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Medicine and the Unfree Market

Medicine and the so-called free market are incompatible in important ways. An outstanding article in the recent New Yorker by Atul Gawande makes that point from yet another new angle. ( has a nasty habit of putting archives behind a paywall, so I don’t know how long the link will be useful.) In all the talk of consumers, insurance, and governments, we’ve kind of lost sight of the doctors. Which is odd, considering that they’re the only ones who actually know what’s going on. Let’s begin somewhere near the beginning.

The issue of cost control in medicine is much in everyone’s mind. Krugman and Ezra Klein have been out in the forefront of the fact brigade. It’s supposed to be the central feature and purpose of health care reform. There are several approaches that boil down to a choice between free markets and regulated oversight. I’ll take the two in turn.

The free market, like anything with “free” in the name, has an appealing ring of being able to make one’s own decisions without interference. It doesn’t work in medicine. At all. I wrote a post a while back about how Profits Cost Us Cures, but it goes way beyond the pharmaceutical industry and touches every aspect of medicine.

Let’s face it, most medical expenses are in a class by themselves. People don’t go to the doctor like they go to buy a car. They don’t say, “Doc, insured patients pay $357 for this type of X-ray. If you’re gonna charge $973, I’m going to Doc B.” They don’t know enough to know a good deal from a bad one, or whether they need the deal at all. Nor should they have to. We’re paying doctors for their knowledge, so there’s something very bass-ackwards in the demand that we acquire the same knowledge before theirs is any use to us.

Even more important, nobody goes to the doctor because they no longer liked their old X-rays and wanted new ones. We’re at the doctor’s when we’re in pain, trying not to think about what it could be, and desperate to get the whole thing over with. At any price. That is also the exact opposite of a situation conducive to calm and careful comparison shopping.

The whole notion that somehow patients can control the costs of medicine is such an obvious crock that if it’s being propounded by anyone smart enough to have a public platform, they must have ulterior motives. As far as I’m concerned, those motives are obvious. Putting the powerless chickens to guard the henhouse is evidence of making sure that the fox meets no obstacles.

So we can forget all the classic consumer choice blather about controlling medical costs. On the evidence, we can also forget about the insurance companies doing it. Their concept is to cut care and grow salaries, an approach that has notably failed at controlling anything. The government? Judging by the Europeans and Canadians, they can do a better job than insurance companies, but at the price of inflexibility that simply can’t keep up with medical reseaarch. For someone fighting a recently curable but not yet insurable disease, that’s intolerable. There has to be a better way.

I think Atul Gawande has shown us in which direction it lies. As he notes:

Health-care costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen. And, as a rule, hospital executives don’t own the pen caps. Doctors do.

He goes on to question why there’s so much variation in the cost of care across US counties. The most expensive is over twice as much as the cheapest.

First of all, it’s got nothing to do with cheeseburgers. Gawande compares two communities, among others, McAllen and El Paso in Texas. Same demographics, same per capita cheeseburger snaffle rate, totally different costs.

The idea that it might have to do with quality of care is laid to rest as soon as he points out that one of the cheapest counties contains the Mayo Clinic.

And that also brings him to the most interesting observation. The Mayo Clinic achieves its lowest cost, bestest care by:

  • Money coming in is pooled across the whole hospital and everybody is paid a salary.
  • Patient care is explicitly the first priority, and people are promoted on that basis.
  • They “meet regularly on small peer-review committees to go over their patient charts together. They focussed on rooting out problems like poor prevention practices, unnecessary back operations, and unusual hospital-complication rates. Problems went down. Quality went up.”
  • They have a “regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up.”

In short, the doctors get money, plenty of it, but they’re not going to get a whole lot more by each opening their own redundant MRI facility and steering patients toward it. That entrepreneurial, profit-oriented process is what’s gone wild in McAllen, aka The Expensive County.

The Mayo Clinic process is more of a one-for-all-and-all-for-one, dare I say it . . . socialist process than a purely market-driven one. It’s also open source, so to speak. Information is pooled, not hoarded.

And, it liberates doctors’ professional instincts to do their best for their patients. The same doctors who actually know what that is and how to achieve it with the least pain and anguish and expense.

An important point here is that changing only the payment method, eg single payer versus multiple payers without changing the incentive structure for doctors will not solve our problems. For me, that was a new insight. But I find it very valuable because it tells us what to do with single-payer once we get it.

Don’t laugh. I want you all to close your eyes and hum along with me . . . “Another world is possible.”

I wish.

