Reflections on the economics of cardiovascular testing
Anthony M. Perry, M.D.
In November 2012 I saw a full page ad in our local Scranton
newspaper from Jefferson
Medical Center
I thought it was interesting that Jefferson Medical Center, in
offering this screening, is contradicting the recommendations of the US
Preventive Services Task Force, a federal government funded expert
organization, whose pronouncements influence Medicare funding, which has within
the past few years counseled against the use of some of these tests for health
screening. To be sure other expert interest groups, such as organizations
representing vascular surgeons and radiologists, have criticized these negative
recommendations but they are nevertheless influential and moreover have an
official aura being quasi-governmental. In fact recommendations of the USPSTF
are being used in the Affordable Care Act to determine which preventive
measures must be provided without payment by insurance plans.
More notable than that to me, however, was that an
echocardiogram, together with the variety of other vascular tests can be
offered for $179. This group of tests, if done in a doctor’s office or
hospital, and paid for by insurance, would be priced at least 5-10 times as
much. Was this offering a “loss leader”, done far below cost to encourage
consumers to come into the store? That seems unlikely considering that the vast
majority of patients with abnormal tests that required follow-up would be
likely to do so locally in the Scranton area rather than in Philadelphia Jefferson Hospital
Why then this price discrepancy and what should be the real
price of an echocardiogram? In our system prices are determined by government
panels and insurers rather than market forces.
In 2009, Medicare cut payments for echocardiograms in cardiology offices
by 25 percent, from $356 to $268, and yet there was no corresponding reduction
in echocardiograms ordered and performed. To be sure private insurances pay
more and Medicare actually pays hospitals much more. [1]
In the New York City
The importance of this cardiovascular screening offering was
not simply its relatively low cost per se. It may in fact be a harbinger of
things to come in the economics of medical services in the U.S. U.S. U.S.
Some physicians are choosing to avoid the cost and regulations
associated with third party payers by opting out of all insurance and
government programs.[4]
This is increasingly common in major metropolitan areas.[5]
The Association of American Physicians and Surgeons, a conservative physician
organization actively promotes and assists the withdrawal of physician
practices from third party payers and their website offers video testimonials
from physicians who have done so and who report a much improved practice
environment without significant loss of patient volume or income.[6] There is a market for out of pocket services
among, for example, individuals without insurance, those with high deductable
policies and those seeking individualized or exceptional service. This
phenomenon is somewhat related to the growing number of "boutique"
practices which offer more personalized attention for an additional fee as a
response to increasing depersonalization resulting from increasing economic and regulatory pressure
in physician practices. Some "pure boutique" practices also involve
elimination of third party payers altogether, offering primary care or other
services for a prepaid retainer.[7]
A trend toward free market reform from the patient side is the
growing popularity of health savings accounts which promote patient
cost-consciousness as well as freedom of choice. Enrollment in these accounts
more than doubled from January 2008 to January 2012 (going from 6.1 million to
13.5 million).[8] The American
Banking Association notes a 55% increase in HSA enrollment in 2011 alone. In
2013 assets in HSA's totaled more than $19 billion and are projected to be more
than $29 billion by 2015. The ABA Indiana Indiana
HSA’s incentivize patients to shop around and compare prices
but this is hard to do in the complicated U.S. third party payment environment
since prices for most services are not evident and are often difficult or
impossible to determine.[13]
In the occasional case where prices are available they have a powerful impact.
For example, market forces are playing a large role in the area of
pharmaceuticals. Higher co-pays for brand name pharmaceuticals have had a major
impact on shifting patient demand from brand name to generic drugs and in
recent years have reduced drug spending overall.[14]
In 2012 prices for brand name drugs outpaced the consumer price index
substantially but prices for generics decreased significantly relative to the
CPI. Interestingly, on average, prices for generic drugs are cheaper in the
U.S. where they are subject to free market forces than in Canada where there is
price control.[15]
Price competition even works to bring high tech medical procedures
into the price range of average income consumers. Examples of these can be
found in "non-covered" procedures such as Lasik surgery, cosmetic
surgery, tubal ligation reversal and alternative medicine. Advertisements for
such procedures clearly indicate prices in addition to statements about safety
and efficacy.[16],[17] In the example of
Lasik surgery prices have come down along with steadily advancing technology,
in contrast to procedures paid by insurance in which technological improvements
generally result in increased prices.
