Wednesday, February 21, 2007

The Health Care Dilemma: The Value of Investing Up Front

Yes, I am thinking about current Episcopal and Anglican events. However, I’m just not settled yet on what to say. And in the meantime, there is plenty to talk about in health care.

These days everyone in the United States is talking again about health care. It’s almost like the heady days of the early years of the Clinton Administration. All the presidential candidates declared and not, are saying it’s important. President Bush wants to encourage folks to buy family health plans by changing the tax code. Massachusetts, California, and Pennsylvania want to add as many people as possible to State Children’s Health Insurance Plans (SCHIP) and to Medicaid, and then require all employers to provide health insurance for their employees. Even Wal-Mart and the Service Employees International Union, along with a number of other organizations, agreed that there is a need for “quality, affordable” health care.

Now, I think there are problems with almost all of the plans, problems that revolve around assumptions about the value of “the market.” Those assumptions manifest themselves in various ways, but they all reflect a belief that competition in a free market will resolve all concerns. And we all know what happens when we “assume…”

There are several reasons that the principles of “the market” don’t work too well on health care. Over time I’m sure I’ll address several. However, for the moment let me focus on one. Many of the market proposals involve the assumption that we can save money if only people will use health care less. Today at a roundtable in Chattanooga, Tennessee, President Bush said, “People can save money with health savings accounts. These are innovative products, innovative ways of providing insurance for yourself and you're family, where you actually save money, tax-free, if you don't spend money on yourself.” That suggests that there are many people out there misusing health care resources, seeking professional care, for example, when they don’t really need it. That does happen, of course. Folks use emergency departments for primary care. They expect antibiotic medications for viral conditions, that antibiotics don’t touch.

At the same time, these proposals aren’t really directed at eliminating those concerns per se. They are interested simply in encouraging folks to spend less money on health care, encouraging them with the thought that they will benefit from the money they don’t spend.

That may look like good economics, but it’s bad health care. In fact, because it’s bad health care it’s bad economics. We are not served by people using less health care. We are better served by them using more health care, and using it earlier. We know well that preventive care is cheaper in the long run than pathologic care; that is, every dollar we spend preventing disease is multiplied in terms of what it saves over treating diseases once they’re established. Over the years I’ve seen estimates of savings as high as ten times the initial expense.

But to accomplish that benefit we have to spend money. We don’t get the savings if we don’t make the investment. Yes, encouraging lifestyle change will help, but it won’t do the job. We can go a long way toward preventing major diseases, but only if we’re spending the money to catch them while they’re minor. We can prevent many of the consequences of high blood pressure, but only if folks are seeing primary care physicians to have their blood pressures checked and receiving the medications they need. We can keep many people out of operating rooms, cath labs, and intensive care units; but to do that we have to pay for screenings, cardiologist visits, and cholesterol medications. We can keep folks from coming to the Emergency Room with pneumonia, but only if we can insure their access to primary care physicians when it’s still just a troubling cough. If we don’t invest the money and time to keep small problems small, we don’t get the benefit of not having to deal with big problems.

And that’s where the rub is. The system as we have it does a good job of paying when there is an identified problem; and the bigger the problem, the better the system is at paying. It’s much harder to make the system pay when there isn’t an identified problem. It’s much harder to get the folks who control what the system will pay to respond when there isn’t an identified problem. And so, instead of considering how to invest in health care when it’s easy, they wait until they have identified problems to address. Unfortunately, the longer they wait to make sure the problem is identified, the more it costs to address it.

This has many applications. For example, we have invested more in Medicare while we have allowed investment in Public Health to slip. We have argued whether we can afford to pay for health care for non-citizens, or at least for undocumented aliens. However, it is precisely among the poor, the transient, and the newly arrived – categories that circulate around undocumented aliens – that contagious diseases are more likely to surface. Even in the suburban hospital that I serve infectious diseases have shown up disproportionately among newly arrived folks, some documented and some not. If we are to be prepared for a pandemic, whether it’s avian flu or something else, we need a strong, active public health service, and we need to make it accessible to the poor, the transient, and the newly arrived. And we need to be willing to pay for it.

There are many other examples. The same principle applies to preventing problems at birth and the major expenses of neonatal intensive care; to reducing absenteeism from industry and from public schools; and to expenses for wound care and eye care associated with diabetes. All these concerns are much cheaper to address early than to address later when they’ve developed serious consequences. But they only remain cheaper if we spend the money and address them. If we don’t invest the money up front, we don’t get the benefit of prevention, and we end up once again paying the high costs.

That’s only one of my problems with a market approach to addressing our health care. There are others, but they will wait for future posts. For my point today, the problem is simple enough: if we want to save money on health care over the long run, in the short run we don’t need to spend less money. We need to spend more.

1 comment:

ab said...

I contributed, several thousand dollars this calendar year, to my employer offered health savings account. I was lucky, for I knew in November, when we make our choice for next years withdrawal amount, about how much of my jaw surgery would be out of pocket. Thats the problem, its darn hard to estimate your oop expenses ahead of time, and if you over estimate, that money is essentially gone.

Also, Bush wants to tax my healthcare benefit, or "worth"? Come on....I'm for levelling the playing field, but they're called benefits for a reason....this just tips the scale towards calling them a liability, especially considering the state of health care.