The debate of healthcare and healthcare financing continues apace, as we get deep into August. Our elected officials certainly knew there would be a certain level of disagreement, but I doubt they envisioned their town halls to become 2009's version of riots over civil rights and the Vietnam War.
You can now see why Rahm Emmanuel and Company wanted healthcare legislation signed and sealed before the August recess, though. Any 1,000+-page bill will have elements with which everyone disagrees, and it's just a matter of time before interest groups organize and solidify opposition to those elements.
Given that my Congressman, Jim Moran, is hosting his healthcare town hall -- accompanied by Howard Dean, presumably for moral support -- this evening, I thought it would be a good occasion to post my next essay on how I would like to see healthcare reformed.
My other commentary on reform appears here (each link should open in a separate window):
The "Public Option" For Health Reform Is No Option
When Discussing Heath Care, Paul Krugman Should See A Doctor
Copays, Premiums, and Risk-Pooling ... Oh, My!
The current essay recommends removing doctor's office visits from coverage under health insurance policies, and expanding the role of nurse practitioners.
The Problem
The financial structure of most health insurance policies encourages overuse and misuse of the healthcare system, with resulting increases in healthcare costs, as well as pervasive inefficiency.
One consequence of third-party payment is that the consumer of the service (in this case, the patient) is shielded from the true cost of the service. If you ask most people what a doctor's visit "costs," they will probably respond with whatever amount their copay is. The true cost is much higher -- probably $100 for a 15-minute visit.
As a result of this "cost-shielding," people are much more likely to see a doctor, for many more reasons, than if they had to pay full price for a doctor's visit. Many visits to the doctor are due to the common cold and allergy symptoms, for which very little can be done to alter the course of the condition except for rest, proper eating and hydration, and over-the-counter symptom control treatments.
Most common cold or allergy complaints do not require a visit to a highly-trained physician -- a nurse practitioner can treat the patient just as effectively, and at much lower cost. I would expect a comparable 15-minute appointment with a nurse practitioner would cost about $25.
The point is that many office visits to physicians are unnecessary, with money and time being wasted by the patient. Additionally, the physician could be using his/her time on much more sick or injured patients. But, since it only costs $20 or $25 to see "the expert," why wouldn't you? People would certainly think twice about making an appointment if it would cost them $100, especially if appropriate care could be obtained for a quarter of the cost by a nurse practitioner.
And why should office visits be removed from coverage by health insurance? Again, the third-party payment structure leads to overuse, as the consumer is not informed about the true cost of the service. The result is excessive, unnecessary use of healthcare services.
The Solution
I believe two changes affecting office visits would show dramatic healthcare cost reductions, with no lessening in quality: 1) remove office visits from health insurance coverage, and 2) increase the scope of services that nurse practitioners can provide.
First, the financial structure of health insurance policies. The vast majority of health insurance policies cover all office visits, with the insured only paying a modest copayment (typically $10 to $25). Office visits are, by far, the largest healthcare expense, due to their frequency.
Removing office visits from health insurance policies would render them similar in function to auto insurance policies: financial relief is available for highly expensive (or "catastrophic") needs, but less expensive services are wholly out of pocket. (This concept is actually available today as health-savings accounts (HSAs), but is largely unused.)
The second change, increasing the scope of services by nurse practitioners, is already gaining traction via some physician practices and urgent-care clinics. It only makes sense to have patients treated by a practitioner who is well -- but not excessively -- trained to provide the care necessary to heal the patient.
If you are hungry, in a hurry, and without much cash, it does not make sense to order a meal at a four-star restaurant; a fast-food establishment better meets your needs. However, if an important occasion is arriving, for which the added expense and time is worthwhile, then fast food might be counterproductive, and a fine restaurant is warranted. The same "triage" could apply to your choice of healthcare practitioners.
The net result of having the cost of office visits borne by the consumer/patient would be a greater ownership of one's healthcare. Office visits for (apparently) minor illnesses or injuries could be managed by a nurse practitioner. The nurse practitioner could triage the patient (via questions or observation), with potentially serious conditions being transferred to a physician.
From the physician's perspective, insurance compliance costs could be reduced, as fewer claims would need to be submitted and tracked. The physician would still "keep" the patient, but the nurse practitioner would be handling the majority of visits.
