Many aspects of US society today are organized under the assumption that if every individual pursues what is in his/her best <i>financial</i> interest, the "invisible hand of the free market" will produce the best possible outcome for everyone.<p>Yet here we have reputable doctors acting in their self interest, and the result is that they are ordering unnecessary surgeries for financial gain. Meanwhile, patients are essentially unable to protect themselves against this travesty.<p>Maybe in this case the invisible hand cannot be seen because it is not there?
Is this really surprising? Who doesn't know this?<p>My wife was in labor for a bit less than a day. Baby was fine, everything good, but apparently we were taking too long. Doctor demanded we do a c-section. When we said we wanted to wait, she walked out, slamming the door. We got scared, they made 60K for about 20 minutes of work. Guess what the c-section rate at that hospital is? 50%. Not kidding. I'm in the wrong business.<p><a href="http://www.icanofnj.com/hospitalcsectionrates.htm" rel="nofollow">http://www.icanofnj.com/hospitalcsectionrates.htm</a>
In Ontario doctors were allowed to switch to capitation, where they receive a lump sum for each patient under their care, rather than billing per service.<p>My personal physician loves it, he no longer wastes time filing for OHIP payments and no longer worries that maybe he is only ordering procedures to make more money rather than for a legitimate purpose.<p>This is a particular problem when diagnosing problems, is "your gut" or "your greed" telling you that the patient needs this $1000 test.
The two things I read in this article, minus the loaded language and assumptions:<p>1. "Medical offices which have equipment for certain services provide those services more often than offices that don't."<p>They've got the equipment in-house, so of course they're going to use it. The article doesn't take into account the possibility that patients are choosing to go to these offices _because_ they have the in-house facilities for the treatment they want. Going from "doctors who have X machine order X procedure more often" to "doctors treat patients like an ATM machine" is a huge leap.<p>2. "Some surgeons in Florida performed unnecessary surgeries for money."<p>There are bad apples in every bunch, this is why you get a second opinion before going under the knife. Yes surgeons get paid per procedure, yes it's a flawed system, but that doesn't mean they're all wheeling and dealing to get as many people to submit to surgery as possible.<p>It's worth noting also that whenever the article says "charged patients" what they mean is "billed patients' insurance company." Chances are the people who don't have insurance were the ones smart enough to see another doctor before paying.<p>This kind of fearmongering crap undermines confidence in medical professionals and medical science. The vast majority of medical professionals are extremely hard working, knowledgeable people who's primary goal is to help everyone that walks through their door. Without trust from their patients, they can't do this effectively.
I once read that traditional Chinese medicine practitioners work on a sort of subscription basis, where patients only pay when they are <i>healthy</i>, thereby creating a strong incentive for the doctor to get a sick patient back to health in a cost-effective manner.<p>I have no idea as to the veracity of the story or the effectiveness of such a model (and hold no truck with the pseudoscientific methods used by such practitioners), but it raises an interesting thought - would healthcare be more effectively funded through some mechanism other than private insurance or state funding? Might the debate over healthcare have been narrowed into a false dichotomy, when there may be a far better option lying unnoticed on the third hand?
This is why single-payer is the only way to go. There has to be some panel of disinterested experts evaluating the cost/benefit of a given treatment for a given illness, backed up by the buying power of something really huge. Yes, that's "death panels" to you Tea Party members following along at home.<p>Of course that wouldn't prevent any doctor and patient from doing whatever they wanted, at their own expense.
I take issue with the "most medical costs are accrued in the last year of life" point that gets bandied about. We don't know <i>a priori</i> which year is going to be your last! This makes the point into almost a tautology.
This New Yorker article examining major discrepancies in health-care costs between McAllen Texas (which is the 2nd most expensive health-care market in the country) and the town up the road was eye opening for me. The summary is that when doctors invest in medical facilities (like in-practice labs) they are financially motivated to direct patients to use those facilities.<p><a href="http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all" rel="nofollow">http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_...</a>
<i>"According to government estimates, each neurosurgeon at Halifax Health was generating more than $2 million a year in hospital profits. The hospital charged fusion patients an average of about $80,000, according to Florida records on Halifax Health analyzed by The Post, ranking the procedure as one of the more expensive."</i><p>Wow.<p>The image of the physician as somebody who is there to help relieve suffering is cemented as a meme, but the way the system seems to have evolved in the past few decades is towards help as a secondary duty if any.<p>Unfortunately, anyone who seems to want to speak out against the system is immediately rebutted with cries of "Why do you hate doctors?" and "They saved my babies!".<p>It is very hard to have an honest discussion and self-introspection in the current environment, especially with so much money at stake.