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Single payer vs Public option

This is all you need. Shove this in anyone’s face who starts saying, “But, but, but . . . the guvvamint!” From a comment by Mikirivi on Krugman’s blog, a graphic prepared by Dr. Klein for the Arizona League of Women Voters:
Click on image for full size
side by side comparison of the two options

The one solitary “disadvantage” that I can see in the Single Payer column is that the insurance industry would need restructuring. I seem to remember reading somewhere that that’s over two million workers. So it’s nontrivial. But as I remember reading in the same place, most of the skills in the insurance industry are various office skills and are eminently transferable to other fields. (We could even, like, you know, help people make the switch.)

So we could have a system that costs half as much and insures everyone (“Single Payer and beyond” section in the link), or a variant on the baroque BS we have now. The choice is obvious. Baroque BS, of course.

The whole thing is eerily reminiscent of the electric car vs GM debacle. On the one hand everyone wins and GM has to be restructured, whereas on the other hand everyone loses and GM . . . .

health insurance, single payer

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My life in their claws

I feel like a mouse in a room full of cats. In the struggle for health care reform, will Big 0’s need for popularity or his need for Big Medicine’s money win out?
cat watching mouse across a chess board
A few weeks ago, I would have bet on number two. Never forget that this is the (expletive deleted) whose idea of the right way to gut Illinois’ attempt at State-assisted health care was to say

“We radically changed [the health care bill] in response to concerns that were raised by the insurance industry.” (Obama, 2004/05/19)

But (will wonders never cease?) the Dimmicrats seem to have understood that they have to get something accomplished this term or people might start to wonder why the Repugs were to blame for everything. Even Big 0 is on board for using the “nuclear option” to stop filibusters on health care reform. So they’re going to reform.

This is giving me that uncomfortable Hope(tm) feeling. They never did specify what they were hoping for. Turned out to be rather different from what I was hoping for. Now they’re going to reform health care from a Kafkaesque trap to . . . to what? They’re not saying.

But the fact that the health insurance moguls have suddenly started participating gives me a bad feeling. Next thing you know, health care will be radically reformed in response to their concerns. I can’t bring myself to share Krugman’s kind words, although I hope he’s right that industry interest in controlling costs is “some of the best policy news I’ve heard in a long time.”

I fear the worst, though. Our only leverage against it is threatening to throw the Congresscritters out of their jobs. Which brings me to the point of this post. (You knew I’d get somewhere eventually, right? Right?) Call, email, fax the relevant Critters daily. Hourly, if you have the stomach for it.

Katiebird has corralled a wealth of information in one place. Her posts and others at The Confluence have really helped me know when and what to do for maximum effect. (Keep it up, Katie! and Stateofdisbelief! and everybody!) The single payer day of action was a real W00T! moment. Now that the industry has decided to “help,” constant threats to Congress are our only hope(not tm).

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Medical Milestones

Three stories, the first more interesting, the next two much better than all the other depressing stuff smothering the news. (None of these are up-to-the-minute. I’ve been offline, not to say out of it, for a while.)

(J. Pathol., abstract, and ScienceDaily.) Professor Ruth Itzhaki and her team at the University [of Manchester’s] Faculty of Life Sciences have investigated the role of herpes simplex virus type 1 (HSV1) in [Alzheimers Disease] ….

Most people are infected with this virus, which then remains life-long in the peripheral nervous system, and in 20-40% of those infected it causes cold sores. Evidence of a viral role in AD would point to the use of antiviral agents to stop progression of the disease.

The team discovered that the HSV1 DNA is located very specifically in amyloid plaques: 90% of plaques in Alzheimer’s disease sufferers’ brains contain HSV1 DNA, and most of the viral DNA is located within amyloid plaques. The team had previously shown that HSV1 infection of nerve-type cells induces deposition of the main component, beta amyloid, of amyloid plaques. Together, these findings strongly implicate HSV1 as a major factor in the formation of amyloid deposits and plaques, abnormalities thought by many in the field to be major contributors to Alzheimer’s disease.

This is a major breakthrough against Alzheimers, if the results hold up on further research.

Two huge triumphs, quietly happening:
Read more »

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Gulf War Syndrome and chemicals connected (duh)

I can’t say I’m surprised. I’m mainly wondering why it took 17 years….

From the BBC:

There is evidence linking chronic health problems suffered by Gulf War veterans to exposure to pesticides and nerve agents, US research has found. …

These were an anti-nerve gas agent given to troops, pesticides used to control sand-flies, and the nerve-gas sarin that troops may have been exposed to during the demolition of a weapons depot.

