Medicare Part P

Why don’t advances in technology bring the same cost decreases (and quality increases) in health care as they do in other sectors of the economy? That was the central question this episode as EconTalk host Russ Roberts welcomed Dartmouth’s Jonathan Skinner. Is innovation in health care always worth it? And why do some seem to benefit disproportionately more than others?

1. I’ve long joked that my cats get better quality health care than I…And this is a theme Roberts and Skinner pick up this week. They suggest several reasons why we might feel this way…in the absence of “Medicare Part P.” What has actually happened to the real cost of caring for our pets? What are the challenges of measuring this change and what it might teach us about human health care? To what extent does competition among vets reduce the cost of pet health care by introducing innovation and other cost-saving measures? What about pet insurance? How does private pet insurance contribute to the quality and cost of animal care? 2. Roberts and Skinner also spend a good bit of time on opioids in this week’s conversation. Revisit this 2012 episode on the Social Security Disability Insurance (SSDI) program. How might the changes in SSDI eligibility have influenced the opioid issues Skinner is concerned about. How did Autor propose changing SSDI in this previous episode, and to what extent might this solve the opioid problems of today?

3. At the end of the episode, perhaps the biggest questions remaining for me are these. Is the digital health care revolution being oversold? Why aren’t we seeing the benefits promised by the digital age in the area of heath care? How much of health care requires personal contact? What are your thoughts?

READER COMMENTS

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Stewart

Jul 15 2016 at 3:42am

As usual, an interesting and stimulating EconTalk conversation. I work in drug safety during clinical development and post-marketing in the pharmaceutical industry in Japan and have 3 comments on this podcast:

1. First an alternative perspective on why we really do want clinical trials to test against placebo and not limit new drug approvals to drugs that “beat” currently approved drugs in head-to-head clinical trials. A clinical trial is a complicated experiment and there are a variety of ways in which the experiment can fail to tell us the “truth.” Let’s say we have approved drug A, experimental drug B and placebo C. If we just test A and B and find they are equivalent, it may be because the experiment was too sloppy to show the real difference. Having C included helps because if A=B=C we know the experiment isn’t showing anything better than placebo either because the drugs don’t work or the experiment was flawed. Why not just require that new drug B is better than existing drug A? Because in the real world not all patients can take drug A and we would like to introduce competition for A even if there are no clear new advantages to B. There are also cases where we are testing a drug in patients that have already failed existing therapies or as an add-on to existing therapies and then we need to test A+B vs A+C. Clearly, my employment makes me biased on this topic but there is my perspective anyway.

2. Any discussion of the prescription opioid abuse and death problem in the US should consider the way the use of opioids increased when there was a new focus on increased treatment of pain. See for instance:
http://www.pharmaceutical-journal.com/opinion/comment/the-prescription-opioid-addiction-and-abuse-epidemic-how-it-happened-and-what-we-can-do-about-it/20068579.article
I doubt that you can tie that increase to any specific economic downturn and I would wager you won’t find opioid deaths higher in basket-case economies like Greece than you do in the US.

3. On the effects of insurance on medical costs: where I live in Japan we have a national healthcare system with insurance coverage that excludes pregnancy/labor & delivery (since pregnancy is neither a sickness out of your control). We had to pay everything out of pocket for each pre-natal visit and the week-long hospitalization which is standard at the time of delivery for each of our three children who were born here. Each pre-natal visit included blood tests and an ultrasound yet the full cost for the visit (no insurance!) was less than $100. Labor/delivery and the week-long hospitalization came to around $3000, again with no insurance coverage, for the typical hospitals we used (you can find more expensive care if you want). I suspect that is much less than the actual cost in the US.

jw

Jul 15 2016 at 6:45pm

To item 1, price transparency is also a critical differentiator between the systems.

Ten years ago, my fathers quintuple bypass and seven day hospitalization would have been billed at $87K if he was uninsured, $33K if he was insured, and $5 out of pocket due to his corporate retirement plan.

For my only hospital stay, I asked pre-billing, my doc, post-billing and no one would give me a figure. My deductible was out of pocket and since I didn’t owe anything else, I had no right to know.

Nowhere else does a market work this way.

David Halonen

Jul 15 2016 at 9:26pm

Good question in this discussion: What one thing would you change with health care?

How about: Eliminating the biggest tax loop-hole in the IRS code, the employer sponsored tax write off of health insurance?

If you buy individual insurance, it’s with after tax dollars. Hence, a loop-hole is a tax write off not available to someone. This loop-hole creates the 3rd party payee, which is an in-surmountable influence on behavior.

Car, home, etc insurance don’t suffer from 3rd party payee problems and appear to be without so many problems. I maintain this simple change would immediately restore sanity to this space.

