Hospitals compete for money, not the people's health. We need to stop this.

For decades, Santa Fe, NM, had only one hospital. St. Vincent’s was founded 155 years ago by the Sisters of Charity, but was taken over by the national Catholic corporation CHRISTUS in 2008. It’s a pretty good hospital with about 200 beds, for a small city of 85,000. A couple of years ago, the largest health system in New Mexico, Presbyterian, opened another hospital. It is a big building, but has only 30 beds, so its additional contribution is not primarily general inpatient care. Interestingly, while the hospital is on the far southwest side of Santa Fe, its main medical center building is directly across the street from St. Vincent’s. This is obviously not a coincidence, as it is now firmly in the center of the area in which people are accustomed to coming for medical care, establishing itself, at least for outpatient care, as a competitor.

The point that I want to talk about is not hospitals in Santa Fe specifically but rather competition among hospitals in general. This is not a problem in rural areas and small towns where the struggle is, rather, to hang on to their hospitals at all (often with just a very few inpatient beds, and almost invariably losing money). It may not be a big issue for mid-size cities like Santa Fe. It is a huge issue in the major metropolitan areas where most hospitals and doctors are, and where there are the greatest concentrations of patients (the medical term for what in English we call “people”).

In these areas, you will find that almost every big hospital (or “medical center” or “health system”) has a Cancer Center. And a Heart Center. Centers for Orthopedic Surgery and Sports Medicine are also big. And in the last decade Neuroscience centers have joined the ranks of “must-haves” for each of these centers. Of course, if they deliver babies, they certainly will have a Neonatal Intensive Care Unit. What is wrong with this? Are these not important, serious diseases that can and do kill a lot of people and need treatment? Am I advocating against treating, say, cancer?

Not at all. But while there are a lot of people with cancer, it is a finite number. Was the new Cancer Center just opened to a lot of hoopla at St. Elsewhere necessary because there were many cancer patients for whom there was not room in the Cancer Center at Downtown General, opened a few years ago, and now would have an opportunity to receive treatment? Or, just perhaps, is St. E’s hoping to attract many of the patients, and perhaps the doctors, who currently use DG to instead use their new, glitzy, state-of-the-art facility? Is it a simple matter of competition for a limited market?

If we had a medical care system that was based on the health care needs of the population, we wouldn’t have such redundancy of facilities; we would have enough for all the people who need care and not unnecessarily duplicate services. Downtown General might have centers of excellence in cancer and orthopedic sports medicine, while St. Elsewhere might be great for heart and neonatal care. And, since we are fantasizing about a system in which the driving force is the health of the people, let’s throw in primary care and mental health. But that doesn’t happen. And, in our hypothetical city, even with both cancer centers (and perhaps yet another at Doctors Medical Center), there will still be bunch of people who cannot receive care because they have no insurance or their insurance is poor (i.e., they are “underinsured”).

So, in addition to creating excess capacity, which creates major excess cost, competition in medical care services doesn’t meet the needs of all the people. The true driver of the health system, making money, creates at least three major sources of inequity:

1. The services are only for the well-insured. Entire groups of poorly-insured people are excluded. The services offered by these special centers may be highly-profitable, but only if they get paid. They don’t make money providing care to poor or uninsured or underinsured people. 
2. The services offered are those that are highly profitable, and most often this is for particular procedures. Yes, cancer is bad. So is heart disease. But the real reason for these centers is that these conditions are very well reimbursed by insurers, so the hospitals (and doctors) make a lot of money (provided the patients meet criterion #1, of course). For example, while chemotherapy drugs are ridiculously expensive, of course, making money for the pharmaceutical industry, the hospital makes money on the “administration fees” which are far in excess of the actual cost of administration. In addition, the creation of new “centers” are often driven by a single procedure. No one had big “Neuroscience” centers until the procedure for inserting a catheter into a brain artery to pull out a clot was developed. THAT is reimbursed incredibly well! All of a sudden every big hospital needed a “Stroke Center” and started competing (and paying a lot of money for) “stroke doctors” (who might be neurologists, neurosurgeons, or invasive radiologists) who could do this procedure. But poorly reimbursed services? No matter how much the people need them, don’t expect lots of new centers for primary care. Or mental health. Or even general surgery. Essentially, we discriminate not only against those who are poor or uninsured, we discriminate against those who are unlucky enough to have poorly-reimbursed diseases!
3. The third great inequity is obviously geographic. If you live in a major metropolitan area, and are well-insured, you can have your choice of which hospital is the best for your problem. You consult US News, ask your friends, read the ads. But if you are in a small town or rural area far from such a city, it’s a long trip. And not worth making if you don’t have the money.