Even in the case of "covered" procedures, markets in
the U.S. are responding with lower and, more importantly, transparent prices
for the occasional cash payer, such as patients with very high insurance
deductibles or Canadians who are willing to pay out of pocket to escape long
waiting lines. One well established out-patient surgical center in Oklahoma
City has begun to post prices for bundled surgical procedures on the internet
directed toward cash paying patients. Their prices are a small fraction of
those charged by other traditional sources such as at a nearby hospital in the
same community and have consequently attracted the interest of self-insured
companies for treatment of their employees. Success in this large market could
readily stimulate price competition in other similar entities.[18]
The internet has great potential for connecting patients with
doctors who offer transparent pricing for pre-paid services and numerous web
sites are springing up to help consumers identify medical prices.[19] New websites are
appearing offering personalized advice from medical experts for a fee.[20]
Another rapidly developing medical source for out of pocket
payers is medical tourism. First world quality medical services are being
provided in developing or third world countries for a fraction of their usual
cost and are often linked with luxurious amenities.[21] Although it
represents only a minor portion of all medical services, medical tourism is a
growing phenomenon around the world. In November 2013 the Medical Tourism
Association held the sixth World Medical Tourism Congress in Las Vegas with
hundreds of speakers and exhibitors[22]
and the industry now has its own trade journal.[23]
I am told by an inside source that one of the Pennsylvania Blue Cross entities
is developing a pilot program to consider offering its clients such services.
It is worth noting that in the industrializing areas of both China and India
there are now modern medical services available using state of the art
technology and western style practitioners that are used by the rapidly
developing middle classes.[24]
These are paid for out of pocket and are generally far lower in price than
equivalent services in modern western countries.[25]
One of the most interesting free market based developments is
the retail medical clinics[26]
which are rapidly expanding in numbers in pharmacies and supermarkets. These
facilities, unlike freestanding urgent care centers, are located conveniently
in retail stores, staffed by non-physician practitioners, and most importantly
offer a list of well defined services with clearly posted prices. A substantial
majority are located in large chain drug stores.[27]
However the entrance of supermarkets and superstores such as Wal-Mart and
Target into the mix raise the possibility that a more aggressive consumer
oriented business model may develop over a more traditional medical model. For
example, Wal-Mart in its advertising emphasizes low price and notes that some
of its sites do not accept medical insurance.[28]
This survey of emerging market forces in medical care returns
us to our original focus on the price of echocardiograms. From the former
discussion it would appear that this test should be within the range of the
average income person to pay out of pocket if the price were based on the
actual cost and particularly if it could be done at a fixed site where there
was a higher volume of testing with more efficient organization for supervision
and interpretation. Unlike the sporadic cardiovascular screening program, the
test would be regularly available, but, like the screening programs, could be
done along with a battery of other available cardiovascular tests such as
vascular ultrasounds and standard treadmill testing for clearly posted prices
at the discretion of the consumer who would receive an official written
interpretation written in layman's terms with recommendation for any needed
follow-up. A retail medical clinic would appear to be an ideal site for such a
function, possibly in a superstore such as Wal-Mart where any wait involved for
the customer could be occupied by shopping elsewhere in the store.
What changes in our system might occur if basic cardiovascular
testing became readily available for a price equivalent to a monthly cable TV
payment or less? It is interesting to go through the thought experiment.
To begin with it is important to emphasize how the free market
affects prices and distribution of goods and services to the consumer. In the
free market prices and availability of goods respond to consumer choice.
Producers respond to consumer demand. In
a competitive system producers do not set prices arbitrarily but are obliged in
order to make profit and avoid loss to produce things that people want at a price
they are willing to pay. As pointed out by economist Thomas Sowell, "Most
of the great fortunes in American history have resulted from someone's figuring
out how to reduce costs, so as to be able to charge lower prices and therefore
gain a mass market for the product." Henry Ford marketed the first Model T
at $850 in 1908, when he sold 5,986. By 1916, when he sold 577,036, he had got
the price down to $360.
Retail businesses rise and fall based on their ability to
observe and respond to social and demographic changes. Early in the last
century the majority of the U.S. population lived in rural areas. As
transportation improved, mail order companies with their large selection and
low prices replaced the country store. As time went on and the population
rapidly moved from the country to the city Sears & Roebuck found themselves
replaced by the A&P and department stores which located in densely
populated urban centers. These companies were in turn replaced by shopping
malls and supermarkets as more modern transportation caused movement from the
cities to the suburbs. Thus in the free market the consumer moves the system.
