The Power of Numbers: Health Economics, Single-Payer, and Massachusetts

When I came out against the Massachusetts health reform law a year ago I felt I had put myself out on a limb. The orgy of self-congratulation in Massachusetts spread from left to right, and even left/progressive commentators and bloggers were lavishing it with praiseful phrases like “exciting” and “model for the nation.”

Mitt Romney and his Democratic opponents had a symbolic victory to use in their next campaigns, while labor leaders could boast to their membership that they “get things done.” It was Governance by Press Release.

But numbers don’t lie.

The numbers built into the Massachusetts plan – and the hard realities behind the numbers that weren’t in the statute – pointed to an inevitable conclusion: Insurers might profit in the short term from a forced march of state residents into their plans, but underwriting results would eventually be disastrous.

Or they’d anticipate danger and price their products accordingly. Care would be available but not affordable, putting lower-income state residents in a bind. The net result: Either financial hardship or a new tax penalty for lower-income residents of Massachusetts.

Why? Because only the sickest would choose the higher cost of enrollment over the lower cost of paying the tax penalty, especially in Year One. Then the hard work would have to begin – the work that should have been done before the law was enacted.

Well, it’s the morning after. I’ve written about the Tylers, the owners of a diner who may have to close their business as a result of the law. I’ve linked to other news stories that cover the slow awakening now going on among lawmakers and officials responsible for the plan.

It’s morning in Massachusetts. Time to shake off the hangover and go to work.

So, does that mean I’m a hard-left critic of any appeasement with the public/private system? The forces of numerical law that predicted to Massachusetts’ problems don’t point that way, either.

As I wrote in “The Invisible Scalpel” and “Friendly Fire,” the U.S. has a health economy that’s unique in the world. It’s larger than the entire economy of Great Britain.

It’s had more than fifty years to grow into an system (in the systems theory sense) that includes health insurers, hospital reimbursement systems based on maximizing gain, and physician treatment behaviors that have grown up around payment structures rather than health. (Not to mention a mix of physician specialties that developed in part based on expected income – and a hundred other factors.)

Could we convert to single-payer overnight? I don’t see how, unless we created a program of Marshall Plan proportions to handle the shock of radically transforming this massive economy.

To those who have written me or blogged to say that I’m an “insurance company plant”or a “hard-right shill” I would respond: this isn’t me talking. Again, it’s the numbers.

Other single-payer proponents have been far more friendly – and enlightening. I’ve had an ongoing friendly correspondence with Nicholas Scala of Physicians for a National Health Plan. PNHP is an invaluable source for health data and information on international health systems.

I can agree with Nick and other single-payer advocates on most goals: affordable and practical coverage for every American. Ready access. A system that is “user-friendly” and dedicated to improving health outcomes.

I’m not even opposed to single-payer care per se. My biggest objection as such is that “single-payer” is a means, not an end, and I think many of us – on all sides of policy debates – tend to get overly attached to the means.

If I could prove to single-payer advocates that there’s a better way to meet the same goals, why should we have to argue? Conversely, I’m open to being persuaded that theirs is the best way to meeting our common goals – but I’m not there yet.

I just don’t think we have a plan to get there from here. That’s why I’ve provisionally endorsed the concept behind the John Edwards plan (though it’s important that he provide more detail soon).

Free-choice programs aren’t boondoggles for the insurance industry if they force insurers to compete with the public system, as under the Edwards plan. Instead, that requires private payers to either a) outperform the public system, b) provide a plan that some people will pay more to join, or c) wither away as a result of market forces.

Single-payer advocates say they can’t achieve “a.” Let’s see if they’re right. As for “b,” there is concern this will create adverse selection against the public system. Let’s look at that from a legislative perspective. And if “c” occurs — well, then everybody’s happy.

And we’d have done it by the numbers.

High And Low-Tech Communications: Patients’ Minds Are The Forgotten Medical Device

Claims adjusters have a public image as hard-headed, cynical, worldy-wise business people. (Think Edward G. Robinson in Double Indemnity, if your memory stretches back that far.) Workers’ comp adjusters understand something, however, that health execs and policy types often overlook: the “soft factors” of patient belief and comprehension have a dramatic impact on case outcomes.

Comp claim adjusters – at least the good ones – develop an understanding of patient psychology because it’s in their best financial interest to do so. A patient who’s frightened that he won’t get good care may get a lawyer, driving claim costs up. A patient who’s angry she can’t get appointments scheduled may delay her return to work. A patient who’s confused may not recover effectively.

A smattering of recent articles and developments shine light into different corners of the “patient’s mind” issue.

Writing in Medscape, Keith J. Petrie et al. (free enrollment required) review recent litererature regarding “the influence of illness perceptions on outcomes in patients with medical conditions.” The more interesting citations address the influence of disease perception on outcomes, as well as the effect of beliefs about need for treatment and their impact on treatment compliance (e.g. taking medications for AIDS treatment). Their conclusion – that “illness perceptions have been shown to have important associations with outcomes in a range of acute and chronic illnesses” – places a burden on physicians to communicate effectively with their patients.

The San Francisco Chronicle looks at a new initiative to provide “health care consumers” (I still can’t warm up to that term) online, searchable data on on quality of care and patient satisfaction by type of treatments for California hospitals:

While a dizzying array of hospital report cards already exists, the developers of the Web site CalHospitalCompare.org (www.calhospitalcompare.org) say it’s the most comprehensive site for people to use when making decisions about where to receive health services.

“There is no other Web site … that combines data from this many sources,” said Dr. R. Adams Dudley, project director for the Institute for Health Policy Studies at UCSF, which collected and analyzed the data for the site.

I used the site to compare two nearby hospitals and found it easy to use and readily navigable, unlike many other “health consumer” sites. The main reason for that is that it’s reporting very little about each hospital. All it tells you is how care was rated in three simple areas – quality, timeliness, satisfaction – in a way that easily lets you compare hospitals by type of condition.

Sites like this are a model for more complicated ventures, and could ideally create “feedback loops” that force hospitals to improve in areas where they’re deficient. In that sense, HHS Secretary Mike Leavitt was right when he said that “our goal isn’t just to digitize healthcare data, it’s to create a ’system’ out of a sector. We can’t do that without healthcare IT.” But I start to worry when politicians start to talk about “aliging incentives to choose high quality, low cost providers.” It’s the right idea, but I get concerned about execution.

On the low-tech side of the spectrum, Gloria Mayer at Healthleaders discusses the impact of poor literacy on health outcomes in chronic conditions. These conditions are significant cost drivers in health, and our system is designed to concentrate more on high-tech and high-pharma solutions than it is to the more prosaic, but sometimes far more cost-effective, “human touch” efforts that impact both cost and outcome.

Sensitivity to literacy issues is important, whether you’re considering instruction sheets for surgical aftercare, pamphlets on your newly-diagnosed condition, or hospital signage. (Lost, confused, and frightened patients may not return for needed ongoing treatments.)

Conclusions?

1. Patients’ minds can be used to improve outcomes.
2. “Provider profiles” need to factor in the doctor’s ability to communicate to the patient in a way that is clear, reassuring, and leads to better compliance. (Short of patient surveys, duration-of-care and other markers can be used to measure a doctor’s “bedside manner” and its impact on treatment effectiveness.)
3. When it comes to searchable online data, simpler is better.
4. Literacy management in health may not be as glamorous as searchable “health care consumer” websites, but it may do just as much good in the long run.