1.
Featured Article:
Where Are the Innovators in Health Care? By REGINA
E. HERZLINGER, WSJ, July 19, 2007
No sector of our economy is more in need of innovation
than health care, yet its many regulations handcuff entrepreneurs. A
consumer-driven health-care system will unlock these shackles to bring about a
much-needed entrepreneurial revolution.
Health care's $2.2 trillion of costs (17% of GDP),
breaks the backs of U.S. firms that compete with companies in countries
spending, at most, 12% of GDP on health care. Yet, despite this torrent of
cash, more than 40 million Americans lack health insurance, mostly because they
cannot afford it. Although some claim we have the world's best health-care
system, where are the quality outcome metrics to back this up? Don't try that
one on the loved ones of the 300,000 people killed by hospital "medical
errors" in the past few years.
In almost every sector of our economy, brilliant,
effective innovators have forced sluggish U.S. industries to become more
productive. Sam Walton's exquisitely detailed supply chain management, coupled
with his daring decision to locate Wal-Marts in rural areas, kick-started the
boom in retailing, while Bill Gates, Steve Jobs and Michael Dell drove
productivity in the IT sector. These entrepreneurs, and so many others, have
fundamentally improved our economy by making goods and services better, cheaper
and more accessible. To read more, please go to www.medicaltuesday.net/index.asp.
But can you name any innovators in our bloated,
inefficient health-care system? While there is innovation in the medical
technology and health-insurance sectors, when it comes to health services, the
800-pound gorilla of our system, entrepreneurs are nowhere to be found. And
their absence has enabled the status quo providers to get fat and sloppy.
One analysis showed that hospital activities accounted
for $400 billion of the excessive costs of U.S. health care while all too many
quality measures have worsened. Patients learn -- sometimes the hard way -- to
bring along an assertive, intelligent loved one to protect them during a
hospital stay.
Entrepreneurs avoid health-care delivery because
status quo providers, abetted by legislators and insurance companies, have made
it virtually impossible for them to succeed. Unlike any other U.S. industry,
consumers do not set prices, yet they provide all the money through taxes for
government programs and foregone salaries for employer-provided benefits. A
third party -- a government or an insurance company -- not only sets the prices
but goes so far as to specify procedures and even the kinds of patients to be
covered.
Lately, payers are even telling doctors how to
practice medicine -- and those who follow their recipes get paid more. The
recipes are devised through an innovation-killing "peer review"
process. The history of medicine is filled with shameful stories of
"peers" who used their powers to suppress innovations: Judah Folkman,
the brilliant scientist whose anti-angiogenesis theory forms the basis for many
important new cancer drugs, for example, had difficulty obtaining peer-reviewed
government research funds for nearly a decade.
Third parties' lock-hold on reimbursement punishes
innovators. When the Duke University Medical Center's innovative new program
for people with congestive heart failure so substantially improved patients'
health that hospital visits and usage plummeted, the perverse nature of the
payment system meant Duke couldn't benefit from saving its patients' money --
nearly $8,000 per person. In only one year, the program had reduced costs by
40%, yielding the kind of do-good returns that would normally earn kudos from
Wall Street and Main Street. But, because the third parties pay providers only
for treating sick people, they penalize innovators who make people healthy. . .
.
Until we control our own health- care system, the
entrepreneurs who could reform it -- and make our lives better -- will continue
to look elsewhere for opportunities. Who can blame them?
To read the entire report, (Subscription required) go
to http://online.wsj.com/article_print/SB118480794902371108.html.
Ms. Herzlinger is a professor at Harvard Business
School, a senior fellow at the Manhattan Institute and the author of "Who
Killed Health Care?" (McGraw Hill, 2007).
See Book Reviews (Section 9) for another of Dr.
Herzlinger's books.
* * * * *
2.
In the News:
Scientist with an Agenda and Government Bureaucrats Can Be a Flawed Combination
The Steamrollers Of
Climate Science, By Clive Crook, Financial
Times, Aug 1 2007
Almost from the
beginning, critics have attacked the Bush administration for the way it has
dealt with science. In many areas - and emblematically in the case of climate
change - well-qualified accusers have complained that the White House and its
political appointees across the federal government have interfered with the
work of scientists, misrepresented their findings and censored their public
statements. Many of these cases are shocking - or at least they were, until
people became inured to them. . .
So when the White House
disagrees with most other governments in the world and expresses doubts about
the Intergovernmental Panel on Climate Change, [IPCC] that view is
contemptuously dismissed as one more instance. . .