The provider succeeds who can offer convenience, broad selection and low
prices. We now are in the era of the superstore where we go to buy groceries,
hardware, clothing, medicines and garden supplies, as well as eat lunch, do our
banking and now get our flu treated. Everything is available 24/7 for our
convenience. Medical testing could be added to the list. The test results, both
images and reports could be easily uploaded to a personal web site, or to a
flash disk drive, or transmitted to a designated physician.
I would contend that cardiovascular testing is ripe for
transformation to the free market with dramatic benefit to the public. As noted
a small market already exists for cardiovascular screening paid out of pocket
even for those who are otherwise insured. Furthermore, after a long steady
decline in out of pocket medical payments from about 47% in 1960 to under 12%
in 2007, there has been an increase in past few years as more patients accept
high deductable plans. Experience with
increasing numbers of non-participating and boutique medical practices as well
as retail clinics show that some consumers are willing to pay for medical
services directly out of pocket for reasons of price, convenience and personal
preference. What will be needed for revolutionary transformation of
cardiovascular testing however is involvement of major retailers who can
develop a mass market by cutting prices and providing convenient access to
testing of satisfactory quality. Medical planners who prefer a managed system
might resist this development but it may not be in their power to control. In
this regard the example of the automobile is interesting to consider. Henry
Ford’s revolutionary production methods made transportation available to the
common man, freeing him up from a life confined to a small community. But,
whereas central planners dream of mass transportation, in the free market
consumer demand and producer response to that demand has been far greater for
personal transportation and automobile distribution has steadily moved from one
per family toward one per individual. This demand for safe, cheap, rapid and
convenient transportation of the individual, rather than mass transportation, is
certainly not satisfied and so automotive technology will continue to develop
and respond accordingly.
When considering whether a mass market could develop for
cardiovascular testing a fundamental point to be made is that evaluation with
ultrasound and EKG, both resting and with exercise are much superior to
physical exam for cardiovascular assessment, particularly for detection of
occult disease in the individual without symptoms. The stethoscope which
detects sounds of heart valve closure and abnormal blood jets has for decades
been the esoteric marker of the physician. Hung around the neck, it has become
the symbol of the initiated health professions worker. However, it is 200 year
old technology which reached its peak of development in the 1960's and compared
to present day methods is of limited value. Auscultation of the chest has
become a usually pointless routine in the assessment of the patient by nurses
or other paramedical personnel. At best it is a waste of time and at worst may
be harmful such as when abnormal sounds are misinterpreted and lead to
inappropriate treatment. It remains useful at the bedside for those physicians
who understand its use and limitations. In a patient with well defined
abnormalities who is also well known to the physician it can be useful in the
office for serial assessment. On the negative side it requires the patient to
disrobe and it takes time and focus away from the main tasks of evaluation,
discussion and counseling. It can detect abnormalities of heart valves but is
often misleading or inaccurate in assessing location and severity of the
problem. It cannot be used for detection or evaluation of coronary artery
disease and is of minimal use for heart chamber malfunction. In evaluation of
diseases of the blood vessels the stethoscope is almost useless and even
palpation of the pulses is misleading and often leads to incorrect conclusions.
Physical exam of the heart and blood vessels is far surpassed in accuracy by
ultrasound techniques. Ultrasound can fairly accurately assess heart valve
function, heart chamber size and wall motion and intracardiac blood flow and
pressure. In larger blood vessels it can detect the presence and to some extent
the size of stenoses and evaluate blood flow and pressure. The stethoscope can
evaluate heart rhythm but is far surpassed in accuracy by the EKG which with
modern equipment is done and interpreted very cheaply and rapidly and can be
carried out over longer time intervals. In addition when combined with exercise
testing the EKG can in many cases detect the presence of severe cardiac
ischemia, even in individuals without symptoms.
Why then are ultrasound and EKG not used more frequently in
routine cardiovascular assessment. Neither is harmful and both can be repeated
frequently. The main impediment to their more widespread and frequent use is
cost and inconvenience resulting from lack of market forces influencing their
pricing and distribution.
In the centrally controlled third party method of payment for
medical services which is dominant in the United States funds collected from
consumers are pooled and then redistributed by government or insurance
administrators. In such arrangements technology and testing become a cost
liability resulting in perverse incentives to set up impediments to
utilization. Third party payment for testing is allowed only for specific
medical diagnoses and must be authorized by a physician or other provider.
