Why Consumer-Driven Health Care Will Fail

The creation of consumer-driven health plans (CDHPs), health insurance policies with high deductibles linked to a savings option and with more financial respnonsibility shouldered by patients and employees and less by employers, was completely inevitable. The American public likes to have everything, whether consumer electronics or other services, as cheap as possible. With escalating health care expenses rising far more rapidly than wages or inflation, it's not surprising employers needed a way to manage this increasingly costly business expense.

In the past, companies faced a similar dilemma.  It wasn't about medical costs, but managing increasingly expensive retirement and pension plan obligations. Years ago, companies moved from these defined benefit plans to defined contribution plans like 401(k)s. After all, much like health care, the reasoning by many was that employees were best able to manage retirement planning because they would have far more financial incentive, responsibility, and self-motivation to make the right choices to ensure a successful outcome.   

How did that assumption turn out anyway?

Disastrous according to a recent Wall Street Journal article titled Retiring Boomers Find 401(k) Plans Fall Short.

The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal. Even counting Social Security and any pensions or other savings, most 401(k) participants appear to have insufficient savings. Data from other sources also show big gaps between savings and what people need, and the financial crisis has made things worse.

In others words a lot of people don't have enough money to retire.   The options they have are simply "postponing retirement, moving to cheaper housing, buying less-expensive food, cutting back on travel, taking bigger risks with their investments and making other sacrifices they never imagined....In general, people facing problems today got too little advice, or bad advice."

Though employers were able to manage retirement expenses, employees paid a significant price.  This wasn't intuitively obvious in the 1980's when these plans became more commonplace.  Over the past decade, the less than rational behavior by employees hasn't gone unnoticed by those who study behavioral economics or those in the government.  As a result, more organizations and companies are nudging employees into the right behaviors with auto-enrollment into 401(k) plans and auto-allocation of these funds with protection from any future liability as noted in the Pension Protection Act of 2006.

The analogies to health care and specifically consumer-driven health plans should be clear.  Workers don't save adequately for retirement even when in their best interest.  It's very likely that workers won't save money adequately to fund future health expenses.  After all, if people can't fund retirement, something we undoubtedly all look forward to, which one of us is willing to saving for chemotherapy or open heart surgery, which no one wants?  According to the annual Kaiser Family Foundation Employer Benefits Survey, the average annual deductible for single coverage and family coverage is nearly $2000 and $4000 respectively for health insurance plans that are health savings accounts (HSA) eligible.   The deductibles are slightly lower in health insurance policies that are linked to health reimbursement arrangement (HRA).  About 13 percent of employees are covered under either plan.

Unlike those in retirement planning who can work longer, even if not desirable, employees who are ill may not have an option to work to pay for their medical expenses.  There continues to be evidence that people are curbing their health care due to the ability to pay.

Though experts debate on whether this is a good thing (patients are avoiding unnecessary and expensive therapies and opting for less pricey but equally as effective options) or a bad thing (patients are avoiding the preventive screening tests or therapies that overall can decrease future costs), the opportunities to ensure patients make the right choices should be clear from workers' less than optimal experience with 401(k)s.

If employers wish to help curb medical costs, then they will need to engage workers with programs like employee wellness, assisted decision making (either as second opinions or patient-friendly informed consent), and access to medical experts, equivalent to personal financial advisors, who may be able to help workers make the right choices for their health.  Within the business community, there is some acknowledgment that access to these tools will be necessary to not only manage costs but keep employees healthy and productive.

Done correctly, consumer-driven health care can be what everyone hoped they would be, nudging healthy behaviors and slowing health care costs with workers selecting only cost-effective therapies.  If implemented poorly and organizations simply shift health care costs and financial responsibilities to workers like retirement planning decades ago, the nation will need to accept more than ever that increasingly more people get the medical care based simply on their ability to pay and not on medical necessity.

As a practicing primary care doctor, I hope that day never comes.

Why This Primary Care Doctor Loves his Electronic Health Record

A recent post in the Wall Street Journal Health Blog noted that a study found electronic medical records don't improve outpatient quality.  The authors of the Archives of Internal Medicine article, Electronic Health Records and Clinical Decision Support Systems, correctly points out that we should be skeptical and "doubt [the] argument that the use of EHRs is a "magic bullet" for health care quality improvement, as some advocates imply."