What can and should we do? In the long term, we need to eliminate the motivation of hospitals to compete for profitable services by putting them on a global budget, which is what is done in Canada as part of their single-payer health care system, called (interestingly) Medicare. And, of course, we need to cover everyone so there are no people left out because they are poor and uninsured, a universal health insurance system, not “cover more” but “cover everybody”. And by long term, I mean as soon as possible.

In the mid-term, we must change policies to much less dramatically favor certain procedures at the expense of others. Pay more for mental health and primary care. Pay less for cancer drug administration and sucking clots out of brain arteries. Stop making it so much more profitable to do knee surgery than gall bladder surgery. The availability for any kind of procedure should be based on the need for it, not how well it is highly reimbursed. That is a totally backward motivation, and dangerous to our health. This can actually be done by federal policy simply by changing how (US) Medicare values and pays for services. Because Medicare is the largest payer, it sets the market rate. Private insurers may pay more, but it is always “multiples of Medicare”; the ratio of what is paid for one medical service relative to another is set by the federal government.

And while we’re at it, let’s eliminate the universal tax-breaks “non-profit” hospitals get for anything that they do, which are mostly things that will make them money! As evil in many other ways as for-profit hospitals are, they are at least required to pay taxes, and go to the capital markets for capital expansion. No donations to a hospital should be tax-deductible if they are going to be used for a money-making scheme. Again, in Canada capital budgets are separate from operating costs. A hospital is not motivated to increase its operating profit so it can expand and build, to better compete with others. It must apply for additional capital funds, which will only be available if they serve a health need.

In fact, this is something we can do in the near term. As citizens and donors, we can demand that the next opulent fund-raising gala for our local hospital is not for the purpose of expanding money-making services, but rather to expand those services to those who cannot currently access them. The money raised should be earmarked only for, say, providing cancer care at our great cancer center to uninsured people. That would be something for which tax-deductibility is justified.

It is outrageous that our health system in the US is structured to maximize money-making and not health. But as in so much else in our society, those making the money have a lot of it to use to exert their clout. It is going to take a massive national effort by the people to make the changes that we need to have.

 

 

Corporate mergers, retail clinics, and monopoly capital

Two huge mergers have recently been announced in the health insurance sector. First, Aetna announced its intention to acquire Humana for $35 billion, creating a behemoth. Not to be outdone, Anthem (the enormous group of formerly non-profit Blue Cross/Blue Shields that have gone for-profit) announced it will buy Cigna for $47 billion. Consolidation in the industry is moving fast, and soon there will be oligopoly. Robert Reich, in his July 5, 2015 article The Choice Ahead: A Private Health-Insurance Monopoly or a Single Payer discusses these mergers, observing that

Executives say these combinations will make their companies more efficient, allowing them to gain economies of scale and squeeze waste out of the system. This is what big companies always say when they acquire rivals.

Yes, indeed. They always say it, and while sometimes they achieve efficiencies-- this usually involves firing people -- it almost never benefits the consumer; prices almost always go up. Remember airline mergers? Bought a ticket lately? Despite the rhetoric of capitalism about competition, virtually all companies would prefer to be monopolies, control the industry, and set prices, guaranteeing huge profit. If they cannot, the next best thing is oligopoly, control by a few companies, with collusion so that they all make huge profits. Competition is their bugbear. Yes, we have federal regulators, but the result of their regulation has been those airline mergers. And telecommunications mergers. And financial services mergers. And banks too big to fail. So don’t count on them.

