Saturday, February 3, 2018

Tackling Health Spending

On Thursday, the National Pharmaceutical Council (NPC) and Health Affairs launched a new initiative to address health spending called Going Below the Surface. It's is a "research-first endeavor dedicated to unearthing and examining the drivers of health care spending in the United States, and convening a multiple-stakeholder discussion to better understand what we receive for these investments."  The U.S. spends 18% of GDP on health care which is far more than any other country. And, despite all that money, we have worse outcomes.

David Cutler from Havard University shared a few shocking comparisons. The one that has stuck with me is Duke University Hospital has 900 hospital beds and 1,300 billing clerks. Do you think maybe we could save some money by streamlining how we pay for care?

Amitabh Chandra from Havard University showed this cost curve to illustrate how the first health care dollars spent extend life significantly, but you quickly reach a point where we're spending half a million dollars to extend a person's life by a matter of days. This leads to the tough questions. Who decides where the time isn't worth the expense? Is there one answer for everyone in the country or could individuals choose the coverage they want? 


There are strong incentives in our system to produce low-value innovations. To date, we have not been able to say "no" to low-value care. There is no public support for rationing care, so the government can't put the breaks on, at least not at the federal level. Every other country has figured out that their government is responsible for controlling costs, but there was widespread agreement that we can't look to our government to solve this problem given the current state of affairs. 

Patients rarely have the information they need about cost, outcomes and value to make informed decisions and who among us makes great decisions when we are seriously ill? Even if we had the information hope is engrained in Americans. We believe we or our loved ones will be the excpetional responder to a treatment. To think otherwise is to give up. 

By a show of hands, people seemed split between looking to health care providers and employers to really make some progress. At the moment, my vote goes to the employers. I think Amazon-Buffet-JPMorgan Chase could really do some creative things by joining forces. (Note to self: update resume.) Mollyann Brodie from the Kaiser Family Foundation stated their research shows that people trust their employers. 

I'm particularly interested in how people can be brought together to make value-laden decisions. Craig Mitton touched on this in his presentation and mentioned a deliberative polling practice. I plan to look into Daniel Yankelovich's work on this. I'll share the group decision making process I developed to allocate health care resources soon.

Corinna Sorenson talked about her work evaluating the effectiveness of the Choosing Wisely Campaign. Less than half of the recommendations reduced low-value care and those reductions had limited impact in the 3-5% range. I've been following this initiative for years and thought it had a ton of potential, so the results are discouraging. I heard yesterday that Consumer Reports is pulling out of the initiative and that the National Alliance of Healthcare Purchaser Coalitions is going to step in to fill the void. 

Leslie Greenwald pointed out that our unsustainable spending has been sustained for many years. The healthcare sector employs a lot of people--12% of the population. I heard that at one point Massachussetts wanted to try to curb health care spending and then realized that it would displace so many workers if they were successful that they decided to leave it alone. From an economic standpoint, I think it would be ideal to retrain those billing clerks at Duke to do something that has a greater social value. The one point during this full day of presentations about health care that the audience erupted into spontaneous applause was when it was suggested that we'd be better off taking money out of health care and investing upstream in the social determinants of health. 

This was the kick-off to a two-year initiative so there are understandably more questions than answers at this point. You may have heard that health care is complicated, but that just means we need to allocate more resources to finding solutions. I look forward to seeing what we learn. You can follow along on the Going Below the Surface website and a Health Affairs blog that's dedicated to health spending. 

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