This should surprise no one.  Were we that naive to think that simply installing health information technology (HIT) in the medical field would generate significant improvement in outcomes?  Does simply installing computers in our classrooms improve educational test scores?

Of course not.

The excellent commentary after the article makes some plausible reasons why the clinical decision support (CDS) didn't seem to improve outcomes on 20 quality indicators.  First, it isn't clear that the CDS implemented across the various doctors' offices and emergency rooms actually addressed the indicators studied.  Second, the data studied is already dated (from the 2005 to 2007 National Ambulatory Medical Care Survey), a long time in technology terms (iPhone first debuted in 2007).  The authors of the original article also point out that there is some evidence that institution specific use of CDS actually improves quality.  Whether this can be scaled to the national level is the question.

In other words, it isn't just that perhaps CDS failed, but rather the robustness of the system was inadequate, that doctors failed to use them, or just as importantly patients were unswayed by the doctors reminded by the CDS to do the right thing. One of the 20 quality indicators studied was in fact the appropriate antibiotic use in viral upper respiratory infections.  As most people know already, there is not typically an appropriate antibiotic to use for a virus.  It's a virus.  It does, however, take good bedside manner to inform and educate an ill patient!

As someone who has had the benefit of a robust electronic health record since the spring of 2006, I know I'm incredibly lucky.  In an April 2009 New England Journal of Medicine article, only 4 percent of doctors nationally have a fully comprehensive EHR that I take for granted daily. Only 1.5 percent of hospitals have a comprehensive EHR, which I also have access to.  CDS is also an incredibly helpful tool and an excellent reminder to provide the right care every time.  It is a safety net.  Understandably some EHRs aren't that good, the CDS is clunky, and certainly the one I use is good, but not perfect.

The real issue isn't finding a perfect EHR, but rather how do we address the culture of the medical profession. There is something still heroic and mystical about a lone doctor, independent, smart, and getting the job done.  Indeed, to get into medical school, one has to be self-motivated, persistent, and determined.  Why on earth would we need a computer to help us?

Frankly, because it makes us better doctors.  CDS frees up time and mental energy.  I don't have to remember the latest guidelines on immunizations, repeating blood work, or treatment of illness like coronary artery disease, congestive heart failure, and hyperlipidemia.  Most of these diseases are well understood and often under a protocol, something known as precision medicine, a term used by Harvard Business School professor Clayton Christensen. 

Now I can focus on if the patient in front of me is an exception to the protocol as well as thoughtfully diagnose and treat their ailments which don't fit any protocol (cognitive medicine) because science hasn't evolved to that level of understanding.  I'm a big believer in the history and physical exam and how the use of HIT can make care more personal.  Having real-time access quickly and reliably to medical information and data 24/7 is important to make this happen.  Instead of hunting for lab work in a paper chart or trying to find a specialist's consultation, I can access the information I need rapidly and focus on the patient in front of me.


Sadly, however, many doctors don't feel the same way. Perhaps it is a generational thing. Perhaps it is because their EHR is inadequate.  It might also be, however, our training and tradition which limits us from improving.  If anything, the medical profession needs to emulate ourselves after the aviation industry where technology is used to support decision making and make pilots and flying even safer and better.  We are where our aviation colleagues were in 1935 as noted in Dr. Atul Gawande's New Yorker piece, the Checklist.  Because, really, CDS is essentially a checklist.

In the situation where a patient doesn't fit CDS, then we get to do what we do best and that is use all of our training to get a patient better.   HIT, EHR, and CDS are things the next generation of doctors must accept that will make the care we provide more personal than ever before.  In the end, that is what patients really want.

This is why I love my EHR so much.

