State of the Union January 2009

The Issues: Health Care

Virginia Postrel and Shannon Brownlee assess the prospects for health care reform in the midst of a financial crisis
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VIRGINIA POSTREL: Happy Inauguration Day.

SHANNON BROWNLEE: It was pretty inspiring to see all those people on the Mall!

VIRGINIA POSTREL: But I felt bad for the folks in Hawaii, where it was 6 a.m. It's West Coast sympathy.

SHANNON BROWNLEE: As somebody who was born and raised in Honolulu, and who went to the same school as our new president, I would imagine a lot of people in Hawaii were wide awake and happy to be watching from the warmth of their livingrooms.

VIRGINIA POSTREL: I'm sure they were. I just feel bad for them, because I'm not a morning person.

The financial crisis may have put off an attempt at sweeping health care reform, but the Obama team has made improving computerization of medical records part of their stimulus plan. How optimistic are you about that process?

SHANNON BROWNLEE: I'm not so sure that the financial crisis will put off sweeping health care reform, but we can return to that question in a minute. I think it was smart to put electronic medical records into the stimulus package, for a couple of reasons. If the federal gov't devotes real money to helping providers get wired it will be a nice boon for the high tech sector. It will also help make health care more efficient—though maybe not as easily as some think.

There are big technical hurdles standing in the way. I think the buzz word is interoperability, but basically we need a way for your doctor's computer to be able to read records from the hospital and other doctors, and vice versa. I'm no techie, but I understand that's a huge challenge.

VIRGINIA POSTREL: Whenever the idea comes up, privacy groups always raise concerns. I'm not sure patients worry as much as organized groups, but that's an issue.

And interoperability is, in any computer system, a huge challenge. Bank of America's California computers can't interface with the rest of the bank's computers—years after the merger.

SHANNON BROWNLEE: It's funny, but people are more worried about somebody looking at their medical records than at their bank records. We seem perfectly happy to have electronic banking.

That's pretty depressing about Bank of America!

VIRGINIA POSTREL: When I moved from Dallas back to L.A., I had to close the accounts we'd opened in Texas to get one the banks here could access—even though it was all B of A.

SHANNON BROWNLEE: And banking is pretty simple compared to the information contained in a medical record. We may need the federal gov't to simply set a standard platform—everybody has to be interoperable with Kaiser's system, or UCLA's. Assuming UCLA Medical Center even has electronic records.

VIRGINIA POSTREL: UCLA Medical Center has excellent electronic records. In fact, my internist, whose office is in Beverly Hills, can access my hospital records, including radiology reports, from his office, because he's part of the UCLA system.

SHANNON BROWNLEE: But here's the problem with hanging our hopes on EMR—they can't create order out of the chaos of our current system on their own.

VIRGINIA POSTREL: But it would be tremendously costly, not just in dollars but in lost information and transitional errors, to try to start from scratch. It's certainly a difficult problem, though one that everyone in medicine seems to agree needs addressing.

SHANNON BROWNLEE: So maybe UCLA's standard could be used in Southern California. The point is, somebody may have to say this is the standard, live with it.

Starting from scratch is what many hospitals have been doing.

VIRGINIA POSTREL: As a stimulus, my economist husband jokes that maybe they should just hire lots of people to do data entry. After all, laid-off retail clerks and journalists can't design computer systems.

But, of course, you need a system first.

SHANNON BROWNLEE: What's interesting is the fact that the federal gov't has to get involved in stimulating EMRs in the first place. I can't think of another major industry that has not decided to invest in computerized records. Why not health care? Because you don't get rewarded for doing a better job of caring for patients, or doing it more economically, two things that EMRs could help providers do.

SHANNON BROWNLEE: I would imagine providers will have to hire people to enter data once they go digital.

VIRGINIA POSTREL: You can do amazing things with scanners these days. Just ask Google.

Your point about rewards is an important one. Health care is remarkably insulated from the normal feedback we see in other industries.

SHANNON BROWNLEE: EMRs aside, I would argue that bringing down health care costs should be seen as a long-term stimulus because insurance premiums are a drag on other businesses.

In the rest of the market, high cost generally indicates higher quality, better service, a better product. Not in health care.

VIRGINIA POSTREL: Sometimes, though my Civic is an awfully great car at a low price.

