Prevention does NOT save health care dollars

[eridani]

http://edlabor.house.gov/documents/111/pdf/testimony/20090423DavidHimmelsteinTestimony.pdf

A Canadian hospital gets paid like a fire department does in the U.S. It negotiates a global budget with the single insurance plan in its province, and gets one check each month that covers virtually all costs. They don’t have to bill for each bandaid and aspirin tablet. At my hospital, we know our budget on January 1, but we collect it piecemeal in fights with hundreds of insurers over thousands of bills each day. The result is that hundreds of people work for Mass General’s billing department, while Toronto General employs only a handful - mostly to send bills to Americans who wander across the border. Altogether, U.S. hospitals could save about $120 billion annually on bureaucracy under a single payer system.

And doctors in the U.S. waste about $95 billion each year fighting with insurance companies and filling out useless paperwork.

Unfortunately, these massive potential savings on bureaucracy can only be achieved through a single payer reform. A health reform plan that includes a public plan option might realize some savings on insurance overhead. However, as long as multiple private plans coexist with the public plan, hospitals and doctors would have to maintain their costly billing and internal cost tracking apparatus. Indeed, my colleagues and I estimate that even if half of all privately insured Americans switched to a public plan with overhead at Medicare’s level, the administrative savings would amount to only 9% of the savings under single payer.

While administrative savings from a reform that includes a Medicare-like public plan option are modest, at least they’re real. In contrast, other widely touted cost control measures are completely illusory. A raft of studies shows that prevention saves lives, but usually costs money. The recently-completed Medicare demonstration project found no cost savings from chronic disease management programs. And the claim that computers will save money is based on pure conjecture. Indeed, in a study of 3000 U.S. hospitals that my colleagues and I have recently completed, the most computerized hospitals had, if anything, slightly higher costs.

Video link at Political Videos
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x305409

[Jeep789]

1. Thank you. Same is true with smoking prevention, including 2nd

hand smoke. I don't mind when people claim it allows people to live longer but claiming health cost savings is, quite simply, a lie.

[madrchsod]

2. i`m declaring bankruptcy on medical bills....

and i have insurance. i refused to pay for a botched operation and they sent me to collections and wage garnishment against my wifes income...

we really need health care reform

[Kansas Wyatt]

5. Have you seen an attorney for the botched operation?

I had a horrible accident in the 90s, and then received errant tormenting treatment, which would have been considered malpractice. The hospital knew I could not pay the bill anyway, so they immediately forced me into filing bankruptcy, while I was still trying to recover.

I didn't know until later, and it was the least of my concern at the time, but when I filed bankruptcy, I was prevented from filing a lawsuit against them for their malpractice. Not sure how it all works, but I then realized why this hospital really pushed the collections right away.

Just saying you might want to talk with an attorney first, to see where you stand on any claim against them. I've found in life that the easiest way to dodge a bullet, is to run into it.

[madrchsod]

11. i checked a lot of lawyers...would`t take it because.....

you sign that right away before the operation-mine was infection. i still need another operation

[Fire_Medic_Dave]

22. How much was the bill?

How did they manage to get your wife's wages? Bankruptcy seems extreme.

[hedgehog]

3. Prevention not only saves lives, but it makes lives better.

For example, better to not ever have the heart attack or need the by-pass surgery. Better not to need the hip replacement, even if the medicine is costly.

[eridani]

12. Yes it does. However, just like any more aggressive medical intervention--

--it COSTS money.

[geckosfeet]

4. Yes, yes and maybe. The insurance companies LOVED the MA health

care reform plan. They have a captive source of income. Romney 'simply' created a law that said we will penalize you with taxes if you don't pay up to the insurance companies. (How is that for a tax hating RW lier.) The insurance companies are all fighting for piece of the pie and building administrative staffs in their claims departments. The problem is, we are forced to buy insurance but the insurance companies are not forced to pay for health care. They selectively deny or allow claims with the same impunity that they always did. It does not take a genius to see that the insurance lobby had Romney in their pocket.

The premise that multiple insurers are less cost effective and efficient that a single insurer is a manifestation of the same problem - the insurance companies. Whose idea was insurance anyway? What a scam. Entire industries built on actuarial tables and claims departments. And we are all dependent on these organizations to allow us to seek health care, to arbitrate car accidents, homeowners insurance, disability, life, and on and on until we get to credit default swaps where the model has disintegrated like a mud pie in a rainstorm.

But I digress.

Administrative costs associated with filing claims are MEANT to deter. Insurers make filing and supporting a claim such an expensive and exhaustive process that at some point most folks simply throw up their hands and say 'ok whatever'. Hospitals, government organizations, some clinics and doctors can afford to carry a staff to ride herd on the claim process.