Americans Cut Back on Doctor Visits - Very Worrisome

The Wall Street Journal reported that overall medical use fell as patients had fewer doctor office visits, lab testing, and maintenance medications possibly due to the recession or as a result of consumer driven healthcare in the way of higher deductibles and copays.  This is very worrisome.  Certainly patients should have some financial responsibility for their care, but skimping on care will only result in Americans not becoming healthier, but sicker.  Though the article cited some examples of patients saving money by not seeing their allergist for a refill of medication and simply calling for one and getting an athletic physical at a local urgent care clinic for $40 rather than $90 at the doctor's office, these tiny behavior changes aren't going to bend the cost curve in medical care.

Sure, some patients are holding off on elective surgeries.  This might be a good thing as research has suggested that Americans get too many procedures compared to other industrialized countries.  However, this could be equally as bad as there may be an equal number of people who truly need surgery to improve their quality of life and ability to walk but can't do so because they can't afford it.

With more financial responsibility of higher deductibles and copays, patients will simply skip care, specifically, needed medical care.  As the drugstore CVS noted, there was a "drop-off in new prescriptions for maintenance drugs tied to a decline in physician visits".  In other words, patients are not getting treated for their high cholesterol, high blood pressure, or diabetes to prevent premature heart attacks or strokes.


Paul Ginsburg, a respected health economist of the Center for Studying Health System Change noted that this patient behavior "could go beyond the recession. Being a less aggressive consumer of health care is here to stay."


I disagree with him in the sense that patients weren't necessarily aggressive before, but behaved in a rational manner when copays were low, there were no costs to medications, lab work, and office visits.  The question is with very high financial barriers to seek care will they make the right choices?  Will Americans change their behavior and become healthier?

The answer is no.

As a practicing primary care doctor I know when I must seek medical care and when I can safely skip.  If this data holds true for the next few years, America will have a very big problem.   We will have a less healthy workforce because they cut corners on their health.  A generation of Americans who will skip important preventive screening tests because they feel fine and aren't willing to pay the high copays.  Those with medical conditions like diabetes will develop avoidable complications of blindness, kidney failure, and amputations because patients don't renew their maintenance medications.

Americans will die sooner, have a worse quality of life, and more preventable complications as a result of consumer driven healthcare.  The doctors who are best in advising patients on the right care, the primary care doctors like internists and family doctors, are leaving their practice in droves because of issues of work-life balance and decreasing reimbursement.  Healthcare costs for the short-term may fall only to rise rapidly as patients are forced to be treated for conditions that could have been handled earlier more easily and for a lot less.

In other words, the perfect storm of a worsening healthcare system is upon us soon.

Which will leave the government no choice but to establish a single payer government run system.

Our Big Problem - Obesity - Who Will Solve?

The Wall Street Journal recently published Our Big Problem: Obesity penned by a British physician Anthony Daniels, pen name Theodore Dalrymple, who feels that the weight problem is due to fragmentation of families when it comes to meal times. Families don't prepare or enjoy meals together. Fast and already prepared foods dominate the kitchen table. It is simply a consequence of the modern society we live in. He wishes that the fast-paced fragmented American family life will return to the days of home cooked meals and sit down dinners.

He recognizes that this ideal world is highly unlikely. As a result, he suggests that is that government should regulate and restrict further the food we eat. Sugar and fat content of fast foods would be an area of government intervention.

He'd better be kidding. Anyone who has been watching Jamie Oliver's show Food Revolution has seen how well intentioned government regulations on school nutrition can result in very unhealthy food that fulfills the requirements but not healthful. (Is a squirt of ketchup really a vegetable serving?). Government does have a role in society, but will be unable to fix this problem.

Unfortunately doctors can't stop the obesity epidemic either. Recent reports noted that primary care doctors lack the training and resources to address the issue with their patients, even as they feel the responsibility to provide advice. The problem is that in a survey of 290 doctors found that 72 percent had no one in the office trained to discuss weight management. Of the 90 percent of obese patients who were counseled to lose weight about a third of patients noted they weren't told how to lose weight.

Winning the war on obesity won't come from government regulation or somehow getting doctors to be better in educating and counseling patients. It won't be families resorting to a simpler slower pace of life that existed a couple generations ago.

