hospitals

Economic View: Overcoming Obstacles to Better Health Care

Unfortunately, no single change will transform our health care delivery system into one that we can afford. We are going to have to try lots of new approaches that depart from standard practices.

I have several suggestions that I think would help, including an experiment that would require a change in either state or federal regulations: giving some high-quality health care providers the opportunity to practice in a world without malpractice lawsuits.

To me, the ideal health care delivery system would include:

¶ A fee for health rather than fee for service model. Doctors and hospitals should be paid for keeping their patients well. Paying them for doing more tests and surgeries creates bad incentives.

¶ A scientific, evidence-based approach to everything it does. Although this sounds unobjectionable, as soon as we get into some details you can see that it is easier to say than to do. For example, consider setting guidelines for when to use expensive imaging technology such as M.R.I. and CT scans.

Not only are such tests expensive, but they can lead to more, sometimes pointless, expensive procedures. A CT scan conducted to investigate a symptom will often find a small unrelated abnormality. These tiny masses are sometimes called “incidentalomas.” The vast majority of them are benign, and further testing can be expensive, worrisome and dangerous, leading to interventions that cause serious side effects or even death. But a few incidentalomas are portents of real disease. The problem is that as technology improves, it can lead to more accidental discoveries, and we need thoughtful guidelines to avoid leaving lots of patients unnecessarily anxious, scarred and broke.

¶ More employment of midlevel professionals like pharmacists, nurse practitioners and physician assistants, to give primary care physicians more time to talk to their patients. While I don’t want to be treated by someone exceeding his level of competence, many of these professionals are underused. A goal should be to allow all members of the health care team to work to the full extent of their expertise, something that is not currently the norm. This would free primary care physicians to spend more time with patients.

¶ A requirement that all patients meet with their doctors or trained end-of-life counselors and prepare living wills. I am not suggesting that anyone be required to make any particular choices about these difficult end-of-life questions, merely that patients talk about the trade-offs and make some choices before they are incapable of doing so.

We now spend a disproportionate amount of money during the final months of people’s lives, often with little hope of meaningfully extending them. We should at least make sure that patients are given the opportunity to opt out of spending their final days in a hospital, hooked up to tubes and running up enormous bills.

MANY fine providers do some of these things now, but they face an important impediment. They worry that if they stop administering a test that might cause more harm than good, or take steps to fully use the abilities of assistants, they will be sued for malpractice. As it is now, a doctor or hospital can be sued if the plaintiff can show that “normal standards of care” were not followed, even if those normal standards of care are inappropriate.

Thus, to encourage high-quality health care providers to adopt sensible practices, let’s offer an inducement. Those with a record of providing high-quality care at good value could apply to the government for a safe harbor from malpractice suits. Organizations that receive this status could require patients to waive their right to sue for adverse outcomes. Of course, no patient would be forced to stick with such a provider, and with the new rules on pre-existing conditions under the health care reform law, those who wanted to retain their right to sue could go elsewhere. And an organization could lose this right if its quality declines.

Courts have previously ruled that such waivers are illegal, presumably because they do not believe patients should be trusted to make this judgment, but the experiment I suggest can test this concept in a limited way, starting with only the highest quality providers.

Personally, I would gladly give up my right to sue. Maintaining it is implicitly costing me money, for which I get little in return. Over the past five years, malpractice insurance companies have paid out to patients only 37 percent of the premiums they collect, according to the National Association of Insurance Commissioners. About 40 percent of that money goes to lawyers, meaning that patients end up with less than a quarter of the dollars that doctors and hospitals pay for insurance. That is a return that makes state lotteries look like good investments.

Tort reform is a complicated subject and not a panacea. Texas capped malpractice awards for noneconomic damages at $250,000 in 2003, yet health care costs have not fallen. But tort reform deserves a better test.

To be clear, I am not proposing that this change be made universally. My suggestion is that we experiment by offering patients the option of selecting a health care provider with a record of quality that requires patients to waive certain rights to sue.

When it comes to my health, I would rather my doctor base her decisions on science rather than what she, or some lawyer, thinks will stand up in court.

Richard H. Thaler is a professor of economics and behavioral science at the Booth School of Business at the University of Chicago.