Health insurance companies are not the only mega-corporations profiting from “health care” by siphoning off money that could actually be spent improving health, or at least providing medical care. Obviously, there are drug companies (as I recently discussed in Chemotherapy, Quality of Life, and Corporate Profit on July 26, 2015), but also big pharmacy chains (like CVS, Rite Aid, and Walgreens) as well as other retailers that usually have a pharmacy (like Walmart, Kroger and Target) that have now branched out into providing health care, through what are known as “retail clinics”.

In the New England Journal of Medicine on July 15, 2015, John Iglehart writes about “The expansion of retail clinics—corporate titans vs. organized medicine”.[1] Here the case against the corporations is less clear, or at least the case in favor of organized medicine is. Iglehart points out that the opposition from organizations like the AMA, the American Academy of Family Physicians (AAFP), and American Academy of Pediatrics (AAP) have focused on the lack of continuity of care and “disruption of the patient-physician” relationship. Recently, opposition has softened (I guess folks know when they’ve lost) except from the AAP. It seems to me that these clinics provide a menu of services that primarily is focused on acute care for relatively minor infections and injuries, immunizations, and monitoring of chronic diseases like high blood pressure, and are pretty popular with the people who use them. They are conveniently located (for the people who use them), generally have little or no wait, and are staffed by professionals (usually nurse practitioners) who know what they are doing.

The problems with such retail clinics fall into two broad categories. First, when people use them inappropriately, not for acute or minor conditions, but as their usual source of care. For healthy younger people, this may be all they need. For older folks and others with chronic conditions such as high blood pressure, diabetes, hyperlipidemia, chronic lung disease, heart disease, etc., they are not sufficient. The danger is when people only seek care when they have symptoms, such as (particularly) pain, whether to such a retail clinic, traditional physician’s office, or emergency room, and ignore prevention and management of their chronic conditions. I do not fault the providers in these settings; there is evidence that they urge people with such needs to follow up with their primary provider. But, once the acute symptoms are gone, they may not. Some of this, sadly, may be financial.

The other problem is more interesting, and gets back to the financial issue. Providers and the organizations representing them (“organized medicine”) has real concerns because such retail clinics “cherry pick”, or skim the easy cases that pay for (or more than pay for) themselves, leaving physicians with the care of patients with diseases that take more time and are reimbursed less per hour (or minute) of work; this destroys the business model of primary care practice. As long as we depend upon a fee-for-service, reimbursed-for-care-provided, private medical model, this puts a real burden on physician practices which, while looking bigger than the small retail clinics, are usually tiny compared to the corporations that own those clinics.

Another medical area in which there is a clearer case of fear of competition disguising itself as virtue is in the shrill hostility of US-based medical schools, represented by the Association of American Medical Colleges (AAMC) to off-shore (mainly Caribbean-based) medical schools, as described by Robert Goldberg in Discrimination against foreign medical schools is bad for your health in the online publication “The Hill”. The argument against such schools from the AAMC is in part that the students are “lower quality”, the ones rejected by US medical schools. The flaw here is that there are many highly-qualified students who do not get into US medical schools, demonstrated by the recent dramatic expansion of the number of US schools and the class size of existing schools. Are there Caribbean schools of poor quality? Yes. Is the academic preparation of students in Caribbean schools, on average, lower than those in US schools? Probably. Is this a reason to try to put them out of business, by both bad-mouthing and trying to limit the access that their students have to educational loans? I don’t think so.

