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Sunday, January 1, 2017

Defining health care - a fundamental but thorny problem

There are two articles published in this week's NEJM highlighting the importance of caregivers in the outcomes of health care delivery (NEJM1) (NEJM2). The come on the coat tails of and NAS report titled "Families caring for an aging America" (NAS report). They should be required reading for anyone interested in getting our arms around the health care delivery monster we have created.

In some sense these reports state the obvious. What those of us involved in health care delivery accomplish in our offices represents a miniscule fraction of what goes into the production of good health outcomes. Our interactions with patients are transient and many respects trivial. The vast majority of patient's lives are experienced in the vast swaths of time outside of our care delivery environments, either inpatient or outpatient clinic based. Few if any of our transient office or hospital encounters are likely to result in meaningful impact if patients are sent out into environments that do not facilitate enduring support of our common goals.

The NAS report delivers a series of recommendations as to how to address these current and looming expanding problems as the population ages. There are host of recommendations touching upon additional data collection, legal and policy supports, and changes in funding mechanisms. It is hard to argue with any one of these recommendations, but they tend to miss a larger point.

Once one gets outside of what has been defined as health care delivery over the past 100 years, it will become almost impossible to define the boundary between what is health care delivery and what represents everything else. One hundred years ago, it was relatively easy to draw this distinction. For the most part, people did not engage physicians unless they were extremely ill. The time and money directed toward health care was substantially less than our current fraction of GDP (18%), estimated in 1929 to be around 4% (1). This percentage of GDP remained relatively stable for more that 40 years. Once expansion of social insurance was injected into the health care economy, we experienced massive expansion of cost.

At least part of this expansion was due to a change in was health care delivery entailed and what goals were embraced. No longer were interventions primarily short term to address acute illnesses, the end result being either resolution or death. Care delivery needed to account for the management of chronic conditions over extended periods of time, something that previously made up only a trivial portion of health care expenditures. This transition occurred during a time of unprecedented wealth and productivity gains in the US and the world and the costs of delivery of the expanded scope was absorbed into the these gains, if not effortlessly, with limited economic disruption that was observable.

The current papers cited above are calling for another redefinition of what health care entails. To be fair, there is no clear discontinuity here and the transition proposed is a natural extension of trends which have been ongoing for the last 50 years. I have no quibble with where these various authors want our care delivery to move toward. We need to cultivate mechanisms which facilitate continuous care and enlist caregivers closer to where patients live. My concern is the idea that we need to expand the current payment mechanisms to cover the costs.

I am an unabashed supporter of market based mechanisms to meet human needs. No other mechanism in history has been nearly as effective in allocation of scarce resources to meet human needs. In my humble opinion, the looming bankruptcy of the health care delivery system in the US can be traced directly to the injection of third party payment into an ever growing segment the health care economy and the overall economy in general. This injection disrupted effective market based pricing mechanisms and have tended to both distort resource allocation and insulate the public from many individual instances of these distortions. To expand the scope of what entails health care services while simultaneously remove market discipline and expanding third party payment in even larger segments of the broader economy is a recipe for disaster.

Ultimately meeting the health needs of people as they age cannot be done via command and control approaches and will require what meeting human needs and wants always requires; efficient allocation of scarce resources, continuous improvements in productivity,  understanding that there are tradeoffs involved, and that no matter what system is in place, it will be imperfect in that some legitimate wants and needs will go unfulfilled. Health care goods and services for the most part is no different from and cannot not inherently be distinguished from services in general. Deploying a terribly flawed payment system to an ever broadening segment of the economy in general will create the unintended consequence of making all of us poorer and shrinking the pool of resources which we can tap into to improve the lives of those who need help. 

1. Paul Starr. 1982. The Social Transformation of American Medicine. New York: Basic Books, pp. 261-62. Quoted in Greg Scandlen, 2003. 100 Years of Market Distortions.

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