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Docs vs. Glocks August 8, 2012

Posted by The Armchair Economist in Commentary, Health Care, Medicine, Politics.
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Glad to see more politics being fought by proxy.  This time the second amendment being fought through patient care.  With the sue happy laws in Florida – I’m just waiting for that first suit where a doc gets sued by a family because they didn’t ask a depressed patient about having firearms in the house. Do gun owners really care that much about being asked? If you are a straight gun toting conservative, would you be more offended at me asking if you have MWM sex or if I ask if you have a gun in your house (to be clear: Id like to reserve the right to ask both)

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Controlling Health Care Costs November 18, 2011

Posted by The Armchair Economist in Economics, Fix Health Care, Health, Health Care, Medicine, Technology.
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I cam across an Op Ed on controlling health care costs through bundling.  I’ve read about novel health systems that focus on high risk/frequent fliers that take daily vital signs via telemedicine and other ways to prevent costly admissions (ie: daily weights for CHF patients, daily in person clinic visits to monitor healing wounds in diabetics).    With the enormous cost of admissions, and inefficient management of patients as inpatients (ie: often working up problems that can be worked up/treated as outpatients)  I see this as a potential way to reduce the cost on our health system.

One particularly interesting statement:

Half the population — mostly young people and healthy adults — consumes just 3 percent of costs, while the sickest 10 percent consumes 64 percent

It would be interesting to see where this information comes from – and to compare insurance company statistics to see what percentage of health care costs are consumed by the sickest 10%.   Although I am a proponent of capitalism and the free market, there are areas (health insurance being one of them) where I feel that the free market cannot work.  Too many inefficiencies – administration/marketing/overhead amounting to as much as 25% of costs being directed to non healthcare related costs, too much incentive to game the system (your legal obligation is to minimize payouts to the insurees and to maximize profits).    I’ll elaborate on all of this in a future post (hopefully)

A look at the reality of Universal health care December 23, 2007

Posted by The Armchair Economist in 2008 Election, Health Care, Medicine, Politics, Ron Paul.
7 comments

When it comes down to a persons life, it is easy to make a knee jerk reaction and blame it on the insurance company. If you’ve read some of my older posts, you should be familiar with my stance on why for profit insurance companies are a inherently flawed concept. However, the recent case of Nataline Sarkisyan illustrates the reality of resource management that would be necessary under a universal payer system of health care.

A 17-year-old died just hours after her health insurance company reversed its decision not to pay for a liver transplant that doctors said the girl needed.

Nataline Sarkisyan died Thursday night at about 6 p.m. at University of California, Los Angeles, Medical Center. She had been in a vegetative state for weeks, said her mother, Hilda.

“She passed away, and the insurance (company) is responsible for this,” she said.

“They took my daughter away from me,” said Nataline’s father, Krikor, who appeared at a news conference Friday with his 21-year-old son, Bedros. more on this case here

It is easy to automatically point the finger at the insurance company and blame them for the death of the girl. However, there are several considerations we need to think about. The primary issue being, would a liver transplant have saved her life? I do not have access to her medical records so the only thing I can do is postulate. In this case, the patient had leukemia and complications arose from a bone marrow transplant. She was already in a vegetative state for several weeks prior to the surgery. Would a new liver have improved her life in any significant manner? The insurance company originally denied her liver transplant based on the absence of any evidence that a liver transplant would improve her condition (The current trend in health care is something called “Evidence Based Medicine”, where treatment is only rendered if it is shown in clinical studies to therpeutic). In the absence of any evidence that this would prove therapeutic, should insurance companies be forced to pay? The alternative view is that the patient’s doctor felt that the liver transplant was necessary, so the question arises, is the doctor or the insurance company responsible for making medical decisions? One argument can be made that although the insurance company refused to pay for the operation, the doctors had a responsibility to give the transplant to the patient regardless if they will be reimbursed (this is consistent with how medical malpractice decisions have been rendered in recent cases). I would not be surprised if the patients family or insurance company brought up point in the ensuing lawsuit, but this is a whole other blog.

As a response,


John Edwards tonight cited the case of a 17-year-old California girl who died after her insurance company refused coverage on a liver transplant to save her life as a call to action to change the current system of healthcare in America.
“Are you telling me that we’re gonna sit at a table and negotiate with those people?” asked a visibly angered Edwards, challenging the health care companies. “We’re gonna take their power away and we’re not gonna have this kind of problem again.” More here

Why is this case relevant to national health care? John Edward’s platform on health care (as with the other Dems) is to transform America’s health care system and provide universal health care for every man, woman and child in America (cited directly from his candidacy webpage).

