Health Care is Robbing Our Children’s Education

Today’s Managing Health Care Costs Indicator is $1 Billion

All countries eventually spend 100% of their GDP – and why not spend more on health care, which offers us benefits we really value?

Well –because health care costs ‘crowd out’ other important services, including societal functions that lay the groundwork for our future economic prosperity.  I'm thinking again about education. 

This month, Massachusetts schools are singled out in The Atlantic Monthly  as being far better than those of other states, although far inferior to the schools in many foreign countries. 

This week, however, The Boston Foundation  released a report detailing how health care costs across the state are putting our children’s education at risk.

Health care costs have risen on average 13.6% per year from 2000-2007, while general cost of living has only risen 3.4%.   Health care costs went up a staggering $1 billion from 2000-2007 for Massachusetts school districts – gobbling up every cent of increased state aid during that time, and devouring an extra $300 million in addition that required cuts elsewhere in the budget.   High health care costs for state workers have also hobbled the state’s ability to provide full funding for poorer school districts. The report notes that “from 2000-2007, increased spending on health care consumed 2/3 of the entire increase in state spending”

This data complements a report from Peter Orszag in September which showed that as states spent more on health care, they underfunded public colleges and universities.

Here is how Massachusetts school systems are coping with the 144%  increase in the cost of health care from 2000-2007.

-        Purchases of textbooks  ↓ 57%

-        Teacher training ↓ 23%

-        Overall non-inflation adjusted budget excluding health care ↓ 2%

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During this time, school budgets would have had to increase by 26% just to keep up with inflation. The report also noted that school districts in poorer communities have fared most poorly, while wealthy districts were in a better position to address rising health care costs by increasing tax rates. 

If we want to have world class schools for our kids, we have to control the costs of health care.

Smoked Pig

Today’s Managing Health Care Costs Indicator is $2159

Today’s New York Times features another tale from the land of variation.

  

Cardiologist Mark Midei inserted 30 cardiac stents in patients in a single day in 2008. The stent manufacturer (Abbott) purchased a $2159 barbeque dinner including a slow-smoked whole pig for the cardiologists’ home two days later.

The pig is a great headline, and a savory metaphor for the problem of overuse of high-margin procedures, some of which are invasive and have clear associated dangers.  The hospital subsequently notified 585 patients that they might have received medically unnecessary stents.  585!  This is mind-boggling.  

This story, initially reported in the Baltimore Sun, is reminiscent of the Tenet hospital in Redding, California.  That hospital built an empire providing cardiac surgery with very low complication rates – but it turned out that many of the cardiac surgery patients had normal coronary arteries. See Shannon Brownlee's excellent 2007 book Overtreated for the details.  

It’s especially interesting how this physician’s behavior was revealed.  His cardiology group had agreed to be purchased by the local hospital, but the hospital turned around and made him a separate deal and decided not to purchase the entire group. At that point, his spurned group attacked him, and a former chief executive vowed to “spend the rest of my life trying to destroy him personally and professionally.”  The hospital has paid $22 million to settle federal charges of kickbacks to Dr. Midei's former group. 

Most variation in health care is not as extreme as the allegations at St Joseph’s in Baltimore.   Most physicians who practice at the 90^th percentile of resource use don’t realize that they are using more resources than their colleagues, and few believe that they are performing unnecessary care.   We need better reporting on resource utilization and continuing effective peer review.  It’s a pity when peers are only effective at reining in rampant overutilization when they no longer inure benefit from that utilization.

Death Panels are Here!

Today’s Managing Health Care Costs Indicator is $4.5 Million

Well, we have a death panel.  It’s the Arizona legislature.

Arizona was the last state in the union to implement a Medicaid program (jointly funded by the state and the federal government).  The program is aptly called the Arizona Health Care Cost Containment System.   

Arizona faces a yawning budget deficit –as do many states.  The bursting housing bubble hit Arizona hard, and tax collections are way down.  The state has already sold and leased back its capitol building, and new taxes are off the table.

The state determined that the success rate of heart, pancreas, lung and liver transplants is too low to justify the high costs of these procedures, and stopped paying for these as of October 1.  

Here’s what this means for a patient:

Francisco Felix, 32, a father of four who has hepatitis C and is in need of a liver, received news a few weeks ago that a family friend was dying and wanted to donate her liver to him. But the budget cuts meant he no longer qualified for a state-financed transplant.

He was prepared anyway at Banner Good Samaritan Medical Center as his relatives scrambled to raise the needed $200,000. When the money did not come through, the liver went to someone else on the transplant list.  NYTimes December 3  

There is no easy answer here.  The state has too many needs for its limited budget, and these transplants are indeed enormously expensive.   However, transplants have proven to be effective, and the alternative for patients is death.  It’s not clear that a state agency is the best party to evaluate success rates of procedures, and the Times reports that “national transplant groups call the figures misleading.”

We need to eliminate unnecessary medical expenditures to leave room in the budget for proven effective therapy, even when it’s expensive.  There are 100 people on transplant lists in Arizona who will be removed if the legislature doesn’t reconsider. The total projected savings are $4.5 million. 

Variation in Practice: Rosiglitazone Case Study

Rosiglitazone, a drug used for treating diabetes, has been shown in recent studies to be highly associated with increased risk of cardiovascular complications. While it's effective lowering blood sugar and helping patients attain a good hemoglobin AIC, which is how we judge diabetes control, it appears to increase the chances of a bad outcome.

The initial study showing that this medicine appeared to be 'trouble' was a metaanalysis published in 2007, and accompanied by an FDA "black box" warning.  The good news is that this new information and warning was associated with an impressive ~45% drop-off in drug utilization.  We often worry about the slow pace of incorporation into practice of new information.  In this instance the communication around the dangers of rosiglitazone looks like a big success.

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These images come from an article in the New England Journal of Medicine on November 25. 

Here's a worry though.  Look at the geographic variation of use of this drug from 2005 to 2010.

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The dropoff in rosiglitazone use is pretty uniform across the country- about 75% decrease in use for each quartile of previous utilization.  (The authors don't give state-specific data).  However, the northern plains and New England states had a low rate of use of this medicine in the first place -and maintained this over time.  Use of this (expensive) medicine represented an exceptionally large portion of diabetes medication costs in states including Idaho, Utah, Wyoming, Oklahoma, and Kentucky in 2005. Although these states used the highest amount of an exceptionally expensive diabetes medicine - they are not states known for differentially higher quality diabetes care.

This is another illustration of the Dartmouth Atlas contention.   Variations in overall cost usually don't purchase better quality - and sometimes purchase higher risk.