Article source: http://www.nytimes.com/2013/02/24/business/overcoming-obstacles-to-better-health-care.html?partner=rss&emc=rss

Health Insurance: What You Need to Know

The best place to get health insurance, of course, is from your employer. Group plans are typically cheaper, and your employer will probably cover much of the cost.

There are three main types of coverage you can choose from: H.M.O.s (health maintenance organizations), P.P.O.s (preferred provider organizations) and the newer option called an H.D.H.P. (high deductible health plan) paired with a savings account. A small number of companies still offer old-fashioned, fee-for-service plans, but their ranks are dwindling. Here’s what you need to know about the most common plans:

H.M.O.S provide comprehensive coverage at a low cost to the consumer. In general, you don’t pay any deductibles or co-payments for basic care (and if you do, they will be relatively low). But your choices will be limited. You can generally use only the doctors and hospitals within the H.M.O.’s network, though more plans are easing up on this restriction, and your designated primary-care physician will determine the level of care you require and when you need to see a specialist.

Pros: Low cost. Coordinated care.

Cons: A limited choice of providers. If you go out of network, for example to a specialist, you will probably not be reimbursed.

PREFERRED PROVIDER ORGANIZATION AND POINT OF SERVICE plans were created in response to consumer frustrations with the limitations of H.M.O.s. You can choose to go to network providers and pay a small co-payment, or go out of network and have only a portion — typically around 60 to 70 percent — of your costs reimbursed. The main difference between the two is that a point of service plan requires a referral from your primary care physician to see a specialist, while the preferred provider plan does not.

Pros: More flexibility than an H.M.O.; lower overall out-of-pocket costs than a fee for service plan.

Cons: It’s tricky to predict your costs unless you’re willing to stay within the network. Getting reimbursed for out-of-network claims can be a hassle.

HIGH-DEDUCTIBLE HEALTH PLAN Over the past few years, more employers have begun to offer the option to sign up for a high deductible health plan that is linked to a health savings account or health reimbursement account. Some employers may offer the high-deductible health plan on its own and allow the employees to set up a savings account with the bank of their choice.

The plans work like the preferred provider option, but the deductible is much higher — at least $1,150 for coverage of a single person and $2,300 for families. To compensate for the larger deductible, employers typically offer different two savings options:

A health savings account allows you to put away pretax dollars and then withdraw the money to pay your out-of-pocket costs. (Your employer may kick in some money, too.) In 2009, you and your employer can put up to a combined limit of $5,950 in a health savings account if you opt for family coverage ($3,000 for singles). The money rolls over from year to year, so you can basically store up a medical emergency fund. When you’re 65, you can take the remaining money out without paying a penalty, though you’ll pay taxes on the withdrawal if you’re not using it to pay for medical costs.

A health reimbursement account is financed solely by your employer. Typically, an employer will contribute an amount equal to about half the employee’s deductible The money rolls over from year to year, but you cannot take the money with you when you leave the company.

Pros: Low premiums. Tax-free savings (in the case of the health savings account).

Cons: Potentially high costs, especially if you or a family member becomes chronically ill. Don’t choose this option unless you have the money to pay the deductible.

INDEMNITY, OR FEE-FOR-SERVICE, PLANS are offered by fewer and fewer employers because of their expense. They allow you to go to any doctor, hospital or medical provider you choose. The plan typically reimburses 80 percent of your out-of-pocket costs after you fulfill an annual deductible.

Pros: Flexibility. You can go to any medical provider, anywhere, without seeking plan approval first.

Cons: Your total out-of-pocket costs will probably be higher than in a preferred provider plan or H.M.O. Most fee-for-service plans don’t cover preventive care like flu shots or mental health services.

To help narrow your choice, here are the steps you should take:

1. Ask your favorite doctors which insurance plans they accept. If you find that one or more of your doctors do not accept any insurance plans, then you’ll want to select a plan that reimburses you for your costs when you go out of the network.

Article source: http://www.nytimes.com/2009/02/03/your-money/health-insurance/primerhealth.html?partner=rss&emc=rss

Economic View: Overcoming Obstacles to Better Health Care

Health Insurance: What You Need to Know

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