For the rest of us, however,
this is a pity - because to put it bluntly the ICC deserves the
administrations' disdain. It is a seriouslsy flawed
enterprise and unworthy of the slavish respect accorded to it by most
governments and the media. In the decisions which have already been made on
climate-change mitigation, to say nothing of future decisions, the stakes are
enormous. In guiding these momentous judgments, the flawed IPCC process has
been granted, in effect, a monopoly of official wisdom. That needs to change
and the IPCC itself must be reformed. To read more,
please go to www.medicaltuesday.net/news.asp.
For a fully documented
indictment, read the article by David Henderson in the current issue of World
Economics. Mr Henderson, a distinguished academic economist and former head of
economics at the Organisation for Economic Co-operation and Development (OECD),
has been tangling with the IPCC for some time. Five years ago, he and Ian Castles (a former chief of the Ausralian
Bureau of Statistics) first drew attention to a straightforward error in the
way emissions scenarios were being calculated. . .
Underlying it all is a
pervasive bias.
From the outset the IPCC network was fully invested in the idea that climate
change is the most pressing challenge confronting mankind and that urgent
action far beyond what is already in prospect will be needed to confront it. .
.
But if governments are to
get the best advice, they need information and analysis from an open and
disinterested source -or else from multiple dissenting sources. . . One incompetent institution, committed
to its own agenda, should never have been granted this degree of actual and
moral authority over the science, over public presentation of the science and over
calls for "more serious action" that go well beyond the science.
To read the rest of the
article (subscription required) please go to www.ft.com/cms/s/4a2bb6f6-404b-11dc-9d0c-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F4a2bb6f6-404b-11dc-9d0c-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fcomment%2Fcolumnists%2Fclivecrook.
* * * * *
3. International Medicine: £1bn cost of waiting to see a
GP, Jo Revill,
Whitehall editor, Observer, Sunday July 22, 2007
Business leaders are to deliver a tough warning to the
government that employees are spending millions of hours a year sitting in
doctors' waiting rooms during office hours because of the lack of weekend GP
clinics.
Three and a half million working days were lost last
year because employees had to see a doctor during working hours, according to
the Confederation of British Industry. This was more than four times the number
of days lost to industrial action in 2006.
In an unprecedented move, the CBI is writing to Health
Secretary Alan Johnson asking him to give urgent consideration to opening
doctors' surgeries on Saturdays and Sundays instead of making it a weekday-only
service. To read more, please go to www.medicaltuesday.net/intlnews.asp.
The CBI, which is preparing a report that will call
for a shake-up of GP services, estimates that the total cost to the economy is
around £1bn a year, based on the fact that people visit their GP an average of three
times a year and that the average hourly pay rate is just under £11.
The warning from business leaders will strengthen
Gordon Brown's determination to make faster access to family doctors a priority
for the health service, amid growing public unhappiness at the time spent in
waiting rooms. It comes as new figures were released last week showing that in
the first year of the new pay deal, 2004-05, some family doctors started to
earn as much as £250,000 a year and that almost half of GPs in Britain earned
£100,000 a year or more.
Dr Neil Bentley, the CBI's director of public
services, said last night: 'Businesses need a healthy workforce, but not one
stuck in doctors' surgeries during the middle of the day. It's frustrating for
firms and for hard-working people who would rather be getting on with their
jobs, not trapped in waiting rooms.
'The best surgeries should have greater opportunity to
expand, while the NHS should use new providers to challenge existing services,
and to provide care in areas that struggle to get GPs at all. All too often,
the system seems to exist for the benefit of doctors and not patients.' . . .
To read the entire article, please go to http://observer.guardian.co.uk/print/0,,330238690-102279,00.html.
The NHS does not give timely access to healthcare, it only
gives access to a waiting list.
* * * * *
4. Medicare: REFORMS TO AVOID by John Goodman,
PhD, President, NCPA
This is the season for health insurance reform, and
that's dangerous. The odds of doing something bad are much higher than the
chances of doing something good, says John C. Goodman, president of the
National Center for Policy Analysis.
With that in mind, here are four things policymakers
should avoid: To read more, please go to www.medicaltuesday.net/medicare.asp.
·
Do not turn a tax
subsidy for health care into an entitlement; Medicare and Medicaid entitlements
are already on a course to crowd out every other government program -- we
cannot survive creating more health care entitlements.