Lastly, and here is where my thoughts differ from the OP and Himmelstein - the efficacy of treatment is what health care is about isn't it? Of course it costs money. But I would rather have preventative care up front than less effective follow up care after suffering debilitating symptoms for twenty years. The focus should not be about what preventative treatment costs. It should be on efficacy. Of course it's going to cost money. Just like it costs more for a decent computer than it does for a filing cabinet, paper and pens. But a computer is much more capable in the hands of someone who knows how to use it. This is where part of the dichotomy lies. Health insurance as a business and health care as humanitarian service part ways when we try to put a value on quality of life.

[ejpoeta]

9. that's my fear about mandating health insurance coverage.

the insurance companies can charge you whatever they want and you have to pay it. period. it will be like car insurance is, where they can charge you whatever they want and you are going to pay through your nose if you have had any claims. the only way it will work is if the profit incentives are not there. and that isn't going to happen if the insurance companies get to decide.

[eridani]

13. I don't think that Himmelstein would disagree with your last paragraph

As a family practice doctor, he is big on prevention himself. He's just attacking the notion that nattering on about "prevention" is some kind of adequate substitute for getting private insurers out of controlling access to care.

[FarCenter]

6. No data presented on prevention -- achieving savings would cause unemployment

First, the testimony says "A raft of studies shows that prevention saves lives, but usually costs money." However, the studies are not named and no data is given regarding the outcomes of the studies. Pure unsubstantiated assertion.

Second, the testimony says "In other words, if we cut our bureaucratic costs to Canadian levels, we’d save nearly $400 billion annually – more than enough to cover the uninsured and to eliminate copayments and deductibles for all Americans."

At a loaded labor rate of $100,000 / year for bureaucratic positions, the $400,000,000,000 translates to 4 million jobs that would have to be terminated to achieve the savings. Actually, the labor rate is probably lower and the number of jobs lost higher, since these are mostly adminstrative/clerical low-wage jobs. Most of the jobs are filled by women.

While the savings could conceivably be ploughed back into better medical care for more people, this would done by people with medical training filling fewer, better-paying jobs.

[eridani]

14. So people have to get paid to essentially kill their neighbors just so they have jobs?

How about retraining them to provide actual care? Also, a big advantage of single payer is that the government could flat out dictate that NONE of the remaining claims processing jobs could be outsourced.

[Hannah Bell]

23. Does canada have a significantly higher UE rate than the US? I don't think so.

Insurance is a socially useless business.

I'd rather pay more people to clean the hospitals, staff the nursing homes, pay freaking "greeters" to stand in front of the hospital than pay nearly 1/3 of every healthcare dollar to insurers. Those people, even the greeters, would be performing some useless service instead of killing trees.

[Juche]

7. Social securty costs go up too

If prevention adds (as a guess) 3 years to people's lives that is an extra 3 years of medicare and social security payments. so even though we should focus on prevention for the quality of life issue, it will probably cost more in the long run.

To really improve healthcare you need to cut administration and improve efficiency. I think we spend a trillion dollars a year on ineffective healthcare interventions, not using our bulk purchasing power and unnecessary administration. A single payer program that made bulk purchases of medical supplies with the US equivalent of the UK's NICE program (a program that studies producitivy per dollar spent on healthcare) would probably end up saving us a trillion a year.

[notesdev]

8. What will save health care dollars

is getting rid of the middlemen who add nothing of value to the process but suck up an amazing amount of money.

Second on the list is putting some reasonable limits on lawsuits. Doctors shouldn't have to treat every patient as a potential lawsuit lottery participant.

[ejpoeta]

10. the problem is this.....

how do you differentiate between an actual malpractice and just something the doctor couldn't control. accidents. they happen. there are things that are beyond anyones control. and in order to make it possible for those whose doctors actually did something bad, like leave in medical equipment or something like that while protecting them from the average thing that was no one's fault is the key. i don't know where we ended up in this place where accidents aren't just accidents and such. In society in general we have this pervasive idea of a lottery ticket.

If someone comes over to my house, I fear that if they fall down the stairs I will be sued, even if it is just that they weren't watching where they were going or something. My nephew fell off of the playground equipment at the county park at our family reunion several years ago and had a concussion. Did my brother sue? NO! he asked them to fix the equpment to prevent kids from falling off in future, and they did. I mean, it's gotten to the point where in some cases people HAVE to sue just to get anyone to do anything. But for the most part, people seem to be greedy and see that it's just a way to get what THEY deserve.

[eridani]

15. In other industrialized countries, if people suffer negligence they don't have to sue--

--just to get any necessary ongoing treatment. If you have it as a right of citizenship, you don't sue for it.