In any type of universal health care, there are limited resources and tough decisions need to be made on who deserves to use these resources. For all the ills of insurance companies, there is still one thing that they do well: manage resources. In this case, Cigna (the insurance company in this case) is a perfect metaphor for a national payer in universal health care. For example, should more money be devoted to treatment of cancer in a 65 year old patient who has smoked 2 packs of cigarettes a day for 40 years, or for preventative health care for a 6 month old infant? Consider the fact that one major limitation of organ donation is the dearth in supply of organs relative to demand of organs. According to the OPTN, there are 16,679 patients on the Liver Transplant waiting list (Source). Where a liver is so highly valued, should the liver be used on this particular patient where the outcome is uncertain.. or should the liver be used in someone with a diagnosis that is expected to have a more proven outcome?

These might seem like preposterously extreme decisions, but in universal health care rules will need to be made to clearly delineate who should and should not receive care. In this case I am confident enough to bet my degree that in a universal health care setting, that this patient would NOT have gotten her liver transplant.

While it is noble to want to give everyone in the country free health care, one needs to understand the ramifications of universal health care on an individuals choice and true effect on quality of health care. digg story

Fixing health care in the US? Part I November 16, 2007

Posted by The Armchair Economist in Business, Commentary, Economics, Fix Health Care, Health, Medicine.
3 comments

Huge task… I know. I realize that I always come up with ideas to ponder but I’m discouraged in pencilling it down because it means taking hours away from my day to flush out my ideas that will likely be a unintelligible tome. Rather, I will post short segments/thoughts (open to discussion if you feel like commenting) of problems I’ve identified.. as well as possible solutions. Search under the category ‘fix health care’ for future installments.

Problem: The oft cited ‘America spends XX% of their GDP and health care still sucks’
The reason for our high costs are obviously multifaceted…

  • We have the newest technologies, newest procedures, newest pharmaceuticals.. All of this costs money. If I was deathly ill, I definitely want to be in the US with all of its resources at its disposal to cure my illness, over any other country.
  • We subsidize the rest of the world’s health care. The cost of most new technologies are not regulated in the US (ie: manufacturers can charge whatever they want) while prices are heavily regulated by all other nations (ie: thats why drug prices are so much cheaper in socialized systems than in the US), otherwise these nationalized systems would be bankrupt. (likewise, allowing competitive pricing in other countries would likely drive down the prices in the US)
  • Preventative health care is not a priority in the US: Since there are so many insurance companies out there (all focusing on the bottom line) there is no guarantee that the expenditures they lay out today (for a disease you do not have and may not get), would benefit them in the future, since you can always go to another insurance company thus negating their investment in your health. Their solution? Reduce emphasis on ‘low return’ preventative health care, and try to ‘manage risks’ (ie: minimize sick patients on their rosters.. even to the point of canceling policies in the middle of expensive chemotherapy as elucidated by Health Net recently)

Yet for all of our costs, our health doesn’t seem to be any better..

  • Our health isn’t a failure of our health care system, it is a failure of priority and accountability. With a cultural priority on wealth accumulation, work, and leisure time becomes a valuable commodity. Increase in middle class and disposable income means more money to spend on dining out and convenience foods. A cultural focus on higher education is migrating our workforce to a more sedentary service oriented economy. Health care is a means for us to enjoy those steak dinners and burgers yet maintain a ripe old age. (ie: 1 surgery to make up for 30 years of culinary indiscretion, hit me)
  • Our infant mortality rate sucks (#17 according to Michael Moore’s Sicko) Two key reasons that come to mind: the definition of ‘infant’ is different. In the US, infant mortality counts an infant exhibiting any signs of life, regardless of gestational age or size. (ie: high risk, premature babies <28 weeks or less than 1000gr would not be counted as infants in some countries). Additionally, the technology allows us to birth high risk babies that would likely not be carried to term elsewhere. Basically this is a numbers game.. the question is, if you were going to have a high risk baby, what country would you want to be in?
  • Lies, damn lies, and statistics: Statistics can be massaged to support any statement. Lets look at objective statistics.. for exampling by match risk factors (ie: obesity) with outcomes by country.. (I’m not suggesting that US would come out on top)

Solution:

