Saving Money and Saving Lives

Today’s Managing Health Care Costs Indicator is
$86 Billion

A brief article in yesterday's New York Times notes that California, by having among the highest tobacco taxes around, and by spending significantly on tobacco education and counter-marketing, has the lowest adult smoking rate of any state except Utah, and has seen rats of lung cancer decrease at a rate three times as fast as the rest of the country. All told, the state calculates that it has saved $86 billion in health care costs.  (I can't find the actual report, so I would discount this somewhat). There's more detail at this blog, and here's a link to a press release from September.

Hans Rosling's 200 Countries, 200 Years, 4 Minutes

This is a fascinating video from the BBC with a statistician showing increasing wealth and life expectancy by country from 1810 to 2009.  The visualization is excellent - and the impact of the WWII and the swine flu epidemic is impressive. More impressive (and not commented upon) is the fall in life expectancy in China associated with the Great Leap Forward in the  late 1950s.

What does this have to do with health care costs?  The places where health care is most expensive just so happen to be those with the highest GDP -and in general they have the longest life expectancy.   Increasing wealth is enormously important to improved health - all the more reason we should manage our economies for robust growth.  When health care costs end up being so high that they are a major impediment to growth, that can actually lower health!

Where Doctors Are Paid Too Little

Today’s Managing Health Care Costs Indicator is $900

That’s how much a Czech physician makes each month, NPR reported this weekend.  

 “Pay doctors more than a streetsweeper” reads the sign on a retired ambulance piloted by a doctor campaigning for better wages.  Czech Republic physicians can move to Germany or Austria and increase their wages by a factor of 5, while cutting their hours in half.

Physicians in the United States are on the average the best paid in the world, and that is part (but only part) of why health care costs here are so high.  See this post from last fall for more details. But paying doctors too little can lead to a terrible brain drain in a world where professional skills are transferrable across national boundaries.   The remaining physicians will have inadequate capacity to care for all Czech residents, which will lead to a decrease in the quality of care

Clearly, the Czech Republic pays its physicians too little.   That might look a way to save money, but it’s not likely to be effective at delivering high quality health care over the long run.

Rationing Health Around The World

The World, a public radio show cohosted by the BBC and the Boston NPR station, had a four part series on rationing health care  around the world last week.  The radio shows as well as the web material help demonstrate how hard it is to distribute scarce health resources. 

The series starts in South Africa, where committees in hospitals determine who gets dialysis and who doesn’t.  These committees started by considering “social worth,” but have moved to prioritizing those who would be good candidates for kidney transplants, and who could therefore get off dialysis quickly.  If you’re a drinker, or if you’re overweight – well, dialysis could save your life, but it won’t. 

The series moves on to the UK, lauded by health policy experts around the world, where the National Institute for Clinical Excellence (NICE) assesses comparative effectiveness and determines how much the National Health Service (NHS) will spend to save a quality adjusted life year (QALY).  Right now the number is south of $50,000.  If a new drug might help you but would cost more, it isn’t covered.  NICE has been successful at pressuring drug companies to lower prices in exchange for access to the NHS market – but its authority to do so expires in 2012.  It’s hard to feel good about denying a drug that could save someone’s life.

Next stop is Zambia, which can’t afford HIV drugs for all the HIV patients.  The country has long had poor governance, and has a shortage of health personnel and medicines.  The main method of rationing in Zambia is the queue.  People have to wait a half day for a brief clinician appointment, and another half day for the pharmacist to fill a prescription. Those who cannot wait – perhaps because they are employed or have young children – go without life saving medications.

The final installment is a visit to India, where a resourceful pediatrician faced a shortage of ventilators during an influenza epidemic.  She fashioned homemade continuous positive airway pressure machines from a few dollars of readily available supplies, and saved  many dozens of lives.  This is an example where disruptive innovation made an enormous difference.  The homemade machines weren’t nearly as good as ventilators for these critically ill children.  But the makeshift machines were better than nothing, and the physician improved them “on the fly” during the epidemic.

These stories point out that rationing is painful – and it’s not restricted to poor countries.   We already ration care in the US by rationing access.  It’s not easy for a Medicaid patient to find a dentist or a specialist in many states, as Medicaid pays very low rates.  We might give FDA approval to a $90 a month medicine for cancer, but few eligible patients who don’t have generous insurance coverage will benefit from these medicines.  In Arizona, Medicaid beneficiaries are dying because the state will not fund evidence-based transplantations. 

We’ll be having more distributive justice conversations in the US, because we won’t be able to afford uniform access to all health care innovations as they are currently priced.  The best way to minimize the number of times we refuse to offer useful therapy to patients is to lower the cost of interventions, but we’ll still face a demand for more health care than we can afford.