Additional restrictions of frequency of use are often imposed and in the case
of more expensive tests special additional authorization requiring complex
procedures is required. In some advanced countries with more completely
centrally controlled systems there is outright rationing with long waiting
periods for testing and other medical technology. Thus such a centrally
controlled system, which is intended to benefit the public by controlling
prices and producing fairer distribution of goods and services, produces
exactly the opposite effect.
Contrast this scenario with what is happening with other types
of technology in the free market segments of the advanced economies. Technology
which increases productivity, enhances convenience and provides entertainment
is of great interest to businesses and to the general public. A multitude of
companies and individuals compete vigorously to respond to this demand by
producing and selling a bewildering array of ever more effective devices at
ever lower prices. Equally numerous resources are available to help consumers
to decide what to purchase. Products which are less effective or higher priced
fail as do the companies which produce them. It is important to consider that
the net effect of this large and intense marketplace is rapid, widespread
distribution of technology to consumers at all economic levels. No bureaucracy
exists to worry about an overall technology budget or to attend to its fair
distribution. The impersonal free marketplace does a far better job of
achieving these goals.
Considering all this I would propose two questions: Could a
free market for cardiovascular testing develop in the midst of our centrally
controlled system? If the answer to the first question were positive, then what
would be the consequences of such an occurrence?
The answer to the first question begins with the fact that
screening for cardiovascular disease is generally not covered by third party
payers even though death and disability from diseases in this category which are
often without symptoms in the early stages are commonplace. Third party
administrators in government and insurance companies look upon such testing as
a Pandora's box of uncontrolled spending. The public understandably however
appears to be highly interested in
knowing about such hidden problems and some at least are willing to be tested
for a modest out of pocket payment at a price above and beyond what they pay
for medical insurance. The person who pays this fee is highly satisfied with a
negative result, in contrast to the third party payer who considers normal
tests to be a sign of unnecessary utilization. For the person discovered to
have a serious hidden problem the result is "priceless".
As public acceptance grows for convenient, low-priced retail
medical clinics it would seem a small step for cardiovascular screening tests
such as echocardiograms, exercise EKG's and vascular ultrasounds to be offered
for low advertized prices in the increasingly ubiquitous superstores and
superpharmacies and for something of a mass market to develop. In addition low
prices and convenience would be equally attractive to price conscious patients
such as the increasing numbers of those with high deductable medical insurance
and health savings accounts who might require such tests for defined medical
reasons rather than for screening. At present insurance payment by third party
payers for cardiovascular testing requires a physician gateway and specific
diagnoses. Since their utilization is not subject to market competition the
overwhelming majority of cardiovascular tests are done in the very inefficient
setting of medical offices and hospitals where their price and reimbursement
far exceeds actual cost, and where they are inconvenient to access and require
scheduling. If the retail clinic scenario were to materialize however one would
expect a rapid movement away from the present system. Some might argue that the
present medical based setting allows physician supervision over quality. In
fact however the actual performance of cardiovascular tests is largely by
technicians with physician involvement limited to interpretation of images so
that the actual site where the testing is performed is of no consequence. In
any case if physicians and hospitals wished to continue providing
cardiovascular testing they would be forced to compete on the basis of price
and convenience with resulting benefit to the consumer.
A likely outcome of out of pocket payment and a competitive
pricing system would in fact be a snowballing effect toward general elimination
of insurance payment which would be uncompetitive because paying by insurance
adds administrative costs and complex regulation. The gross illogic of giving
funds to a third party to redistribute and restrict payment rather than paying
directly would begin to become painfully obvious. The assumed rationale for
insurance payment for medical services is to reduce cost and ensure access for
patients. In actual practice the elimination of competitive market forces and
the use of a third party payer produces exactly the opposite result, that is
cost is increased and accessibility reduced. It seems likely that, in the case of basic
cardiovascular testing, out of pocket payment at a price highly affordable together
with easy access would dramatically increase the frequency of testing. Testing
would be done at the discretion of the consumer for any reason rather than
through physician gatekeepers. Funding for those who could not afford even the
lower market based prices could be handled in the same manner as we presently
support food purchases in those with low income by providing a debit card, or
even better, a health savings account from which testing costs could be
debited.
