• The realities of health care reform

    When I was in medical school, we had a class on health economics taught by William Kissick. I didn’t pay as close attention as I should have (especially given what I do now). But I remember one thing he stressed. It involved the iron triangle of health care.

    There are three aspects of health care systems that are essential: quality, cost, and access (thus the triangle). The problem is that they are in competition with each other (that’s the iron part). I can make the health care system cheaper, but that will inevitably require limiting access in some way or letting quality suffer. I increase the quality of the health care system, but that will be expensive or, again, require limiting access to it. And I can increase access to the health care system, but that will cost money, or result in some hit to quality.

    Make no mistake about it. The PPACA is about access. It is about getting more people into the health care system. And it does obey the iron triangle. Regardless of the rhetoric you’ve heard, it does cost a lot of money: $938 billion over a decade, to be exact. Yes, there are new taxes and spending cuts to cover those costs, but they do exist. No one covered millions more people for free.

    I teach a class to first year medical students now on health policy and economics. When I talk about this, I always say that anyone who promises you that they can make the health care system cover more people, save money, and maintain or increase quality is lying or a politician.

    I bring this up because as the Republicans in Congress start to bring together alternative health care plans, a way to gauge their seriousness is by how much they ignore the iron triangle. If they want to cut costs, that’s fine, but if they propose to do it without decreasing access or decreasing quality? Forget it. The way many other systems cost less than ours is to make sacrifices.  Some may not view the changes as sacrifices (see single-payer supporters), but believe me, others do.

    Alternative plans can point to tort reform, or waste and abuse, but these are more complicated than you think and nowhere near the cost savings that are needed.

    Say what you will about the PPACA, but the fact that it had to be written and scored forced it to be real.  The goal was to cover more of the uninsured.  To do so will require upwards of a trillion dollars over the next 10 years.  I think there were more efficient ways to do it, but I still think it’s worth the cost.

    I tell my students that the health care systems of France, the UK, Canada, and others are not an accident.  Those are democratic societies; the people chose those systems over time.  We may not like some of what they have, including less technology, more restrictions, less access to new drugs, more government regulation, wait times for certain things, gatekeepers, etc.  But those are the ways in which other systems save money and cover everyone.  Those were hard choices, and others make them all the time.

    If alternative plans are to be offered, they will need to go through the same rigor of the PPACA. Put it on paper, in detail, and say out loud what you hope to gain and what you are willing to sacrifice. Most of us would welcome a debate on those decisions.

    No handwaving.  No promises of magic solutions that somehow save money, increase coverage, and improve quality.  If you do that, you’re lying or a politician.  Or both.

    Share
    Comments closed
     
    • Aaron, I don’t think your Iron Triangle has to hold for the United States. Other industrial countries have health care systems that are at least as effective as ours, if not arguably more so, have universal access, and cost much less than ours.

      Making a workable health care system with high quality, universal access, and much lower costs than ours is a solved problem, one that every country except ours has been able to manage. I think Taiwan put their’s together in six months. The problems with our system are political and structural. There is so much waste in the current system that it ought to be possible to move towards what ever other peer country has and increase coverage, cut costs and not sacrifice quality.

    • David Graff,

      It depends on how you define quality. If you define it as little regulation, access to unneeded technology, low specialist wait time, and little in the way of gatekeeping, then those other countries do suffer in quality.

      I suspect that you, like me, don’t define quality that way. And so, we could adopt a single-payer system with little reduction in (our definition of) quality. Not everyone agrees. One man’s waste is another’s quality.

      That said, I agree (and have said many times) that the fact that our system costs so much, has crappy access, and middling to poor quality is evidence of its irrationality. We could scrap it and start over. But if we’re not going to, and only willing to make incremental changes, the iron triangle holds.

    • So how do you define quality?

    • I don’t see why costs can’t in principle be reduced with incremental change, why it should be necessary to scrap everything and start over? Isn’t that the point of the cost cuts to Medicare at the heart of the ACA? The more fracked up our system is now relative to a wide range of known solutions, the easier it should be to find small changes that improve things somewhat.

