Posts Tagged cost

Medical Care and Control Theory

sweatshopPiecework maximizes human productivity.  Make more things, get more money.  Garment workers and physicians both have been paid under this system — it’s great if the payment per piece is high but miserable if the price is low.  Because piecework itself is no guarantee of quality inspectors were invented to reject low quality products.  Thus, the little piece of paper in your new shirt pocket “Inspector 23”.

What if you went to a doctor’s office and had to be inspected before the doctor was paid?  You had to have that little piece of paper “Inspector 23” to submit an insurance claim. That’s never going to happen but you get the idea.   The doctor is paid by the number of services but the service should meet a quality standard.

This example is just the tip of the iceberg.  Medicine is discovering process control without much input from the well established engineering field of process control.  It’s sad, and perhaps a little arrogant on the part of medical administrators and law makers, to ignore the extensive work on process control.  People do not like to be considered as little boxes in a system diagram — understandable — but a failure to think in this way is wasting trillions of dollars.  The time for change has arrived.

PieceworkThe black box of medical care is what happens with the doctor-patient interaction.  1) A patient enters the office, operating room or x-ray office then health care happens then 2) the patient leaves.  As it stands now the physician is paid by the number of services performed so the possible process control at points 1 and 2 are wide open.  Nothing is measured, nothing is controlled, and quality is not guaranteed.

Control Theory

Now, consider modern process control with 5 control points, a measurement point and feedback to control the input to the black box of health care.  What is in the black box?  Perhaps just one health care provider.  Or perhaps many health care providers. Instead of a black box it might be a grey box with lots of individual elements.

Parallel SystemPerhaps the box contains whole specialties or perhaps many hospitals within an accountable care organization across many states.

At the highest level of abstraction the feedback loop is intended to minimize cost but at the lowest level the feedback loop is intended to maximize quality.  To make sure throughput is maintained the providers need to be paid by the number of services performed but the flow of patients is choked off if quality is not adequate.

This is rocket science.  But, as Einstein says, a system “should only be as complex as needed”.  Health care is very complicated and at the present the garment industry is not the model the world should be using.  Simplistic ideas of supply and demand are not adequate to make a rocket fly nor to control cost in a health care system.

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Switch to Generic Medications — no problem!

genericmedSwitching from a brand name medication to an available generic medication is safe, easy and will likely save you a lot of money.  Thanks to the work of the FDA, generic medications in the United States are quite safe.  Patients in the US take more generics than in other countries.

When a patient starts a new brand-name drug (e.g. Lipitor) there is a risk of a side effect or allergy to the active ingredient.   But, when a patient switches to a generic medication (e.g. atorvastatin) the patient already knows the active ingredient agrees with them so the chance of a reaction is as close to zero as medical science can make it.

Prescribers are well aware that some generic medications may come in different forms (tablets or capsules) and different strengths — this is not a problem, the prescription just has to be adjusted to match what the patient needs.  Most care providers are quite willing to make the change to help lower the cost of treatment — patients tend to take medications they can afford!

The Wall Street Journal had a story today based on the opinion of a “pharmacist-economist” who has been a lead author on only one paper in the past 20 years and who thinks tablets and capsules of the same medication are distinct entities (yes, but it makes no practical difference).  The WSJ is clearly interested how the switch to generics affects the economics for big pharma — it would not be good and the stocks could go down — such a disaster.  However, if you have stock in a brand-name company you could use your stock dividends to pay for the drug.

The new bio-similar drugs and even some old drugs (like warfarin) may have a slightly different effect that depends on some minor manufacturing quirk.  Prescribers are well aware of these peculiar drugs and can easily make adjustments and do tests as needed.  Fortunately, small manufacturing differences for the vast majority of drugs is a distinction without a difference for the patient.

This principle needs to be considered in everyday terms.  The table salt at restaurants may come from separate and  distinct sources — it really makes no difference to the customer — salt is salt!  Marketing departments want you the think a generic is like coal and a brand-name is like diamond — intellectual garbage.

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Generic Medications — where to get them

genericpillGeneric medications are supposed to be inexpensive!  But, not if you are facing price gouging.  Your favorite chain pharmacy may rip your wallet out and empty it.

The PBS NewsHour reported on 12/23/13 an astounding survey   — they found a generic medication for breast cancer (letrozole) ranged in price from $9 to $400 dollars for a 30 day supply.  Even more surprising the company that charged $400 dollars agreed to match the $9 price at a competitor.

Not only do pharmacies price gouge so do insurance companies.  Almost uniformly insurance drug plans add $20 to every generic prescription.  So a typical $10 generic prescription without insurance involvement will cost you a copay of $30 with insurance.  And, do you think the pharmacist will suggest you avoid using insurance — not usually, since the $20 copay is for them!

What should you do?

