“Which is more important- my Lipitor or my Lantus?” is a question I had heard in chorus of variation across my medical training. Patients- who for any number of reasons found themselves struggling to balance the trade-offs between out-of-pocket medical costs and everything else demanding their attention and marginal dollar- try to construct a rational way to create their own personal version of a cost-benefit analysis. Sometimes the dental care had to be put off until a bonus, or a mammogram delayed until next year, and sometimes, a preventative drug, proven to be among the most effective and cost efficient we in the medical profession have, had to be put off until maybe they qualified for complete medical coverage. The ACA is making in roads to help eliminate these discouraging decisions, but before it had the chance to come completely online, I found myself grappling with this conversation from an unexpected corner: my own father.
He works for a small business that has been drifting towards cutting coverage and increasing cost sharing for nearly a decade. With well under 50 employees, it would not have been subject to most regulations in the ACA, and after yet another year of raising premiums to what would have equated to 50% of a monthly salary, my father met with a sad choice. Either forego 50% of his salary, or brave the costs of medical care on his own. With the individual insurance exchanges scheduled to come online in October, he chose in January not to renew his plan. He lives in a state that has chosen not to run its own exchange- so in October he will be an early adopter in the federal exchange and an early beneficiary of its premium subsidies. But that adventure is for another day- first comes the Rubicon of what care should he pay for this year? What is most important to keep up on during his lapse of coverage and what can be foregone?
Suddenly the debates I had been participating in for nearly a decade in the abstract become startlingly grounded. This quandary came at a time of relatively good news in our health care trajectory: more people are getting coverage, more costs are becoming transparent (when before could we compare Medicare reimbursements across the nation at the click of a button?), quality of care is showing signs of improvement, and most surprisingly, we may actually be, as the standard media jargon dictates, “bending the curve” of the cost of health care. I can’t help but picture this as instead of us trying to summit Everest, we now get the more gradual clime of say a Swiss Alp.
A number of recently published studies (check the citations at the end for a few) hold that the slowdown in the growth of health care costs both predated the 2008 recession, and can only account for a moderate portion of the total decline. Prior to onset of the still lingering downturn, the average rate of growth came in at around 6%, and but in the years since, it has fallen to 3% annually, a savings of $770 billion over 10 years. This significant decrease is a result of one-time savings including: job loss, changes in Medicare payment rates, and a change of insurance mix from private to public payers (continuing to prove to be less expensive than their private competitors). This leaves us, as one investigator put it “cautiously optimistic” about what this might mean for the future of our health care budget; less dire warnings of the demise of Medicare and Medicaid, less fear health care will crowd out the other integral areas of investment in public goods, less consternation for the patient, like my father, coming to terms with their share of the cost.
We are still in the early days of working out what these underlying structural changes are, and must continue to diligently examine which of these serve the dual goal of both containing cost but also increasing the quality of our healthcare system. The technological landscape is being altered in unpredictable ways. A large number of blockbuster drugs have rolled off patent, dropping the amount spent on drugs from 10% of health care costs to under 3% annually. This is good news for the consumer, and is a key point for supply side intervention, steering patients towards less expensive, equally effective medicines rather than the higher cost brand name substitute, meaning my father may not have to choose between his two drugs. This is one particular area where other countries in the OECD have been particularly effective at holding down costs. However, we have to balance this against the need to continue to encourage innovation in the pharmaceutical arena. Fewer drugs have been introduced in the past decade, and mounting threats like multi-drug resistant infections emphasize the need to come up with a responsible way to shift investments towards treatments that make real differences to health outcomes, at costs that aren’t prohibitive for the health care system to sustain them.
Other forces underlying the current paradigm shift in our cost structure have been bubbling beneath the surface for some time, and the ACA is working to solidify their place in medical culture. Growing evidence indicates greater provider efficiency is making the system both more sustainable and better outcomes more reliable. Hospital-acquired infections are falling, readmission rates are likewise on the decline, redundant imaging and lab tests are following suit. More transparency of information and reimbursement pegged to the improvement in these and other outcomes may help to complete these transformations from efforts, into simply the expected culture of medicine.
