The twin problems of medical ignorance and perverse incentives

Below is a list of characters in Shannon Brownlee's story of America's health care system. Try to guess which are the good guys and which are the bad guys.

* A doctor who found a way to treat breast cancer with massive doses of chemotherapy and bone marrow transplants

* Insurance companies that refused to pay for the breast cancer treatment, until attorneys fought on behalf of patients

* A typical independent practicing physician

* Kaiser Permanente and other medical care behemoths

* Doctors who rely on intution, experience, and personal knowledge of the patient to make treatment recommendations

* A statistician who looks at data to evaluate treatments

If you made the usual guesses about the villains and the heroes, then Overtreated will surprise you. For example, concerning the aggressive treatment for breast cancer, Brownlee concludes (p. 141):

insurers unwittingly made the treatment a feminist cause by refusing to pay for it. Breast cancer advocacy groups...threw their weight behind the embattled women...When transplanters like Peters testified in court that the procedure was established practice, when in fact it was not, they stoked the perception among patients that high-dose chemo offered a shot at cure.

Hope Rugo stopped performing transplants on breast cancer patients in 1999...she said, "We believed in it passionately. Now I think about all the women who died during transplant, who would have lived much longer without it."

Doctors and hospitals did not wait for clinical trial results before embracing what turned out to be an ineffective, painful, and debilitating procedure. Brownlee repeatedly chides physicians who rely solely on habit and intuition while remaining ignorant of statistics. The biggest hero in her book is Jack Wennberg, the Dartmouth statistician who has documented the large differences in rates of medical procedures across regions--with the procedure-intensive regions showing no better outcomes than the those regions with fewer procedures.

Why Not McMedicine?

Another point that Brownlee stresses repeatedly is the inefficiency of independent physicians, as compared to large managed-care companies. Independent physicians do a poor job of co-ordinating care of the individual patient, and they lag behind in their use of electronic medical records.

Brownlee does not come right out and advocate McMedicine, but she comes close. She writes (p. 278), "How often does all of this coordinated care actually happen? Outside of a few systems, like the VHA [Veterans' Administration], Group Health, and Kaiser, rarely at best."

As a journalist, Brownlee assumes that the lack of co-ordinated care represents a market failure that government needs to fix. As an economist, I wonder why the market has not produced more McMedicine. Here are some possible answers:

1. With consumers responsible paying for less than 15 percent of personal health care spending out of pocket, health care providers are insulated from the pressure to provide quality service at low cost.

2. Perhaps, for the majority of patients, fragmented care works well. When you only have one condition at a time, the cost of co-ordinated effort may exceed the benefits. Co-ordination only becomes important when you have multiple conditions, or a disease like diabetes that requires thoughtful management.

3. Most of the potential for efficiency gains from large-scale medical providers are precluded because of licensing laws and practice restrictions.

I think that (3) is worth pondering. Our system for licensing doctors, nurses, physical therapists, and so forth, makes it very hard to rationalize and improve our health care delivery system. If you wanted to make McMedicine really work at delivering quality care at low cost, you would economize on the use of highly-educated professionals. Instead, you would use technicians and trained apprentices. You would attain the trust of consumers by earning an overall corporate reputation for reliable service, not by having each employee display a sheepskin on the wall.

The point is that getting the advantages of McMedicine may not be a matter of sheer collective will, as Brownlee would have it. Instead, it might require radical deregulation of medical licensure and practice regulations.

Physician Compensation

Brownlee points out, as many others have noted, that compensating physicians for procedures creates some unwanted incentives. In particular, it rewards doctors for doing more procedures. Doctors try to see as many patients as possible who are in their particular "sweet spot:" if you are an orthopedist who specializes in knee surgery, then you try to see lots of people with bad knees.

Brownlee proposes the alternative of paying doctors a salary, based on the number of patients that they see. However, I would argue that this would create the opposite incentive. Under a capitation based compensation system, a doctor would want to see as few sick patients as possible, because each one takes a lot of time. You will be paid more if you have a large roster of healthy patients than if you have a small roster of sick ones.

