Tuesday, October 5, 2010

People and Populations

Here is one of those classic struggles--between the individual and the country as a whole.  If you're an individual over 65, then a PSA might be of interest to you.  But if you're buying healthcare for 100 million people, you would never pay for a PSA.  Sure, a few men would die because their prostate cancer went undetected.  But not many, and they're dead now.  Same for mammograms under age 50.  Now, the Rand corp has produced a study showing that if you have a hip replacement, the long term results and mortality are better if you get rehab services post op.  But it's cheaper to send the old folks directly home.  So what do you do?  That depends on whether you're concerned with the individual or with the population. 

And that's what it's all about.  To save money--and we need to do that--some patients will have to accept less that optimal results.  Sometimes that's OK.  I remember as a medical student seeing a man in the ER who had mostly cut off the tip of his finger in a machine at work.  My first thought was to ship him off to the university plastic surgeons to re-attach his finger tip.  Nope.  The plant doctor arrived, nipped off a bit of bone and soft tissue, and closed the now shorter finger.  "This man is not a violinist.  He's a carpenter.  I can have him back at work within a week."  He was right, of course, but he never asked the patient.

We'll have to do some of this.  The biggest problem with U.S. healthcare today is that it costs too much.  Not so much that we provide too much of it, but the unit cost is too high.  An appendectomy or a hip replacement just cost too much--more than they need to.  The easy answer is price competition to force providers to find creative ways to reduce their costs and subsequently their prices.  It can be done.  It has been done in other industries.  We can do it too, but we have to try.

Yesterday, I listened to a woman talking about federal healthcare plans--the health insurance that's offered to government workers.  She talked about Sarasota, FL, a town with a very expensive hospital.  The health insurance plan tried unsuccessfully to bargain with that hospital and eventually contracted with another hospital about 10 miles away.  This woman called the plan executive and ordered him to include the expensive hospital in his policy, regardless of the cost.  This is not the way to lower healthcare costs.  Some hospitals need to be priced out of existence, but we need the courage to do that.  Many--perhaps most--locations in the U.S. have a dominant hospital that "must" be included in any local health insurance policy.  And that defeats competition.  As others have pointed out, U.S. healthcare is a series of local monopolies.  Until we are willing to put out an RFP for hip replacements, it will be difficult to control costs.

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