Even aside from the economics, patients don't shop around much. I'm shocked that anyone in L.A. who has a choice goes anywhere but UCLA for cancer treatment, but they do.

SHANNON BROWNLEE: If we built cars the way we pay for and provide health care, it might look a little like this: cars are built not by companies, but by individual artisans, each of whom specializes in a different part. You got your engine guys, and then you have engine specialists who only build valves. You have electrical specialists, chassis specialists, brake specialists. Each specialist does her thing and then passes that part of the car to somebody else. But there's no rhyme or reason to who she passes it to. Now imagine that we pay for our cars not on the basis of how well they run or what kind of mileage they get, but on the number of parts each specialist used to put his or her piece of the car together.

VIRGINIA POSTREL: I'm not sure about insurance premiums being a drag on business. It's something you hear a lot, but it's a complicated question. Insurance is part of employee compensation, so it may keep money wages somewhat lower, but you have to pay people what the market will bear. And the Big Three automakers, about whom we hear so much, are burdened by paying for contracts they made with retired workers, who are covered by Medicare.

SHANNON BROWNLEE: I'm less convinced than you are that UCLA would be the right place to go.

VIRGINIA POSTREL: Maybe I'm a deluded patient, but it worked for me.

Everyone I know who interacts with the medical system says the same thing: Why can't these people talk to each other? Why isn't there one person in charge of my case?

SHANNON BROWNLEE: Insurance premiums have long- and short-term effects on employers. Over the long term, employers generally can shift the cost of rising premiums to workers in the form of lower wages. But over the short term, rising premiums can make it harder to make other investments that would allow a business to grow, or become more efficient.

Retired workers are not all covered by Medicare. The average auto worker gets to retire long before Medicare kicks in.

VIRGINIA POSTREL: That's another problem.

SHANNON BROWNLEE: One reason your primary care doctor often doesn't seem to be in charge is because he or she is overwhelmed with seeing other patients. PCPs are now seeing 40-60 patients a day in order to keep the lights on. This is a stupid way to run a health care system—pay the person who should be coordinating care the least amount.

VIRGINIA POSTREL: However you pay for it, the cost of health care won't go away. The fundamental question is the one you started with: Where do we get the incentives and feedback we're used to in other industries? I don't want to overemphasize this, but one problem is simply that patients expect health care to be free to them. Why don't I pay my primary care physician like I pay my hairdresser or plumber and save insurance for very expensive, unexpected events like cancer? (I'm ignoring the issue of chronic disease, which is a serious one, for the moment.)

SHANNON BROWNLEE: Returning to your previous comment about patients shopping around, I can only think that people who argue that the ill should be able to control their own care can't possibly know any really sick people. In particular, they can't possibly know anybody with a complex, chronic illness—which is, of course, just the kind of patient who is costing us the most money.

VIRGINIA POSTREL: People don't necessarily want their primary care physician coordinating their care. In fact they hate it when HMOs make them gatekeepers. But they want SOMEONE coordinating. Maybe we need more use of the role you see with transplant coordinators for kidney transplants—a highly organized physician's assistant (at least when I was a donor) who makes sure everyone gets what they need and the patient stays in the loop.

SHANNON BROWNLEE: I think that's a perfectly reasonable model—pay out of pocket for primary care, either on a per visit basis or per month, and then have catastrophic care. There are a couple of problems with this model, however. 1) A lot of people don't have the money to pay for frequent visits to their PCP. 2) Patients aren't particularly rational about the way they decide what’s needed and what isn't. Probably a better model is the capitated, per month payment.

VIRGINIA POSTREL: One thing I've wondered is why doctors aren't paid more like lawyers, by the hour rather than the procedure.

SHANNON BROWNLEE: Who hates it when PCPs are gatekeepers? (I know PCPs hate the term.)

VIRGINIA POSTREL: People who don't have a PCP they love, for one. Or people who want to pick their own specialist. This is all anecdotal, of course, both personal and journalistic anecdotes—as is much of the health care discussion.

In my bizarre case, it would have been a problem, because I was diagnosed with breast cancer in Dallas, a month before I moved to L.A. I didn't have a PCP in L.A. until after I'd gone through nearly a year of cancer treatment. But the cancer team did communicate with one another, so it wasn't a big problem.

My surgeon referred me to the internist I now use.