·
Avoid mandated insurance
coverage and mandated benefits; proposals to require everyone to have health
insurance increase the likelihood that the government subsidy will become an
entitlement.
·
Don't create perverse
incentives for health plans; if people can switch insurance plans annually at
premiums that are unrelated to expected costs, the plans will seek out the healthy
and avoid the sick.
·
Don't encourage people
to forgo private coverage by expanding public coverage; there should be no
expansion of Medicaid or the State Children's Health Insurance Program in a way
that encourages people to drop their private coverage in order to get free
public coverage.
www.ncpa.org/sub/dpd/index.php?Article_ID=14805
Government
is not the solution to our problems, government is the problem.
- Ronald Reagan
* * * * *
5.
Medical Gluttony
- Hospitals Account for $400 billion in Unnecessary Healthcare Costs
Herzlinger [Section one above] quotes one analysis,
which showed that hospital activities accounted for $400 billion of the
excessive costs of U.S. health care while all too many quality measures have
worsened. Patients learn - sometimes the hard way - to bring along an
assertive, intelligent loved one to protect them during a hospital stay.
That's 20 percent of the U.S. health care costs [or
half of hospital costs] considered as gluttonous.
To read more, please go to www.medicaltuesday.net/gluttony.asp.
Mr. Lee, a 94-year-old Chinese American, had some
discomfort under his breastbone after eating. Since he felt some food was stuck
in his esophagus despite drinking fluids, he was taken to the emergency room.
It resolved in the ER after the nurse gave him another glass of water. However,
he received an extensive cardiac evaluation - complete ECG and cardiac
laboratory evaluation with a repeat in six hours to rule out a myocardial
infarction. He was feeling well within 15 minutes of arrival and he asked if he
could go home. He was told that he needed a cardiac ECHO, stress tests and a
CT. After about $6,000 worth of testing, he was allowed to go home. When he
came to our office, he apologized for having gone to the ER. He said if he had
waited another 15 minutes at home and drank another half glass of water, he not
only could have saved his insurance company all that money, but he wouldn't
have wasted nine hours in the Emergency Room. His own diagnosis of esophageal
spasm was probably correct. Why did he go? His daughter and wife insisted.
Friends, daughters, wives and other relatives can
cause huge unnecessary increased health-care costs.
* * * * *
6.
Medical Myths:
Japanese Health Care Is Superior to the UAW's
The UAW's Health-Care Dreams By SHIKHA DALMIA, WSJ, July 27, 2007
It is not within the power of United Auto Workers President
Ron Gettelfinger to save GM, Ford and Chrysler. But it is certainly within his
power to kill them. Whether he chooses to do so will soon become clear. What
are arguably the most critical contract negotiations in the history of Motown's
auto industry began this week.
America's former Big Three auto makers are teetering
on the brink of bankruptcy -- Ford's second-quarter profit notwithstanding. And
one big reason for their dire state, apart from collective amnesia over how to
make hit cars, is their ever-escalating health-care expenses. Every car they
produce, they plaintively assert, contains $1,500 in health costs that their
Japanese competitors don't face.
But Mr. Gettelfinger has already declared that he is
not in a "concessionary mood." UAW workers at Ford and GM agreed to a
health-care cost-sharing deal during an unusual round of mid-contract
negotiations in 2005. Closing the competition gap with Japanese auto makers
now, Mr. Gettelfinger insists, requires not more concessions by auto workers --
but a Japanese-style government health-care system for all workers.
"We pay more, but get less," he thundered to
roaring applause at a recent NAACP luncheon. To read more,
please go to www.medicaltuesday.net/myths.asp.
Doubtless, some of Mr. Gettelfinger's tough talk is
posturing, calculated to extract the best possible deal from auto companies.
Yet his perennial calls for a national health-care system -- echoed by leading
Democratic presidential candidates -- affect the dynamics at the bargaining
table: By feeding the notion that Japanese workers are getting a better
health-care deal than UAW workers, they make it harder for Mr. Gettelfinger to
make reasonable compromises and sell them to his rank-and-file.
But do Japanese workers really live in some
single-payer, health-care heaven where all their medical needs are covered by
general taxpayers with no cost to them? Hardly.
The Japanese system comprises three basic insurance
plans: one for the self-employed and the unemployed, including retirees under
70; one for the elderly over 70; and one for all private- and public-sector
employees. The employee plan is not just completely self-financed, with no
taxpayer support. It actually subsidizes the other two, an arrangement that is
becoming increasingly unsustainable as Japan's population ages. (Both Toyota
and Honda declined to give an estimate of their current or future health-care
premium burden.)
