Speaking Notes

PADM 5791

April 7, 2010

Dr. Neubauer

 

LAST WEEK managed care and this week MANAGED COMPETITION.

 

MANAGED CARE has helped reduce overall health care costs BUT there has been a serious backlash and true horror stories.  It works pretty well for the large majority of people who do not have major medical problems.    It does not work well for those who need very costly medical interventions, including those with diabetes, AIDS and kidney failure.  It does not work well for those who need organ transplants.

 

Our textbook includes a very brief section on MANAGED COMPETITION at the end of Chapter 10.  I base this material on these five sources.

 

 

THE BOOK BY ADAMS AND BALFOUR

 

The word, "evil" is pretty heavy and may not be considered to be academic.  If you like, substitute some other term for it. 

 

To me, the idea is that complex social systems can produce outcomes that individuals working alone probably would not individually produce.  It is certainly not my intent to vilify "business" simply because the "bottom line" is often a very powerful incentive.

 

Adams and Balfour write that there are at least four ways we can use to switch off our moral compass.

 

1)         harmful behavior can be repackaged as positive (moral inversion)

2)         individuals can create distance between themselves and the harmful behavior

3)         we can minimize the destructive activity

4)         we can dehumanize or find a way to blame the victims

 

Adams and Balfour also cite the use of language in phrases like, "collateral damage." 

 

THE MOVIE, "DAMAGED CARE"

 

Linda Peeno (played by an actress) is a physician who takes employment with Humana and then with Brothers (a nonprofit organization) to review requests for medical services.  In each setting she finds herself having to make "deny or approve" decisions under great pressure to make "deny" decisions.  A patient dies because his employer's policy (in the fine print) excludes organ transplants.  She leaves both organizations and becomes associated with efforts to question managed care.  The movie is based on the life of the real Dr. Linda Peeno. 

 

http://en.wikipedia.org/wiki/Linda_Peeno

 

Dr. Peeno's home page

http://drlindapeeno.tripod.com/

 

The real Dr. Linda Peeno's testimony before Congress

http://www.youtube.com/watch?v=zGKtROmiJL8&feature=related

 

Paper by Dr. Peeno

http://www.harp.org/2dcoming.htm

 

Some additional video of Dr. Peeno

http://www.workingtv.com/damagedcare.html

 

 

These four "discussion and study" questions are listed on this page.

http://drlindapeeno.tripod.com/id3.html

 

 

 

 

 

Is Managed Care in Trouble? (Morningstar)

http://www.youtube.com/watch?v=siePCwlV8Dc&feature=related

 

TWO BOOKS BY DR. REGINA HERZLINGER OF HARVARD UNIVERSITY

 

 

Dr. Regina Herzlinger on a Consumer-Driven Health Care System and the Swiss Example

http://www.youtube.com/watch?v=E5bsz_oewDA

 

Her references to "factories" is not clear to me.  I think she means specialized networks of providers for people with problems like diabetes and AIDS. 

 

She says we are heading to universal health care (everyone insured) but the question is whether government will make the decisions or whether individual citizens will make the decisions.  Her critics argue that ordinary people are not smart enough to make informed decisions.  She argues back that if only 20% make good decisions in time the rest will follow. 

 

I think she is advocating a "service science" approach (facilitated by a new career category of Personal Medical Care Planners) that allow loosely coupled networks of providers emerge around major need categories such as diabetes, breast cancer, AIDS, and so forth.  Medical information will be owned (and possessed?) by patients themselves.  Instead of large bureaucratic hospitals (and associations of hospitals) the system will fragment into a multitude of small, highly specialized providers. 

 

It is not yet clear to me whether she advocates that patients navigate this web of providers themselves or whether there be larger facilities (such as facilities that specialize in diabetes) who "orchestrate" the variety of services that patients with diabetes are likely to need.  Perhaps this new career category provides help both with insurance choices and with navigating the system. 

 

This video is a good summary of Dr. Herzlinger's ideas.

 

http://www.youtube.com/watch?v=SXwtDDUJS-A&feature=related

 

 

Health insurance mandate -- unless everyone pays into the system there will not be enough money in the system.  Employers give money directly to employees to either buy health insurance or save toward retirements.  Employees must buy health insurance but have an incentive to save some of the money and not just "throw it at" a relatively expensive health insurance plan.  The money is first taxed by the federal government, just as employer contributions to health insurances now are not taxed.

 

Subsidies for the poor -- the government gives money to poor people that they can only use to buy health insurance or save toward their retirements.  In other words, they have an incentive to save some of the money and not just "throw it at" a relatively expensive health insurance plan. 

 

Information -- All health care providers are required to collect and publish data on their outcomes.  This data is to be made available to everyone.  Although not everyone will take the time to "do their homework" enough people will so as to create an incentive for providers to, "get it right the first time" and to be concerned about levels of patient satisfaction.

Innovation -- Specialty facilities will emerge as physicians and others become entrepreneurs and intent new and cost-effective ways to treat diseases. 

 

Risk adjustment -- Providers should somehow be compensated for taking on the "sickest" patients.  Otherwise, they will practice, "adverse selection."  There should be some incentive in the system for providers to actually compete to care for those with high levels of medical need.

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Medicine is not an exact science.  Patients present complex sets of individual needs.  Patients often do not all respond the save way to medications and treatments.  Patients have different personal values and attitudes toward evaluating risks and possible benefits.  

Every system provides opportunities for exploitation.  That does not mean that we should throw up our hands and conclude that because the problem is complex there is no solution that someone will learn to exploit. 

 

Herzlinger's approach depends upon the ability of patients to make informed choices.  She advocates innovation and a plethora of choices, rather than the "one size fits all" approach of what some call, "Congress practicing medicine." 

 

One approach assumes that ECONOMIES OF SCALE result from standardized protocols and processes, all housed under the roofs of large institutions.  It assumes that PROFESSIONALS who are not directly involved in patient care can make RATIONAL DECISIONS involving the ALLOCATION OF SCARCE RESOURCES among large numbers of needs/wants. 

 

OUR TEXTBOOK

 

Characterizes consumer-driven health care as, "you are on your own" health care.

 

Example -- negotiating with physicians and hospitals regarding the cost of services related to child birth. 

 

Example -- going to India for a procedure for $10,000 that would cost $200,000 in the United States.

 

Mentions some managed care organizations sending patients to Mexico for less costly service delivery.

 

Yes, adults can negotiate things, such as the purchase price of a new automobile.  But would not all the personal negotiation itself be time consuming and costly?  Would an industry of personal service brokers be cost effective?  And often, there is a situation in which there is no time to negotiate and the patient is not really in a position to bargain.

 

CONCLUSION

 

Top down reform is difficult because of the political powers of the major institutional stakeholders.

 

The system as it is suppresses efforts to evolve solutions bottom up.  Consider the fate of specialty hospitals.

 

We face the MORAL HAZARD of unnecessary utilization under a system that promotes quality and choice when it is "someone else's money."

 

We face moral dilemmas in situations in which "the bottom line is the bottom line."

 

People ought to know what they are buying.  If they are going to risk dying for lack of an organ transplant because of the policy available to them which they select, at least the insurance companies and managed care providers should not hide such information in fine print