To continue the auto-insurance metaphor, having physician office visits paid by health insurance is akin to having oil changes paid by auto insurance. If that were the case, people would not look for shops offering the combination of high quality and low price that fit their needs -- they would be totally insulated from the "true cost" of oil changes. Additionally, people would not learn the most practical mileage interval at which to get their car's oil changed, and would end up getting oil changes much more frequently than is needed. ("If getting my oil changed every 3,000 miles is good, then getting it changed every 1,000 miles must be better!")
Obstacles
There are several impediments to these changes. The Powers-That-Be are not interested in fostering these changes. Insurance companies do not want to lose the premium revenue that accompanies insurance policies that cover everything under the sun. More rational health insurance policies would be much lower in cost, which helps policyholders, but certainly is not in the best interest of health insurers.
Similarly, the American Medical Association -- the governing body that largely determines which services can be provided by physicians (and only physicians) -- is not interested in having its treating authority diluted by other professions. It views just about any attempt by other professions to treat patients as an encroachment on their turf.
Skyrocketing healthcare costs might do more to expand the availability of creative health insurance policies, such as HSAs, and to increase the availability and treatment authority of alternative healthcare providers, such as nurse practitioners. It remains to be seen whether commonsense, cost-effective, minor tweaks to the healthcare system can garner sufficient support.
Posts
All of the above is accurate and relevant. More is required however. Some form of tort reform is needed to bring malpractice insurance rates under control and boards need to be established to determine if a suit is valid although the right to sue should not be eliminated (try to find an OB-GYN in Philadelphia, you can't because of the jury pool and abundant trial attorneys who will sue for a hang nail). More interstate competition is needed, and policies can be tailored to an individuals needs. As noted by the author above, health care in most cases is truly needed for catastrophic events. The goverment plan which will result in severe rationing due to lack of resources (i.e a bankrupt medicare, medicaid and IRS revenues down 18% this years with staggering budget deficits and runaway spending) is simply not warranted and is a vehicle for the current administration to seize control of the economy along with energy (cap and trade) and the education system (all college loans proposed to be made by the feds and payback probably waived with ten years of service to the government). The answers here and above along with other private solution is the answer or the health care system will collapse in on itself in short order. Note that some provinces in Canada are now allowing patients to pay for services at private clinics as the single payer system is collapsing and care is being rationed with lethal results in some cases. Take note of Dr. Ezekial Emanuels (the white house chief of staff's brother) total life curve matching access to health care to age. This need not happen in the United States.
ReplyDeleteAnother great post Scott. If a patient receives $100 of value from a doctor's visit, but his marginal cost is only $20 due to "comprehensive" insurance coverage through the state or a corporate policy, that patient will consume more doctor's visits that he would otherwise. In the aggregate this increases demand for doctor's visits, driving up the equilibrium/market price for everybody. In short, anything we can do to decrease demand for health care services will drive down the price.
ReplyDeleteI'd also like to submit another possibility, which is to get rid of the FDA and the whole idea of controlled substances. There is no moral reason why the government should insert itself between me and a drug company that wishes to sell me medicine by requiring that I have a prescription. I should be able to go to Walgreen's and buy anything I need off the shelf. This would eliminate the need to even see a nurse practitioner in most cases.
My own thoughts:
http://www.texasconservative.net/?p=566
The anonymous commenter above makes all great points, some of which I will expand upon in future posts.
ReplyDeleteAllen -- thanks for your kind words. I wholly agree with disbanding the FDA. People do not understand that many lives are lost because the FDA (government) limits access to potentially life-saving drugs. It is the classic case of a tradeoff between known costs (lives lost due to approved drugs) and unknown costs (lives lost due to not having access to drugs).
I never like the same entity that makes the rules of the game (government) also playing in the game. There is definitely a role for private-sector groups, similar to US Pharmacopeia, to post opinions about the value of certain drugs for certain conditions.
That would require, of course, more self-education for those who want to buy drugs, while others uncomfortable with that arrangement could always visit a physician or nurse practitioner for his/her opinion. But that option would get the government out of the way of making decisions that impact the individual, and do not represent crimes against others.
I read your article with interest. Do you have any details on the elasticity of demand for GP visits which supports these claims? I wonder if the same goals might be achieved by introducing a 'no claim' discount instead of denying access to the truly needy? This reminds me of the shopkeeper who wouldn't open his store because he didn't want the customers to spoil his beautifully stocked shelves.
