Latest Blog Posts & Articles

More Like a Sludge Than a Nudge

Every once in a while, I post a picture of an effort to nudge people into better behavior. Sometimes, I post pictures of pretty horrendous nudges. In response to one of those posts, Lydia Ashton sent me this picture, of an absolutely, horrendously and horrifically designed “nudge.”

More Like a Sludge Than a NudgeFortunately, I have determined that if you stare at this for several hours, although you don’t understand the graphic any better than you did at the beginning, a strange calm will come over you, although that may just be the herniation of your brain as it pushes through your medulla oblongata in an effort to get away from the picture.

Posted in Behavioral Economics and Public Policy | Tagged

Bundling Hospital Pay Without Bungling Patient Care

Bundling Hospital Pay Without Bungling Patient Care Pic

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Paying someone to mow your lawn is a pretty straightforward affair. Ryan the lawn guy will look at the lawn size and maybe the hilliness of your yard and you’ll settle on a price for mowing and trimming it. When you decide to contract for Ryan’s services on a more regular basis, payment might get a little more complicated. If you pay Ryan every time he mows your lawn he might mow it more often than necessary. But that problem is easily addressed by paying him a fee to take care of your lawn for the entire growing season.

Paying a hospital to care for someone who had a stroke is not so straightforward. Imagine you are an insurance company and you decide to pay the hospital for each day the patient is in residence. With that kind of payment scheme the hospital visit might drag on indefinitely. Indeed several decades ago insurance companies in the United States primarily reimbursed hospitals on a “per diem” basis, cool kid lingo for per day. Incentivized by this reimbursement scheme, the length of stay in American hospitals was often surprisingly long for even relatively mild conditions. Think of the parallel to lawn care: pay per mowing and you can expect lots of mowings!

Healthcare payers have developed several methods to overcome this per diem/per mowing problem. I will explain these methods shortly, but first the bottom line. Figuring out how to pay for hospital care is a hell of a lot more complicated than figuring out how to pay your lawn service.

To combat the unintended consequences of per diem payment coverage, Medicare switched to per diagnosis payments in the 80s, and the insurance companies followed shortly thereafter. Under this DRG program, a hospital taking care of a patient with a severe stroke would receive appropriate payment for that diagnosis, while a hospital taking care of someone with mild pneumonia would receive a smaller payment appropriate for the typical costs of paying for that condition. Following the implementation of this type of prospective payment, length of stay in American hospitals plummeted. In response, much of medical care was shifted to post-acute care, to rehabilitation hospitals, for instance, for stroke patients, or to outpatient clinics for people with pneumonia. These non-hospital services were not covered by the diagnosis-based DRG payments, so healthcare providers had little incentive to practice parsimoniously once their patients left the hospital.

Enter bundled payments. In 2013, the Center for Medicare and Medicaid Services, henceforth CMS, launched its Bundled Payments for Care Improvement Initiatives, henceforth BPCI (in case your life needs more acronyms). In the BPCI, CMS identified 48 clinical conditions that qualify for bundled payments, meaning participating healthcare providers would receive payments designed to cover not only hospital care for the condition in question, but money to pay for all healthcare related services they receive for the next 30 days. Unsurprisingly, not all hospitals are eager to join this program. For starters, the hospitals have to be financially integrated with post hospital providers. If patients receiving stroke care at Our Lady of Acute Care Hospital receive post-acute care from a hodgepodge of rehabilitation facilities, many of which have no connection to the hospital, then coordinating payments will be a disaster. (To read the rest of this article, please visit Forbes.)

Posted in Health Policy | Tagged , ,

What Happens When We Penalize Hospitals For Harming Patients?

Photo Credit:

Photo Credit:

I recently had surgery to relieve an impingement of my left hip. I suffered a complication of the procedure in the hospital where I received the surgery performed follow-up care to treat the complication. As I lay on the table receiving that second treatment I wondered – okay, I mainly wondered “are they really going to stick a needle there?!,” – but I also asked myself “how strange is it that when patients experience complications, hospitals are rewarded with money to perform additional procedures?”

