The Healthcare Reform Paradox
Quality, Quantity or Cost- this is the paradox faced by the President and Congress as they struggle with healthcare reform. Not surprisingly the healthcare reform debate is being framed by every segment of the healthcare system. Consider the following:
Yesterday Aetna (NYSE:AET) second-quarter profit fell 28%, a drop blamed in part on members’ increased use of medical services and on health providers’ higher billings per case.
Also on Monday the Centers for Disease Control and Prevention released a report that stated the medical costs of treating obesity-related diseases may have soared as high as $147 billion in 2008. According to Thomas Frieden, the CDC’s new director, “Obesity and with it diabetes are the only major health problems that are getting worse in this country, and they’re getting worse rapidly,”
Today’s Wall Street Journal includes an excellent piece by Melinda Beck entitled; Injecting Value Into Medical Decisions –In Debate on Reform, Many Say Quality Should Trump Quantity, But What’s Best Isn’t Always Clear. Ms. Beck writes: “As lawmakers battle over how to expand coverage for more Americans and how to pay for it, an equally contentious issue is looming: Many experts, doctors and politicians want to revamp the U.S. health-care system to reward the quality of care. That’s a big departure from the decades-old practice of paying medical practitioners for the quantity of services they provided. It could mean fundamental changes, philosophically and practically, to a system that has long allowed doctors great leeway to use their own medical judgment and has given many patients the luxury of not having to make treatment decisions based on cost.”
The fact is everyone wants healthcare reform yet no group wants to see their particular area of interest be subjected to cost controls. Take for example the American Diabetes Association (ADA) who’s web site states; “Our current system will pay for a leg to be amputated because of diabetes, but all too often leaves people without the tools to manage their diabetes to avoid complications like amputation, blindness, heart disease, and kidney failure. The lack of accessible, adequate and affordable health care is putting the lives of people with diabetes at risk-needlessly.” Although Diabetic Investor did not check with other associations such as the American Lung Association or the American Cancer Society, it’s safe to assume they too have concerns similar to the ADA’s.
As this debate intensifies and everyone talks about electronic medical records or preventive medicine it seems as if everyone has forgotten a fundamental hurdle that won’t be solved by healthcare reform; in the US physicians aren’t paid to prevent diseases their paid to treat them. The same is true for health insurers. As the earnings from Aetna indicate the last thing an insurer wants is their members using more medical services. Yet as the CDC report indicates left untreated chronic disease states such as diabetes and obesity cost the system billions.
Diabetic Investor isn’t overly optimistic that healthcare reform will do anything more than deal with who pays for healthcare. As we have said before just because a patient has coverage in no way guarantees the care they are receiving is any good. Getting care paid for is a step in the right direction however making sure the patient receives quality care is a quite a different and more pressing issue.
For years Diabetic Investor has been screaming for better patient education. Nearly every study looking at the impact of education shows that an educated patient with diabetes achieves better outcomes and ultimately saves money. The ADA was 100% correct stating that you know we live in a screwed up system that is willing to pay $30,000 or more for a leg amputation caused by poorly controlled diabetes but won’t spend that same $30,000 on education which could prevent hundreds of leg amputations.
This is the same reason companies in the diabetes industry have done little but give lip service to patient education. While these companies fully understand the benefits of patient education at the same time they cannot state to their stakeholders that a million dollars spent on education will directly result in increased sales for their particular device or drug.
It’s also foolish to even discuss healthcare reform without also discussing tort reform. Just any physician who’s faced a malpractice lawsuit and you’ll begin to understand defensive medicine. Or take a look at the recent Avandia controversy and the many class-action lawsuits that followed. The fact is physicians are human and humans make mistakes. It is equally true that even with extensive testing prescription drugs can have unintended adverse side effects that were not evident while the drug was going through the approval process. This does not mean for one minute that patients should not have the right to sue or that, physicians and companies should not pay for their mistakes. However, some balance must be brought to a system that has clearly become unbalanced.
Making matters even worse are the many studies looking at exactly the same issue that reach contradictory conclusions. Or consider the dreaded meta-analysis and retrospective analysis. Does anyone truly believe that the millions of patients taking Lantus received any benefit at all from the flawed studies recently published?
The fact is about the only thing that is not subject to interpretation is what healthcare costs. While there are numerous factors that go into costs, when it’s all said and done cost is one of the few measurable items involved in healthcare. Given the current state of healthcare and the voluminous amount of material being published on the subject it’s safe to state that it’s far easier to cut costs than to get the so-called experts to agree on what “quality care” means.
Just as way of example take a look at the recent debate over conventional versus intensive glucose management. While the landmark DCCT trial and follow-up appear to show numerous benefits of intensive diabetes management. Several recent studies have called into question the benefits of intensive diabetes management, some concluding that intensive management could even harm the patient. The reality is diabetes is not a one size fits all disease state and what applies generally does not always apply specifically. Each patient is different and what works with one does not always work for someone else.
Given these realities cost is about the only item that can actually be measured and easily understood. It doesn’t take an advanced degree in mathematics to understand that a $10 co-payment is better for the patient than a $30 co-payment. Diabetic Investor can’t imagine any company complaining when their health insurance premiums go down or when the cost of a drug decreases.
The bottom line here is no one should be fooled by all this talk about preventive care, electronic medical records and improving the “quality” of care. As Hunter Thompson stated “”Quality” is best measured by those who “use” a product rather than those who make it.” Or put another way “quality” is a subjective standard subject to great debate. While on the other hand what something costs is measurable and indisputable. In the end this is what healthcare reform is all about.
When this debate finally ends Diabetic Investor believes the words of Mary Angelou will best describe healthcare reform when she stated: “You may not get what you paid for, but you will pay for what you get.”
