• You could die

    I meant to come back to this earlier in the week but I got busy. Anyway, a few days ago I wrote about how health care is different than other products and services because it involves death. Make the wrong decision about your health care and, yes, you could die.

    Avik Roy made a good point that death isn’t involved in all that many health care decisions. Sure. It is involved in the disproportionately high cost ones though. But there’s more.

    Death is just the outcome we most fear. In certain situations, its immediacy and the incapacity that precedes it puts us at the mercy of physicians. Whatever the doc says while you’re in the ICU you’ll likely have done to you. Who knows how crucial it is? You’re in no position, nor are your loved ones, to do much comparison shopping.

    But you’re at an extreme information disadvantage even when death isn’t immediate but you fear the possibility of a poor health outcome anyway. I recall taking each of my two daughters to the ER, one for dehydration from the flu, the other for respiratory issues we could not handle at home. In each case I consented to whatever the doctors recommended. It didn’t matter whether they were in immediate danger of dying. I did fear it, at least implicitly. But mostly I wanted my children to be more comfortable NOW. The doctors told me what they were suggesting would help. I trusted them. What else could I do?

    I was faced with the same type of decision for myself this year. I had a strange symptom (no, I’m not divulging details) that could mean something serious or benign. Wanting to be efficient with my time and money (copays are not trivial), I did some internet research and asked a few doctor friends about it. I was told to see a specialist. So I did. Tests were ordered, including CT scans. I was advised that we should rule out all the possibilities, one by one. Who was I to argue? The whole process was inconvenient and expensive. In the end it came to nothing. Along the way I was not in immediate fear of my life, but I was concerned about my health. I went to the doctor for a reason. He’s the expert. I did what he recommended. Wouldn’t you?

    If I had had to pay more for the care out of pocket that would have made the experience more financially painful, but I’d likely have made the same decisions. They’d just have cost me more. Sure, at some dollar value I’d forgo care. But then I’d be risking the bad outcomes I feared. This is the heart of the problem, isn’t it?

    “steve2” (a frequent commenter of posts on this blog) wrote about our trust in physicians at the blog Alexandria,

    When discussing medical care, many claim that it is no different than any other economic transaction. There is emotion involved when you buy a car they point out. You need to trust your lawyer. You can always, you should always, go shopping for the best results and best prices somewhere else. While these are generally true statements, I submit that medicine is different. From my ground-up view as a physician, parent, husband, consumer, friend and patient, it looks and feels much different. When I told that young wife that her husband might be paralyzed, she did not look like the spouses at the car dealer making a purchase. The immediacy and emotion of the young mother [over her ill child] did not seem like that when I go to see my lawyer, or when others see theirs. The elderly wife’s concerns [about her injured husband], that might seem trivial in some ways, misguided in others, represent what I actually see family and patients go through when making their health care decisions.

    I don’t think it is wise to dismiss this notion or minimize it. When we’re in fear of bad health outcomes it is very hard to resist expert advice. We cannot easily distinguish whether that advice is worth the cost. Should the patient have to choose between health risk and financial risk? It doesn’t seem right. Where do we draw the line?

    Health care may be similar in some respects to other goods and services. Yet, it is different and always will be, no matter how “consumer directed” we try to make it.

    • Having experienced consumer-directed health plans both as a patient, concerned spouse and health insurance company manager, I would agree that health care is different from other economic transactions, but I still see great value in these plans. Simply the statement from patient to doctor that “I have one of those high-deductible plans where I pay the first $3,000 out-of-pocket”, helps change the dynamics by the introduction of personal responsibility over “don’t worry, your insurance will pay for it”. Especially in diagnostic testing, in my experience the place of more wasted costs than anywhere else in medicine, this can make a big difference in getting to the same clnical result at dramatically lower cost. What should we try first? Which provider of the service has the best price? Simply interjecting that into the conversation, which hardly ever happens elsewhere in US medicine, is a good step forward.

    • Ken- We docs have incentive to offer you the care that earns us the most money. Do people consciously do this? Some do. Most just dont think about it. Some are actively cost conscientious. One problem is that those who seek to maximize income are the ones who become the entrepreneurs and end up running things.

      Most docs are not very good businessmen. Most just want to practice medicine. They are often content to let someone else run things as long as the money keeps coming in. Some groups are very cost aware, but it is a hit and miss thing. What you suggest would be a major cultural change. It would also be a difficult discussion to have within the emotional context of a major diagnosis.


    • As a family physician I see multiple things that can help address the ever increasing costs of medicine in the U.S, one of which is certainly putting some responsibility onto patients for diagnostic tests. As long as there is the “don’t worry your insurance will cover it” attitude, we aren’t going to control costs.

      I think that the most important changes need to come from physicians themselves. I try to be as cost aware as I can while trying to do what is in the patient’s best interest, both from a health standpoint and a financial one. The health professions have done some of this themselves by doing just what Steve alludes to, ordering tests at least partially because it allows you to code a higher level visit. I do my best to avoid that, somewhat to my detriment financially. In our small town, though, I think it has earned me the reputation of being the guy to go to for those without insurance or with high deductibles. I order only those tests I feel are necessary in any given scenario.