Since 2008, Medicare has been denying payment to hospitals to treatments they provide as a result of preventable complications. For example, when patients are immobilized from illness or disability, they sometimes develop pressure ulcers – their skin breaks down where the weight of their body meets the bed or wheelchair. Pressure ulcers are a big deal. A red spot on a patient’s backside can quickly turn into a sore, then into an ever expanding mass of tissue damage and infection. Christopher Reeve, the actor paralyzed after a horseback riding injury, died from complications of a pressure ulcer.

Pressure ulcers can almost always be avoided by appropriate nursing care. If patients are turned regularly with appropriate bedding and wheelchairs, no single spot will take the brunt of their weight 24 hours a day, and therefore no pressure ulcers will develop. In recognition of the preventability of pressure ulcers, Medicare no longer reimburses hospitals for the services they provide to treat such problems. The same goes for catheter associated urinary tract infections, which I’ve written about before, as well as catheter associated blood stream infections and injurious patient falls.

Medicare’s non-reimbursement strategy makes a great deal of sense. At a minimum, it will save the program money. But will the program have additional benefits? Specifically, now that hospitals are no longer financially rewarded for causing these complications, will this reduce the incidence of these avoidable events? (To read the rest of this article, please visit Forbes.)

Posted in Health Policy | Tagged , , ,

Cost of Treating Hepatitis C Is Soaring

Here is a fascinating picture from the Wall Street Journal, showing how much Medicare has been spending on hepatitis C treatments lately. You can see that the cost is rising dramatically:

Cost of Hepatitus C Soaring

Keep in mind, however, that the new and expensive hepatitis C treatments currently on the market will dramatically reduce costs in the future, because they are curing people of this chronic disease, and therefore preventing liver failure and even liver transplantation. In other words –money well spent!

Posted in Uncategorized | Tagged ,

The Question Isn’t Whether We Are Overdiagnosing Cancer, But How Much

The Question Isn’t Whether We Are Overdiagnosing Cancer But How MuchMedical experts now agree that as a result of aggressive screening programs, we have an epidemic of cancer overdiagnosis in the United States. With mammograms finding tiny cancers and PSA tests discovering unpalpable prostate cancers, we are now unearthing some cancers too early for our own good.

What do experts mean by “overdiagnosis,” you ask? First, overdiagnosis is not the same as a misdiagnosis. If a pathologist looks under a microscope and classifies a group of benign cells as being cancerous, that is a misdiagnosis. Such misdiagnoses are an important consequence of cancer screening, causing patients to experience unnecessary anxiety and to undergo unnecessary treatments. Because no pathologist is perfect, aggressive screening programs will, by definition, lead to increases in such misdiagnoses. But these misdiagnoses do not qualify as overdiagnoses, the way experts use the term.

Second, overdiagnosis is not the same as a false positive test result. When a mammogram reveals a suspicious shadow, or when a PSA test is elevated, physicians usually follow up with additional tests, often culminating in a biopsy of the suspected lesion. When that testing reveals that no cancer is present, the screening test (the mammogram or the PSA test) is said to have created a “false positive,” result. It sent out a false alarm. Once again, false alarms are an important side effect of cancer screening. And more aggressive screening programs (yearly mammograms rather than every other year, for example) will necessarily lead to an increase in false positive test results. By some estimates, women beginning annual mammograms at age 40 will face a 50% lifetime risk of a false positive test. In other words, this is a burden of screening that we need to keep in mind when deciding how aggressively to look for a cancer. But false positives are not the same thing as overdiagnoses.

So what does it mean to overdiagnose cancer?

According to cancer epidemiologist Ruth Etzioni: “Overdiagnosis occurs when screening detects a tumor that would not have presented clinically in the absence of screening.” For example, if a mammogram reveals a tiny breast cancer in a 103-year-old woman, a cancer that if left alone would not grow large enough to cause symptoms (much less death) for another decade, that mammogram would probably have overdiagnosed her cancer—if she had never had that mammogram, she would have lived the rest of her life (maybe to 104 or 107-years-old) blissfully unaware that a small breast cancer was growing inside her body.

