Smulowitz: Paying for health care

I’ve been spending an inordinate amount of time lately thinking about health care reform, and watching as the debate unfolds at the White House and on Capitol Hill. Here in Needham, we’ll be discussing the issues at a meeting of Yes We Can Needham on June 24th. If you are interested in contributing to health care reform, please visit yeswecanneedham.com, sign up, and RSVP for the health care meeting.

In the meantime, I’d like to touch just briefly on the issue of health care costs. We all are well aware of the high cost of health care. It’s reflected in the skyrocketing premiums that are suffocating families and small businesses and leaving our bigger corporations with a competitive disadvantage. But the high cost of health care in the U.S. is a complex issue.

To simplify it a bit, we can look at controlling costs in terms of who pays for health care, and how we pay for it. On the who side of the equation, the Obama administration figures that introducing a public plan to compete with private insurers will cut costs dramatically by increasing competition and simplifying billing procedures. Even if this works, the administration will still need to grapple with how health care is paid for. Under the current system, most doctors and hospitals get paid by a mechanism called fee-for-service. If we provide a service to a patient, we get paid for it. On the surface such a payment system seems reasonable. But one unintended consequence of this system that pays more for doing more has been the overuse of medical care.

This point is explored brilliantly in Atul Gawande ’s article in the June 1st issue of the The New Yorker. My first suggestion is if you have any interest in health care and haven’t read his article, do so.

Gawande tells the story of McAllen, Texas, one of the most expensive health-care markets in the country. In McAllen, more than in any city in the U.S., because Medicare and insurance companies pay doctors and hospitals more for doing more, patients there get more of pretty much every type of medical service, from CAT scans and office visits to gall-bladder surgeries. Patients in McAllen are over-treated for just about every condition, yet have outcomes that are worse than places that spend and do far less. As a doctor, this is not surprising. The more tests and procedures we order, the higher the overall risk to the patient. That’s why I try to carefully weigh the risks and benefits of everything I do – do good, but first do no harm.

This rampant over-treatment, however, is not limited to McAllen. There are exceptions to the rule, in places like the Mayo Clinic in Minnesota and the Geisinger Health System in Pennsylvania. But the general rule is, because the economic incentives in our fee-for-service insurance system encourage higher, not lower, utilization of health care services, that is precisely what we get. Now, Gawande’s article doesn’t tell the entire story. Some of the overuse is clearly a reflexive response driven by a fear of getting sued. But his overall point is that the practice of medicine really should be only about doing what is best for the patient, not about what’s best for the business.

I’m a fairly young physician, so I don’t have first-hand knowledge of how medicine used to be, when doctors had time to make house calls and treated generations of the same family. But irrespective of such nostalgia, it’s disappointing to see how medicine has evolved into a revenue maximizing endeavor, how insurance companies, drug companies, medical technology companies, and even hospitals and some doctors have promoted the establishment of a massive medical industrial complex. I’d like to say this has all lead to better outcomes and better health care for all Americans. But Gawande’s article clearly shows that more health care does not necessarily equate to better health care.

So what’s the take home message here? Though the health care reform debate is focusing mainly on the role of a public insurance option, the McAllen story shows that the issue of how we pay for health care is undoubtedly as important as who pays for our health care. To fix the problem, we’re going to have to make drastic changes in the way we pay for health care. We’re also going to have to come to the realization that maximizing profit just can’t play a central role in a quality, universally available, financially solvent health care system.

If you would like to talk more about this column or any issue confronting us in the health care reform debate, please visit yeswecanneedham.com. Also, please leave your comments here. I’d love to hear your thoughts.

Peter B. Smulowitz, MD, MPH, is a Needham resident and an Attending Physician in the Department of Emergency Medicine at Beth Israel Deaconess Medical Center in Boston, MA and Beth Israel Deaconess Needham campus in Needham, MA.

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