“Convergent evidence now strongly links a class of chemicals – acetyl cholinesterase inhibitors – to illness in Gulf War veterans,” Dr [Beatrice] Golomb [the committee’s chief scientist] told Reuters. [Published in my favorite journal: PNAS, but no link yet.]

The real kicker is, of course, “unlike the most recent conflict in Iraq, the ground conflict during the 1991 Gulf War lasted only a few days, she added.” And in those few days, one third, one third, of the soldiers acquired lifelong conditions.

George’s Folly has lasted how long now?

Technorati Tags: gulf war syndrome, chemicals, acetylcholinesterase

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Profits cost us cures

I know nobody here needs convincing that the free market doesn’t provide the best medical care for all. But it’s not just the care part that struggles. The real heart of medicine is cures and, best of all, preventing disease altogether. Profit-driven drug delivery actually hampers finding the best solutions.

I’d say the most insidious effect is how research gets shunted away from the really good stuff. That takes away benefits in the future, and we don’t even know what we’re missing. It could be the cure for cancer or a vaccine against the common cold. Maybe it’s something that makes childbirth feel like orgasm. (Contractions are contractions. It’s an interesting question why there’s such a big difference in felt sensations.) The point is we don’t even know.

And don’t even get me started on what’s painfully obvious: the fact that prevention can never be a priority in a profit-driven system. Read more »

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Ten Minute Cancer Test

Now all they need is the ten-minute cure.

No, seriously, this is interesting and promising. While a patient is in a doctor’s or dentist’s office, the test can be run and provide results that are much more sensitive than x-rays or other diagnostic methods.

It’s done with “biomarkers.” All cells have hundreds (thousands?) of different proteins on their surfaces, and the specific kinds are characteristic of specific cells. Cancer cells are bizarre in many ways, and have lots of unusual proteins not otherwise found on normal cells. It’s possible to produce a complementary protein that can bind to a specific weirdo protein, and attach a bit of fluorescing dye to the end of the complement.

The complement binds, and when you look at the whole sample under a fluorescence-imaging system (specialized microscopes, but also cheaper gizmos), the cancer cells light up bright green. If there are no cancer cells, nothing lights up. Cancer cells can be detected, so cancers can be caught much earlier than the tumor stage.

The device only works when given a sample, so the first application is a test for oral cancer. (Via Technology Review, which is always full of fascinating news.) Cells from any surface accessible externally, such as the cervix, skin, or rectum, could be diagnosed this way. I also don’t see any reason why any liquid sample, such as blood, cerebrospinal fluid, maybe even cells in suspension, couldn’t be tested the same way. The biomarkers are different, though, so each type of cancer requires its own sampler system.

I’m not sure when the first of these devices might come to a dentist’s office near you, but as an external diagnostic test there aren’t the same sort of years-long studies to be done as for drugs. The future is (kinda sorta) here. All we need is a medical industry that can deliver it.

Being a pessimist, I’m not sure the cure for cancer isn’t a simpler problem.

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How do these people sleep at night?

An article on Alertnet by Ruth Gidley talks about the case currently before the High Court in Chennai, India, about whether to grant Novartis patent protection against a generic Aids drug, Glivec.

Glivec costs some $70 per year for a course of treatment, the patented alternative costs thousands. Glivec is saving millions of lives. Furthermore, by throttling back the Aids virus, it also decreases transmission, so it’s saving millions more people.

Novartis says intellectual “property” needs protection if innovation is not to be stifled.

Let’s have a reality check. A huge proportion of basic research, the kind that makes new discoveries about cures, is funded by the government. Taxpayers have already paid for that. Big Pharma just has the expense of filing for the patent.

Big Pharma does mainly applied research, which involves things like figuring out the best shape of pill, or going through the long and expensive clinical trials after a drug is discovered.

Their other big cost is marketing. They’re also publicly traded companies who have to satisfy their investors, who want as high a return as possible. If Novartis executives said they needed a monopoly so they could charge whatever the market will bear, which would look good on the balance sheet, which would secure their (the executives’) bonuses … well, then, I’d at least give them a point or two for honesty.

To go through this folderol when the product is a new battery technology for laptop computers is one thing. Not good even then, but not flabbergastingly evil.

In the fight against generics, though, these drug company executives are saying that a fair price for their business model is deaths all over the world. It’s the slow, fatal rotting of whole villages. It’s orphans selling themselves in the street.

How do these people sleep at night?

Technorati tags: AIDS, drugs, HIV, Novartis, generic drugs, patents, intelllectual property

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The Real Moral Hazard of Medical Insurance

It came as news to me that there was a moral hazard associated with health insurance. I thought it was a way of paying for medical care. But what the economists mean by it–economists seem to feel that they own the words and can use them to mean whatever they like–what the economists mean is the Halliburton Effect. When someone else is paying, you don’t care how much it costs.