  • Shop around — check prices at several pharmacies
  • ASK if there is any program the pharmacy has to lower that price (sometimes if you get a shoppers card you get better prices)
  • You don’t need a membership to get prescriptions from Costco.  Consumer Reports rated them as having the best generic prices.
  • Here is a great place to check prices:  goodrx.com  (and they will print coupons for free!)
  • You can get mail order generics here with free shipping.  Usually their prices are good:  healthwarehouse.com
  • Don’t involve your insurance plan if it costs you more out of pocket than just outright paying for the prescription.
  • Insurance plans often limit the prescription to 30 days (with a copay every time).  Getting your prescription in 90 day amounts saves trips to the pharmacy and often improves the discount.
  • Pharmaceutical companies often make a long-acting medication just before the patent runs out on the short-acting form.  Ask your doctor if the long-acting medication is absolutely needed.  Sometimes taking a medication twice a day at a generic price is much less expensive than once a day at a brand name price.

The price gouging is astounding.  Patients often think a pharmacy just adds a small amount to the wholesale price.  Not so.  They often set the price at some percentage less that the brand name — hugely more profitable for them and devastating for consumers.

The price gouging makes you understand better why the UK and other countries have legislated a solution — they negotiate a country-wide price for each generic medication and allow only a few dollars to be charged as a dispensing fee.  The US has a long way to go to protect consumers and reduce health care costs.

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S is for Specialist


An expert is someone who has succeeded in making decisions and judgments simpler through knowing what to pay attention to and what to ignore.
(Edward de Bono)


There are about 50 common types of  medical and surgical specialists.  The list runs from allergists to vascular surgeons.  So, in the big picture of health care where do they fit?  Do they add to health care quality?  Are their services cost-effective (as you might evaluate a drug or device)?  When should a patient see a specialist (or not)?  Why are specialists happier than primary care doctors?

Many years ago there were no specialists.  Doctors delivered babies, set broken bones and used leaches.  Treatment of war wounds with amputation heralded surgery as a specialty in the latter part of the 19th century.  As time went by other specialties came into being mostly because specialists were the conduit from research to clinical practice.  As medical information was more widely available specialists simply had more experience with uncommon or difficult problems.  Specialists led the way for new treatments .  Pulmonary doctors treated consumption (TB).  Cardiologists studied EKGs.  Obstetric specialists invented forceps for difficult births.  Now there are at least 50 varieties of specialists.

The specialist world is divided between procedural (surgical) and medical (expert advice) specialists.  A cardiac surgeon is a good example of a surgical specialist.  An endocrinologist is a good example of a medical specialist.  Some specialists do a little of both like cardiologists who do heart catheterization procedures and provide expert advice for treatment of heart disease.  Medical research has exploded to such an extent specialists still maintain an edge by focusing on smaller and smaller areas of expertise.

One might be led to believe every condition should be evaluated by a specialist.  But, there is good evidence to the contrary.  Based on Medicare data:  Areas with more specialists spend more on health care for Medicare beneficiaries but see no improvement in the quality of care, mortality, or patient satisfaction.  The foundation of modern American medical care is being questioned.  What went wrong?  Is it Kryptonite?  How can this be?

 

There are two answers to what went wrong.  First, knowledge about a disease does not always lead to cure but always runs up the bill for tests.  Second, medication and surgery do have complications that can be serious to the point of shortening a person’s life.  In aggregate the specialty world “hit the wall”.  The positives could not offset the negatives.

The foregoing indictment of specialists really put the wind to the sails of primary care.  In fact, treatment of most common ailments is well established with what are called “evidence based guidelines”.   Quality, safety, cost-effectiveness, and patient satisfaction thus depend on a good process to implement the known guidelines rather than special knowledge.  Until recently primary care providers had the lowest job satisfaction of any provider group.  Now, with a new sense of importance and purpose they seem to be personally happier.

The specialty world is fighting back by addressing cost-effectiveness.  Cardiologists have devised cost-effective strategies for treatment of heart attacks (evidence based guidelines) with dramatic improvement in survival.  Oncologists are following guidelines for treating many cancers and engaging hospice at a more appropriate time.  Gastroenterologists have found they can prevent colon cancers by following evidence based  guidelines for doing colonoscopy.   The world’s specialists are not all on board with the idea of being  cost-effective.  Those who do procedures are still criticized for doing them too often (if you have a hammer everything looks like a nail).

THE BOTTOM LINE:

  1. If you have health problems then have regular visits with a primary care provider.  They usually do have good advice about going to specialists.
  2. Do your homework.  Search the Internet about your problem.  If there are ideas you find then discuss them with your primary care provider.
  3. There is still some “ego” challenge for a primary care provider to ask for help in difficult situations.  The simple question: “Do you think a specialist could help us with this problem?” is usually well received.
  4. If you have a life altering problem or are hospitalized more than once for  the same disease a visit to a specialist is certainly reasonable.
  5. If you do go to a specialist make it clear you want your primary care provider kept informed.  Likewise, make sure the primary care provider communicates with the specialist (sends periodic updates) and follows the recommendations primary care actually  requested.

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