<i>US Healthcare System Explained in Six Succinct Points<p>1) A constant battle is underway between insurance companies that do not want to pay any claims, even legitimate ones, and doctors and hospitals incentivised to rip off patients, insurers, and taxpayers with unnecessary surgeries and Medicare fraud.<p>2) Insurance companies demand massive amounts of paperwork out of rational fear of fraud and unnecessary treatments. Doctors perform for-profit (as opposed to for-patient) procedures that guarantee more explanations and more paperwork.<p>3) Doctors and hospitals have direct personal contact with patients, but insurance companies don't. In cases where doctors put patients at huge risk with needless procedures and surgeries, it's easy for hospitals and doctors to point their finger at insurance companies. On the other hand, many sincere, honest doctors have difficulty getting patients the care they should have because insurers believe they are getting ripped off by unnecessary procedures, even when they aren't.<p>4) Doctors make needless tests out of fear of being sued for not doing them.<p>5) The vast majority of healthcare costs occur in final last year or so of someone's life. Politicians who want to do something sensible about this issue get accused of "rationing healthcare".<p>6) Doctors not only have a financial incentive to prolong life needlessly, they also worry about not prolonging life out of fear of being sued by family members unless there is a living will, and perhaps even if there is a living will.</i><p>== Buried a bit, but worth highlighting.
I upvoted the article because it raises some important points about how people respond to incentives in the current health-care financing system in the United States, with a prediction of expected results under the Affordable Care Act as the act is implemented. The kind of comments I'd be delighted to hear from other HN participants is comments about what can be done about this.<p>On my part, I was just doing some Web searches for patient guides about how to select treatments and when to get second opinions. Regardless of how health care is paid for, patients sometimes need guidance about how to choose physicians, and how to choose treatments. (I know this for sure because my family lived in Taiwan for almost three years under Taiwan's single-payer national health insurance system, and we still had to decide which doctor to visit--we had choice in that matter--and whether or not to follow the doctor's treatment recommendation, which we sometimes followed and sometimes did not.) I'll keep looking for a user-friendly guide like that online, and if someone else commenting here can link to one, I'll be very grateful for that.
Interesting article, but the last premise is fairly disingenuous. He lists 6 reasons why healthcare is expensive, then claims that Obamacare doesn't fix any of them, but he's entirely wrong on at least 5 of the 6.<p>1. Medicare / insurance fraud --- The author obviously hasn't heard of the Health Care Fraud Prevention and Enforcement Action Team (HEAT). HEAT led to the record number of fraud charges in 2012. In addition to that, ACA standardized fraud convictions, so any provider convicted of fraud can no longer claim any federal money (Previously, a provider convicted of medicare fraud could still collect payments from medicaid et al).[2] These are only 2 provisions of the roughly 50 that directly address fraud. [2a]<p>2. Massive amounts of Paperwork --- This paperwork is moving to EHR / EMR systems that will file it automatically for the vast majority of patients. ACA mandates that the systems must use a standard format, so that any system built can communicate with all federal / private insurance carriers. [2]<p>3. Since doctors have direct contact with patients, and insurance companies don't it's easy for docs to blame insurance companies for unnecessary procedures --- I'm confused by this point, it seems a bit confused and contradictory toward his other points.<p>4. Doctors perform needless tests for fear of being sued --- The author has clearly never heard of ACOs. One of their primary goals is to limit the number of tests and procedures done. Insurance companies and the government will provide fairly significant bonuses when the cost of provided care comes in below average. [4a] In addition, the ACA provides research grants to study best practices and patient outcomes, having published, peer-reviewed research for common diagnoses will greatly limit the ability to sue for stuff considered CYA. [4b]<p>5. End of life care is insanely expensive --- This would've been addressed in the ACA, but Sarah Palin, Newt Gingrich and their dimwit followers torpedoed the 'death panels' to score some cheap political points.<p>6. Life is prolonged without living will --- Again, thank Sarah Palin, Newt Gingrich, and the Fox News brigade for their insane rants against 'death panels' which would have directly addressed this.<p>[1] - <a href="http://www.npr.org/2011/12/30/144491419/doj-posts-record-for-health-care-fraud-cases" rel="nofollow">http://www.npr.org/2011/12/30/144491419/doj-posts-record-for...</a>
[2] - <a href="http://www.healthit.gov/policy-researchers-implementers/standards-certification-rules" rel="nofollow">http://www.healthit.gov/policy-researchers-implementers/stan...</a>
[2a] - <a href="http://www.btlaw.com/files/ALERT%20-%20Healthcare_Health%20Care%20Reform%20Fraud%20Abuse.pdf" rel="nofollow">http://www.btlaw.com/files/ALERT%20-%20Healthcare_Health%20C...</a>
[4a] - <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/29/obamacares-cost-control-programs-may-be-contagious/" rel="nofollow">http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/29/o...</a>
[4b] - <a href="http://www.nlm.nih.gov/hsrinfo/cer.html" rel="nofollow">http://www.nlm.nih.gov/hsrinfo/cer.html</a>
[5 & 6] - <a href="http://en.wikipedia.org/wiki/Death_panel" rel="nofollow">http://en.wikipedia.org/wiki/Death_panel</a>
It seems fun to hate on "evil" doctors, but why do we consider doctors as any different from "personal business consultants" who's business expertise is health?<p>I'm curious how you guys think medical professionals should actually be paid / how can pricing be done "fairly" in a system where there can never be "information symmetry"?