ReplyDeleteRemoving qualified practitioners from the loop as advocated by Allen and having patients self medicate is frankly frightening.
The food industry is currently under regulated and allows people to select their own diet. Consequently they consume vast amounts of fast food which has led to the obesity and diabetes epidemics in the U.S. Perhaps more regulation on diet and the food industry will lead to reduced pressure on the healthcare system without having to close down the market for primary care.
Thanks for your interest and question/challenge -- much appreciated. I do not have any empirical data on the demand elasticity for GP visits, as I have not researched the literature. I speak more from generalized experience with my own health care, as well as my professional career studying healthcare.
ReplyDeleteAnd, of course, as anyone with children knows, the telephone pediatric nurse is superb at 1) calming parents, and 2) successfully triaging kids regarding the need to see a doctor, or to use OTC medication and treatment. That simple intervention in the healthcare system (triage nurse) helps ensure that doctors have availability to see children who do need their expert care. It also saves countless hours and money due to parents being absent from work for unneeded doctors' visits.
I certainly think from this article that you have a huge misconception of what NPs actually do on a daily basis. I am offended that you seem to think that my time and expertise is considered 1/4 that of a MD. NPs and MDs collaborate with each other and I "keep" my own patients thank you very much.
ReplyDeleteThere are providers in various levels of expertise who don't know what they are doing. It's very irritating that you want the docs to delegate the "snotty nosed visits" and leave the important visits to them to manage. My patients are not wasting my time and would be insulted if you suggested that they see a doctor instead of me. It's articles like yours that sets us further apart, when according to multiple studies, NPs give just as good care as physician. Wow...
To "Nurse Practitioners Save Lives":
ReplyDeleteThanks for reading my article. I think you have the incorrect impression of the purpose of the article, and the value I place on nurse practitioners (NPs).
I am not disputing the value or expertise of NPs. (In fact, the NP at my former physician's practice was light years ahead of "my" physician.) My article was intended to advocate the triaging of patients to the practitioner most appropriate for the intended level of care. I think, for a busy practice, a physician is overeducated for many patient visits. Having a physician treat a patient who has a cold, allergy symptoms, or mild injuries is equivalent to asking a Cy Young-award-winner to throw batting practice. Just overkill, and not the best allocation of resources.
I believe, in many cases, having an NP treat a patient is the best allocation of resources in the physician practice. I would argue that, for many complex cases, the physician is the best practitioner, given his/her lengthier training and education. (And inherited student loan cost, necessitating a higher billing rate.)
I may have erred with the value ratio of physicians and NPs, as well as the spectrum of patient cases carried by a NP. But those are details, and I am happy to be educated about that. But I do not think that my central thesis is incorrect -- that NPs provide great value to a physician practice, and can help lower healthcare costs.
Dear Scott:
ReplyDeleteI know of no Nurse Practitioners that charge less for the same visit that a physician such as myself charges. I am a primary physician, family medicine, and know from experience that my costs are less than the Nurse Practioners that practice in my community. The cost of the Dr.'s fee is a small part of a medical encounter. There is also the cost of lab, X-rays, Cat Scans, drugs, ER referrals, specialist referrals, etc.,that runs up the cost of NP's. There is no data that shows they have cut costs to their patients or the system. Additionally, you are seriously out of date. Nurse Practioners service patients in my state completely independent of physician supervision or monitoring. Again, there is no data to support the idea that they are reducing cost to the system or the patients they see. You state that you prefered the NP working in your physicians office to the physician himself. Don't forget that that Nurse was working under his supervision. In many states, they work independently. How much quality you get under those circumstances is another question. Finally, the nursing profession is much more hidebound and oppositional to improvement in skills and advancement by the various levels of nurses than is the medical profession. In my state, for an LPN to start an IV on a patient, or give an injection, and under my supervision, is fiercely opposed by the powers that control nursing licensure. The LPN can lose her license as an LPN if she does so. Finally, there may have been a time that the AMA had the power to do anything to restrict entry or control the market for healthcare. That is a boogyman that no longer applies. The AMA's irrelavance and impotence in the face of Obamacare should be sufficient proof of that fact.
Greetings:
ReplyDeleteMany thanks for your observations and clarification about my understanding of the relative expense of nurse practitioners, and the impact of the AMA. I had no idea that NPs charge roughly the same rate as physicians. Looks like I might have to rethink my brilliant, simple plan to reform the health system.
Scott