SHANNON BROWNLEE: My big concern, as you know, is unnecessary care, and while I don't argue that the principal force that drives doctors to overtreat patients is greed, it is part of the problem. When so much of medicine is uncertain—who really needs a stent? Does this patient really want a knee replacement—and all of the forces, including payment, are aligned in the direction of more care, then hourly payment doesn't change the incentives all that much.

If you don't love your PCP, you need a new one. Primary care is about relationships. That sounds squishy, I know, but we've forgotten that a huge part of medicine is care and comfort and guidance, not treatment and technology.

The other reason people don't like having to consult their PCP before going to a specialist is we're a nation that wants instant gratification. I want my doctor visit, and I want it now. Now, I have no problem with you (not you personally, but the general you) wanting to go to every doctor in town, but since we pay collectively, I'm not enthusiastic about a system that lets you do that to your heart's content.

As for picking your own specialist, on what basis do people do so? US News & World Report's "America's Best Hospitals"? Better to use your Ouiji Board.

VIRGINIA POSTREL: Since, as you say, so much of medicine is uncertain, it's hard to know in advance what care is unnecessary. Lots of judgment calls are involved and, of course, the state of medical knowledge is itself changing all the time. So, to take an example you use in your book, we now know that bone marrow transplants and high-dose chemotherapy were not an effective treatment. All those mean insurers who didn't want to pay until they were sued were in fact correct. Economics aside, it's easy to say now that those procedures shouldn't have been done. But what if it had turned out the other way? You can make mistakes in either direction, and I'm concerned that, in our efforts to control costs—especially to centrally control costs, we'll stifle valuable innovation.

On what basis should people choose their specialist? By referral from their PCP? But on what basis should they choose their PCP? And why do we assume that a PCP who has a good manner and perhaps even good knowledge of everyday medicine will know the best specialist?

One of the implicit messages of your book is that lots of doctors don't really know the current state of medical science. Best practices don't spread all that fast.

SHANNON BROWNLEE: It's interesting that we think assessment is damaging to innovation in medicine, but not in other industries. When my husband's former employer, a high tech company, came out with a new device that people were supposed to use in their kitchens, nobody bought it. Why? Because it was pretty useless. In high tech, the market can tell a producer what works and what doesn't. But in medicine, the market doesn't know squat. You have to actually do clinical trials, or at least look at large numbers of medical records to know if new treatment is effective. So I don't really see how assessing effectiveness is going to stifle innovation.

VIRGINIA POSTREL: Ah, but contrary to the dreams of many an engineer, the way devices get assessed in people's kitchens isn't a purely scientific question. The question isn't, Does the device work? But, Do people want it? There's a market test.

SHANNON BROWNLEE: "Best specialist." There are a couple of things that go into getting good care. One of them, of course, is competence. You want a surgeon who has done a lot of appendectomies before your belly is opened. But individual competence can't overcome a screwed up, disorganized system. You can have the best surgeon on the planet, but if she's not communicating well with the intensive care unit staff, and the ICU staff isn't paying attention to which drugs you're on, you're toast.

Sure, Do people want it? is the market test, but part of that test involves functionality.

More on the innovation question: We tend to reward innovation in medicine for innovation's sake. Here's an example: there are, oh, on the order of at least 10 different companies all making a device called a vena cava filter. Each one claims superiority on the basis of some innovation in design. But do vena cava filters actually improve outcomes? Surgeons have been using these things for decades, yet they've never actually put them to the real test of efficacy. The French finally did, and it looks like for most patients the devices don't add value, they just add risk and cost. Now, we probably want to do another study just to be sure, but what's the value of innovation in vena cava filters if you aren't going to find out if they actually help patients.

VIRGINIA POSTREL: The sheer length of our conversation, which has barely begun the discussion, demonstrates just how complicated health care issues are.

It’s a matter of managing complex organizations. And it requires taking into account a huge amount of human variation—individual biology, cultural expectations, lifestyle, and so on. There are specialists who need to communicate across specialties. There are third-party payments, for what we might call "true insurance" risks (unexpected events), routine cheap care, and known-but-expensive chronic care that once it's known doesn't fit the true insurance model. All very complex stuff! Thanks for discussing it with us.

Virginia Postrel is an Atlantic contributing editor. She blogs at deepglamour.net. Shannon Brownlee is a senior fellow at the New America Foundation and the author of Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer (2007).
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