The employee plan requires a premium equal to 9.5% of
a worker's annual income. Employees themselves pay about 45% of the premiums
from their paychecks, their employers the rest. This works out to $1,557 for an
employee with an annual income of $36,500 -- average wages for a blue-collar
Japanese auto worker -- according to figures provided by the Japanese Ministry
of Health and Labor Welfare.
But that's not all Japanese workers are on the hook
for. Working families also face a 30% co-pay -- capped at $677 per month for a
mid-income family -- for medical expenses such as in-patient and out-patient
hospital charges, drugs, doctor's visits and diagnostic tests. Because these
services are exceedingly cheap, thanks to massive price controls, in practice
the average Japanese family pays only about $720 a year in co-pays. This adds
up to total out-of-pocket annual expenses of about $2,300 for every Japanese
household, which is comparable to what active UAW workers pay after the 2005
deal in absolute dollars. But relative to their income, Japanese workers bear a
far bigger burden than UAW workers.
Even that isn't the full story. In the event of a
catastrophic or chronic illness requiring prolonged hospitalization, a UAW
worker faces no further expenses. A Japanese worker who hits his co-pay cap
each month would be out of pocket up to $10,000 a year -- about 25% of his
annual pay-check and five times more than a UAW worker under similar
circumstances. This puts a huge strain on some Japanese families, forcing them
to default on their hospital bills. Asahi Shimbun, Japan's respected national
daily, reported that Japanese hospitals lost $180 million in unpaid patient
bills in 2004.
UAW workers get a better deal not only than Japanese
workers, but other American workers as well.
. . . . Given the huge retiree population that the Big
Three support –GM has three times more retirees than active workers -- this has
saddled them with a combined unfunded health-care liability exceeding $100
billion.
By contrast, 90% of retirees in other American
companies don't get any employer-provided coverage after 65, when they become
Medicare-eligible . . .
UAW workers still enjoy a health-care deal that no one
else in America or Japan -- or quite possibly the planet -- does. Yet Mr.
Gettelfinger said last week that the 2005 health-care givebacks were the
toughest decision he ever made in his entire career. This is a startling
admission that reflects the depth of the UAW's entitlement mentality, and its
detachment from the world that its fellow Americans inhabit. But such lavish
expectations are unsustainable under any system -- American or Japanese. This
is a reality that Mr. Gettelfinger must accept. Otherwise, he may well push
U.S. auto makers over the cliff -- and his comrades with them.
To read the entire report, (subscription required) go
to http://online.wsj.com/article_print/SB118549957416479849.html.
Ms. Dalmia, who lives in southeast Michigan, is a
senior analyst at the Reason Foundation.
One of life's unfortunate paradoxes: The workers with
the finest open-ended health care plan in the world complain the loudest and
could end up with the worst – government-rationed close-ended health care. But
then it will be too late to change courses. UK is still trying to restore some
freedom in health care after 60 years of government servitude. Canada is
desperately trying to make sure that none of their citizens experience a higher
level of private health care.
* * * * *
7.
Overheard in the
Medical Staff Lounge: Patient Refills by Phone Are Costly and Hazardous
Dr. Rosen: I've
been trying to train my patients to not call in for prescription refills.
Sometimes I think it is a thankless job.
Dr. Michelle: How
could patients possibly get their medications if they can't call in for
refills?
Dr. Rosen: Isn't
that what the office appointment is for?
Dr. Ruth: Our
office even has a separate prescription refill line to call. We have an RN to
manage that line. Otherwise those calls would paralyze our office work. She's
busy eight hours a day.
Dr. Rosen: So
you agree that phone refills is a huge and costly job?
Dr. Milton: But I
don't see how you can avoid it. To read more,
please go to www.medicaltuesday.net/lounge.asp.
Dr. Rosen: By
giving the patient enough refills to last until the next agreed upon
appointment plus one.
Dr. Sam: I
don't worry or take any time. I just answer my Medical Assistant
"Yes" whenever she asks.
Dr. Rosen: So if
you give a patient a month of Ketoconazole with one refill, and he calls in for
more, you just say yes?
Dr. Sam: You
expect me to pull the chart, do a mini office visit and make a medical decision
for which I can't charge? We're not lawyers who charge for our
"valuable" time.