Our US medical schools get talented students, and then put them through a process that ends up producing doctors underrepresented in the primary care specialties and overrepresented in urban – and especially suburban – areas. As I have often pointed out, we produce the wrong mix of doctors who practice in the wrong mix of places. If (and it is, of course, an if) graduates of off-shore medical schools are likely to fill the medical needs not being met by graduates of US medical schools, then the title of Goldberg’s piece is correct. The same might be said for retail clinics, if indeed they were mostly present in underserved communities, but, based on the business models of their owners, they are generally not.

So, then, we see a spectrum of corporate involvement in health care ranging from the off-shore, for-profit medical school, to the acute care clinics run by large retailers, to the consolidation into oligopoly of health insurance companies, to the large pharmaceutical manufacturers. We also see a response of tepid regulation of the latter two, and protectionism by organized medicine and organized medical schools to the first two. None of these are good for our health. What would be good for our health would be the rational use of health care dollars to provide health care, for everyone, of the right kind in the right setting.

Reich ends his article with

If we continue in the direction we’re headed we’ll soon have a health insurance system dominated by two or three mammoth for-profit corporations capable of squeezing employees and consumers for all they’re worth – and handing over the profits to their shareholders and executives. The alternative is a government-run single payer system – such as is in place in almost every other advanced economy – dedicated to lower premiums and better care.

Which do you prefer?

I feel like raising my hand and waving it in the air saying “I know, I know!”

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[1] Iglehart JK, The expansion of retail clinics—corporate titans vs. organized medicine, NEJM 15 Jul 2015;373(4):301-303

Uber, pricey doughnuts, and health care: serving the needs of the people or the interests of the rich and powerful?

Two articles in the Sunday Review of the New York Times on November 10, 2014 that are not explicitly about health care seem to me to be very much related to the health care system in the US. “Republicans and the puzzle of Uber”, by Josh Barro, discusses the conflicting interests that affect policy making, particularly at the state level, and create an ideological challenge for that party. On the one side, the libertarian wing of the party lauds “the smartphone based car service” Uber as a wonderful example of deregulation, of opening the market to new ideas that nimbly serve the consumer and meet a real need. On the other side are the existing large and small businesses whose owners not only vote Republican but contribute money to Republican coffers, who want to have their interests protected. In the case of Uber, it is licensed taxi owners, but as Mr. Barro makes clear, this extends to many other businesses where profit margins are protected by legal regulations.

Examples that Mr. Barro cites include everything from licensing of interior designers, auctioneers and ballroom dance studio owners in Florida (run by Republicans) to limiting the sale of coffins to funeral homes (in Oklahoma, also very “red”). He notes that this also occurs in the case of very large businesses at the federal level, citing the controversy about the Export-Import bank, which can protect big companies in the US, but is seen as anti-competitive by some in Congress. Other examples which he does not mention include opposition to the presence of food trucks by local restaurants and “blue laws” in some states requiring car dealerships to be closed on Sunday (hey, if it were legal someone would open and then I’d have to also to say competitive, and I don’t want to work Sunday!)

What does this have to do with the health system? A lot, in a lot of areas, but one that is of great interest to me is the recent initiative begun by a collaboration of all of the major family medicine organizations and newly including osteopathic groups called “Family Medicine for America’s Health”. This effort, with the tag line “Health is Primary”, is good and important, calling attention to the fact (and it is fact) that the creation of a cost-effective health system that delivers high-quality care depends upon a strong primary care base (discussed and with evidence presented many times in this blog). It also emphasizes that family doctors are the central specialty in primary care, given the near abandonment of general medicine by internal medicine graduates. The argument is articulately made in a recent article (ironically called, internally, the “über article” as it will be succeeded by other articles addressing components of the problem) in the Annals of Family Medicine, “Health Is Primary: Family Medicine for America’s Health”.