      The problem I have with the whole health care debate (from my inexpert opinion) is the whole emphasis on experimentation and pilot programs designed to lower health care costs, as if no one actually knew how to do so. Its like setting up a massive program research program to figure out how to make the perfect Baguette without bothering to ask any Parisian bakers. Shouldn’t we instead be focussing on the ways that every other country has already successfully used for decades to do so? (BTW, the incedental economist has been a leader in this discussion, which is why I love your blog. I just found this post to be uncharacteristically pessimistic) I submit that other western countries will have to wrestle with the Iron Triangle, they don’t have the obvious models that we do.

      Again, by easier, I speak of the ease of identifying those changes, not implementing them. I recognize that the more fracked up things are now, the more people have been benefiting from the current system and the harder they will resist these changes.

      Perhaps the solution is to define not the iron triangle but the plastic tetrahedron. The FOUR arms should be cost, access, real quality, and waste/illusary quality. The plastic tetrahedron has the iron triangle at its base, but the focus of health care reform should not be changing the shape of this triangle, but flattening the tetrahedron into the triangle. Be bold and willing to say that there is waste out there! Its kind of a joke that politicians will say that they can make savings by reducing waste fraud and abuse without having to make hard choices, but you know as well as anyone, and have done as much as anyone to publicize how many hundreds of billions of dollars of waste, fraud, and abuse there are in health care!

      Otherwise, you essentially make the anti HCR argument. Why are people who have health insurance against HCR? Because they believe that the only way to help the uninsured is by reducing their own benefits.

      ps, I’m not expert here, but aren’t there standard measures of quality like quality adjusted life years? My favorites (because they have been highlighted at Gapminder) are life expectancy and child mortality. In my field of medical imaging, there are standard measures of quality, which basically measure how often the radiologists make the correct call when reading an image. These measures are more or less well defined though can be difficult to asses, not least because of the tremendous resistance to actually making these measurements by the incumbent radiologists and equipment manufacturers.

    • How do I define quality? I’d start with my ten part series on the topic. Here’s the starting point:

      http://theincidentaleconomist.com/wordpress/how-do-we-rate-the-quality-of-the-us-health-care-system-introduction/

    • Wow! (Suddenly I’m a believer in ESP. Almost everything I was going to say has already been written. Except…)

      I don’t know who really said it, but I think it’s a truism that “while everyone is entitled to their own opinion they are not entitled to their own facts.” I think both of your multi-part comparison articles are compelling arguments that you really can “make the health care system cover more people, save money, and maintain or increase quality.”

      Some might be of the opinion that the above are not improvements while “access to unneeded technology,” for example, is,but that doesn’t make it so, any more than me claiming the earth is flat. (And by flat I mean an oblique spheroid.) I think the vast majority of people, who don’t have a vested interest or idealogical fanaticism, would agree.

    • I agree that we could if we were willing to really scrap things and start over. I also agree that we could do so and still leave what _I_ think is a high quality system.

      But there are many, many people in America who define quality by process and not by outcome. Who value speed instead of effectiveness. Who value new instead of good. And those people would see changes that _I_ would tolerate as a decrease in quality.

      Perhaps if we got the rest of the world to agree with us, then we could not lose quality. But that’s unlikely. Or maybe I’ve gotten too cynical.

    • Dr. Carroll,

      I enjoy your blog.

      Question: if PPACA was about access, then why not pay for the $30 billion to $50 Billion to cover these uncompensated costs?

      As well, didnt only 8,000 people sign up for the HDHP exchanges? As well, these programs are already burning through money faster than expected.

      To me, being conservative, it makes more sense to start off with directly solving the problem through the simplest path. PPACA does not do that. It expands the government dramatically. It creates more complexity. The seems like befuddled CMS Medicare equations all over again.

      I have a problem with PPACA because it seems that it builds a huge suspension bridge to get over a small river of lack of coverage (if that is the main purpose of PPACA)