The example of this hypothetical 103-year-old woman is obviously an extreme one, meant to illustrate what experts mean by overdiagnosis. But it makes one thing clear. Cancer overdiagnoses are cases of real and true cancer. In this hypothetical case, for example, the tumor in this woman’s breast really was malignant. The mammogram did not lead to a misdiagnosis or to a false alarm. Instead, the mammogram discovered a cancer that, while real, would not have ever influenced this woman’s life. In her case, in fact, the diagnosis of this cancer would only act to harm this woman, by causing anxiety and potentially by leading to harmful treatments. (To read the rest of this article, please visit Forbes.)

Posted in Medical Decision Making | Tagged , ,

Don’t Be Afraid to Team Up with Your Doctor about Healthcare Costs

Los Angeles TimesHere is a fine story in the Los Angeles Times written by about the importance of talking with your doctor about your out of pocket medical costs.

Despite high medical costs topping Americans’ list of financial concerns, many of us have a hard time telling our doctors that the care they’re prescribing may break the bank.

As part of a recent awareness campaign called “I Wish My Doctor Knew,” the online health social network Inspire asked patients and caregivers what medical concerns they wish doctors better understood.

In more than 700 responses, about 20% dealt with insurance coverage, disability insurance coverage paperwork, and out-of-pocket medical costs.

“What we see every day in our online community, and through this campaign, is that patients don’t discuss fully with their doctors the financial toll of [their] disease,” said John Novack, Inspire’s communications director. “Many patients seem reluctant to bring it up at all … yet it’s a very real hardship and it certainly affects their quality of life.”

Ellen Robin of Oceanside, Calif., can relate. The 59-year-old healthcare contract manager has a chronic condition that led to a heart attack six years ago.

Since then, she says, she has collected a cabinet full of prescription drugs worth thousands of dollars. She abandoned most after her doctor told her to stop them — either because they didn’t work or caused unbearable side effects.

“Every time I get a prescription, I pay my co-pay of $30 or more,” she says. After a week or two, many times she’d have a bad reaction and her doctor would advise her to just stop taking it. “It’s a waste.”

Still, letting her doctor know didn’t come easy. “I do have anxiety about talking money with him,” Robin says.

She’s not alone. The financial strain of medical expenses is a tough conversation for many patients to initiate — despite the fact that high costs prevent millions of people from getting needed care.

A report by Families USA, a Washington healthcare advocacy organization, found that just over 1 in 4 adults with private insurance policies last year went without needed medical care because they could not afford tests, treatments, follow-up care and drugs.

One of the biggest causes of “not taking the medicines their doctor prescribed — or getting the tests their doctor ordered — is that patients can’t afford it,” says Duke University professor Dr. Peter Ubel.

“This deserves priority in the doctor-patient encounter,” Ubel says.

Experts offer a few recommendations for broaching the subject of money with your doctors.

(To read the rest of this article, please visit the Los Angeles Times.)

Posted in Uncategorized | Tagged

These Americans Are Rich – Should We Celebrate?

Expensive medicineAmerican manufacturing has declined precipitously in the past few decades. Companies that were once the source of fabulous wealth for Americans – the U.S. Steel profits that enriched the Carnegie family, the Ford Motor F -1.29% Company profits that enriched its eponymous family – are now struggling to keep up with foreign competitors.

Thank God for American pharmaceutical companies, which are a rare source of wealth in United States. The CEO of Eli Lilly , John Lechleiter, made $11.2 million in take-home pay in 2013. That was dwarfed by the $18.1 million pay package of Richard Gonzalez of AbbVie ABBV +0.24%, which still couldn’t compete with the $20.5 million that Miles White made running AbbVie’s former parent company, Abbott. And Pharma isn’t just a source of hefty c-suite income. Senior chemists at pharmaceutical companies bring in a median salary of $76,000 while senior biostatisticians make around $135,000. Drive through beautiful suburban neighborhoods in Jersey, Indianapolis, and Raleigh-Durham, and you are witnessing the benefits of this thriving industry.

I’m really glad the American pharmaceutical industry is a success. So why did a recent conversation I had with a retired pharmaceutical executive end with him storming away after proclaiming: “I’m sure glad you’re not a member of Congress!”?

