• Status quo bias

    From What We Talk about When We Talk about Health Care Costs, by Peter J. Neumann:

    The problem is that no one in charge seems willing to acknowledge that getting a handle on cost growth will also involve uncomfortable trade-offs. We cannot as a society provide patients with unlimited access and unlimited choice. Providing better-quality care, though it is vital, won’t change that reality.

    The language of the Affordable Care Act highlights the dilemma. The law states, for example, that the newly created Independent Payment Advisory Board, established to recommend spending reductions for Medicare, cannot change benefits, shift costs to patients, or ration care. The law created a Patient-Centered Outcomes Research Institute (PCORI) to conduct comparative-effectiveness research but specifies that the secretary of health and human services cannot use it as the sole basis for denying coverage for items or services. The Affordable Care Act forbids the PCORI and the Department of Health and Human Services from using cost-effectiveness thresholds. […]

    However, changing the conversation to emphasize patients and stakeholders also has unhelpful consequences that few are willing to acknowledge. Focusing on patients’ own preferences to the exclusion of considerations of societal resources will only compound our cost problems. Engaging stakeholders is undoubtedly important, but one person’s stakeholder is another person’s interest group. Moreover, the only stakeholders seemingly not at the table are future taxpayers (our children and grandchildren).

    One way our discomfort with the dilemmas manifests itself is that we find sufficient fault with every possible approach to addressing them so we’re paralyzed. This status quo bias is tantamount to asserting that what we have is the best we can do. We all know that’s false. Would  it really be so bad to try something new, as bad as the critics claim? Is that plausible?

    * I am sometimes viewed as a critic, even when I’m actually not.


    • Well said. I seems to me that patients are the last group in the healthcare system to avoid rationing. It will be painful to them (us) when they (we) ultimately won’t have carte blanche access to the healthcare dollar.

      Your inclusion of future generations as stakeholders in this system is brilliant yet very depressing. I suspect they will shake their head and wonder what the heck we were thinking!

    • I find it interesting that we Americans seem have a bias toward “not deciding” on tough and contentious issues. Of course, as you point out, not deciding to change anything is a decision in favor of the status quo. I’ve seen similar things in natural resource questions around forest and watershed management for instance. I speculate that part of it may devolve to our mental bias of fear of loss (as seen in stock investor behavior). All stakeholders are more afraid of losing their current benefits than they desire the possibly increased benefits resulting from change. And, of course, as in much public policy the benefits are large in aggregate but small for any one person while the costs are concentrated on a fewer number of people who have lots of incentive to lobby about it.

      I agree that we just need to start trying something…it’s hard to see that any of the plausible options are really much worse than what we have and they might be better.


    • The madness will stop when China stops handing out the IOU’s and demands payment.

      Too bad our politicians are too weak kneed to step forward now.

    • Peter states:
      “The problem is that no one in charge seems willing to acknowledge that getting a handle on cost growth will also involve uncomfortable trade-offs. We cannot as a society provide patients with unlimited access and unlimited choice.”

      Peter is right about the uncomfortable trade-offs but they are not the ones he mentions. Most other developed countries provide their citizens unlimited access and unlimited choice and they do it at a cost of half what we spend in the US. Patients in the US already suffer from severe rationing due to insurance company policies (or lack of insurance altogether).
      The “uncomfortable trade-offs” that we need to make involve our overpriced inefficient health care system. The entire medical industry has had a free hand to raise prices without restraint and promote inefficient, wasteful (and even dangerous) procedures. Why does a MRI scan cost $3000 in the US but only $300 in France? Why do we buy so many useless expensive tests and procedures. It is not because of patient “choice”. It is driven by the medical industry. Doctors, hospitals, drug and device makers all make money from unnecessary tests and procedures.
      The “uncomfortable trade-offs” we need to make involve reducing the excessive costs of the system and this means less money for doctors, hospitals, insurance companies and the rest of the medical industry. This will be uncomfortable for the medical industry but patients will benefit.

    • As you have written, any solution to our health care costs must be politically viable. Large changes are too easy to demagogue. Unless some crisis precipitates the need for a sudden change, it seems most likely we will continue on our incremental way. The downside is that each increment can be repealed, and there is no way to keep on the path.


    • I’m actually of the opinion that we have plenty of EASY decisions to make before we have to face any hard ones.

      We overpay physicians, hospitals, pharmaceutical companies, and medical device companies. We overpay for imaging, invasive procedures with no proven benefit, and pharmaceuticals. These are in some sense easy to cut, from a health policy perspective.

      Our choices are only difficult politically. And the “tough choices” canard is most often used by right-leaning politicians who want to make cuts to government sponsored healthcare for ideological reasons.

    • If “we overpay physicians”, then what is appropriate pay for physicians?

      • Less.

        I actually said that we are overcharged by physicians (and the rest) and some of the “work” is useless or dangerous to patients. A lot of the overcharging comes from procedures which are priced much higher than could be justified by time or training. (i.e. 15 minute cataract surgery $ 4000 per eye or 30 minute cardiac cath $ 3000 ) Cognitive services are priced lower. However, I just had an annual physical which consisted of a 20 minute visit with cursory exam (I have no medical problems) where the physician charged $526 so something seems wrong there.

        What is appropriate pay for physicians? I don’t know. Is $175,000 (most cognitive providers) enough to live comfortably? Or do you need $500,000 (most procedure based specialties)? Half of all physicians think they should be paid more.

        • Physicians get paid so much and also think they should be paid more because the general public regards them so highly among other things. When everyone realizes they are just humans, most with above average intelligence and abilities who also make mistakes sometimes, then they can get off their high horses and not be so revered.