Thursday, March 05, 2009
Mixed messages on health care "reform": Send in the sharks
The White House has begun its campaign to reform the American health care system. This is an important project, because Barack Obama is right about a fundamental point: We spend more on health care than other rich countries and our results are not, as a matter of public health, better. They are worse. There are also vast inefficiencies embedded in the system that will cost the next generation an enormous amount of money to cover these presently unfunded liabilities.
Unfortunately, it is highly unlikely that the Democrats will produce a plan that actually fixes the problem. This very morning, the same day that the Obama administration has started pounding the reform tom-toms, Democratic "lawmakers" are pushing legislation to allow tort lawyers to bring state personal injury claims against medical device makers for FDA-approved devices (which claims have been barred by a Supreme Court decision interpreting the relevant federal law). Yeah. Nobody lowers costs and improves quality more than a tort lawyer.
For those of you who are interested in my take on the broader topic (recognizing that, for better or for worse I am the CFO of a medical device company), read my post on questions for health care reformers. It is well over a year old, but I think it holds up pretty well.
6 Comments:
By 
, at
Thu Mar 05, 10:06:00 AM:
Watch how cleverly they try to hide the fact that members of Congress and, probably, all federal employees will NOT be covered by the wonderful new plan.
By , at
Thu Mar 05, 10:52:00 AM:
TH - what concerns me most about the approach almost all politicians take is they look at how healthcare will be paid for; rather than look at the huge inefficiencies and the broader effect on the quality of the healthcare delivery system. On the whole, if you look at what companies and individuals spend, coupled with what is spent on Medicare and Medicaid, we are all paying a huge tax of sorts, a fairly significant amount that is wasteful.
What makes our healthcare system particularly unique to other healthcare systems and to other industries is that America's system is a confluence of every bad/non-productive influence one can imagine. A system where huge regulatory burdens are mixed with unbelievable litigation costs, combined with a free-market system that has to overcome a "Free-Rider" dilemma which all other countries benefit at the cost of the American healthcare consumer (e.g. a drug in Canada and England sell for $10 because that is all the NHS will pay, so in America the drug cost $50 so the drug company can meet it's financial return targets.)
If I were the King for a day here are the six quick steps I would take immediately:
1) Implement Tort reform at a minimum, but more pointedly create a legal system that only pays those patients who have been effected because of gross negligence (e.g. drunk doctor, wrong site surgery). This move alone will save at least 20% in overall healthcare costs. This would also help Doctors to help pay their huge Medical School bills because they now dont have to pay huge mal-practice insurance.
2) Actively manage the chronically sick through an incentive based system. In a Nationalized healthcare system people with Diabetes, HBP, Asthmsa, Obesity, Heart Disease make up over 30% of our current costs; however if actively managed these costs would drop dramatically.
3) Since doctors would now have dramatically lower malpractice insurance, mandate that all physician practices, hospitals, surgery centers, nursing homes, etc. are all computerized and all software programs must run off the same systems.
4) ICU costs are exhorbitant in our country. One-third of a patients total lifetime healthcare expenditures will take place in the last year of life. Culturally, we have to learn to let go and that an 80 year old person who has congestive heart failure, who still smokes, is not worth pumping tens to hundreds of thousands of dollars of cost/resource; only to live a really bad existence in a skilled nursing facility, if they survive.
5) In a Nationalized system you would not need 50 different state insurance boards who deem what a minimum healthcare coverage should look like. That is why in NJ it cost a family of four $2,000/month versus Nebraska where it is $200/month. If we did not have a Nationalized System, these boards would go away and a nationalized minimum would be created where all insurers could then bid on all populations based on free-market principles. The model I would use to determine what should be covered would be a state that is somewhere in the middle of these two extremes.
6) Provide a non-threatening opportunity (especially now that they won't be sued) for Care Providers to share both good and bad outcomes with other care providers, so that dynamic learning can take place. This will not only improve costs, but the quality of care will jump markedly.
Needless to say, this will never fly because the Democrats are the "slave-bitches" to the American Bar Association and every recommendation made requires that the Bar be removed from this huge revenue source called our healthcare system.
By 
Viking Kaj, at
Thu Mar 05, 12:05:00 PM:
Get ready to hand your company over to the the American Association for Justice.
You may want to check out the Wyeth v. Levine slip opinion from the Supreme Court yesterday.
By Escort81, at
Thu Mar 05, 02:07:00 PM:
As QC mentions, tort lawyers are an important constituency in the Party, and Pelosi/Reid/Obama will not ignore that.
Arlen Specter's son is one of the major tort lawyers in Philly, and is one of the reasons Specter doesn't agree with his party fully on tort reform.
PA is a bad state for docs, in terms of malpractice insurance costs overall and adverse trial judgments pulled out of random orifices. My orthopod, who is a great spine surgeon and a good guy, happened to to a stint in the ER and treated a woman who came in to the ER with a compound fracture in her leg. He did everything by the book, she was not happy with the eventual outcome of her leg, sued everybody including my orthopod, and somehow won a judgment (proving again that going to trial is always a roll of the dice, particularly when you have judges that can't judge).
As a consolation prize, the orthopod gets to sit on a tort reform advisory committee appointed by Gov. Rendell.
All of that said, I am not completely anti-recourse. There still can be an issue of faulty medical devices that are faulty because of negligence during the manufacturing process, as opposed to, say, a design "flaw" in a small number of cases that only becomes apparent post-approval after many thousands of uses. Stryker and its artificial hips may fall into either category, depending on your point of view (I don't pretend to have all of the information on that, but the company did recall hips manufactured at its Cork, Ireland plant because of sterility concerns).
By , at
Thu Mar 05, 06:25:00 PM:
Perhaps you should read your second paragraph to discover the answer to your observation about the relative costs of health care in the US and other wealthy nations.
Something about tort lawyers etc.
By h0mi, at
Fri Mar 06, 12:22:00 AM:
"We spend more on health care than other rich countries and our results are not, as a matter of public health, better. They are worse."
I have to dispute this. Pretty much every measurement of US "health care results" vs other countries' focuses on infant mortality & life expectancy differences. I've seen no studies showing that in France/Germany/UK/Sweden/etc. cancer/heart disease/diabetes/AIDS/(insert ailment/disease of choice) patients have higher/lower chances of survival, longer/shorter life expectancies from diagnosis or higher/lower cure rates (for curable disorders). Isn't that rather strange that health care systems are compared but the actual results of health care (the treatment of illness/injury) are never closely examined or compared? Instead we end up seeing dueling anecdotes about number of MRI/CT scanners in 2 border towns along Michigan & Ontario, and claims about waiting lists for various diseases, overstuffed ER's and patients unable to be seen.
