The following sentence from the report of the Massachusetts Payment Reform Commission caught my eye: "It is widely recognized that the current fee-for-service health care payment system is a primary contributor to the problem of escalating costs and pervasive problems of uneven quality." As mentioned below, I admire the work of this Commission, and I have no quarrel with the principles adopted by it, but I believe this particular conclusion is overstated. The characterization is risky in that it gives no relative weighting to other causes and may serve to take those other causes of the hook in terms of policy development. Some reading the report may think that if you change payment methodologies, it will make a sufficiently significant dent in the rate of health care cost inflation. I'm not so sure.
I recently had a chance to view the average annual medical cost inflation rate of a health system's capitated patient group over the last five years. It was ten percent. This was ever so slightly below the health system's fee-for-service patient group, and I am willing to concede that the payment system made a difference. But the point is that is was not a major difference. What might be the other "primary contributors" to the problems we are trying to solve?
Here's my list, produced with the benefit of no data, but just observation of what actually goes on in the four walls of our hospital:
1) Demographics. The huge cohort of baby boomers have now entered the age at which they are seeking hospital care. Meanwhile, their parents are living longer than ever and are coming to the hospital for both acute and chronic care.
2) Entitlement. The first cohort named above expects and demands everything for themselves, and of the insurance products they expect their employer to purchase. For their parents, they often expect extraordinary end-of-life care interventions, paid for by Medicare.
3) New stuff. See #2 above. A knee that previously would have remained sore in the past or be treated by physical therapy becomes a target for arthroscopic surgery.
4) The medical arms race. Physicians and hospitals feel compelled to buy the latest technology, even without proof of enhanced clinical efficacy.
5) Defensive medicine. Yes, the threat of malpractice law suits leads to over-testing and other extra costs.
6) Regional medical mythology. Thanks to Brent James for this insight. Local practice patterns often are just that, with no evidentiary basis.
7) Preventable harm in clinical settings leading to extended hospitalization and bodily injuries.
8) Lack of access itself. If people don't have health insurance and can't get proper early diagnostic and preventative care, they are a more expensive burden on society when they get sick.
9) The cottage industry problem. The medical profession, both in physician practices and hospitals, has failed to adopt process improvement approaches that are common in other industries, that result in redesign of work flow and systems to derive efficiency, quality, and standardization.
10) A sedentary and malnourished lifestyle for all age groups, leading to obesity and other associated physiological problems that are the precursors to major health issues.
In a post below, I outlined the things I would like to see in federal health care reform legislation. Those don't address all of the causes mentioned above, but we should not expect a new law to do so. We can fix some of our inadequacies through legislation, but many components of our problems lie deeper in society.
P.S. While there are pro's and con's of each country's health care systems, similar cost pressures have become evident in much of the rest of the world. Perhaps this suggests that a common organism underlies our problems, homo sapiens and its curious ability to live longer and expect more.