Cost containment in health care… it is possible, and *WE* can make a difference! #hcr #hcsm ~ Gary Becker: ‘Basically an Optimist’—Still

I begin with the obvious question. “The health-care legislation? It’s a bad bill,” Mr. Becker replies. “Health care in the United States is pretty good, but it does have a number of weaknesses. This bill doesn’t address them. It adds taxation and regulation. It’s going to increase health costs—not contain them.”

Drafting a good bill would have been easy, he continues. Health savings accounts could have been expanded. Consumers could have been permitted to purchase insurance across state lines, which would have increased competition among insurers. The tax deductibility of health-care spending could have been extended from employers to individuals, giving the same tax treatment to all consumers. And incentives could have been put in place to prompt consumers to pay a larger portion of their health-care costs out of their own pockets.

“Here in the United States,” Mr. Becker says, “we spend about 17% of our GDP on health care, but out-of-pocket expenses make up only about 12% of total health-care spending. In Switzerland, where they spend only 11% of GDP on health care, their out-of-pocket expenses equal about 31% of total spending. The difference between 12% and 31% is huge. Once people begin spending substantial sums from their own pockets, they become willing to shop around. Ordinary market incentives begin to operate. A good bill would have encouraged that

Great interview in the WSJ. Becker articulates in simple language why he believes the recent health care reform (health insurance reform) bill was a “bad bill.”

I think the final paragraph I highlighted speaks to the number one issue we face, cost. Costs will not be contained by the current platform, and the WSJ and many large corps have already stated that many companies, large and small will curb benefits and possibly cut number of employees due to the health insurance reform law.

Quality and Coverage are the other key issues in health care reform… and there were *simpler* *answers* to that too. But that’s for a different discussion. 

I would add to Mr Beckers statement above… as I have witnessed this on countless occassions in my patients with HSAs or cash payers. Not only will patients shop around, but they will negotiate prices— and more important… they may choose not to have that MRI on their knee when they only injured it 2 days ago.

We  over-treat and over utilize ancillary resources in medicine every single day… at great cost… and very little benefit.

There are many reasons why… some patients demand an MRI, medicine, etc when it’s not necessary. Docs find it more *efficient* (from a practice point of view) to order the test, then to spend 10 minutes discussing why it’s not necessary. I have lost a few patients over the years for not caving into their demands for MRI, Cat Scans, etc… Docs who own an MRI center may be incentivized to order a scan that may not be indicated. Some docs will order the tests and claim they are for protection from med mal suits. The reasons run the gamut.

As Don Berwick has pointed out… if physicians held back on 10% of their scripts for ancillary services, etc the costs to our health care system would diminish dramatically.

While physician behavior needs to change… there are other means to achieve the same results. 

If patients had to come out of pocket for a larger percentage of their health care expenses they would think twice about the need for a number of useless studies and procedures.  Many knee injuries simply get better… no pills, no MRI, no brace… just time.  Same for a multitude of other medical problems.   If we as physicians took the time to discuss the natural history of most of these issues with our patients, many would understand and not insist on useless studies…. nor would they leave our offices upset that they did not receive anything tangible— they will have recieved something tangible… an education about their injury or disease, as well as a plan for management if symptoms persist, etc.  

This is of course not medical advice… nor the opinion of my employers…. just my personal opinion.


About hjluks

A busy Academic Orthopedic Surgeon, Digital Strategist, Chief Medical Officer and father... intently and efficiently navigating the intersection of Social Media and Health Care.
This entry was posted in Uncategorized. Bookmark the permalink.

5 Responses to Cost containment in health care… it is possible, and *WE* can make a difference! #hcr #hcsm ~ Gary Becker: ‘Basically an Optimist’—Still

  1. Victoria Powell says:

    Amen, Amen, and Amen! As a nurse case manager, I have been preaching about the use of HSA and other consumer based models for our healthcare services. We need to provide good primary care, manage our healthcare closely, and be mindful of the costs for each good or service. As a user of a HSA and a nurse, I have really worked with my physicians to limit unnecessary tests, obtain generic prescriptions, and to negotiate rates for diagnostics.

  2. Chukwuma Onyeije says:

    Excellent point, as always, Howard. It is clear that the three-legged stool that make up a health care delivery system are access, cost-control and evidence based practice. The current legislation (as the plan in Massachusetts) address the first leg and is fuzzy about the other two legs. I’m perhaps more hopeful about this legislation than you are, but I do feel that there is a great deal more work to be done. From an economic standpoint I can understand how greater out of pocket expense will enforce more responsible actions from health consumers. As a clinician, I also understand the need to limit unnecessary interventions, tests and procedures.We as physicians are the best ones to reinforce these facts. My question is, do you see any political leadership (from the left or the right) willing to have this type of nuanced and frank discussion with the American people?

  3. Victoria Powell says:

    CO, <o:p></o:p> Very good points and I like the analogy of the three legged stool.  The only politician I have seen that is really working to have a frank discussion on healthcare is Congressman Paul Ryan from Wisconsin.<o:p></o:p> Regards, Victoria<o:p></o:p> VP Medical Consulting, LLC<o:p></o:p><o:p></o:p&gt; 501-778-3378 office<o:p></o:p> 501-315-3378 fax<o:p></o:p> From:

  4. Howard Luks says:

    Chuck… I do not see either side stepping up to the plate…. they are clearly aligned towards pleasing their special interests. The suggestions I highlighted— and teach to every student and resident who rotates on my service do not require the involvement of government and that is the *beauty* of it. Docs can step up and easily cut 10% of health care expenses… incenting patients should not be particularly difficult either. Together, patients and physicians could bring the cost of healthcare down and show the gov how it is done. Perhaps laws on physician ownership, etc would help… but I would much prefer to see docs step up and show that they care and are willing participants in meaningful cost savings measures. I’ll worry about the other legs of the stool for another post 🙂

  5. Howard Luks says:

    Victoria… kudos! HSA’s are great motivators. Change can happen —

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s