[varelse]

16. Prevention increases health care expenses

but increases productivity in other areas. Healthy people are more likely to contribute to the economy than sick people are. We're also less of a burden on the social "safety net".

Does preventative health care produce a net gain or a net drain on our economy, in your opinion?

[eridani]

17. Yes, I agree. None of the benefits show up on the health care dotted line, however

I'm a poster child for your observation. When my grandmother was my age, she'd been dead for 9 years. When my father was my age, he'd been dead for 3 years. I inherited their genes for Type II diabetes and my a1c values didn't go over 7.0 until my 62nd birthday last year. Which of the three of us will have the highest lifetime health care expenses? Me, of course.

However, as you point out, society has already gained the benefit of my being able to use my subsidized grad school training for another 10 years or so, and will gain the benefit of whatever volunteer work I'm doing in retirement.

[northzax]

18. I don't neccesarily agree that you will have higher, lifetime adjusted costs

Assuming equivalence of care of course. What do you think it costs to manage your diabetes annually? A couple thousand bucks? Maybe a hundred thousand over your lifetime? With the added benefit that you continue to work and produce? Compare that to the cost of amputating your feet, a likely end result of non-management, that's gotta be 25k each, right? Or a hundred grand for a new kidney? Eye care when you start to lose vision? Assisted living arrangments for a blind amputee and the resulting loss of productivity? I live down the street from an assisted living center for primarily amputees, most of whom are diabetic. What's the actual cost financially to society to have twenty five men, in their 40s and 50s, living on disability is subsidized housing? Let alone the moral cost of allowing people to get to a place where that is their only option?

[eridani]

20. Don't lump in health care with other social costs and benefits

Managing my diabetes is fairly cheap now because I'm not on insulin yet. Not sure what it will cost later, but a friend on insulin has about $2000/month costs with the insulin, glucose meter test strips and other meds and his copayments for his retiree health plan. The thing is, the longer I live, the more likely it is that I am going to need more expensive interventions sometime down the line, which will be just delayed for 20 or 25 years. And the longer I live, the more chances there are for me to be seriously injured by some random drunk driver.

My delay in onset was a result of counseling about how to deal with high glycemic index foods and aggressive early treatment with metformin before I ever came close to being officially over the line. I also have some class privilege that my ancestors never had--a health club in the basement of my workplace.

Of course the overall social benefits you've mentioned from being able to still contribute to society are there, but they are hard to measure in the same way as direct health care expenses.

[varelse]

19. This is an excellent argument for broadening the debate on health care solutions for the US

Rather than focusing exclusively on health care costs to our society, perhaps the health debate should include a discussion of the economic and social benefits of universal health care access from conception (many health problems begin before birth and can be prevented with adequate prenatal care).

[eridani]

21. That's true, but what makes the argument difficult is--

--how hard general social benefits are to quantify. What dollar value do you assign to volunteering for tutoring or at a food bank? Even the overall total effect of the elimination of most medical bankruptcies isn't all that easy to measure. Still, the argument is worth making if only to promote our values, and values arguments can be very effective.

[varelse]

24. The social benefits of preventing health problems are

the lowering of associated costs. Every child born healthy is a child that could eventually be educated, employed, and actively contribute to society. Every person who, by adequate access to health care, is protected from severe (or even mild) disability will weigh in more as a contributor and less as a consumer of tax dollars spent on our government-funded social safety networks.

There are sound economic reasons for the expenditures aimed at maintaining public health, such as water and sewage systems. There are real costs, both to business establishments and to government, associated with health. Everything from missed work days due to illness to total disability (as was posted earlier, is often the result of a lack of preventative health care) carry a cost which can be, and has been quantified from time to time in published articles and studies.

Consider just the one example brought up by another poster: imagine if your diabetes had not been brought under control early, due to a lack of access to adequate preventative treatment. You might now be blind, disabled, and living in a government-funded facility and collecting taxpayer funded disability. In a worst-case scenario, with inadequate social safety nets in place in many of our states, you might not only be blind and destitute, but homeless for a number of months or years before any taxpayer funded agency stepped in to help. And for much of your life, you would exist as a net liability to our society, rather than the contributor you obviously are now.

This is actually happening - people whose disabilities could have been prevented or could still be corrected with health care or continuing treatment (the mentally ill, especially come to mind) are instead subtracted as contributors to our economy and to their local communities, and added as liabilities to the state, to their own families and communities, and to the taxpayers.

I maintain that an adequate investment in health care dollars, designed to prevent severe and disabling health problems, while more expensive in terms of direct health care costs, provides a net economic benefit to our society.

[eridani]

25. Yes, it does provide net benefit

But it isn't easy to quantify, so we have to resort to describing hypothetical outcomes.