Winning the war on obesity and turning the tide will be due to the same large multi-national organizations that are being vilified. McDonald's top chef, Dan Coudreaut, will impact more lives on a daily basis than any doctor could ever advise over an entire career based on his latest creation which graces the McDonald's menus nationally. The real question is whether our corporations will begin taking on this new social responsibility in keeping our nation healthy or would they rather wish to continue to kill their customers slowly from inside out and dump the health consequences onto an increasingly dysfunctional expensive healthcare system, other employers via escalating premiums, and ultimately destroy US competitveness by creating an unhealthy fatter workforce that is unable to meet the challenges of the future?

Although there will be people quite skeptical about businesses and corporations fixing the problem which they helped create, it appears that this is the case. The Washington Post noted that large food organizations are committed to reduce the calories in existing products, offer healthier selections and smaller portions.

The Healthy Weight Commitment Foundation, a coalition including Campbell Soup, Coca-Cola, General Mills, Kellogg, Kraft Foods and PepsiCo, will slash 1 trillion calories by the end of 2012 and 1.5 trillion calories by the end of 2015. The 16 members make 20-25 percent of food consumed in the United States. The Healthy Weight Commitment Foundation, a coalition including Campbell Soup, Coca-Cola, General Mills, Kellogg, Kraft Foods and PepsiCo, will slash 1 trillion calories by the end of 2012 and 1.5 trillion calories by the end of 2015. The 16 members make 20-25 percent of food consumed in the United States.

This is an encouraging first step. Maintaining a healthy weight is more than asking individuals to choose wisely every meal. It's about helping the public makes the right desired choices by creating products that are healthy, nutritious, and lower in calories. Restaurants and food organizations must lead the way to slow and then reverse the trend.

Otherwise with the status quo, children born since 2000 will the first generation of Americans not to live as long as their parents due to obesity related illnesses like diabetes.

Secret to weight loss is simply: Eat less. Move more. When companies get it right, eating less will be easier to do.

It will be the private sector that begins to solve the obesity problem.

Prevention Won't Save on Health Costs

The Wall Street Journal recently reported that the belief that a focus on preventive health won't save on healthcare costs. In the article, "Prevention Efforts Provide No Panacea on Health Costs" noted that

• The Congressional Budget Office, in a December report, concluded that greater use of preventive care would at best generate modest reductions in costs over 10 years, and might even result in increases.

Saying that prevention will save money is the wrong goal. What prevention does is free up dollars that would have been spent on other treatments and interventions that would have occurred without being proactive and allow them to be spent on improving coverage. As Federal Chairman Ben Bernanke noted in 2008 when addressing the Senate Finance Committee on Healthcare Reform, "that improving access and quality may increase rather than reduce total costs" and the better question may be, "whatever we spend, [are] we are getting our money's worth?"

Without improving prevention, both the insured and uninsured aren't getting their money's worth.

Save Money on Medical Costs - Part 2 - Travel Overseas

There have been a lot of articles over the past year about Americans traveling overseas to countries like India, Thailand, and South Africa to get elective surgeries like joint replacements, heart surgery, and plastic surgery performed. Sometimes it is at the urging of their health insurer.

The Star Tribune reported that the nation's second largest insurer, Wellpoint, will offer Wisconsin-based Serigraph Inc. and its employees the ability to go to India for elective surgeries. Serigraph will pay all of the medical costs. There will be no out of pocket expenses. Travel is paid for as well for the patient and a companion.

"Knee replacement surgery that costs between $60,000 and $70,000 in the United States can be done in India for $8,000 to $10,000, said Jill Becher, a Wellpoint spokeswoman."

The NY Times reported how South Korea has added its medical facilities and staff to be available to Americans. Shockingly a report by the consulting group Deloitte found that "750,000 Americans sought cheaper treatment abroad, a figure projected to reach 6 million by 2010".

The Wall Street Journal earlier this year cited a report by the consulting group McKinsey which suggested that overseas medical travel was posed for future growth.

What does this mean? In the future, you might get the same excellent surgical care overseas for a lot less to your pocketbook, particularly as you are becoming increasingly responsible for healthcare costs. You might even get the opportunity to sightsee as well.

