Who would you put in charge of the investigation? Hercule Poirot and Jane Marple? Or the person most likely to have committed the heinous crime? Believe it or not, in health care we are about to do the latter.

Writing in Health Affairs, Ken Thorpe and his colleagues offer a description of the current phase of the problem:

Medicare beneficiaries’ medical needs, and where beneficiaries undergo treatment, have changed dramatically over the past two decades. Twenty years ago, most spending growth was linked to intensive inpatient (hospital) services, chiefly for heart disease. Recently, much of the growth has been attributable to chronic conditions such as diabetes, arthritis, hypertension, and kidney disease. These conditions are chiefly treated not in hospitals but in outpatient settings and by patients at home with prescription drugs.

So how are we dealing with this challenge? Poorly.

More than half of beneficiaries are treated for five or more chronic conditions each year, and a typical Medicare beneficiary sees two primary care physicians and five specialists working in four different practices. System fragmentation means that chronically ill patients receive episodic care from multiple providers who rarely coordinate the care they deliver. Because of this structural deficiency, patients with chronic illnesses receive only 56 percent of clinically recommended medical care. That gap in care may explain a nontrivial portion of morbidity and excess mortality.

Now before moving on, let’s note that Prof. Thorpe is a long-time adviser to Democrats on health care issues. The reason that’s interesting is that the solution preferred by the entire left wing of the Democratic Party is to force everybody into Medicare (single-payer solution) and the only solution Democratic moderates have proposed is demonstration projects run by Medicare (ObamaCare)!

I hate to be the bearer of bad tidings, but isn’t this like putting Bernie Madoff in charge of the SEC? Although these reformers often call themselves “progressives,” they are really reactionaries. Their model for the future is the failed system of the past.

“I Believe in Yesterday”

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I live in Texas. Right now, the only health insurance I can buy is insurance regulated under Texas law. But if bills before Congress (most notably, one sponsored by Arizona Republican Congressman John Shadegg), are enacted, I would be able to buy insurance regulated, say, by the laws of Virginia, or the laws of Delaware, or 47 other states.

Proponents claim this would greatly increase competition. Opponents claim it would undermine “consumer protections.” I think both claims are mainly wrong. I would not expect the number of insurance companies trying to sell me insurance in Dallas, Texas to change at all. And if I am worried about consumer protections, I can continue to buy Texas-regulated insurance, just as I did before.

In fact, far from losing consumer protections, I would gain access to all sorts of protections I do not now have. Specifically, I would be able to choose among 50 different regulatory regimes. And because market prices (premiums) would reflect the different regulatory costs, I could weigh cost against benefits in selecting the regulatory regime that best fits my needs. Think of it as 49 ways to leave your regulator. (Note: An earlier version of this appeared at the Health Affairs blog.)

50 Ways to Leave Your Lover

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British Scandal: According to Britain’s Independent, the recently released report on Stafford General has ignited the “worst hospital scandal in more than a decade.”

For years, Stafford “routinely neglected” patients. The taxpayer supported management focused on financial targets rather than patient welfare. According to the Guardian, the hospital was understaffed. Clinical decision units (CDUs), areas within a hospital for patients who require further observation and assessment before a treatment or discharge plan can be developed, were used as “dumping grounds to avoid breaching the four-hour target for being treated in [the emergency room].” The Healthcare Commission reported that Stafford dumped “quite unwell” patients into its CDUs “without a dedicated nurse to look after them” just before it reached the 4 hour target, and that its smaller CDU was not even staffed.

The Telegraph reports that basic hygiene was neglected, receptionists triaged casualty arrivals, and thirsty patients resorted to drinking from flower vases. When hospital management was given notice of a “damning inspection report,” they “responded by hiring a public relations team and promised to ‘get MPs [Members of Parliament] on [their] side.’”

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The two most serious defects of ObamaCare were never discussed at the Health Care Summit or in the President’s speech this afternoon. I blame the Republicans for that. As a result, things have gotten worse for the GOP. President Obama is now offering to make minor concessions on the issues the Republicans did bring up and call the whole effort a “bipartisan compromise.” (More on that below.)

Okay, what is the single worst feature of ObamaCare that no one ever talks about? It is something that would completely disrupt American labor markets. Take a look at the chart below. It shows why no employer anywhere is going to be able to (a) provide health insurance to employees and (b) employ workers who earn $30,000. The reason: Any competitor employing similar workers and not providing health insurance would have a huge, insurmountable cost advantage.

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From its early beginnings the Tea Party was dismissed as irrelevant and then derided by the national media. In the summer of 2009 health reform was the hot topic of concern across the nation and to the Tea Party movement. The media, the Obama administration, and Democrats described opposition and questioning Tea Partiers as “mobsters, anti-American, and Nazis.”  President Obama referred to them dismissively as “tea baggers.” The New York Times attempted to link Tea Partiers to militia extremists.