On the producer side, development of a mass market would intensify
competition and incentivize makers of testing devices to produce cheaper, more
compact and more automated machines. In this regard, it is interesting to note
that two-dimensional echocardiography technology came into general use a few
years before the marketing of the personal computer by IBM. Perhaps the
comparison is unfair but on the surface at least the relative stagnation of cardiovascular
ultrasound and EKG technology as opposed to the dramatic transformation of
personalized computing during the same time span is startling.
An interesting parallel to demonstrate how market forces might
impact cardiovascular testing would be in the analogous area of MRI scanning.
In Japan medical services are completely private but prices and fees are
strictly controlled by the government and are set very low. The average price
for an MRI of the head in 2009 was set by the Japanese government at $105 as
opposed to over $1000 in the U.S. At such prices one might have expected
producers to have limited interest in these tests but in fact Japanese
manufacturers responded to the market by producing compact machines at a much
lower price[29] and are producing
these machines for export. As a result
consumer demand increased markedly and Japan now has far more MRI machines and
does far more MRI tests per capita than any other advanced country[30] resulting in both
decreased cost and increased diagnostic capacity. Contrast this situation with
that of Canada where funds for medical services are centrally controlled and
availability of MRI machines is limited by budgetary constraints. One finds
there long waiting periods for all but the most urgent MRI tests[31] and therefore
marked decrease in diagnostic capacity. In truth even Japan's situation is
probably far from optimum since a centrally controlled economy is never able to
match the impersonal market in efficient pricing and distribution of local
needs from moment to moment. Thomas Reid, whose book was previously quoted and
who is a proponent of central control, ascribes the Japanese success to ”tough
cost controls" but no cost controls could possibly match those imposed by
consumers deciding how to spend their hard-earned money and by producers
competing for their business. Nevertheless the tremendous elasticity of
consumer demand demonstrated in the Japanese MRI experience gives a rough idea
of how cardiovascular testing in our country might evolve if it were governed
by market forces.
As discussed previously we might expect direct payment out of
pocket for cardiovascular testing to result in procedure prices that are in
keeping with actual costs and thus dramatically lower. Testing availability in
modern retailing facilities rather than the traditional medical environment
would become far more convenient. Testing paid for out of pocket would no
longer require medical authorization or an approved medical diagnosis and would
be done at the discretion of the consumer. Payment and administration would be
as simple as going through checkout in any retail store. Given the normally
acute interest of individuals in the status of their bodily functions combined
with previous explanations about the low reliability of physical exam in
cardiovascular assessment it is not hard to foresee what could result from this
scenario.
Low cost tests, conveniently available without a doctor’s order
would undoubtedly induce the participation of many consumers. As in the
Japanese MRI experience a large increase in testing frequency would be expected.
This would result in a small but significant finding of serious treatable
cardiovascular abnormalities in individuals with no symptoms who are missed by
the present day medical system with sometimes disastrous consequences. There
would as well be a high frequency of normal results. In contrast to the
attitude of present day third party payers, this result would be no more
objectionable or wasteful than the finding of a normal blood pressure and would
be purely the concern of the consumer. Furthermore development of a mass market
for cardiovascular testing stimulated by consumer interest and demand rather
than a market restricted by third party payers requiring licensed practitioner
gatekeepers would incentivize producers differently. In the present system
sales of equipment are primarily limited to medical facilities and in this low
volume environment there is necessarily limited competition, high price and
emphasis on high tech rather than simplicity. Ultrasound testing, even after
many years of development, remains highly dependent on the skill of the
individual technician to produce a reliable record for interpretation. In a
mass market high sales volume potential stimulates more competition and large
capital investment in research and development as well as efficiencies of
manufacturing and distribution. The expected result would be reliable but cheaper
and much more automatic machines. The Japanese MRI experience is a case in
point.[32] The response of
companies such as Hitachi and Toshiba to a government mandated MRI price
reduction was to produce a new line of compact, inexpensive MRI machines
costing around $150,000 - about one-tenth the price of the bigger machines used
in the United States resulting in a much larger MRI market.[33]
It is interesting also to speculate how low cost, conveniently
available cardiovascular testing paid for directly and therefore controlled by
the consumer rather than the medical provider would affect medical practice.