However, there has been less-than-sweeping coverage in the media, and a less than enthusiastic reception by other groups in the medical establishment. A generally positive article in the Kaiser Health News by Lisa Gillespie on October 24, 2014, “Family doctors push for a bigger piece of the health care pie”, quotes Atul Grover MD, chief public policy officer of the Association of American Medical Colleges (AAMC), who says “while primary care is important, taking funding away from specialty training isn't necessarily a solution because an aging population will need more specialty care.” This may or may not be true – we need as much training in different specialties as we need, not more or less. It is almost certainly true that we need more in primary care and less in some others – but it reflects Grover’s (and AAMC’s) role in representing the interests of our academic health centers and all of its components even when this may not be in the best interests of the health of the American people. Just like the Republican party, AAMC has constituents that may reflect different interests.

Thus, there is some irony to another quotation from Grover, that “It’s always a question of what motivates groups to do these kind of campaigns — is it looking out for patients or your own interests, and generally it’s a combination of both,” because this is exactly the position the AAMC is in. However, it is a real caution for the family medicine organizations who are working on “Family Medicine for America’s Health”: to the extent that this campaign keeps to the high ground of America’s health (as it generally is, notably in the Annals article) it deserves strong support. To the extent that the self-interest of family doctors is, or is seen to be, the major driver of the campaign, we risk being lumped with other “special interests”: we could become the funeral homes in Oklahoma selling coffins, or at least the AAMC.

The other NY Times article on November 9, 2014, is from Margaret Sullivan, the Times’ “Public Editor”. “Pricey doughnuts, pricier homes, priced-out readers” addresses common complaints from readers that the Times, not only in its advertising but its articles, seems to be addressing an incredibly wealthy crowd. Anyone who reads the paper is impressed by the lack of accessibility of the homes featured often costing not just millions but tens of millions of dollars, the ubiquity of ads for $10,000+ watches, and articles as well as ads for the highest-end consumer items ($160 flashlights and doughnuts costing $20 for a half-dozen). Sullivan notes that these may seem “aimed at hedge fund managers, if not Russian oligarchs”. She quotes Times executive editor Dean Baquet who, adding insult to injury, says of Times readers “I think we have as many college professors as Wall St. bankers”. This is a double insult; first of all there are way more college professors than Wall St. bankers, and the idea that college professors are the economic “low end” is amazing.

Ms. Sullivan’s article cites mixed reviews of the extent to which the Times covers of poverty (the Pew Research Center says 1% of page 1 articles), but it is clear that appealing to the middle class is missing from the Times. Baquet talks about “balance” as if it were reasonable to balance coverage of issues relevant to the 0.01% with those of the 1% or even only the 10% wealthiest Americans, and only an occasional piece addressing the world of the rest of the nation lives in. This, of course, is what parallels the health care system.

Our hospitals seek to attract well-off and well-insured clients, “balancing” them with poor people. But there are way more poor people, and they tend to be sicker and need more care, so justice, equity, demands that there be much, much more care and attention allocated to them than to the wealthy. If the Times makes money from advertisers who want to reach the wealthiest customers, our hospitals are interested in pleasing their wealthiest customers (oh, I mean patients) in hopes of getting big donations. And those donations are almost never used to provide necessary health care for the sickest and poorest, but rather to open new units (adorned with the donors’ names) to recruit yet more well-off patients. Both our health care institutions and the NY Times are about augmenting their income rather than meeting people’s needs.

Ms. Sullivan ends with “In the end, the upscale doughnut and the penthouse apartment — lofty as they may be — have nothing to do with The Times’s highest purpose.”  Good for her. Maybe Mr. Baquet will get the message, but I doubt it. At bottom, however, if the “balance” of whose interests are addressed by New York Times articles seems off, or offends you, or doesn’t meet your needs, you can read your local paper.

If the balance of who our health care system cares for is way off, we have to work to change it.