  • Use our political and economic leverage to allow less restricted pricing by socialized nations This will obviously face substantial resistance. Arguably, we are suggesting to raise the health care costs of other nations so that we won’t have to pay as much (although rightfully, we have been subsidizing R&D for the rest of the world)… probably not the most popular proposal.
  • Increase the accountability of health to the individual: With the exception of genetics, your health is your decision. Your decisions can influence your health in 50 years. Each cigarette you smoke increases your risk for emphysema, lung cancer, coronary artery disease, etc.. why should your decision affect my financial wellbeing (in terms of higher insurance premiums.. to take care of your sick ass in 30 years). Each bag of fries, canister of pringles, slab of filet mignon, and can of soda will increase your chance of obesity, diabetes, hyperlipidemia. How can we influence peoples decisions and make them financially accountable for their decisions? Consumption tax… or Fat and Sugar tax if you will. Taxes collected can be used to subsidize healthcare costs as well as fresh fruits and vegetables (not necessarily to pay for farm subsidies though).
  • Prohibit health insurance companies from being for profit entities: There is an inherent conflict of interest in making money in the insurance industry. While the industry argues that it increases competition and reduces costs to the consumers, all it does is reduce corporate accountability. Ideally insurance works by pooling risk, in a profit motivated world insurance works by reducing costs. By becoming mutual companies where profits are distributed to the policy holders, there is a form of checks and balance.. money saved goes back to people who payed the premiums, and any policy changes that might reduce benefits affects only policy holders.
    • Shift the responsibility of verifying information accuracy on applications to the insurance companies: In response to the Health Net fiasco, insurance companies shall be prevented from changing coverage once they begin accepting premiums. Insurance companies argue that this will foster fraud (ie: people will underreport existing conditions).. I’m not sure why no one has thought of this before, but rather than sitting back and collecting premiums, insurance companies should be responsible for doing due diligence on the health of a prospective client BEFORE they begin accepting premiums rather than while they are undergoing expensive and lifesaving therapy. (I would classify this responsibility as ‘risk management’) This is not as much of a hardship on insurance companies as you would think, insurance companies can protect themselves by easily sharing patient information with each other to verify the accuracy of applications.


Thats all I have for now. I reserve the right to continuing updating this entry for additional points, accuracy, and hopefully citations. I welcome your thoughts to fixing the system.

digg story

Further evidence that Health Insurance companies should not be private, for profit entities November 12, 2007

Posted by The Armchair Economist in Business, Ethics, Health Care, Medicine.
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Woodland Hills-based Health Net Inc. avoided paying $35.5 million in medical expenses by rescinding about 1,600 policies between 2000 and 2006. During that period, it paid its senior analyst in charge of cancellations more than $20,000 in bonuses based in part on her meeting or exceeding annual targets for revoking policies, documents disclosed Thursday showed.

The simple view is that corporations exist to make money for their shareholders (ie: their fiduciary duty), insurance companies make money by paying out less money than they collect in premiums, thus it would make sense that companies would try to reduce their risk by eliminating clients that need paying out… which is contrary to the whole idea of insurance. All the more galling is that these companies can collect premiums for years, but when they are called to pay out claims (ie: their customer gets sick), only then do they do a careful review of the customers application to see if the customer is ‘eligible for care’ (shouldnt this be something they figured out before they started collecting premiums?).

The question is how can we fix this conflict of interest? Perhaps requiring insurance companies to be mutual companies rather than for profit entities, so that all balances (if there are any) at the end of the year are returned to policy holders (ie: there is no ‘for profit’ motive, and money are returned to the people who paid out the premiums in the first place). Another idea might be to place the burden of ensuring accuracy of medical information on application the insurance companies responsibility, thus once they accept premiums from a customer, they are on the hook for their care as long as the patient continues to pay their premium (ie: they cannot walk away from a contract). Additionally, even IF the patient neglected to mention a preexisting condition, claim payout denials should only be restricted to those relating to the omitted condition (ie: the article discusses a woman whose insurance company who denied coverage for breast cancer surgery and chemotherapy claiming she omitted having a heart condition). Or perhaps, we can do without health insurance companies all together, or have one quasi-governmental, non profit insuring agency.. having all policies under one roof would aid in information sharing (ie: no need to verify ‘preexisting conditions’), reduce overhead (ie: $$ spent on marketing), and likely improve medical care (easy access by medical professionals to the patients past medical care).

Any thoughts on whether these solutions would work? How other solutions to this problem?

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