These are welcome adaptations, and necessary if we are to continue to work towards achieving the outcomes comparable to other countries in the OECD, who generally invest a good deal less, and get a good deal more, out of their health indicators. But we must be careful not to use one marker as a surrogate for another. A smaller but equally as important factor in the downturn of health care costs is increased cost sharing by patients across a whole variety of services. The goal is of course to encourage patients not to indiscriminately seek unneeded visits, tests and care, as evidenced by data showing a fall in the number of physician visits over the past 4 years. But we again strike a balance between a consumer making an economical decision, and foregoing care that is shown to be effective. We all suffer from present bias- that it’s much easier to put off investments that will benefit us in the future, when compared to the investments we can feel an acute need for. The co-payments on Lipitor and Lantus are good investments for future health, but it can be quite difficult to feel that pull when the cable or insurance bill comes. Economics and psychology have been forced to re evaluate the models that act as if we are all rational actors- and the design of our health care system must certainly follow suit. The ACA works in this direction by insuring that well-proven preventative care is available at no cost to the individual; but we must not let up in our scrutiny over whether increased cost sharing is driving people away from care that we shouldn’t be encouraging anyhow, or away from interventions whose neglect will cost us more both in money and suffering in the future.
And how are we going to answer these questions? At the federal level has been a debate around implementing the IPAB, a board designed to help study these questions over what is effective care, and at what cost. It is startling to think of the number of interventions that have a weak (or no) evidence base for their implementation. Other OECD nations have moved in the direction of requiring assessments of health technology- both their efficacy and cost. This is step 1, which could be assisted by fully funding the IPAB and cost-effectiveness research. But a second crucial step is going beyond this, improving on where NICE (the British National Institute for Health and Clinical Excellence) has fallen behind. Between 2000-2013, the board only cited 20% of interventions as either “not recommended” or for use “only in research.” Other countries, using a variety of attempts have not fared much better. It is easy to study efficacy, but quite difficult to deny coverage for new interventions, or those which have been the unproven standard for decades. Imagine how the healthcare landscape might be altered if cost-sharing depended more on these kind of criteria rather than our current attempts?
Because let’s be clear: at an individual level, these evaluations take place in every office, every hospital, every family. For my father, it was how effective are these drugs? What risks are they preventing? What was insurance paying for that maybe it shouldn’t be? Such ad-hoc priority setting is overwhelming, and quite frankly barely possible even with a medical professional in the family. In the final decision, after weighing the evidence, Lipitor and Lantus went into the “keep” column, along with a less expensive blood pressure medication with a riskier side effect profile. A yearly appointment at the dentist was kept. On my lone assessment of the evidence, his yearly physical was cancelled. A PSA screening put off indefinitely. But I would have felt much less ambivalent with a more clear structure for evaluation, a more thorough resource to refer to for decision making.
And this is a clear next step in our work in balancing the dual goals of cost containment and quality in our healthcare system. Increased coverage is a necessary, but not sufficient endeavor. And neither is this “bending of the cost curve”, now a stroll up the Matterhorn instead of K2. We must also resolve to take a clear-eyed examination of our choices and interventions, of our costs and our limitations. We must move in the same direction as Britain, Singapore, France, Germany. And we must better them.
Some resources for more data on the facts and figures above:
Alexander J. Ryu, Teresa B. Gibson, M. Richard McKellar, and Michael E. Chernew. 2013. Spending Trends: The Slowdown In Health Care Spending In 2009–11 Reflected Factors Other Than The Weak Economy And Thus May Persist Health Affairs 32, no. 5:835-840.
M, Cutler David, and Nikhil Sahni. 2013. If Slow Rate Of Health Care Spending Growth Persists, Projections May Be Off By $770 Billion. Health Affairs 32, no. 5: 841-850.
M. Stabile, S. Thomson, S. Allin et al. 2013. "Health Care Cost Containment Strategies Used in Four Other High-Income Countries Hold Lessons for the United States," Health Affairs, 32 no. 4: 643–52.