Dr. Rosen: Don't
you think that a big problem doctors have is that there are so many folks that
usurp our time, which we give freely and without remuneration, that we become
desperate and will do things not in our best interest or even the patient's
best interest just to remain solvent? Dr. Sam, suppose you give that patient a
refill for Ketoconazole and she goes into liver failure and may even die. A
malpractice suit could take up most of your time for several years.
Dr. Edwards: That's
the only time I ever wish I was a lawyer. You know my lawyer charges $180 an
hour and the smallest charge is one-fourth an hour or $45. So a three minute
phone call is $45. And every time I have a legal problem, she makes sure she
uses her supervising lawyer for at least one hour and he charges $320 an hour.
A phone call to him costs me $80 if it's only for a minute or three.
Dr. Sam: Why
don't we charge like attorneys? That would certainly get people's attention.
Dr. Milton: But
we have third-party insurance that controls the whole health care equation -
doctors, patients, and the "value" for the interface. It's a take it
or leave it situation.
Dr. Edwards:
Attorneys charge for any time they spend on your case, whether in their office,
in their home, in their bathroom, or on the phone to you. And not only that,
every time they use their phone or their duplicating machine, they have to
punch in your case number so you get charged for every minute of time at the
hourly rate and every sheet of paper. I once put a small message on a Christmas
card I sent to both of my attorneys. The Junior Attorney charged me $45 for
reading his and the senior Attorney charged me $80 for reading his, which was
their quarter-hour rate. Now, doesn't that make the sphincter at the end of the
anal canal go into spasm?
Dr. Rosen: I
once had a similar experience and the attorney apologized. She said she had no
control over that. Her legal secretary opens all her mail and posts the charges
to the account.
Dr. Milton: But we can't do that in our managed care
environment. Bismarck in Germany who started government managed care 200 years
ago didn't have that tight a grip on our profession.
Dr. Rosen: And
we have people that want us to return to the government control that our grandparents
fled from under the euphemistic term "that all industrialized nations have
government controlled medicine." Didn't our country chart a new course for
humankind?
Dr. Milton: For
the same reason that people struggling after obtaining freedom by getting rid
of a totalitarian ruler also wish for the comfort and security of a dictator.
Dr. Walter: When
the speaker of the Lutheran Hour toured Russia in the 1960s, to obtain a blood
sugar to check his diabetes, he relayed that they took a scalpel to pierce his
vein and collect the blood. They didn't have needles like the free world did.
But the people of Russia had free blood sugar tests and food on their table.
But at what price? The exorbitant price could not be seen or understood. It was
confiscated from the people to make it free for others.
Dr. Rosen: So we
have to start with small and simple things. If all of us would just give all
the refills to last until the time that we and the patient agree upon, Dr. Ruth
could save the salary of her group's RN and we all could save many hours a week
of our time and make life more pleasant.
Dr. Michelle: I'm
going to start today and give refills until the next appointment plus one in
case they have to reschedule the office visit and will not do another phone
refill.
Dr. Sam:
That's a good idea. Then when my Medical Assistant asks whether she can OK the
refill, instead of yes, I'll always say no.
Dr. Rosen: By
giving adequate refills, [up to 11 are authorized in California for one year]
phone requests for medicine will then indicate a change in the patient's
condition and require a follow-up appointment, or it's their last refill and,
therefore, it's been a year and a yearly review and re-writing of all
prescriptions is the order of the day.
Dr. Milton:
Sounds like that should also improve the quality of care and avoid malpractice
lawsuits.
Dr. Rosen: And
make the practice of medicine more pleasant.
* * * * *
8. Voices of Medicine: A Review of Local and Regional
Medical Journals
From The SAN MATEO COUNTY
MEDICAL ASSOCIATION BULLETIN, April 2007
The
Changing Face of Tibet: A Mixture of Religion, Tradition and Medicine By Philip R.
Alper, M.D.
Did I
recently travel to Tibet to discover the meaning of life? Well, not exactly.
But I did harbor an intense curiosity about a place that is 3 times the size of
California yet has less than half the population of minuscule Israel and still
seems to always be in the news.
