The Phony Price Tag for Health Reform

By DAVID HANSEN

A few days ago my daughter, a physician serving largely the uninsured, came home emotionally drained from a typical day at the office. Most of her afternoon's patients were seriously ill, facing expensive, complex care, and needlessly so. They had come into such poor health because of inadequate management of chronic conditions and mostly it was due to their inability to pay.

One of the day’s patients was a man in his forties who had been diagnosed with high blood pressure four years prior. Uninsured, he received inconsistent treatment for his condition, leading to a heart attack two years later. The attack precipitated heroic emergency room and then hospital treatments, free to him but expensive to the rest of us, including placement of a stent; however, with the immediate crisis over, lack of money for drugs led once again to gap-filled care. Key in his follow-up care should have been the drug Plavix, considered critical for avoiding clotting after stents, but he couldn’t afford it so he stopped taking it ten months too early. Now, just two years later, he’s developed severe high blood pressure that has damaged both his heart and kidney. Our medical system will provide him once again with heroic and very expensive hospital care, all of which likely could have been avoided if proper health care insurance had enabled his condition to be systematically managed for the past two years. The system as a whole, and likely government funding in particular, will end up paying hundreds of times more because his care was so poorly managed. Of course, we’re also losing a potentially productive man all the while, if not forever.

She’d had other patients that day with similar levels of inadequate early medical attention, each now facing expensive, heroic medical efforts to keep them alive. There was the gentleman with a prostate tumor that upon diagnosis was already stage 3, the young woman who’d gone two years without treatment for bulimia and now faced chronic medical problems for the rest of her life, and the diabetic who’d developed heart problems because proper monitoring of her condition was financially out of reach.

“We almost never saw cases like that in Cuba,” my son-in-law exclaimed. He was, until my daughter snatched him off the island in a romantic heist, a Cuban family physician. “Those kinds of patient histories are what you’d expect to see in the poorest of Africa, but not in a country with a health system.” Cuba, contrary to popular wisdom among the left, does not provide technologically advanced medical care consistently; however, it has highly systematic, comprehensive primary care for all. It does the simple things in medicine very well.

Our “system” for medicine in America provides wonderfully heroic, technologically advanced medicine for almost everyone, also for most indigent once they show up at an emergency room. However, simple, inexpensive care management is neither covered nor provided for many, as both the uninsured and underinsured fall through gaping holes in primary care access. This leads to poor primary care for a substantial chunk of Americans. The gaps in attending to the simple lead to belated reliance on the complex and expensive.

There are ample statistics that drive home this point. The Commonwealth Fund assembles many in its National Score Card on health system performance. Compared to benchmarks set by best performing countries, in 2008 the United States comes out poorly in providing systematic care management. The US had:

• Nearly twice the percentage of adult hypertensive patients with blood pressure above prescribed limits (140/90 mmHgd)
• Nearly twice the rate of heart failure hospitalizations that were deemed avoidable if the patient had gotten proper outpatient care prior
• Nearly twice the number of diabetics hospitalized in cases where the hospitalization could have been avoided with proper primary care
• Over three times the percentage of patients treated in an emergency room for conditions that could have been treated by regular doctor
• Over three times the rate of hospitalizations for acute attacks among pediatric asthma patients, attacks that are fully avoidable with proper primary care management

The point is that when Americans can’t afford proper care we don’t just let them die, we first spend lots of money on them to provide expensive, avoidable care. And then we watch them die: The USA had in 2008 a 59% higher rate of “mortality amenable to health care,” i.e., people dying of diseases that they wouldn’t die from if they lived in countries with health systems providing benchmark levels of chronic care management. The USA is at the very bottom in this critical statistic, among 19 industrialized countries.

These statistics suggest that the potential to save on medical bills by eliminating avoidable hospital care through better primary care are huge. Remember that three quarters of the health care dollar goes to care for the chronically ill, for which significant chunks of hospital treatments are avoidable with systematic, consistent care management.

Then come the additional economic gains, and thereby also tax gains, from keeping people of working age alive and productive. Medicare funds would also be relieved of caring, once they reach 85, of those grossly undertreated in younger years.

So let’s turn to economic assessments that were given Congress about health reform costs and benefits. Is it probable that a health reform bill, by providing health insurance for 94% of Americans, will make a difference in getting them proper, early care? Yes. Will it save money, also for the government, and by substantial amounts? Yes again. Yet the $1 trillion, 10 year cost estimated by the Congressional Budget Office (CBO) fails to account for these probable huge economic gains for society and financial gains for government coffers. Indeed, these likely savings are considered too soft to “score” in CBO land. By mandate the CBO isn’t allowed to estimate the financial gains of reforms succeeding in making Americans healthier, however solid the case for savings can be made.

Thus, the CBO numbers present economic half truths, but full lies. They’re grossly misleading by putting hard numbers on a narrow set of issues, direct government costs and revenues under the assumption that health care practices remain as they are, while refusing to evaluate the much larger and more important gains from changing care for the better. And then these full lies get tossed like hand grenades into the debate, a discourse so degraded that best practice guidelines become “death panels” and malinformation spearheads most attacks.

To those that believe the costs of current health reform packages are exorbitant: Have you truly considered the economic costs of not creating more rational financing of care? The default of failed reform is one for which also you will be footing the bill. And then comes the moral costs of letting Americans unnecessarily lose their lives’ quality if not their lives altogether. Be careful what you wish for as you work so feverishly to derail reform.

David Hansen has aided organizations with health care strategy, IT planning, and new venture development for a couple decades, both in Scandinavia and in the USA. He holds graduate degrees in Economics and Business Administration from the University of Bergen, Norway and the University of California. He, like thousands of other health economists, has dreamed of significant health care reform in his lifetime.