There has been growing interest and discussion among health care planners in
recent years about the concept of "patient centered care", not only
from the standpoint of patient rights but also as a means to improve safety,
quality and cost. Proponents of this idea speak of patient empowerment and
shared decision making. But although this idea recognizes and attempts to
correct a serious flaw in present day medical care delivery, on close
inspection these proposals are more sophistry than innovation. Under this
concept medical care delivery remains controlled by provider gatekeepers and
third party payers with the added gloss of attentiveness to unique patient
attributes and increased explanation.[34]
Real patient centered care would reverse those roles and leave the individual
consumer in charge just as he is in most other important areas of economic
activity such as buying a home or car or electronic equipment, choosing and
carrying through an educational pathway, starting and managing a business or
seeking employment, saving and investing excess capital, providing for security
with insurance and retirement plans and so on. Consumers usually have little
expertise in any of these areas but make their decisions based on common sense,
personal preference, and advice from others including family, friends,
published information and paid experts. In actuality medical consumers, even in
our present controlled system, do much of the decision making. Except usually
in emergencies they decide when and in what way to interface with medical care
providers, and whether or not and in what way to follow their recommendations.
They decide about personal health habits, when to seek medical advice, which of
the various variety of providers to consult, whether to use advertised or
non-restricted remedies, whether to undergo tests and procedures and so on. In
the area of acquiring medical procedures and other technical services, however,
consumer choice is highly restricted by the economic and social structure
peculiar to medical care and to very little else in our free market economy.
The great majority of medical services are purchased through third party
payment systems and require the approval of both a medical provider and the
third party payer. This system is so ingrained that, except in the case of an
identified screening program, those who must or who wish to pay directly out of
pocket for even the most minor and harmless medical procedure are expected to
present authorization to the testing facility with a provider’s order and
diagnosis and furthermore must pay a price far in excess of that charged to third
party payers.
And yet this paternalistic, authoritarian system requiring a
consumer to have permission to purchase a technical medical service is a mere
construct without a legitimate basis and solely derived through custom based on
the prevailing third party payment system. The existence of low cost screening
programs demonstrates this fact. Nevertheless it is argued that consumers, with
limited technical knowledge, are incapable of deciding what is needed and that
testing decisions should follow protocols and guidelines determined by panels
of experts.[35] The error of this
concept is obvious on its face. Putting aside that consumers frequently make
decisions about purchasing highly technical items in many other spheres, that
experts have only limited knowledge about individual consumer needs and desires,
and that expert panels often give contradictory or outdated advice or are
ultimately proved incorrect, in fact medical consumers frequently make highly
technical, life or death medical decisions. Would there ever be a question
about individual autonomy in deciding whether or not to have a high risk
procedure, or a surgical operation, or a dangerous medical therapy or to decide
on which practitioner to utilize? Are not these critical judgments made by individuals
with limited technical knowledge and are they not of far greater importance
than deciding whether to have a harmless medical procedure on one’s own
volition? Clearly where some risk is involved, such as with radioactivity or
contrast procedures, reticence on the part of providers and involvement of
government regulators would be operative, but for low risk cardiovascular
procedures with ultrasound or EKG a willing buyer and seller should be all that
is needed. In the case of an exercise EKG a preliminary questionnaire and
explanation, and a brief exam might be prudent.
Consumers might purchase cardiovascular testing for screening
purposes. Present day screening programs are only sporadically available and
are used only to a very minor degree. But testing available regularly at a
convenient location would likely be far more utilized. Such testing might to a
large degree supplant physical exam of a routine nature at the physician’s
office which as previously noted is often of limited value. Reports and images
would be recorded onto a digital medium for the purchaser but also could be
transmitted to the patient’s physician. Such a scenario does not preclude
practitioner involvement but simply elimination of the gatekeeper role. The
physician would undoubtedly remain the major adviser in recommending when and
what type of testing should be done and also might give recommendations on the
quality of testing facilities. Practitioners might also develop testing
facilities of their own which would give name brand reassurance to consumers,
but to succeed would also have to compete on the basis of price and convenience
rather than having the captive market which exists at present. However other
sources of consumer advice and information, such as the increasingly popular
medical information websites available today, would undoubtedly be increasingly
available, probably dramatically. We would possibly be entering a new era of
bona fide "patient centered care" with a more informed public, consumers
actively involved in their personal health.
