• The devil is in the details

    Austin and I have been up and back this morning on the odd ways people have misinterpreted this post.  Avik Roy weighs in by talking about the fact that while health care is different from other markets, in that it does involve life-or-death decisions, that those aren’t as common as we think:

    It turns out that the true range of life or death decisions in health care is rather narrow. If a poor woman gets hit by a bus and is sent to the ER, we all agree that America should come together and pay for that woman’s care: and, in fact, we do pay for it. If a physician makes a mistake, causing a patient to die or suffer disability, we have malpractice litigation for that—i.e., this is a problem upon which government-subsidized health care has no impact.

    It would benefit those who believe that health care is incompatible with the free market to refine their arguments. A stronger liberal argument for socialized medicine would be: let’s let the free market reign in those areas of health care that are most like the rest of the market economy (i.e., non-catastrophic and elective care), and instead focus on socializing the aspects of the system that are most unlike the rest of the economy (i.e., catastrophic care).

    I don’t disagree on his initial point – as a pediatrician I rarely have to deal with life-or-death decisions with my patients.  I do, however, need to deal with significant quality-of-life issues.  All the time.

    When Avik calls for a stronger liberal argument, he’s ignoring the fact that many have been making it for a while.  I, for instance, have no problem with using the free market for some things.  I said this just two weeks ago:

    I come down somewhere in the middle.  I’d say that for the stuff we agree everyone should get, that comprises the base set of quality health care, you ignore the moral hazard.  We want people to get that, and we should make it as easy as possible.  But for stuff that is unnecessary – and there is a lot of it – we let people get additional insurance to cover that.  Or we cost-share that.  Or we make them pay for it themselves.

    I don’t think, for instance, that insurance should pay for elective plastic surgery.  I don’t think it should pay for Lasik.  I don’t think it should pay for more expensive drugs when equally efficacious generics are available.  I don’t think it should pay for full body CAT scans or unnecessary screening tests.  I don’t think it has to pay for single rooms or fancy food or satellite TV.

    All of those things – cost share away.  Free the markets.

    But for things which do work and yet still are not life-or-death decisions, like asthma medications, diabetes check-ups, appropriately recommended colonoscopies and mammograms, and so on, I think that we should avoid the free market.  We want people to get that stuff, even need them to.  And even small increases in cost-sharing have been shown to dissuade them from it, resulting in bad outcomes and sometimes increased cost.

    Avik and I don’t disagree in principle, we disagree on the details.  And I think if Avik looked closely, he would see that many people arguing the more “liberal” side have been making strong arguments in this fashion for some time.

    • Dr. Carroll:

      I am fortunate enough at my age to only need one maintenance drug: Lipitor. Its one of those still-patented drugs that costs me and my company/insurance carrier a lot more than generic substitutes.

      I probably should try one of the generics. But I am hesitant to only because Lipitor is working quite well for me (and at the 10mg level, at that). I do agree with you that if: “… equally efficacious generics are available…” my insurance company shouldn’t help me with this one. Obviously, the “devil in the details” is whether the generics are equally efficacious for me.

      My son is an R2 resident working Internal Medicine in Oregon. When he works with VA patients he is “required” to try the most cost-effective treatments first. Fortunately, as he tells me (and here I go generalizing again) most of the most cost-effective treatments actually have the highest probability of returning better outcomes! Wow. That sounds like hippie talk to me….

      So, the question: Is the VA’s (seemingly sound) policy something the average doc employs, as well? 15 years ago, when my GP asked me to try Lipitor I’m guessing there weren’t any good generics available, the the point there is probably moot. But nowadays, with plenty of good generics, are Docs more inclined to try the cheapest stuff first, before prescribing more expensive, patented drugs?

      This obviously depends on how quick the patient needs to see some results… but for the more general case, what’s the norm?


    • Dale,

      You are full of excellent questions.

      Unfortunately, what your son is seeing at the VA is not what is going on in most of the world country. We don’t think in terms of cost-effectiveness enough. I’d push in that way, but that’s probably why I’ll never be elected.

      The reason that we don’t often know if the drugs are equally efficacious because they are rarely studied head to head. That’s what comparative effectiveness research is about. Remember how hard people fought against that?

      As to your specific question, I think Lipitor goes off patent in 2011. I imagine generics will become available quickly, and you’ll be able to keep on taking the same drug for a much cheaper price.

    • Dale- In my field, anesthesiology, there is generally no such policy, but many groups are trending towards some sort of cost conscious behavior. My group has eliminated a number of drugs that cost more, but we did not think worked any better. Sometimes, it is difficult to make the right economic decision. We purchased an ultrasound machine a while back to help with certain nerve blocks. We get much better results, less pain for our patients and fewer complications. The problem is that the machine can also be used to do blocks where it does not add much benefit, but you still get the extra fee when you use it. The incentive exists to use it all of the time.

      At present, our cost conscious behavior is just driven by a few in our group. I have no idea if they would maintain that if we retired.