Dr Arun Rao and The Wright Center on Aging

1c88508Now you may not be in the market for a geriatrician, but if you are, I strongly recommend Dr Arun Rao of the The Irving S. Wright Center on Aging. (The Wright Center is affiliated with Cornell Medical of New York.)

Over the years we have the need to work with many different doctors and medical groups dealing with Mom’s Lewis Body Disease. Dr Rao and his team provided exemplary service — they even made house calls to visit Mom after it became a major trauma for her to leave her apartment.

Not everything he recommended worked — anyone need a Lazy-Boy chair? — but he was constantly trying, open minded to our concerns, and very responsive to our needs. It’s been a difficult time, and Dr Rao and the team have been a big support.

[Update: Dr Rao is now a Primary Care Physician, LIFE St. Mary at St. Mary Medical Center in Langhorne, PA. Still highly recommended.]

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More Perverse Incentives


(image (c) by KT of Lake Orion)

I was shocked to read an analysis in The Economist which among other things showed that the “stagnation of middle-class incomes in recent years is in large measure caused by health-care inflation.” Remember all those articles wondering why there was no wage growth considering the productivity gains? Now we have the answer…

Health-care must be on my mind. Not sure why, perhaps my Mom’s situation is playing into it, but my last post was about an article in the New Yorker, which described a feedback system designed to make health care costs spiral upwards:

  • doctors make recommendations on treatments
  • no patient is ever going to want less treatments
  • doctors get paid on what they recommend

While doctors need to take the Hippocratic Oath, many studies have shown that doctors are not immune to commercial influences.

Then when you throw in the zinger from the New Yorker article — namely that more procedures, tests, medicines and specialists do not statistically yield better results — you see how crazy the system already is.

Then the article from The Economist pointed out a whole new perverse incentive involved:

…most Americans get their health insurance through their employers. This dates back to the era of post-war wage controls, when firms offered benefits instead of pay rises. Today’s tax code sets it in stone. Employers can buy health insurance with pre-tax dollars. Individuals cannot.

When a typical patient goes to the doctor, he has no idea what anything costs. He pays only about 15% of the bill, so if the doctor recommends something he will probably say yes. The doctor gets paid for everything he does, so he has a powerful incentive to perform costly, unnecessary procedures. Besides, he may be socked for damages if he omits a test that a lawyer subsequently convinces a jury might have been useful. The costs are passed on to insurers, who pass them on to employers in the form of higher premiums, who then pass them on to workers in the form of lower pay.

What can we do about this? Surely there is some way to break these crazy loops of cycling costs.

How about removing companies from providing health insurance and allowing individuals to deduct the costs of heath insurance from their taxable income? That would help, but most people say isn’t practical. But in a world where General Motors can go bankrupt, why not give it a full hearing?

And how about banning doctors from receiving incentives or having a fiduciary interest in the procedures they’re recommending? We banned the drug companies from “spiffing” doctors for prescribing their drugs. Why not take this further?

When I hear politicians talk about “health care reform” these topics rarely come up. Massachusetts‘ “revolutionary” health care reform was all about making sure that all people had access to health care. A great goal all by itself, but don’t tell me it had brought down costs in the Commonwealth.

Since I’m pretty sure Obama isn’t reading Adam Honig Dot Com, I’m going back to writing about music, traveling and M’bar, like usual.

What’s wrong with the US Healthcare System?

(image from the New Yorker.)

I just read the article I’ve been looking for regarding the American healthcare system: Annals of Medicine: The Cost Conundrum by Atul Gawande of the New Yorker.

Mr Gawande lays out perfectly the perverse incentives that face doctors in the US. By examining the medical cultures in various cities around the US, he demonstrates that spending more on medical procedures, equipment, etc., do not produce better results. In fact, they can produce worse results.

But since doctors are paid (in most cases) by the number of tests and procedures they recommend, the cost of healthcare has grown completely out of control.

Mr Gawande goes further to show that the current proposals the government is considering to ‘check healthcare costs’ will not be effective:

Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coördination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.

Definitely worth a read.