Treatments that don't cure the disease; we are spending money on the wrong things

In “Heralded treatments often fail to live up to their promise” (Kansas City Star, May 17, 2014), Alan Bavley, writing with Scott Canon, continues to demonstrate that he is one of the excellent health journalists – excellent journalists – in the US, along with Elisabeth Rosenthal of the New York Times. The common practice in the news media (and, thanks to a typo, “medica”) is to hype the new, exciting, dramatic, expensive, and hard to believe even though you want to. In politics, we often see the media acting as flaks for the government, the rich, and the powerful (sometimes, of course, these can be in conflict). Bavley and Rosenthal  and their ilk actually do investigative journalism, trying to the best of their ability to find out the truth rather than to reprint press releases.

The article begins with a review of a surgical procedure that was designed to control high blood pressure (hypertension) without drugs, by cutting some of the nerves to the kidneys. It made sense, it was seen as a big breakthrough (“The potential benefit was huge,” said a cardiologist). Unfortunately, when actually subjected to appropriate scientific study, it didn’t work. Or, rather, it worked just as well as placebo, a sham surgical procedure. The same cardiologist remarks ““This could be considered the biggest disappointment in cardiology of this century, but “the medical community went about it right.” 

Science worked. Unfortunately, the authors add,

“If only that were always the case. A combination of industry marketing, overly eager doctors, demanding patients and news media ready to cheer on anything that sounds like a breakthrough is popularizing many drugs, surgeries and other treatments long before they’re adequately tested. Far too often, they’re ultimately proved ineffective, no better than older, cheaper therapies, or even hazardous. Billions of dollars are wasted and tens of millions of patients are put at risk”

Yup. They go on to cite the Vioxx scandal, in which Merck concealed evidence of its biggest-selling drug causing an increase in heart disease. But that was taken off the market; many other unproven (or worse, proven to be ineffective) treatments are not. They talk about arthroscopic knee surgery, still often being done for conditions for which it has been shown to be no more effective than a sham procedure. They discuss surgical robots, costing upwards of $1.5 million, and proton-beam radiation treatments (those babies, the machines, really cost a lot!) for which the evidence of effectiveness compared to more standard and much cheaper treatment is mixed, at best. But hey, if you’re a hospital, and the competition has robots and proton-beam accelerators, who’s going to come to you if you don’t have one? Poor people? Heaven forfend!

And it is all about getting the advantage on the competition to make more money. A good argument can, and should, be made that competition in hospitals helps no one. That if there were an expensive item that there were an actual medical need for one of in the community, there should be one, not one at every hospital. But that would presume that the goal of the health system was to increase the health of the American people at the lowest effective cost. It isn’t. It’s to make money. If I can get your patients to come to me instead, it is seen as a victory (from a competitive business sense). It is really a loss for the health of our people and the pocketbooks of us all.

It is particularly depressing because that money is not buying us health. If you still harbored the belief that “we have the best health care system in the world”, it’s time to acknowledge that you are wrong (although we forgive you given the hype!). We should all know how expensive our health care system is, that we spend way more than any of the other developed countries (members of the Organization for Economic Cooperation and Development, OECD). The attached graph, from Steven Woolf, MD, PhD, who was a plenary speaker at the recent Society of Teachers of Family Medicine Annual Conference, shows a comparison of spending and life expectancy for the OECD countries. That’s the US way off to the right, spending more than anyone by far, but having a life expectancy close to the Czech Republic. Better than Mexico, Poland, Slovakia, Hungary and Turkey, but at enormously greater cost!

Woolf was the lead author of the Institute of Medicine’s (IOM) recent report “Shorter Lives, Poorer Health” , which presents depressing, but unfortunately accurate, data on our health status. We are among the “leaders” in death rates from communicable and non-communicable diseases and from injuries. Only for a few causes are our death rates better than the average. Our life expectancy at birth is worse than any of the 17 comparison countries for men, and second worst for women. Our probability of survival to age 50 is lower than any of 21 comparison countries. At any age until 75, we are never better than 15 out of 17 in terms of life expectancy. We do have better survival rates once we reach age 75, but there is no information on how much of that is keeping people alive despite poor quality of life.

