• Ten (or more) ways to improve health system efficiency

    The Commonwealth Fund offers ten ways to improve the health system. The Institute of Medicine (PDF) offers its set of ten. My list of directions for reform that deserve more consideration and debate do not completely overlap:

    • Health savings accounts circumscribed according to value-based design
    • Removing preferential tax treatment of health insurance
    • Competitive bidding
    • Shared decision making
    • Death panels (no, not really, more like bodies that synthesize studies for evidence-based care)
    • Reference pricing
    • Value-based contracting
    • Administrative simplification
    • Legal safe harbor for providers and insurers that base decisions on evidence
    • Longer-term (> 1 year) insurance contracts
    • Price transparency

    One correspondent suggested:

    • More risk-rating and larger subsidies for those who can’t afford their premium
    • Med mal reform to reduce claims frequency
    • Kill the GME program

    There’s a whole lot that could be done in the area of pharmaceuticals and devices. There’s stuff that could be done in the areas of antitrust and medical practice ownership. What else? You may have other ideas. Put them in the comments.

    Though I do like some of the above very much, I am not endorsing or promoting any of them in this post. (I have in others.) I will say only that most or all of them are far more interesting approaches than what we normally see coming out of Congress.



    • reduce the amount of money allowed to be siphoned off ti bill payers

      adopt a more efficient pharma business model…too heavily subsidized by government

      improve patient outcomes

      improve treatment processes

    • Can someone link to the rationale behind killing the GME model (as Austin mentions above)?

      I agree but would like to see the underlying evidence.

    • I will tell you this from personal experience and reading : most med. mal claims are made against the same docs. as a lawyer, when our office went after docs we inevitably found that this was not their first rodeo. The ‘bad’ doctor monitoring in most states is horrific. And the coordination between states is just as horrific. An example from our office: a doc we made a claim against in Mass. (Side Note: In Mass., med mal claims must pass a tribunal to go to court; our case easily did) for failing to order a simple tap from an installed shunt to relieve brain pressure; child died a terrible death at age 6; we found out later left MA and went to practice in PA and PA had no knowledge of his troubles until we told them. Our claim was the 5th against him in MA.

      That is inexcusable.

      Also, as far as insurance companies go, the following quote from the insurance co. is fairly representative: we will offer 160k because a 6 yr. old Hispanic kid’s death in Mass. only has that value. I am still sickened by that quote twenty years later.

      The legal profession often has the same problems regarding bad lawyers continuing to practice. Better professional monitoring would help reduce malpractice claims in both fields. But every study I have read claims mal prac claims add at best 1-2 percent to insurance costs. I would think with proper action that can be reduced quite a bit.

    • Just from an implementation point of view, most of this list really frightens me. What are the odds that a democratic legislative process would enact, regulators implement, and everybody else respond as intended, and what are the odds that any democracy would make the necessary changes, or even notice feedback? Really intricate policies based on manipulating incentives, as favored by many economists, have a way of predictably turning into disaster, e.g. the limited effects of reference pricing, or the textbook case of what happened when economists’ idea of energy trading was enacted in California and the UK, as modified by lobbyists.

    • I hope I am not completely discrediting the above list by noting that it looks virtually identical to my own wishlist…

    • I find the 2001 Health Affairs article to be consistent with a general blindness toward resident and even medical student value by both the lay public and current physicians.

      Prior to the 2003 work hour restrictions, medical students and residents performed upwards of 50-70 hours a work a week unrelated to education, outside their function, and/or not involving patient care. This clerical or ancillary work, being uncompensated on an hourly basis, saved the hospital from hiring other staff to perform the duties.

      In many cases the teaching hospital could not afford to hire appropriate levels of staffing, and thus without this “free labor”, patients would be harmed, and thus the system relies on the moral character of the medical student or physician trainee to get whatever is necessary done. To say this is not economic value is deceptive.

      After work hour restrictions went into effect, while still only requiring a resident to AVERAGE 80 hours of work per week, hospitals needed to cover services with supplemental providers such as mid-level nurses, nurse practitioners, or physician’s assistants. Free student or resident labor for ancillary duties and clerical work is less available, and thus work needs to be passed to existing employees who are paid for their time, or the work does not get done.

      Residents have no collective bargaining, the system is based on a match not a market, and the historical hazing and “right of passage” treatment by older (well-paid) physicians, all contribute to residents not having much of a voice or power to change these circumstances.

      The implicit value of a resident, as opposed to say a physician’s assistant, to the attending physician is also unrecognized. Whereas a surgeon can bill additionally for a physician’s assistant time, and thus provide a profit center to the physician, billing for resident time is not allowed. The proposition that economic value and compensation can be attributed to a worker with less education and experience, shows that either much of the 8-10 years of college, medical school, and early residency is useless and should be changed, or that the system is designed to exploit the hope and idealism of residents. Don’t ask the system to change now and you will be rewarded in the future. It is hard for me to believe that even a 2nd year surgery resident ( having hundreds of hours more experience than a PA working 40 hours a week) has less economic value.

      Please do not take this as non physicians do not have value, however the current system perpetuates that residents (not matter what their level of training) have only a modicum of value. Examples are many, but include the multiplied labor value of Nurse Anesthetists ( minimal training) compared with anesthesia residents, and the above mentioned treatment of PA surgical assistants. Both of these happen to have dramatic effects on maintaining or growing older physician salaries. Of course, the PA and CRNA organizations may have a problem with me saying this, but then that is their job. Promoting the interests of their members.

      Increased debt burden compared with prior generations of physicians and managing a much sicker hospital population compounds negative feelings not necessarily toward patients (although more and more become jaded), but toward the system.

      When economic wonks ( not you, I find your blog interesting) decide that residents lack economic value without addressing serious issues with the medical education and GME system, but instead regurgitate studies performed in the 1970s and 80s, it is disheartening.

      In the end, residents do it because there are limited other options en masse. The residency anti-trust lawsuit of 2004 was dismissed not because of an airing of grievances and losing in open court, but because of a last minute back-door exemption of anti-trust law pushed by the hospital and insurance industries because it is clear that residents save the system money through uncompensated labor.

      In no other field besides medicine would laboring 50-70 hours over and above an “educational” value be tolerated. It is resident hope of joining the 1-5%, the debt overhang, and duty to patient care that motivates residents to continue. I’m not even stating that duty to patient care is number one. And in part it is a history of unquestioned hierarchy, older physician’s (un)enlightened self interest and relative financial comfort that allows such a system to continue to exist.

      Reform medical training, but we should be honest about the contribution of residents.