Let me explain. (To read the rest of this article, please visit Forbes.)

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What Physicians Could Learn from Accountants and Veterinarians

What Physicians Can Learn From ARebecca Plevin, from KPCC public radio in California, is quickly becoming one of my favorite health reporters. She is really digging in to the strange world of health economics. Here’s a nice piece she did, comparing how people talk about costs when meeting with financial counselors versus veterinarians versus, of course, going to see their own doctor:

Here at Impatient, we’ve been exploring why doctors and patients don’t often discuss the costs of health care. I’ve also been offering tips on how both can play a role in making these conversations a part of routine care.

But this concept of discussing costs in the exam room is still foreign to a lot of people. So today, for a radio story that’s airing on KPCC, I provide examples of situations where these types of cost-related discussions occur more frequently.

My search for models for better conversations about health costs brought me to the Hollywood office of accountant Persida Matei.

She says she asks her clients a lot of questions when she first starts working with them. Questions, she says, like, “are you married? Do you have children? What is your age? What is your tolerance to risk?”

She says she would never offer investment advice without first understanding her client’s short- and long-term goals. She explains: “It may be a great investment, but not a great investment for them. And then you’ve done them a disservice.”

What can we learn from Matei’s interactions with her clients?

For one, it’s important that doctors know if a patient is on a high-deductible health plan, and is digging deep into her own pocket to pay for recommended procedures and medications. As I’ve reported, a doctor might then tailor any recommendations to the patient’s specific needs.

Dr. Peter Ubel, a physician who studies health care costs, is a big advocate for these types of discussions.

“I used to tell my patients, ‘look, I’m the expert on the medical facts, but you’re the expert on you,’” Ubel says. “And so I need to understand you better, to help you figure out what’s best.” (To read the rest of this article, please visit KPCC.)

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Showing Doctors How to Lower Healthcare Costs

KPCCThere are lots of things we need to do to get healthcare costs under control in the United States. Critical to most of our efforts, however, is to get physicians to practice cost-conscious care. Here is a nice story on this topic, from Rebecca Plevin at KPCC public radio in California:

As regular readers of Impatient know, I’ve been on a mission recently to encourage consumers to talk with their doctors about health care costs.

Everyone I’ve spoken with for this series – patients on high-deductible health plans, patient advocates and a few doctors - agrees that through these conversations, patients and doctors can work together to potentially lower people’s out-of-pocket costs.

But as Duke University professor Peter Ubel points out, patients can only have so much influence over their doctors’ recommendations.

“One of the biggest limits to the power of health care consumerism – of patients to discipline the health care marketplace – is the fact that doctors make most of the medical decisions,” Ubel tells me.

He offers this example:  If a patient goes to see a doctor for back pain, and the doctor recommends an MRI, the patient can shop around for the most affordable MRI. But, he says, “I, as a patient, might not know that I didn’t need any MRI.”

Convincing doctors to avoid ordering unnecessary tests, or avoid prescribing expensive brand name drugs when generic versions are available, requires a larger, cultural shift in health care. One health system in Northern California has developed a way to concretely change physicians’ behavior.

Could this be a model for a cultural shift toward more cost-conscious, high-quality care? (To read the rest of this article, please visit KPCC.)

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What Do Cancer Centers Think Patients Are Looking For?

What Do Cancer Centers Think PicIf you were a cancer center trying to get patients to come to receive care at your facility, what message would you send them? In other words, what would you as a cancer center director think people would value in choosing a place to receive cancer care?

One way to answer this would be to survey cancer center directors. You could conduct face-to-face interviews or written surveys. You could hold focus groups, if you could get all the directors in a room together.

But Laura Vater and colleagues from the University of Pittsburgh had a much cleverer and simpler way to answer this question, published recently in the Annals of Internal Medicine.

They analyzed cancer center advertisements. They collected national advertisements from U.S. consumer magazines and television networks, dutifully analyzed the topics covered in each ad, and tabulated the results. What they found is telling, if not totally surprising. (To read the rest of this article, please visit Forbes.)

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