Want more? In case you think it is only the minority populations (although that would be part of our population), non-Hispanic whites rank no higher than 16 of 17 at any age below 55. And the only portion of our population for whom mortality rates have risen is non-Hispanic whites with less than 12 years of education. From 2005-2009, the US had the highest infant mortality rate of the 17 countries and the 31st highest in the OECD. Non-Hispanic whites and mothers with 16+ years of education also have higher infant mortality rates than those in other countries. Among the 17 peer countries, mortality from transport accidents decreased by 42% in the OECD between 1995 and 2009, but by only 11% in the US. The same trends hold for child and adolescent health – and ill-health and mortality.

And then there are the areas where we really shine, particularly health issues related to guns.

• In 2007, 69% of US homicides (73% of homicides before age 50) involved firearms, compared with 26% in peer countries.
• A 2003 study found that the US homicide rate was 7 times higher (the rate of firearm homicides was 20 times higher) than in 22 OECD countries.
• Although US suicide rates were lower than in those countries, firearm suicide rates were 6 times higher.

We have the highest child poverty rates in the OECD, our preschool enrollment is below most countries, and the ratio of social services spending to medical spending is below almost all other OECD countries.

This is insanity. We are spending enormous amounts of money, but we are spending it so that our hospitals can compete with each other, so that we can deliver the most expensive and high-tech care whether it benefits people’s health or not, and we then do not have any money left to do the things that would really enhance health: expanding education, creating jobs, decreasing poverty, ensuring that people had homes and enough to eat.

Not to mention the guns.

Competition vs. Coordination in health care: remember the patient!

Two of the most prominent policy recommendations for improving the health care “system” in the US have been increasing coordination of care and increasing competition. Both have very positive aspects, and I have written positively about the potential of both approaches, but also about the very real pitfalls. Coordination of care sounds like a “no-brainer”; everyone would like the physicians caring for them in one setting (say, in the hospital, or on a visit to a specialist, or in a rehabilitation facility or even nursing home or home care) to know what has been done to them previously, what the results have been, and what their previous providers thought. At the minimum, we want to think that there is communication, and that (often expensive) lab tests and x-rays are not repeated for no reason other than that our current provider cannot access those done somewhere else. In addition, coordination of care should mean that care is delivered in the most appropriate setting, often the most cost-effective setting, and that when we move from one setting (say, outpatient to inpatient, or inpatient to rehab) it is for good reasons based on what is best for our health, and not for bad reasons (say, what makes the most money for the providers).

Competition in health care also has value if it prevents artificially inflated charges and cost, just as it does in other parts of the market place. This may be most obvious in price-sensitive elective care, such as the Lasik® and contact lenses cited by Sen. Rand Paul, but is most important when it is absent and prices rise, such as in the case of hospitals (like Bayonne Medical Center; see The high cost of US health care: it's not the colonoscopies, it's the profit, July 28, 2013) that have a lock on a market. While business leaders  often extol the benefit of competition, in fact all prefer to have a monopoly on the market (or at least be part of a oligopoly, where only a few players exist in a market and often collude on pricing) as it maximizes their profit. Airfares are a good example; I live in Kansas City, and if I fly to NYC, the round-trip fare for a non-stop is more than twice what it is to fly to Washington, DC. This was not always true; there used to be several airlines flying non-stop from KC to NY, but now there is one. There are at least 2 flying to DC.

OK, so both coordination of care and competition can be beneficial in the healthcare marketplace. But what about when they are in competition with each other? This is the subject of a “Perspective” in the New England Journal of Medicine by Katherine Baicker and Helen Levy, “Coordination versus competition in health care reform”,[1] August 29, 2013. They point out that despite the potential benefits of care coordination, and its older cousin, consolidation, it can be anti-competitive and some health care consolidations have been investigated by the Federal Trade Commission for this very reason. The problem is not an ideological commitment to competition, it is the results: the merger of two hospitals providing similar care raises prices, as does movement of care from low-cost venues such as doctor’s offices to higher-cost (and reimbursement) venues such as surgi-centers and hospitals (see again July 28 post). Baicker and Levy note the “subtler” issue of bundling, such as occurs in the case of computer software, where in order to get one product a company makes which you want, you are forced (or encouraged, through a big discount) to buy others you may not want; to get a lower price on that great browser you have to buy the operating system, or the word-processing software. It certainly can and does occur in healthcare:  “…bundling offers providers who have market power in one product domain (such as tertiary hospital care) an opportunity to dampen competition in other product domains (such as primary care) by requiring insurers to contract with them for both products in order to receive discounts.”