The other? Doctors will begin to discover that like auto workers, their jobs can indeed be outsourced. If we as a medical profession don't see this challenge, then we may very well suffer the same fate as that of the big three automakers, Ford, GM, and Chrysler, who as we speak are looking to the government for a multibillion dollar bailout. Don't think it can happen? That's what the UAW thought as well.

Health Savings Accounts - A New Way of Paying for Medical Care

The Wall Street Journal reported about a report from the General Accounting Office that found those individuals who purchased health savings accounts tended to be wealthier. Health savings accounts (HSAs), which must be coupled with a health insurance plan with a high-deductible, has been the cornerstone of the Republican plan to improve healthcare inflation. Certainly the premiums for a high-deductible plan are significantly cheaper than traditional plans by up to 50 percent and the rate of health care costs slowed to about 3.6 percent as compared to 7 percent for companies that adopted HSAs. The concern among some is that those with HSAs are getting less medical care and services.

Is this a bad thing? It depends. If individuals decreasing unnecessary care because now they are responsible for the deductible then less consumption of healthcare is a good thing. If, however, people are putting off or delaying important preventive care this could be more costly and detrimental in the future. Preventive care can often find problems before they become expensive debilitating problems.

For example, would you delay getting your car maintenance if you had a high deductible? It depends. If you could not afford to have your car breakdown at the most inopportune times, then you might get routine regular preventive care. You might even do it yourself and change the oil and rotate the tires if you knew how to and had the time. If, however, you didn't know what to do, then you might not do it or figure it is unnecessary and take your chances. The difference between our bodies and our cars is you can always buy a new car.

From the article:

• Some analysts say much of those employer savings come because many HSA participants tend to forgo care. "There is a lot of evidence that suggests that when patients pay a higher percentage of the cost of their care they get less of it," says Michael Thompson, a principal at PricewaterhouseCoopers, which advises employers on health plans.
• Self-employed attorney Jonathan Stein, 34, of Elk Grove, Calif., got an HSA in 2005. Because he is responsible for paying the entire bill, he didn't go to the doctor for a recent bout of flu and doesn't get annual physicals despite a family history of heart disease and cancer. "My doctor and I fight about that when I do see her because she wants me to come in every year," Mr. Stein says. "If it was covered by insurance I'd probably go."
• Watson Wyatt expects 54% of big companies next year to offer high-deductible health plans, many of which are HSA eligible, up from 39% in 2007. Since the plans were introduced in 2004, more than six million Americans have enrolled in HSA-eligible plans, although that represents a small percentage of the more than 200 million people with private health coverage.

HSAs make sense for individuals who know when to get care and when to safely skip care. Having less medical care isn't a bad thing as long as it makes sense and won't cause problems in the future. Who best to figure that out? Empowered and educated patients. If you don't feel like you have the knowledge or expertise to figure it out, then who next? A primary care doctor. After all, if you are like many people, you don't do the actual car maintenance yourself, you have a trusted mechanic tell you what needs to be done. The same applies to your health. The difference is that your health advisor is your doctor.

Current Doctors Want Work-Life Balance

A Wall Street Journal article noted that the current generation of doctors want to have a balanced professional career and family life. This belief is far different than in the past when doctors essentially did nothing else except practice medicine. The implications for patients are that the doctors you like may only work part-time and when you wish to see them that they might not be available. It doesn't necessarily mean that the care you receive is any worse but that it might be different that what we are used to.

What is fascinating is that many older doctors view this new generation of doctors' work ethic (or lack thereof in the former group's eyes) as (a) a reflection of a group that feels entitled or (b) as not good enough because the high costs of education and relatively low return in compensation relative to other more lucrative careers, like business, are attracting the best and brightest. Many of those doctors simply feel that increasing doctor compensation or making medical education less expensive would simply result in the return of doctors who do nothing else but see the practice of medicine as a calling. Anything less is viewed as inferior medical care.