This restoration of the purchase of cardiovascular testing to a
normal economic model has implications that extend well beyond this limited
subject. The contrived "patient centered care" concept advocated by
health care leaders leaves individuals as much as always under the control of
the medical care establishment and third party payers. Converting passive
patients to real consumers of medical goods and services could be one key to
improvement in the health of our population through increased awareness and
participation in good health practices. Good physicians understand that time
spent communicating with and educating their patients is a major key to
achieving "compliance" with their recommendations. However what would
be involved here would be a reversal of roles. Healthcare advocacy groups such
as the ”Trust for America's Health"[36]
contend that the great majority of chronic illness in our country results from
unhealthy lifestyle behavior and that this, rather than the traditional medical
treatment system, should be the major focus of improving public health. Many
experts have pointed out that preventive medicine done through the standard
medical care system does not save money since the cost of numerous negative
tests often outweighs the economic value of illness prevented[37] and often has somewhat
limited impact since the emphasis is really more on finding early disease
rather than real prevention.[38]
Quoting one blog with a preventive health focus, commenting on this debate,
" A better solution would be to look
for preventive steps outside the hospital or doctor’s office. This goes back to
some of the recommendations issued by the TFAH (Trust for American's Health)
report. Investments in wellness programs, health education and counseling could
yield better results. Much could be achieved by grassroots movements and
community-based initiatives if done the right way. That would still require
financing, but the dollars spent could go a whole lot further." [39]
But must it require movements,
group initiatives and government funding to incentivize individuals to interest
and educate themselves about their own health? Are such mechanisms needed to
interest consumers in their food, shelter, transportation, communication or
entertainment? Do modern "health care planners" really want
"patient centered care" in which patients take more of a role in
decision making? One would think not since they envision "Accountable Care
Organizations", large tightly organized medical provider groups
supervising the physical well being of geographical population segments,
perhaps competing with other similar provider groups. Such a vision implies full
central control of funding and implementation of medical care. In this scenario
individuals remain "patients" with "medical homes".
"Patients" undergo tests and treatments in keeping with protocols
devised by expert panels and authorized by federal agencies. Orders are given which the "patient" is to
follow at the risk of being "non-compliant"[40]
Consumers in the free market, on the other hand, decide what it is they want
and need and choose from myriad available options offered by providers
competing to provide the best value. Which alternative has the better chance of
producing an informed public and a dynamic health care industry striving to
innovate?
[1]
For a good discussion of the inner workings of Medicare price-setting see
"Medicare Gets Serious About Payment Cuts" in the April 2010 edition of Managed Care
magazine by Thomas Reinke. http://www.managedcaremag.com/archives/1004/1004.medicare.html
[2]
http://clearhealthcosts.com/blog/2012/04/echocardiogram-with-doppler/
[3]
http://www.thehearttoplay.com/calendar.html
[4]
http://www.internalmedicinenews.com/news/practice-trends/single-article/doctors-keep-it-simple-ditch-insurance/b0abd7c3662e9a71f2146a57db39dec8.html
[5]
http://well.blogs.nytimes.com/2012/10/01/when-doctors-stop-taking-insurance/
[6]
http://www.aapsonline.org/index.php/video/81/article/82/; http://www.aapsonline.org/index.php/site/article/restoring_free_markets_to_medicine/?newsletter=off&utm_source=AAPS+Alert+Sign-Up&utm_campaign=3939d5ed10-&utm_medium=email
[7]
http:// patients.about.com/od/followthemoney/f/FAQboutique.htm
[9]
http://www.americanbanker.com/magazine/122_11/health-savings-accounts-provide-proft-and-growth-for-banks-1053520-1.html
http://www.aba.com/Issues/HSA/Pages/hsacouncil.aspx
[10]
http://www.mathematica-mpr.com/publications/PDFs/health/healthyindianaplan_ib1.pdf
[11]
http://www.forbes.com/sites/aroy/2011/11/11/obama-administration-denies-waiver-for-indianas-popular-medicaid-reform/
[12]
http://www.kpcnews.com/news/state/article_1b337497-8662-57b0-8217-0b5d121131e6.html
[13]
"Availability of Consumer Prices From
US Hospitals for a Common Surgical Procedure" Jaime A. Rosenthal; Xin Lu, MS; Peter Cram, MD, MBA JAMA Internal
Medicine Feb 11, 2013
[14]
http://www.ajhp.org/site/Projecting_future_drug_expenditures_2012.pdf
[15]
http://lab.express-scripts.com/prescription-drug-trends/price-gap-between-brand-and-generic-drugs-widens/
[16]
http://www.allaboutvision.com/visionsurgery/cost.htm
[17]
http://www.tubal-reversal-surgery.net/tubal-reversal-cost
[18]
http://www.surgerycenterok.com/media.php
[19]
https://www.snaphealth.com/
[20]
http://www.justanswer.com/
[21]
http://www.sfgate.com/business/article/Americans-look-abroad-to-save-on-health-care-3274578.php
[22]
http://www.medicaltourismcongress.com/
[23]
http://www.medicaltourismmag.com/
[24]
“For wealthy people in the big eastern cities, China today has excellent
medical care in clean, modern hospitals.”