Thomas A. Coss, RN

Jul 16 2016 at 4:32pm

On Digital Health-

There is no industry endowed with more information than the financial industry. We have stock transaction history going back over 300 years, and high frequency data at that. Still despite this abundance of data, we all blew the call in 2007. If Big Data ever had a chance to claim value, it would have been then. It did not.

To think that with a decade and a half of organized clinical data that we’re somehow going to improve all clinical decisions is naive if not insane. The truth is, medicine isn’t as good at math as you might think, and generally hostile to economic thinking.

Upon this we can all agree, only you can do your own healing, and in the end, only you will do your own dying. Act accordingly. Don’t accept your Dr. telling you things are “normal”, or that he or she is not worried. Get the data, images and results and find an RN to help walk you through it all. We have no power and no money, you can trust us.

Tom Coss, RN

Ari Tai

Jul 19 2016 at 7:37am

A number of the premises are dependent on government provided counting. A year before the soviet collapse some analysts came up with proof they’d been lying to themselves every planning cycle as their establishment lied to justify their comforts and advancement. Mr. Casey knew exactly what was happening. And between Mr. Regan, the sauds, and Mr. Casey’s efforts they freed those billions of slaves (as summed over time). Perhaps there’s truth hiding under the disease numbers here. There are enough numbers here to fit a curve to reported vice actual unemployment and underemployment. And from there the impact on running the printing presses to keep the proles happy. Someone should hire a college student, but they’d need an armed guard after publication.

Jimmy Walker

Jul 20 2016 at 9:30pm

Russ, haven’t you heard about the hammer, where every problem it sees is a nail. Healthcare management may be a little more difficult than mere personal cost incentive. You sound a little callous and dated as you keep trucking out that old conservative mantra. And your throwaway solution of abolishing all health care management in favor charity and personal initiative is far too real to be funny. There is a lot about life at the margins you don’t seem to understand. You would be better served to listen to your guests who seem well-informed than to profess a disdainful, conservative ignorance. Let’s break some new ground here rather than evoke the same old tired, out of date Hayekian mantras. You are better than that.

SaveyourSelf

Jul 28 2016 at 2:49am

3. Is the digital health care revolution being oversold?

I’m sitting here in my Emergency room, surrounded by at least four banks of computers. On the screen directly in front of me, I summarize visits in electronic medical records which can be accessed from any internet enabled computer. A small portion of the screen is occupied by the menu strip for Dragon-Medical. I speak in a microphone and Dragon transcribes my words into text documents. To my right is a screen I devote to internet access which I use primarily to access medical databases. Those databases give me rapid access to pictures, tables, algorithms, research findings, and text descriptions on medical problems, signs, and symptoms. I can also use it to access medical records at other hospitals on the patient I am about to see. To my left are two screens devoted to displaying xrays. I work night shift so I send some of the films to Australia, where it’s daytime, to get a radiologist’s impression, since my local radiologists are asleep. Behind me is a screen that will give me direct, video access to the specialists at the nearby large medical center and give those specialists access to my medical record system. In my pocket is my phone which contains a drug database I reference on nearly every patient I see along with diagnosis and treatment algorithms that are superior to any of the textbooks I studied in medical school. Elsewhere on the same phone is a picture from my sister of a red spot on her infant son’s arm. She read online that the red spot might be a sign of lymes disease and wonders if she needs to see a doctor. I can tell, 240 miles from her son, that the red spot is a spider bite. She’s fine just watching it.

I’m an ER doc; I’m a generalist; and I give care equivalent to the best specialists in the world—not because I’m knee deep in specialty minutia all the time, but because I can rapidly access and sort through information compendiums maintained by said specialists in the moment.

This isn’t a story about me, though. It’s a story about information. You ask if digital health care fails to meet expectations. I tell you there has never been as good a doctor as I in all of history and that fact has very little to do with me. I just happen to be alive at a time when digital information is beginning to blossom. What’s more, this is only the beginning. This EMR in front of me is clunky. Dragon misunderstands my words 10% of the time. These medical databases are bursting full of information and ideas that have no reliable studies to back them up. But it’s all improving, every day. The future is very bright. Digital medical is only an infant right now, but one that shows infinite promise.

Why aren’t we seeing the benefits promised by the digital age in the area of heath care?

Perhaps you are not looking in the right place. Look at outcomes. Look at life expectancy.

How much of health care requires personal contact?

Any time a human being tries to do something new, he will make mistakes. A genius is a person who made every mistake possible in a focused area of study and knows how to avoid those mistakes in the future. I can hook up my own dishwasher but the plumber is likely to do it faster and his work is less likely to fail. Same with health care. There is advantage to running questions through a medical professional who swims around in medical questions all day long every day. Less likely to make mistakes. She’ll still make mistakes, no question, just fewer of them…on average.

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