The real way to solve this problem is to get the patients motivated and involved in their own care and treatment decisions.
In a free market, driven by true choice, patients have the responsibility of learning more independently about their diagnosis, treatment options, and their physician. By doing research, a patient may be driven to get a second or third opinion when faced with a diagnosis like cancer.
By utilizing healthcare savings accounts (HSA) and high deductible low premium insurance plans, patients are driven to find the best doctor with the lowest prices.
This is how the invisible hand works, choice and competition on each side of the market. The result- A decrease in price and an increase in quality.
An ex-colleague of mine went into the pharmaceutical industry to work as a drug rep. They get $X to spend on each doctor they visit as part of their job. My colleague was quite moral, and she would only use the money for the <i>stated</i> purposes: improving the doctor's practise. Charts, equipment, training. Usually it's spent at discretion, and often spent on football tickets, holidays, etc.<p>She reported that some doctors already used it for practice-improving stuff. The middle set of doctors were a bit like "oh well, the gig is up". But the third set of doctors were <i>outraged</i> that she should tell them how to spend <i>their</i> money. They saw this drug company money as part of their personal income.
I didn't read the article thoroughly, but one point to think about is patients may be more likely to visit with a particular doctor if said doctor frequently performs the surgery they believe will help them.<p>I am the perfect example of this. I went to a particular doctor with the expectation that he would eventually perform the surgery I desired. He did technically evaluate if I was a good candidate, but I got the impression his patients only visit him if they want the surgery performed. He also does a lot of these surgeries, making him more experienced and more attractive as a surgeon. I would imagine this Florida doctor is similar.
The problems with US healthcare seem fairly well known. But I want to know what sorts of solutions are promising. I don't think single payer is right for the US, it's much too anti-American. I also don't think a free-market free-for-all would work...medicine is way too stacked against the customer. Obamacare, while seriously flawed, is probably still a step in the right direction. Would getting employers out of the business help? I keep hearing about insurance company inability to compete across state lines. What else?
I hate that we're not allowed to self-medicate. I understand the risks, I've done my research, I know more than my local pharmacist, yet they won't give me s&&t without a piece of paper signed by someone who supposedly knows better.<p>I always had a strong suspicion that the doctors prescribe too many medications (which were also brands more expensive than the generics). Not so paranoid after all.
In general most people will operate in their financial self-interest over the long term.<p>Taking it back to startup-land, this is why sales team compensation structure is discussed at such length at the board level. You generally get exactly what you compensate for, and it's easy to create unintended consequences.
I have recently come to the conclusion that ultimately problems like this stem from high income inequality. Humans have a tendency to compare themselves to people who are better off than them. Fifty years ago doctors were very well off in general and were esteemed. But now this is not the case and the desired prestige can now only be accomplished through financial gain. Back when income inequality was not so great other motivations came into play besides profit.<p>There is a perniciousness in American society where too many people have bought into the "I've got mine, forget you" attitude. Where money is the main source of prestige of a person. The problem highlighted by the article is a societal one. Profit is not a great motivator of innovation and ought not be as high a goal as it currently is in the U.S.<p>What fascinates me the most is that the segment of society that appears to be doggedly in favor of a profit first public policy appear to be people who follow a book that says that love of money is the root of all evil.
bhauer: a few flaws in your analysis. Insurance companies do not like prices being high either. They have to raise premiums and this discourages people from purchasing insurance. Insurance companies have a vested interest in making sure that you do not get ill. They have to pay if you get ill. This is the reason that people who smoke pay higher insurance premiums.<p>Outside of other comments: of course profit changes doctors' decisions! Why wouldn't it? The medical industry is a business. It is, however, the most regulated industry in the USA. Tech is the least regulated. In the tech industry progress and innovation abounds. It does not in the medical industry. I see a correlation there.
<i>It would have been nice if Obamacare fixed some of the above problems. Unfortunately, Obamacare did not fix any of them.</i><p><i>Fraud, ridiculous amounts of paperwork, and incentives to do the wrong thing were everywhere you looked before Obamacare. The same problems exist now.</i><p><i>Worse yet, Obamacare added to the mess by over-charging millennials and their kids, and undercharging smokers and others with unhealthy lifestyles. Except for those below certain wage thresholds, insurance costs are likely to increase.</i><p>Yep.