      A good physician that establishes good repoire with his/her patients can usually convince a patient that “wants everything checked” to get only those tests that make sense in any situation. There has to be “rationing of care” eventually because what is happening now is unsustainable. However, physicians and patients need to be the ones making those rationing decisions, not a bureaucrat in D.C.

    • Eric- I agree that docs can make a big difference. However, if you believe that incentives matter, one of the key factors in market economics, how do you remove those incentives on an institutional level? This does involve more than individual docs too. The decision of a hospital to concentrate on more expensive, but higher revenue generating prostate cancer treatments would be a good example.

      Just as a thought experiment, suppose you had an evil twin. How difficult would it be for him to increase his earnings while staying within the generally accepted norms of an ethical practice?


    • Steve – Maybe it sounds hokey, but my driving incentive is to do what is best for my patients…it let’s me sleep well at night. I like to make a good living while doing it, if I wasn’t paid well for what I do, then I would likely quit caring as much. If I really wanted to boost my income significantly, I’d probably have to quit medicine because there is only so much you can do to boost income, primarily see more patients more efficiently.

      Part of the problem with the current system is that it incentivizes ordering more stuff rather than thinking through problems. We need to incentivize practicing good, cost effective medicine. We also need tort reform.

      As for the question with hospitals, if there is a new prostate cancer treatment that is more expensive but more effective, then by all means pursue that. If it isn’t any more effective than the older, cheaper alternatives, then it would be unethical to pursue that, in my opinion.

    • The discussion of late has been focused on how health care is different from other economic situations (presumably as a justification for the government to get involved instead of having a market outcome). Despite Arrow’s article focusing on the differences of health care, I don’t think this is the appropriate question when we’re interested in where we should leave outcomes to markets. The appropriate question is whether leaving a certain aspect of health care (or other industries) to the market leads to efficient outcomes. Though a doctor in certain respects is like an auto mechanic – both have more information about the problem than you, that doesn’t mean that the market outcome is necessarily the best. The economic literature on principle-agent relationships and contract theory shows numerous situations where relationships with “experts” lead to inefficient solutions (1). Most people can think of the inefficiency with having a good mechanic. As individuals we really can’t tell if a mechanic is taking us for a ride, especially without spending a lot of money. And despite leaving auto repair to the market, there are plenty of bad or crooked mechanics out there(2).

      (1) I don’t have a lit review in front of me, but can provide a review article or a syllabus on demand.
      (2) This is based on my personal experience. No offense to mechanics out there.

    • GrandArch – Comparing physicians to mechanics isn’t a bad analogy. However, no offense to mechanics here, I would hope there are less crooked, shady doctors than there are crooked, shady mechanics. Going through at least 7 years of postgraduate training tends to weed out a fair number of the slimeballs who decided to do something easier.

      I would also argue that the market IS at play weeding out both bad doctors and bad mechanics. They may still be in business, but they most likely aren’t very busy as word of mouth is a powerful tool in both auto repair and medicine.

    • Eric –

      You bring up a good point – the fraudsters and slimeballs are probably weeded out by educational requirements and other measures. My greater concern, however, is that there are differences in outcomes and differences in cost effectiveness that are difficult for patients to measure, creating inefficiencies in our market-based models. And while consumer publications (e.g. Angie’s list) love talking about word of mouth, I’m not sure it really makes sense in the situation of an outside expert treating idiosyncratic problems. For example, I’ve used a mechanic I’m vaguely satisfied with for years. Each time something goes wrong with my car, it’s pretty idiosyncratic – it’s different from previous times. If my mechanic eventually fixes it, I don’t know how much time he really needed to fix it or if he really needed to change those parts. When I’ve switched to other guys, they charge more or less, but they’re treating different problems.

      Similarly, my illnesses are pretty idiosyncratic – they’re specific to me and they’re generally unrelated to other instances I’ve been sick.(*) I can’t compare what one doctor does to successfully treat one disease versus what another doctor does to successfully treat another disease at some other point in my life. Similarly, I can’t even compare how my doctor successfully treats me for a disease versus how another doctor treats someone else for that same disease, as there are individual-specific effects. As a result, I have a lot of difficulty knowing if my doctor is the most effective, given the limits of my body, and if he’s wasting resources. I do admit that certain specialties like cardiac surgeons have reputations (usually known only to other doctors) and statistics on outcomes, though this is limited to those performing specific procedures. In many day to day cases, however, all I can really compare are things like bedside manner and wait times – i.e. amenities.

      I’m not sure I’m advocating for someone to “fix” this inefficiency in any specific way, but I think I appreciate efforts at peer review and clinical guidelines.

      (*) Yes, I’m assuming I’m not consulting multiple doctors for the same condition.