Once again, we get yet another close look at America's medical-industrial complex and the bubble it has become.
Here is a snip summarizing the possibilities for cost savings.
The stunning inefficiency of the U.S. health care system as a whole is now beyond dispute. To see the magnitude of aggregate waste, one only has to look at the gross disparities in how medicine is practiced in different parts of the country and with what results.And this is part of the reason ACA as it was crafted is a far cry from any real solution to those excessive costs.
The best-known work in this area comes from the Dartmouth Atlas Project. For more than a decade, researchers there have systematically reviewed the medical records of deceased Medicare patients nationwide, including those who suffered from specific chronic conditions during their last two years of life. And by doing so, the researchers have uncovered striking anomalies that point to vast inefficiencies.
In Miami, for example, the Dartmouth researchers have discovered that the average number of doctor visits for a Medicare patient during the last two years of his or her life is 106. But in Minneapolis, among Medicare patients suffering from the same chronic conditions, the average number of doctor visits during the last two years of life is only twenty-six. Yet in both cities, all of these patients are equally dead at the end of two years.
The implication is unavoidable. The much higher volume and intensity of medicine as it is practiced in Miami as compared to Minneapolis may benefit some patients in some ways. But all the extra exams, as well as the extra tests, drugs, and operations that doctors in Miami regularly order for their patients, bring no aggregate gain in life expectancy.
By extrapolating from such disparities in medical practice around the country, Dartmouth researchers have developed the widely accepted estimate that roughly a third of all health care spending in the United States is pure waste or worse, mostly in the form of unnecessary and often harmful care—amounting to some $700 billion a year. Using a similar approach of comparing best and worst practices, a recent study by the Institute of Medicine concludes that overtreatment and other forms of waste in the system consume $750 billion annually. That’s roughly the cost of the entire Iraq War.
This finding is in line with that of another recent study published in the Journal of the American Medical Association (the house organ of America’s doctor lobby!). It calculates that on its current course the U.S. will spend nearly $11 trillion between 2011 and 2019 on health care that has no benefit to patients and that is often harmful to their health. Cutting that waste by just 4 percent a year, the study concludes, would be enough to keep health care spending in line with the growth of the economy, which in turn would be enough to evaporate the federal government’s long-term deficits. And it would mean that wasteful health care would no longer crowd out care that actually improves and prolongs the lives of patients.
And that brings us back to the Affordable Care Act. The ACA established the Patient-Centered Outcomes Research Institute, and gave it the mission of doing so-called “comparative effectiveness” research. But in so doing, it specifically forbids PCORI from using QALYs, or anything like them. The statute stipulated that PCORI “shall not develop or employ a dollars per quality adjusted life year (or similar measure that discounts the value of a life because of an individual’s disability) as a threshold to establish what type of health care is cost effective or recommended.”
More broadly and pointedly, it also states that the secretary of health and human services, who oversees Medicare, Medicaid, and the soon-to-be-up-and-running exchanges for private health insurance, “shall not utilize such an adjusted life year (or such a similar measure) as a threshold to determine coverage, reimbursement, or incentive programs.”
The implications of this language are far reaching, and explain why PCORI’s executive director so emphatically asserts, “You can take it to the bank that PCORI will never do a cost-effectiveness analysis.” As long as using the concept of a quality-adjusted life year is forbidden, along with “similar measures,” there is no way to measure the cost-effectiveness of any given drug or treatment. And that’s just what the big drug companies and medical device makers wanted all along.
Taken literally, it means that it is impossible for health care policymakers to even “recommend” one drug over another just because one costs, say, $1 million per pill and produces blindness as a side effect and another costs only $10 and leaves you with your sight intact.
Other language in the ACA ensures that it will be taken literally. The statutes that govern PCORI, for example, establish it as a nonprofit organization and then specifically require that “members representing pharmaceutical, device, and diagnostic manufacturers” are guaranteed seats on its board and allowed to serve on its expert advisory panels. Today, for example, PCORI’s board includes representatives from Pfizer, the world’s largest drug company; from Medtronic, a $16.2 billion manufacturer of pacemakers, stents, and other medical devices; and from a “patient advocacy” group called Friends of Cancer Research, whose funding derives from such Big Pharma players as Pfizer, Bristol-Myers Squibb, AstraZeneca, and GlaxoSmithKline.
The ACA also stipulates that scientists doing research under contract with PCORI may not publish their findings unless PCORI determines that the research is “within bounds”—the meaning of which, of course, the board itself gets to decide. If PCORI’s board deems it out of bounds, both the offending scientist and his or her institution are banned from receiving any other grant for a period of not less than five years, which for many scientists who specialize in evaluating the quality of health care would be a career ender.
Welcome to the real politics of health care.