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Saturday, December 7, 2013

The untenable position of physicians as cost control agents

In October in JAMA, Tilburt, et al published the results from a survey of physicians regarding their perceptions of their role(s) in the control of costs in health care (JAMA. link). Nearly everyone surveyed recognized that out of control costs were a big problem and needed to be addressed. What was reported from this study was what was viewed as surprising results showing that most physicians did not view themselves as having the primary role as controller of costs, and that other parties should take on larger roles.
Physicians also hold nuanced views about their perceived responsibility for health care costs. Most (78%) agree that they “should be solely devoted to [their] individual patients’ best interests, even if that is expensive,” whereas 85% disagree that they “should sometimes deny beneficial but  costly services to certain patients because resources should go to other patients that need them more..........Yet 85%also agree that “trying to contain costs is the responsibility of every physician,” and 89%agree that “doctors need to take a more prominent role in limiting use of unnecessary tests.” This apparent inconsistency may reflect inherent tensions in professional roles to serve patients individually and society as a whole. Previous smaller studies have suggested that US physicians endorse the ideal of prudent stewardship but are reluctant to withhold available but costly services that could benefit individual patients.....Physicians clearly struggle with these tensions and how they can act individually and collectively to provide optimal, sustainable quality care. They also recognize themselves as just one component of a multifaceted system of stakeholders responsible for addressing increasing costs. Indeed, they ascribe a higher degree of responsibility for controlling costs to external forces such as health systems, insurance companies, and even patients and trial lawyers than they do to themselves.

Then who should be primarily responsible?

Maybe this is the wrong question. Perhaps the better question is that how are other industries grappling with this? Is the automotive industry going through a crisis because we are spending too much on cars and dealers are being singled out because they are not concerned sufficiently with cost control? Is the mobile phone industry concerned about the explosion of users of mobile phones and cellular service? Do we try to hold accountants or lawyers accountable for the overall cost of financial or legal services?  I don't think so.

There are major differences with these other industries since for the most part the costs of these services are falling in real dollar terms and the quality of the goods involved are improving, even without requiring the parties involved in the manufacturing and distribution to agonize over driving costs and prices down. Why is this not happening with health care? This very important difference revolves around what I refer to as health care exceptionalism.

We have been indoctrinated in the tenants of health care exceptionalism, in that health care is different. This is based upon delusional thinking centered around the idea that decisions regarding health care should not be influenced by scarcity. Within the broader economy, markets control the allocation of scarce resources and scarce resources (which are all resources to some degree or another) tend to end up in the hands of those who make best use of them.

The beauty of market based allocations is that no single party must be charged with management of scarce resources, setting prices for all, or driving affordability. It is a shared responsibility and although Adam Smith's invisible hand has been repeatedly trashed as an allocation tool, no better alternative has been shown to actually work as well. Within health care, market mechanisms have gone AWOL. Prices are artificial. Actual costs are opaque. Supply has been regulated to death and regulatory agents initially deployed to protect the public now protect the guilds which choke supply.  The cost of losing the market mechanisms and succumbing to regulatory chokeholds is that prices lose their ability to send scarcity signals and efficient allocation of scarce resources does not happen.

These articles in JAMA highlight what happens when these market mechanisms are lost. Because we view health care a somehow fundamentally (and inherently indefinably) different from other human wants and needs, so distinct that we could not possibly entrust allocation of resources to something as vague as the 'market". we declare that we must use some other mechanism. Who or what is supposed to step up to fill these holes is left undefined? There is no way that physicians can do this job and it places them in a position which is thoroughly untenable, creating financial and ethical quandaries which we are not at all prepared to deal with. The grand experiment of planned economies of the 20th century demonstrated unambiguously that experts cannot replace markets as allocators of scarce resources.  To place physicians front an center is the role of resource allocators in health care will undoubtedly fail. The results of this survey do not demonstrate lack of leadership but in fact demonstrates real wisdom in that physicians recognize that they are no experts in resource allocation. What we do as physicians really provides us with none of the tools or expertise to control costs. It is not our job.

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