MEDICAL ECNOMICS AUGUST 2001 JIM ROHRER, PHD DEPT OF HEALTH SERVICES RESEARCH & MGT.
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Transcript of MEDICAL ECNOMICS AUGUST 2001 JIM ROHRER, PHD DEPT OF HEALTH SERVICES RESEARCH & MGT.
MEDICAL ECNOMICS
AUGUST 2001
JIM ROHRER, PHD
DEPT OF HEALTH SERVICES RESEARCH & MGT
OBJECTIVES –be able to
IDENTIFY UNMET ASSUMPTIONS IN HEALTH CARE AND WHY THEY MATTER
EXPLAIN SOME WAYS HEALTH CARE SYSTEMS ARE DIFFERENT IN OTHER COUNTRIES
DESCRIBE RECENT TRENDS IN US HEALTH CARE
EXPLAIN HOW PRODUCTION COSTS CAN BE CONTROLLED
ECONOMIC THEORY
“..ECONOMIC THEORY PROVIDES NO SUPPORT FOR THE BELIEF THAT COMPETITION IN HEALTHCARE WILL LEAD TO SUPERIOR SOCIAL OUTCOMES.”
Tom Rice, The Economics of Health Reconsidered. HA Press 1998.
UNMET ASSUMPTIONS
CONSUMER KNOWS WHAT IS BEST FOR HIM/HER
CONSUMERS ARE RATIONAL CONSUMERS HAVE ENOUGH
INFORMATION FIRMS DO NOT HAVE MONOPOLY
POWER
RICE’S CONCLUSIONS IF YOU WANT THE COMPETITIVE MARKET
TO WORK, YOU MUST FIRST GIVE CONSUMER’S PURCHASING POWER – UNIVERAL HEALTH INSURANCE
WHEN HEALTH INSURANCE IS VOLUNTARY, THE FREE RIDER EFFECT WILL RESULT IN UNDER-FUNDING
EQUITY REQUIRES THAT THE HEALTHY SUBSIDIZE THE SICK VIA EQUAL PREMIUMS
REVIEW
US HAS MOST EXPENSIVE HEALTH CARE SYSTEM IN THE WORLD
YET WE HAVE ACCESS PROBLEMS AND QUALITY PROBLEMS SOMETHING IS NOT WORKING RIGHT
INTL COMPARISON, 1998
INDICATOR GERMANY US
MD VISITS/CAPITA
MD’S / CAPITA
VISTS / MD
HOSP DAYS / CAP
BYPASSES/100,000
$/CAPITA
6.5
3.5
1857
2.1
38
2424
6.0
2.7
2222
0.7
223
4178
MD PERSPECTIVES, 2000
PROBLEM CANADA % US %
NMBR GP’S
SPECIALSTS
EQUIPMT
SURG WAIT
MEDS COST
COST REVIEW
PT TIME
VISIT COST
55
61
63
61
17
13
42
19
19
13
8
7
48
37
42
61
EXPLANATIONS
MANAGERIAL INEFFICIENCY (EG 1500 INSURANCE COMPANIES)
CLINICAL INEFFICIENCY (UNNECESSARY CARE)* HIGH SURGERY RATES IN US* VARIATION IN SURGERY RATES
NOTE: MD’S DO NOT DELIBERATELY PERFORM UNNECESSARY PROCEDURES
POLICY REACTION
MANAGED CARE AND GOVERNMENT WANT REDUCED COSTS/ENROLLEE
TTL COST = PRICE X QUANTITY REDUCE ALLOWED CHARGES REDUCE NUMBER OF EXPENSIVE
PROCEDURES PERFORMED SUBSTITUTE LOWER COST
PERSONNEL
RECENT DEVELOPMENTS
LARGE CAPITATED MD NETWORKS MAY BE GOING OUT – SMALL GROUPS WORKING ON FEE SCHEDULES ARE COMING BACK
MEDICARE+CHOICE IS A FAILURE-SENIORS DON’T SIGN UP-BUT “COMPETING HMO’S” IS THE ONLY REFORM IDEA AVAILABLE
ECONOMICS OR MEDICINE?
MD’S TELL MANAGED CARE THAT MANY PROCEDURES ARE UNNECESSARY
LONG STANDING CONFLICT BETWEEN MEDICINE AND SURGERY?
ROYAL COLLEGE OF PHYSICIANS AND SURGEONS (APOTHECARIES AND BARBERS?)
WHY DO WE OVERUSE PROCEDURES IN THE US? REIMBURSEMENT ON FFS BASIS POOR COVERAGE OF PRIMARY CARE
AND PREVENTION GOOD COVERAGE OF EXPENSIVE
PROCEDURES
COMPARE TO NHI/NHS
PATIENT DOESN’T PAY OUT OF POCKET
VISIT FAMILY DOCTOR AS NEEDED HOSPITAL MD’S ARE SALARIED/NO
INCENTIVE TO DO PROCEDURES
UK EXAMPLE
5% OF GDP VS 17% IN US EVERYONE HAS ACCESS PREVENTIVE MED MUCH MORE
INGRAINED (SEE BMJ, PREV MED) IF WE TRIPLED THE BUDGET OF THE
NHS IT WOULD BE A GOOD SYSTEM AND STILL CHEAPER THAN US
BACK TO REALITY
WE ARE STUCK WITH US SYSTEM SO MD’S START HMOS AND REDUCE
PROCEDURES RATES? TRIED AND FAILED HOSPITAL PARTNERS DEPEND ON
PROCEDURES MOST FACULTY ARE PROCEDURAL
SECOND OPTION
CUT COSTS – REDUCE COST PER VISIT VIA MANAGERIAL CONTROLS
NOTE:MGRS DON’T LIKE THIS ANY MORE THAN MD’S DO
INCREASE VISITS/MD REDUCE OVERHEAD – BUILDINGS,
CLERKS
INCREASING PRODUCTIVITY KEEPING SAME NUMBER OF MD’S
* GET MORE PTS (MARKETING)
* REDUCE WAIT TIME FOR APPT
* MORE SCHEDULED CLINIC HRS
* INCENTIVE PAY (A LA FFS)
* CHANGE MIX OF MD’S TO INCREASE REVENUES (PROCEDURES)
INCREASING PRODUCTIVITY
OTHER OPTIONS REDUCE THE NUMBER OF MD’S IN
THE PRACTICE REDUCE MD SALARIES
HAMPSTER IN ITS WHEEL?
IRRATIONAL IN SOME WAYS BUT CONSISTENT WITH FREE
MARKET VALUES COMPETITION PERSONAL RESPONSIBILITY FOR
HEALTH OPPORTUNITY FOR PROFIT
DISCUSSION QUESTIONS
IS THERE A PROBLEM WITH PRACTICING IN A PROCEDURAL SPECIALTY WHEN WE SUSPECT THAT MANY OF THE PROCEDURES ARE NOT NECESSARY?
IS THERE A PROBLEM WITH DOING QUICK PRIMARY CARE VISITS W/O PREVENTION SVCS?