There is a
joke about a jaded Westerner who does travel to a mountaintop in Tibet to meet
a guru who will tell him the meaning of life. The joke isn't that funny, so
I'll go no further with it other than to note that it gives tacit recognition
to the idea that religion and Tibet seem close to being synonymous. Of course,
here I am speaking of Tibetan Buddhism and the Dalai Lama, who, in a departure
from conservative tradition, recently visited Stanford Medical School and is
doing a joint project with the Neuroscience Institute on the physiology of
meditation, using the most advanced magnetic resonance imaging techniques. To read more, please go to www.medicaltuesday.net/voicesofmedicine.asp.
The Dali
Lama fled Tibet for India many years ago, when the Chinese government declared
Tibet to be an integral part of China and asserted its right to control
religious life in the "Tibet Autonomous Region." As I would come to
learn, the story is exceedingly complex, and considerable ethnic tension
remains between the mainstream Han Chinese and native Tibetans. (The latter
actually most closely resemble Peruvian Indians in looks, dress, and even the
kind of jewelry they wear.)
A military
invasion (or suppression of a rebellion, depending on the point of view) in
1950 and 1951 has been followed by a large influx of ethnic Chinese into Lhasa,
the capital city. Much has been done to improve the infrastructure of the
region since then. Less has been done to integrate the populations. Stereotypes
abound. As one Tibetan put it, "The Chinese think we are lazy and stupid,
and we think they are rude and overly materialistic." Nevertheless, Tibetans
send their children to China for the best educational opportunities. One such
student was asked what Tibetans eat. She answered, "Sand—it cleans out our
digestive organs" and rocked with laughter as she recounted how her
deadpan explanation actually convinced a couple of her classmates.
The truth is
that both China and Tibet remain quite primitive across wide reaches of their
territory. We found this as we traveled through Yunnan in southwest China,
gradually climbing by motor coach over the course of nearly a week to
acclimatize ourselves to Tibetan altitudes—12,500 feet in Lhasa and 4000 feet
higher in some places we visited. (The new train from Beijing to Lhasa also
crosses the mountains at 16,500 feet, but as part of a faster 48-hour
itinerary. Despite oxygen provided by mask to all passengers, one early
passenger did not survive the trip.)
The
indigenous population was startling in their adaptation to a difficult
environment. For example, in a mountain pass between Lhasa and Gyantse, isolated
homes were scattered around Turquoise Lake, seemingly oblivious to the
4.5-mile–high altitude and the paucity of people. Nearby, a herd of yaks
crossed an ice field, as if that was a perfectly normal thing to do.
Everywhere
we went, the people were black-haired, copper-skinned, and had rosy
cheeks—looking both sturdy and healthy. Without dentists, full mouths of white
teeth were typical. Poverty is endemic, but it does not interfere with the
pervasive quiet dignity of Tibetans. . .
But it is
the place of religion in life that makes the most profound impression on
visitors. Wherever we went, pilgrims on foot, in carts pulled by tractors, or
in trucks were making pilgrimages to monasteries sometimes hundreds of miles
away. Prostrating themselves on the ground to accumulate greater merit in this
life to be favored in the next life was commonplace. . .
Historically,
the seat of Tibetan power lay in its monasteries, and even today the support
of monasteries is clearly viewed as worthy by Tibetans, if suspect by the
Chinese. However, things seem to be changing. China is increasingly intrigued
by arguments in favor of preserving its ethnic heritage. Monks are modernizing
and, perhaps following the Dalai Lama's example, there is greater interest in
the outside world. We saw more than a few carrying cell phones and sporting
jeans and sneakers under their robes. . .
To
read the entire report, go to www.smcma.org/Bulletin/BulletinIssues/April07issue/FeaturedArticlesApril07.html.
Dr. Alper is
an internist in Burlingame, Calif. He originally wrote this story for Internal
Medicine World Report. The entire article appears online at www.imwronline.com.
* * * * *
9.
Book Review: MARKET
DRIVEN HEALTH CARE by Regina Herzlinger
MARKET DRIVEN HEALTH CARE - Who Wins, Who Loses in the Transformation of
America's Largest Service Industry by
Regina Herzlinger. Addison-Wesley Publishing Company, Inc. Reading, Mass, 1997,
xxviii & 379 pages, (includes index) $25. ISBN: 0-201-48994-5
Dr Herzlinger, Professor of Business Administration,
Harvard Business School, suggests by her title "how the market - not
managed care - will provide the solution to the deep problems that plague the
American health care system." Consumers in the United States are ambivalent
about medical care--bemoaning high costs and inefficiency while applauding
research advances and individual health care providers such as doctors and
pharmacists. The abundant information that is available for other
sectors--prices, cost, quality, availability--is stunningly absent in health
care... Even prices are generally quoted "a la carte" not for
the full episode of care. Herzlinger's book intends to help remedy "the
contradictions in the American health care system: to keep what is so good
about it and to purge what is so bad."