Well, yes, people are always willing to waste other people’s money. A moment’s thought, however, says that this is not a big factor for patients. As Uwe Reinhardt, an economist at Princeton, points out, “Moral hazard is overblown.. … People who are very well insured, … do you see them check into the hospital because it’s free? Do people really like to go to the doctor? Do they check into the hospital instead of playing golf?” (from Gladwell, New Yorker, Aug. 29, 2005. Link below.)

It has to be said that some people do go to the doctor for nothing. They may be hypochondriacs, slackers, or just plain weird. The question is whether this is a big enough factor to affect the costs we all pay. The answer is yes, but not because there are so many slackers. It’s because we spend so much money trying to make sure there aren’t any.

Malcolm Gladwell in his excellent New Yorker article on this topic summarized the depressing statistics:

“Americans spend $5,267 per capita on health care every year, almost two and half times the industrialized world’s median of $2,193; the extra spending comes to hundreds of billions of dollars a year. What does that extra spending buy us? Americans have fewer doctors per capita than most Western countries. We go to the doctor less than people in other Western countries. We get admitted to the hospital less frequently than people in other Western countries. We are less satisfied with our health care than our counterparts in other countries. American life expectancy is lower than the Western average. Childhood-immunization rates in the United States are lower than average. Infant-mortality rates are in the nineteenth percentile of industrialized nations. Doctors here perform more high-end medical procedures, such as coronary angioplasties, than in other countries, but most of the wealthier Western countries have more CT scanners than the United States does, and Switzerland, Japan, Austria, and Finland all have more MRI machines per capita. Nor is our system more efficient. The United States spends more than a thousand dollars per capita per year–or close to four hundred billion dollars–on health-care-related paperwork and administration, whereas Canada, for example, spends only about three hundred dollars per capita. And, of course, every other country in the industrialized world insures all its citizens; despite those extra hundreds of billions of dollars we spend each year, we leave forty-five million people without any insurance. A country that displays an almost ruthless commitment to efficiency and performance in every aspect of its economy–a country that switched to Japanese cars the moment they were more reliable, and to Chinese T-shirts the moment they were five cents cheaper–has loyally stuck with a health-care system that leaves its [uninsured] citizenry pulling out their teeth with pliers.

We can take it as proven that moral hazard does not apply to patients’ spending, and that preventing it increases costs instead of reducing them. (Hardly surprising, since we’re pouring money into something that doesn’t exist.) It also increases costs in a direct and bad way by discouraging people from getting preventive care.

And yet, having said all that, there really is a moral hazard associated with medical insurance. Not in the economists’ sense, but in the real one. To see why, consider biology.

The point to being a social animal is that we band together to survive. Individuals sometimes do things for the group that don’t benefit them directly because when others do the same thing, it does benefit them. There’s a give and take. Even capuchin monkeys, which have brains the size of an orange (a small one), have recently been shown to have a sense of fairness and to get huffy when it’s violated. (See, e.g. Science News for a popular summary. Original article available on paid subscription, Sarah Brosnan and Frans deWaal, Animal behavior: Fair refusal by capuchin monkeys. Nature, Sept. 18, 2003, 428: p. 140)

Something rooted so deeply in who we are is not optional. It’s right up there with the desire for sex, children, or friends. Pain, for instance, is processed differently when it is in a good cause, such as childbirth or surgery, than when it is in a bad cause, such as torture. If people could switch off that aspect of abusive pain, they would, but I’ve never heard of anyone who could do it. We have a huge need to feel that things are fair.

The need for fairness, perversely, makes us justify our own bad acts as fair (known officially as the “theory of cognitive dissonance”). Most people aren’t totally stupid, so on some level we know that’s what we’re doing. Then we have to justify them more loudly. Better yet, we do them again to prove that doing them the first time was a good idea. Then we have to raise the volume another notch and keep doing whatever it takes to avoid admitting we were wrong.

Letting other people die on the street violates the essence of what any social creature is about. If we let it happen when our own lives are not in danger, we go into a spiral of self-justification from which the only exit is admitting we did something wrong. Many people would rather die than admit any such thing. If other people are doing the dying, so much the more reason to go on doing it.

And that is the real moral hazard of the US system of health insurance. It turns us into people even monkeys would blackball.

Technorati tags: health insurance, medical insurance, single payer, universal health insurance, fairness, moral hazard, ethics

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