As an economist, I believe that there is no perfect way to compensate doctors. I would like to see experiments tried with different systems than the one we use today, to see if they improve things. But I would definitely not say that shifting to a capitation based salary system would bring nirvana.

More Evidence

One of Brownlee's primary recommendations that I can wholeheartedly endorse is an effort to obtain more knowledge about the effectiveness of medical procedures. She writes (p. 291-292),

[Doctors] are required to take a statistics course, but they don't actually learn how to interpret medical evidence...Does every patient who undergoes major surgery need a vena cava filter...Doctors still disagree. Is lithotripsy, using ultrasound to blast kidney stones into tiny bits, better than surgery? It might not be as safe as doctors and patients think it is. Does everybody with slightly elevated cholesterol really need to take high doses of cholesterol-lowering drugs? These questions represent a microscopic fraction of the mysteries that remain in medicine.

On this point, I have no quibbles. Ian Ayres, in his new book Supercrunchers, gives an example of a straightforward exercise in probabilistic analysis that 75 percent of doctors get wrong (p. 214 of his book). I know I once had a Harvard-trained doctor who got a similar problem wrong and gave me bad advice as a result (he is no longer my doctor).

In my own book, I advocated a Medical Guidelines Commission to try to add to our medical knowledge. I think that such an approach will threaten the typical doctor, just as the Moneyball baseball stat geeks threaten traditional scouts. But we need to turn the supercrunchers loose on medical data and see what they can do for us.

Overall, Shannon Brownlee deserves praise for providing a more nuanced and accurate picture of the problems in our health care system than what gets portrayed in the popular media. My main reservation with her book is that she tends to make the solutions seem more straightforward and less problematic than I believe them to be.

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Many Brits pay twice for dentistry

It's supposed to be provided by their government health insurance

Scores of patients are being forced to pay for private dental treatment because of a continuing lack of NHS dentists, a large survey suggests. Almost a fifth of NHS patients have gone without treatment because of cost. Others are even resorting to extracting their own teeth after the largest shake-up of NHS dentistry in 50 years. According to the Government’s own estimate, more than 2 million people who wish to access NHS dental care are unable to do so. In April last year, ministers introduced a new dental contract, which aimed to increase access and simplify charges.

But the Dentistry Watch survey conducted by Patient and Public Involvement (PPI) Forums throughout England suggests that a majority of dentists believe that the quality of patient care has declined since the changes and that huge problems remain in finding dentists who will accept NHS patients. For example, when a new dental practice opened in Portsmouth in April hundreds of people queued around the block to register.



Between July and September this year 5,212 patients and 750 dentists were asked for their views: 78 per cent of private dental patients reported abandoning the NHS because either their dentist stopped treating NHS patients, or because they could not find another one who would. Of those patients not using NHS dental services, 35 per cent said it was because they could not find an NHS dentist close to their homes. Only 15 per cent claimed it was because they believed they could get better treatment. Six per cent of patients said they had treated themselves, including extracting their own teeth, because they were unable to get treatment.

The arrangements under the new contract have been criticised by dentists as a crude, target-driven system, which does not encourage them to treat complicated cases or take on new patients. Of the dentists surveyed, 45 per cent said that they were not accepting any more NHS patients and 58 per cent said that the quality of care patients have received since the introduction of the new dental contracts has got worse. Nearly three quarters said they were aware of patients declining treatment because of the cost. However, 93 per cent of patients receiving NHS treatment said they were were happy with the treatment provided.

Sharon Grant, Chair of the Commission for Patient and Public Involvement in Health, which organised the survey, said: “These findings indicate that the NHS dental system is letting many patients down very badly. “It appears many are being forced to go private because they don’t want to lose their current trusted and respected dentist or because they just can’t find a local NHS dentist. This is an uncomfortable read for all of us, and poses serious questions to politicians.”

Commenting on the findings, the British Dental Association said that the survey highlighted the “serious concerns” about the impact of reforms to NHS dentistry in England. Susie Sanderson, chairman of the association’s executive board, added: “The new contract has done nothing to improve access for patients and failed to allow dentists to deliver the kind of modern, preventive treatment they want to give.”

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