In Part One of this four-part book, Herzlinger looks
back twenty-five years to studies that found disparity in patient care. Women
in Maine underwent hysterectomy four times more often than those in New
Hampshire, implying that some back woods docs were a "greedy lot."
Nevertheless, providing equitable care to women seemed easy. Allow a few smart
doctors to routinize medicine and then tell the rest what to do and how to do
it. Quality would improve, and the cost of health care would plunge--one of the
cornerstones of today's powerful for-profit managed care movement. To read more, please go to www.medicaltuesday.net/bookreviews.asp.
Herzlinger finds this strategy puzzling when compared
to recent changes in most sectors of the American economy. She points to
manufacturing's innovations in organizational structure, technology,
information, and employee empowerment. The author describes "focused
factories," where cleaving vertically integrated firms and
"outsourcing" goods and services have proved beneficial, both in
costs and customer service. These successful ideas have eluded much of the
health care system, which continues to replicate the mistakes of long-gone
manufacturing giants--believing that "big is beautiful" and that
direction should come from the top.
By 1986, fifteen years after Herzlinger's initiation
into the maddening contradictions of the American health care system, she was
convinced that the forces that had revitalized manufacturing could reshape the
health care system. A revolution was on its way. However, unique
barriers--complex technology, multiple professional roles, and daunting legal
requirements--had to be overcome. To prepare potential medical care managers,
Herzlinger developed an MBA course at the Harvard Business School,
"Creating New Health Care Ventures," proposing lower priced
specialized medical care, "available before and after working hours, in
easy-to-reach locations like work sites, shopping malls, homes, and
schools," much as the eyewear sector and chain of cancer centers are doing
right now. There will be winners, healthier, better-informed patients and
health care providers no longer having to answer to bottom-line-oriented
managers, and losers, providers who do not value customer convenience over
their own and who also enjoy being in complete control.
In Part Two, Dr Herzlinger, using examples found in
managed care and horizontal integration, analyzes why the two popular remedies
for the health care system--downsizing, or managed care, and upsizing, or
"big is beautiful," fail in most cases. She gives examples that
merged hospitals have increased their costs disproportionately . . .
To read the entire review, please go to www.healthcarecom.net/bkrev_MarketDrivenHealthCare.htm.
* * * * *
10. Hippocrates & His Kin: The Cheapest Patient Is a
Dead Patient
At the Institute of Ethics and Emerging Technologies (IEET)
Conference, David Meltzer, a medical economist from the University of Chicago,
was not amused by Ronald
Bailey's comment that when you take into account all of the
money spent on health care, the cheapest patient is a dead patient.
HMOs have understood that for years.
Since, 1970 when I went into
practice, I've noticed that my 70-year-old patients look younger and better
than my 60-year-old patients did at that time.
But health care has not
gotten any less expensive with the prolongation of ageing.
To read more,
please go to www.medicaltuesday.net/hhk.asp.
Rupert Murdock will take
control of Dow Jones and the Wall Street Journal next fall. Maybe we'll see the
premiere six-column newspaper re-emerge. If the Financial Times can continue to
give us seven columns of news before we even open it and disturb the person
next to us, I'm sure Rupert will restore the dignity of the WSJ.
Even the Sacramento Bee has
a six-column business news section in their format, which is wider than the WSJ.
Then we won't have
difficulty finding the WSJ among all the newspapers in the Staff Lounge.
Ron Paul, MD, is considered
by nearly everyone to be the most freedom-loving idealistic Representative with
the highest degree of integrity of any Congressman. (www.ronpaul2008.com/) Recently it was reported that
he also has several slices of pork going to some of his friends in Texas. His
staff reportedly justifies this, as I recall, being necessary to get
re-elected.
If a man of such integrity
cannot rise above the evil influence of Congress taking money unnecessarily
from hard working Americans and redistributing it to friends, then Congress
must be one of the most Evil Institutions in America. Why would anyone even
consider entrusting their personal health to such an institution with ulterior
motives?
Why do business people and
physicians smile and relax in August?
Because Congress is on their
summer recess and we don't have to fight for survival.
* * * * *
11. Organizations Restoring Accountability in HealthCare,
Government and Society: