be citizens but never paid in to the system, with million dollar plus hospital bills. Inevitably, they have a full code status: which means they may try to die, but we won’t let ’em. And when you try and talk to the family, they refuse to consider anything other than full care. She could live another 20 years like this! If that family was responsible for even a fraction of the true cost of the care the patient received, they would be singing a different tune.

    The short answer to the healthcare question: we are keeping people alive who should be allowed to die. I am not talking relatively healthy, intact people who will get better, and walk out of the hospital and have some quality of life. I am talking quadriplegics who are completely unresponsive, ventilated, on hemodialysis with tubes in every orifice, and some new ones we made for them. Or the 88 year old stroke/sepsis/demented patient whose family demands we do everything to save her. How about the 89 year old, deaf, blind and demented patient that got brain surgery for a brain tumor? We are slaves to the unrealistic expectations of the family, in so many cases, it’s unreal. Let’s face it, when you’re not paying a dime for any of it, it’s easy to say “Do everything!”

    Healthcare doesn’t need to be less expensive. We should all pay something for the care we receive. What healthcare should be is more evenly distributed so that dollars go to those who have a chance for real recovery. For the OLD old, the most humane and most economical option is hospice, in so many instances. Some on the things we do to patients, in the name of keeping them alive, would be considered torture in another setting.

    But when you try and bring these kinds of issues to the fore, there’s always someone shouting “DEATH PANELS!”, somewhere in the background.

    • mikkel

      I may have a biased sample considering what it covers, but I’ve heard of very similar things happening often at the cleveland clinic not due to patients’ families, but because of the surgeons. They would be very disingenuous about the chance of recovery to a suitable standard of living to the point that I know half a dozen nurses that thought about bringing various doctors to the ethics board.

      • ksb43

        Surgeons perform surgery. It’s what they do, and I guess it’s how they make their money. I work for a teaching hospital and so the atmosphere is a little different. Most of the doctors I work beside, don’t make that much money in the whole scheme of things. I know for a fact that I make more than a resident at my hospital.

        I have seen situations that I thought were unethical, in particular recently, a resuscitation that went on waaay too long, resulting in an alive (ie, with a heartbeat), but brain damaged, vented, quadriplegic. What that man went through as they tried to save his life, I wouldn’t do to my worst enemy. But the family was standing outside the room the whole time, egging on the doctors.

        What I’ve seen more than anything, is a reluctance on the part of doctors to deliver bad news to loved ones of a patient. They’re human, too, and they don’t want to be the one to confront a family with really bad news.

        • vey9

          “What I’ve seen more than anything, is a reluctance on the part of doctors to deliver bad news to loved ones of a patient. They’re human, too, and they don’t want to be the one to confront a family with really bad news.”

          This will sound cold since it doesn’t apply to flesh and blood, but I don’t think that anyone that cares much about anything wants to deliver bad news, whether it is a repairman telling someone that their hard drive is shot or a plumber that says the drain pipes are too thin to repair, fact is that things wear out and break — people, too.

          Some people always accuse repairmen that care about things of being gleeful about it announcing “not worth fixing”, but that isn’t the way I look at things. When I realize that things are a lost cause I usually cut them a break on my price which helps to salve my conscience.

          Maybe I am wrong to do that. Maybe they don’t care.

    • LionAslan

      please state what hospital you work for. I would never put a loved one in your care. Blah blah blah about deciding who lives and who dies, youre not God, that you even think you could decide who receives care and who doesnt goes against everything to do with healing. It’s not death panels people fear. It’s people like you who are inflated thinking they know who should have care and who should not. Your hospital is subsidized and charges sky high prices because it is subsidized. Dont pretend you’re not on the dole. You are. Big time.

      • ksb43

        LOL. What you know could fit on the head of a pin. Every hospital that accepts Medicare or Medicaid is under the thumb of the feds, or “on the dole”, as you put it. I am merely a teeny weeny cog in the big, big wheel of the US health system. And if you or your loved one were sick enough, you would beg to come to my hospital, because in many cases the academic institutions are the only ones willing to take the case.

        • LionAslan

          Nope, given your laughing scorn, I’d never bring anyone to where you worked. Many hospitals have a mission to take all. You have some kind of idea youre special. Your institution is not special. It is literally one of tens of thousands. Youre subsidized by insurance companies big time. That’s part of why everyone’s premiums are sky high because of institutions like yours. Youre on the dole Vera. Your very salary is subsidized by us. BIG time. You can scorn and laugh all you want. You’re in the wrong field.

  • DLS

    “when you try and bring these kinds of issues to the fore, there’s always someone shouting “DEATH PANELS!”, somewhere in the background”

    Don’t confuse the rare irrational attack with intelligent concern about the nature of the people who are engineering our “reform,” as well as well-known facts, including the previous existence of death panels since the 1960s, and the equivalent (including ethics committees who can make “futility” decisions already), providing the infrastructure for what with some of these on the Left is a known slippery slope.

    Overreaction to the protest, or dishonest mischaracterization of it, is self-defeating and self-discrediting.

    • Zzzzz

      I think slippery slope arguments are bogus, as a general rule.

      Frankly, Terry Schiavo was a wake up call to a lot of us concerning what happens when the same folks, who are falsely screaming ‘Death Panels’, are anywhere near the levers of power. They would keep everyone alive and hooked up to feeding tubes and other torturous devices; brain dead or no, expressed wishes or no, hope of improvement or no. It doesn’t even matter if it bankrupts the country. They want to give dominance to their religious predilections over your body and you and your families finances. That doesn’t characterize all the protest, but it characterizes a large enough segment to make it worth combating.

  • Jim_Satterfield

    Today NPR’s All Things Considered had an excerpt from that show about the “war” between Big Insurance and Big Pharma. Insurance doesn’t want to pay a lot for drugs, Pharma wants everything they can get by hook or by crook. Insurance has a point when they increase co-pays for brand name drugs when there is a perfectly good, chemically identical generic available. They don’t have a good point when they try and force someone to settle for a generic of another drug instead of the one they and their doctor have determined is more effective for them. The drug companies…well, it’s all about the profits, isn’t it? Because the point about substituting drugs is just about the only one they do have, IMO. The games they play with patents based on minor changes in molecular structure that doesn’t affect drug efficacy and the massive marketing budgets tend to show an industry with little regard for customers.

    Neither industry cares for anything but their profits so if their endless push for increasing them has negative effects for society at large we cannot count on them to do anything about it. So who will?

  • DLS

    “I think slippery slope arguments are bogus, as a general rule.”

    They aren’t at all, given factual, historical reality. Not only have we had death panels themselves and the functional equivalent for decades, but the history of liberals and radicalism of behavior and compromise of ethics, and related tainting of euthanasia, is uncontestible fact and an open record. It’s no surprise that there have been books written by authorities such as C. Everett Koop so many years ago (the 1970s) on just this issue, as well as related oceans of ethics-related material on all kinds of topics of this kind.

  • just wanted to say This American Life is the best radio program on the air. . ..

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