Unfortunately, they are completely mistaken. The trend of the current generation of doctors merely indicates this cohort’s desire for work-life balance. It isn’t limited to just medicine as all businesses and organizations have noticed the same thing. Certainly medical care has gotten much more complicated with patients living longer with more complex problems. The answer isn’t simply increasing compensation or decreasing medical school loans (although either would be helpful), but rather how do we develop programs and systems that make the practice of medicine sustainable. Institutions and medical groups that do so will be rewarded with new doctors. Those that fail will find it increasingly more difficult to hire colleagues. There is no reason to believe that this generation of doctors can’t meet the challenges of medical care the same way other groups have done before them. There is no reason to expect that medical care will suffer simply because one generation views the world differently than previous groups.

Knowing How To Reform Healthcare Is Easy. Doing Is Hard.

Like most things in life there is a big difference between knowing and doing. Most of us know what to do to stay healthy. Don't smoke or quit smoking. Exercise regularly. Eat a diet balanced with all of the different food groups in reasonable portion sizes. Maintain a healthy weight. Get screened for various medical problems early. One study suggested that doing these simple interventions extended life by 14 years!

Yet despite these seemingly boring yet simple lifestyle changes, there obviously there is gap between knowing and doing. About two-thirds of Americans are either overweight or obese. This trend is now affecting children. We all know what to do, but often it is we don't go about doing it.

The same applies to healthcare reform. A recent editorial in the NY Times noted that the cost of providing high quality medical care varied substantially among hospitals. The least costly were the famed Mayo Clinic and the Cleveland Clinic. The most expensive? UCLA, John Hopkins, and Mass General. The reason was that doctors at the most costly hospitals were paid fee for service. Do more and get paid more. On the other hand, doctors at the Mayo Clinic were on a salary. Health outcomes were the same. If all hospitals performed at the level of Mayo Clinic, then Medicare would save billions.

At the same time an article on the Wall Street Journal blog noted that a congressional advisory committee recommended that Medicare should pay primary care doctors more and less to specialists because of a shortage of primary care doctors, which if unresolved will result in increasing healthcare costs and worsening outcomes. In other words, pay primary care doctors more but have specialists be reimbursed less for each procedure. What will happen? Specialists will do more procedures to maintain their standard of living.

If Mayo Clinic can attract doctors and patients to their system. If doctors are salaried and patients do as well at less cost, then doesn't it make sense to have doctors paid to think instead of simply doing procedures?

Health Savings Account - Another Way to Fund Retirement

The Wall Street Journal ran a piece discussing how health savings accounts (HSAs) are being used by individuals as another way of saving for retirement and not to fund their future healthcare costs but as . Financial services firms and investors are finding that the ability to fund the account tax-free, allowing funds to grow tax-free, and then spent tax-free dollar for dollar on qualified medical expenses aren't the HSAs only attraction. Since dollars in an HSA don't need to be spent on medical expenses and can be withdrawn at age 65, with the funds subject to ordinary income taxes, many instead are using the HSA as another retirement account.

• "HSAs offer a triple tax advantage," says Bert M. Halliday, a first vice president and senior adviser at Merrill Lynch & Co., who leads a team of financial advisers specializing in these accounts.
• Money in the accounts can be invested in stocks, bonds, mutual funds and certificates of deposit. Merrill is managing about 20,000 HSAs for clients, mainly doctors, lawyers and accountants, says Mr. Halliday.
• "It's a great perk" for people approaching retirement, says Betsy Billard, a private wealth adviser with Ameriprise Financial Inc.
• Maxing out on annual contributions to an HSA can be an astute financial strategy for the well-heeled who can afford to cover any out-of-pocket medical expenses without dipping into their HSA.
• However, HSAs are less favorable for lower-income unhealthy people because out-of-pocket expenses increase with the amount of health-care services you use, and the tax advantages aren't as great for people in lower brackets. In this scenario, paying more up-front in premiums is likely to be a more cost-effective option.

What's the catch? You need to know when you must get care to stay healthy and when you can safely skip. Unlike auto insurance where a high deductible may prevent you from getting dents or dings fixed for your car, your body doesn't have replaceable interchangeable parts.

It seems more like the HSAs were geared to those in higher income and the current participation seems to reflect that demographic. As HSAs are the focus of many of the Republician presidental candidates as a way of addressing our healthcare crisis, the question is is this the right plan?