Health information technology is a prime example of the tension. Heavily pushed, and subsidized, by the federal government as a way to improve coordination of care, it “can in theory promote both competition and coordination, but only if they are implemented well — an interoperable health information technology (IT) environment, for example, should promote both, but health IT without interoperability may simply lock patients in to their current providers or provider networks by making it difficult or costly to move their records, reducing competition. The opportunities for a win–win are limited.” Most providers who use EMRs will acknowledge their advantages (“I know what is happening elsewhere – at least within the system”) but complain about the huge amount of time it takes to enter data, and the fact that many large systems have bought the components of systems that facilitate billing, but often not those that offer great patient care advantages (such as the creation of “registries”, i.e., lists of the patients with similar conditions, such as diabetes, that may need similar regular interventions). And interoperability? No way. “Provider lock” – getting a healthcare system to spend so much money on your EMR product that they can’t change – has become the main strategy for most health IT companies. “The worst nightmare of most health IT companies,” says a friend who is in the field, “is that Apple will get involved and create a product that works better and is easy to use. And will probably be cheaper. So they want to lock you in.”

Baicker and Levy make three suggestions for how this tension might be resolved. One, look for “win-win” situations (could this be health IT? they ask). Two, have courts that enforce anti-trust laws look explicitly at the trade-offs. Three, look across silos to see how a seemingly positive change in one area would potentially have a negative effect in another. These are all good suggestions, but all limited and quite “iffy”. And all, I point out, as often is the case in rarefied discussions of health policy, missing the most important point: What is best for the health and health care of people, or patients? Not “consumers”, these largely hypothetical well-informed people whose problems are so non-urgent and budgets so large that they can shop for health care as they might for shoes, but the people who are sick, who are stuck in their health plans (whether government like Medicare and Medicaid or because their employer only offers one) or are uninsured?

This is where the doctors, who are often criticized (even by me; see Physicians' role in controlling health costs: do no financial harm, August 25 2013) are often right when they talk about meddling by bureaucrats. The issue is, however, that the policies adopted by Medicare and private insurers (often quite different, per Baicker and Levy) are indirect; they attempt to influence both the quality and cost of care by financial incentives or disincentives, and this permits – indeed encourages – gaming of the system, trying to maximize income while minimizing cost and risk. This is obvious, but is still true, and its impact is often to the disadvantage of people. The solution may well be more explicit regulation to directly address what needs to happen. Not micromanagement (“use this drug”), although following evidence-based treatment approaches might be among them, but those that explicitly encourage high-quality, cost-effective care. Coordinate care, but block monopolies; encourage consolidation between organizations providing complementary rather than the same services; do not pay increased costs because a system has a monopoly; demand that health IT systems be interoperable; measure quality outcomes that control for severity of illness and the socioeconomic risk factors of patients.

A single-payer health system, Medicare-for-all, could have the clout to make this happen. It could also run the risk of “non-competitiveness”. However, if we are all in, if even the most privileged have to use it, then that will protect the interests of the most vulnerable better than any form of competition that allows private companies to opt out of covering them, and puts the poor and sick and old in a separate system in which others do not have a stake.

It would be evidence of a core commitment to social justice.

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[1] Baicker K, Levy H, “Coordination versus competition in health care reform”, NEJM 29Aug 2013; 369(9):789-91, DOI: 10.1056/NEJMp1306268