Reid, T. R.
(2010-08-31). The Healing of America: A Global Quest for Better, Cheaper, and
Fairer Health Care (p. 152). Penguin Group. Kindle Edition. My personal
conversations with individuals, both in and out of the medical community, who
are familiar with these systems indicates that modern medical care paid for out
of pocket is readily and commonly available in China and India for a much lower
cost than in western countries and are utilized by the growing middle classes.
Reid’s statement that these facilities are for “wealthy people” is confusing
and misleading. The numbers of “wealthy people” as the term is commonly used
could hardly account for the ready availability of modern medical services in
both these countries. It is, in fact, the ordinary city dweller who is using
them.
[25]
A Chinese patient of mine who spends many months annually in China brought for
my perusal the report of a general health survey obtained at a major city
medical center in 2012. This included a
total body PET scan, MRI's of the spine, ultrasounds of the upper and lower
abdomen, echocardiogram, EKG with vectorcardiogram and a host of blood chemistry, hematology and
urinalysis test. These latter included a complete lipid analysis, and numerous
vitamin and mineral blood levels. The total price was equivalent to U.S.
$1500-1800, certainly less than 10-20% of the U.S. price. The scans which I observed were similar to
those I see done in our local facilities.
[26]
http://www.deloitte.com/assets/Dcom UnitedStates/Local%20Assets/Documents/us_chs_RetailClinics_111209.pdf
[27]
http://www.minuteclinic.com/services/
[28]
http://www.walmart.com/cp/Walmart-Clinics/1078904?fromPageCatId=1078904&catNavId=1078904
[29] Reid,
T. R. (2010-08-31). The Healing of America: A Global Quest for Better, Cheaper,
and Fairer Health Care (pp. 92-93). Penguin Group. Kindle Edition.
[30] MRI
scanners per capita
http://www.oecd-ilibrary.org/sites/health_glance-2011-en/04/02/g4-02-01.html?contentType=/ns/StatisticalPublication,/ns/Chapter&containerItemId=/content/serial/19991312&itemId=/content/chapter/health_glance-2011-30-en&mimeType=text/html
[31] Waiting
list for MRI in Canada
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2653696/#__sec7title
[32]
Reid, T. R. (2010-08-31). The Healing of
America: A Global Quest for Better, Cheaper, and Fairer Health Care
[33]
Unfortunately Reid in his report
misunderstands the economic principles involved and seems to believe that
government control is the key factor. As
virtually every economist of every political stripe agrees, markets determine
prices much more efficiently than do government bureaucrats who are simply
incapable of responding accurately to complex forces of supply and demand. Reid
contends that doctors accept the low fees to get business. But in Japan's
capitalist economy if MRI providers could not make a profit they could not stay
in business, resulting in fewer MRI's rather than a large increase.
[34]
Michael J. Barry, M.D., and Susan
Edgman-Levitan, P.A. Shared Decision
Making — The Pinnacle of Patient-Centered Care N Engl J Med 2012;
366:780-781March 1, 2012DOI:
10.1056/NEJMp1109283 http://www.nejm.org/doi/full/10.1056/NEJMp1109283
[35] In
a recent major
journal editorial the opinion was expressed that
even primary
care physicians do not have adequate knowledge
to contradict recommendations made by expert advisory groups.
Mitchell H. Katz,
MD Can We Stop Ordering
Prostate-Specific Antigen Screening Tests?
JAMA Intern Med. 2013;173(10):847-848.
doi:10.1001/jamainternmed.2013.1164.
[36]
http://healthyamericans.org/ - Trust for
America's Health
[38]
http://www.chicagotribune.com/health/sns-rt-us-preventive-economicsbre90s05m-20130128,0,2360401.story
[39]
http://blog.seattlepi.com/timigustafsonrd/2013/02/03/saving-healthcare-costs-through-prevention-may-prove-elusive/