All these characterizations are wrong.

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I have refrained from commenting on the idea — hoping it would wither on the vine and simply waft away. I had not heard much about it in some time and was not missing it at all. But then there it was. In The Wall Street Journal last Thursday, on the very day of President Obama’s Health Care Summit! Being urged on Republican summiteers by Republican policy wonks, no less.

The idea: allow all out-of-pocket spending on health care to be deductible. Or, put differently, allow people to buy health care directly with untaxed dollars, just as they can now (through an employer) buy health insurance. What’s wrong with that?

If you’re getting insurance at work, your employer’s premium payments are escaping, say, a 25% income tax, a 15.3% payroll (FICA) tax, and a state and local income tax of 6% or more. For a middle-income family, the government’s share of the cost of your health insurance is approaching 50% — which is why so many people obtain too much of it.

Now suppose that we had the same tax treatment for out-of-pocket medical expenses — for deductibles, copayments, and spending on items not covered by your health plan. All of a sudden, government would be paying almost half the cost of those expenses as well. This would have the effect of cutting in half the net cost to you of any medical expense not paid by your insurer. A $1,000 MRI scan would now have an aftertax cost of only $500. A $100 acupuncture session would cost you only $50. A $15,000 in vitro fee would now be $7,500.

You don’t need Econ 101 to figure this one out. If you cut the price of anything in half, people are going to buy more of it — and medical care is no exception. In fact, people would have an incentive to buy medical services until they were worth only 50 cents on the dollar. We would inevitably get more spending, more waste, and more health care inflation. All the problems we now have in health care would become worse — not better.

I Ain’t Missing You

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“There are strains out there, and they are becoming more and more common, that are resistant to virtually every antibiotic we have”… said Dr. Louis B. Rice, an infectious-disease specialist at the Louis Stokes Cleveland V.A. Medical Center and at Case Western Reserve University.

He’s talking about:

A germ [that] is one of a category of bacteria that by some estimates are already killing tens of thousands of hospital patients each year.

Full article on the rising threat of infections unfazed by antibiotics.

You didn’t watch the President’s Health Care Summit? Hey, I get paid to do these things so the rest of you can engage in more productive uses of your time.

Here’s what I learned: The people who are proposing to reform our health care system actually know very little about how our health care system works.

• Neither Democrats nor Republicans have any idea whatsoever about how to control the rate of growth of health care costs.
• Neither party has any idea how to fundamentally improve the quality of care.
• And although both parties would increase the number of people nominally insured, neither party truly understands the problem of access to care and neither has any realistic idea of how to achieve it.

Here is the lesson you can draw from all this: Under no circumstances do you want to give any of these guys power over your health care.

I will give the Democrats credit for coming up with lots of sob stories (every Democratic speaker had at least one heart-rending anecdote and most had two or three), even though almost none of them had anything to do with solving the problems of cost, quality or access to care. Since Republicans couldn’t produce even one sob story, here is a tear-jerker I offer them that I think tops all the Democratic ones:

“Tell Laura I Love Her”

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President Clinton went to his cardiologist at 11:30 a.m. on February 11, 2010 — with several days of chest pressure (angina). He was immediately admitted to a hospital and had two stents placed in his coronary arteries. This restored blood flow to his heart muscle and relieved his chest pain. He left the hospital for home at 6 am the next day, ready to return to his busy lifestyle, including helping the Haitian relief efforts.

The Clinton episode could not have occurred at a more instructive time. That very day, a Wall Street Journal story implied that stents for coronary artery disease may be “unnecessary” or produce results that are no different than management by medication alone, especially in light of the findings of the COURAGE trial study, published in 2007.  Yet many in the Pay-for-Performance movement ignore the most important results of the study: Stents reduce chest pain faster, return people to active, productive lifestyles and overall make people happier. Sadly, ending suffering in patients is not necessarily viewed as a desirable or necessary result when it costs more money and there is no change in the death or heart attack rate. 

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If you think American administrative costs are high, consider this. NHS Blog Doctor has an informative post on the kinds of jobs that proliferate in the British National Health Service (NHS). There are Equality & Diversity Managers, Patient Experience Managers, and Spiritual & Pastoral Care Managers, all of whom earn “higher salaries than, for example, junior hospital doctors and experienced ward nurses.”

The job description for a Patient Experience Manager? “Work with the Head of Patient Services to embed patient experience metrics as an integral part of performance management across the Trust.”

The same job ad asks “Are you passionate about improving the experience of all our patients and carers? The Trust must put the patient and their [sic] carers at the centre of all we do.”

Does the NHS exist for the benefit of those that they are supposed to serve or the benefit of those that they employ? Judging from this job ad, at least one NHS hospital cannot make up its mind on that point.