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Saturday, January 29, 2011

Placing bets on the outcomes of health care reform

It will be at least a few decades before we can rightfully engage in some Monday morning quarterbacking relating to the the most wave of health care reforms. By the time that anyone can look back with sufficient time to really assess success or failure, it is likely that memory of where we were and where we desired to be will be so remote that no real consensus will be reached regarding success or failure, cause of effect, or future directions.

There sill be some unquestionable measurable milestones which will be available. Whether anyone will actually pay attention to them is doubtful. One set of estimates will be projected costs. With the exception of the Medicare prescription drug benefit (Medicare part D), no other health care entitlement implemented over the past 50 years has come in even close to projected costs. We can argue as to why that is the case but from my perspective, cost overruns are predictable when programs offer services where those receiving the services are insulated from the true costs. Medicare part D did buck this trend but it also contained the very unpopular donut hole provision where recipients did feel some of the sting of their medication costs. However, in the infinite wisdom of the new health care reform, this is going away, a politically popular provision but a fiscally irresponsible one. My bet is that part D will start to look like the rest of Medicare in terms of growth of expenditures beyond the rate and inflation and growth of the underlying economy.

The basic architecture of health care reform is to take the worst aspects of specific segments of the heath care economy and move to generalize these to the entire health care economy. Unfortunately, the attempts to generalize particular elements has selected the features which are the worst in terms of health care inflation. The stated goals are to expand the numbers of individual who use the insurance vehicle as the primary payment for their health care expenses and to move to increasingly insulate them from the cost of their care. It is hard to imagine any other outcomes other than worsening over consumption, escalating costs, and mis-allocation of resources. I believe it was Einstein who said  "Insanity: doing the same thing over and over again and expecting different results". Seems like he was describing the latest round of legislation.

In their attempts to create accountable care organizations (ACOs), there is at least an attempt to push the decisions relating to allocation of resources  relating to care away from a centralized command and control model and downstream closer to the point of care. This approach is not entirely without merit but unfortunately the devil is always in the details. Such an approach will require tremendous flexibility of individual operating units to respond quickly to unique local conditions. I am not aware of any precedent for such flexibility within the framework of such an increasingly monolithic state controlled network. While the health care reform bill was voluminous , the documents detailing the final rules will make the initial bill look like a scant amount of evening reading. As these rules get more an more onerous, more an more effort will be devoted to either staying within the lines or gaming them. Actual quality of care of delivering value to patients will fade quickly into the background as those who devote energy and resources to such noble endeavors will find that this focus will financially bankrupt them.

Enduring complex systems simply cannot be conceived by our feeble human minds.  However, we can anticipate how people will behave when particular incentives are put in place and from these tendencies, we can predict the direction of where broad movements will lead. We cannot accurately predict the timelines nor the absolute magnitude of shifts. Similarly, human nature is pretty consistent over time. We cannot predict what any given human will do nor can we predict how populations will behave within a narrow time line, but the arrow of human history shows some rather consistent trends over time.

When given the choice, people will want more. Yes there are exceptions of those with particular discipline but more often than not we will be gluttons when given the chance. Utopians have been conceiving of the means to change human nature for thousands of years and been moved by their passion to implement their visions. They have little to show for their efforts other than millions of dead, the casualties of murderous impulses to perfect humanity. Such efforts in the future are not likely to achieve any more success than Lamarckian attempts to create tailless salamanders by breeding animals after removing their tails. People remain gluttonous and will opt for more, particularly when their own costs for acquisition are modest.

Still, proponents of national health care will continue to draw from anecdotes of undesirable circumstances and outcomes to call for further dramatic action. It feels good to be part of the revolutionary vanguard, urging action. Success will be measured not by actual problem solving but instead by the mere implementation of some plan and the mass of resources allocated. Better to do something, even if ultimately destructive than be accused of doing nothing. Furthermore, there will always be more anecdotes to justify further action, allowing those driving the change to feel good about themselves, no matter how destructive their activities might be in the longer term.

It takes courage to buck the trend and resist the desire to go beyond simply championing what you believe is right and bypass individual choice by co opting the coercive  power of the state. Positive change  implemented by free people reaping the benefits of their good decisions or suffering the consequences of their poor decisions takes time, perhaps more time than what allows for appreciation by individual humans. There lies the problem. We are not only gluttonous but also impatient. That will not change.

We live in an imperfect world where there will always be "bad" outcomes and scarce resources. The mindset which believes that this situation can be improved by increasingly complex and coercive rules which need to be made increasingly so each time there is an undesirable outcome is a terribly dangerous and destructive mindset, no matter what intentions might underlie them .

1 comment:

  1. This is, unfortunately, one of the most prescient monographs in this column. Perhaps most disconcerting for those of us who are both practitioners of health care and, in the not too distant future, very likely frequent recipients of it, is the truism that "Actual quality of care of delivering value to patients will fade quickly into the background as those who devote energy and resources to such noble endeavors will find that this focus will financially bankrupt them."

    While we would like to think that brave, innovators will find ways around this problem allowing freedom of choice at some cost to attain quality health care in the future, militating against such a two-tier system is the need for the predominate payers, whether the state or private insurers acting as public utilities, to suppress any comparative system that would highlight the inequities of the health care status quo the majority receives. At the frontline of resistance to a private system in competition with the predominate payor paradigm will be the physicians participating in the established regime themselves. A privately run alternative to state directed care is an affront to the professionalism of state sponsored practitioners, whether there are real or imagined disparity in their competency or care. Furthermore state affiliated practitioners will correctly perceive the ever expanding and demoralizing administrative burdens of their practice venue. Jealousy is a powerful emotion most easily gratified by destroying the object of one's envy.

    I relate this from experience as a physician who does not participate in any insurance plans, although at present there is only envy not enmity among colleagues who relate their frustrating, arduous endeavors to reap minimal financial benefits from such things as Medicare's compliance incentives, or fights for private reimbursement that consumer more time than productive patient care—all the more frustrating when done with the patient's benefit foremost in mind. My contribution to such discussions is that I don't have to deal with those issues I just see patients, bill them a reasonable fee and for 20 years that business model has provided me with an acceptable professional income. However come the revolution, if I don't go bankrupt as projected, I do fear for my head.

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