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Business: Health Care by the Numbers

Steven Pearlstein
Washington Post Columnist
Tuesday, October 5, 2004; 11:00 AM

Washington Post business columnist Steven Pearlstein was be online to talk about his latest column. He writes today about health care and a novel clinic in New Hampshire that has revised how patients and doctors interact.

A transcript follows.

About Pearlstein

Steven Pearlstein writes about business and the economy for The Washington Post. His columns on the economy appear every Wednesday and Friday.

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Edina, Minn.: Our political leadership - both parties - always seem to express shock at the rise of health care costs and refuse to admit to the nation that if we all want to use Viagra at 80 and live to 100, that someone is going to have to pay for it. The whole discussion is about cost shifting - not quality or outcomes and about demonizing various players - drug companies, HMOs, etc.. What is your opinion on the political discourse regarding health care in this country?

Steven Pearlstein: You couldn't be more on the mark. The discussion seems focused on demonizing one party or another and gaining political advantage by demagoguery. And it is by all parties. One of the more disingenuous examples is how Ted Kennedy and some other Democrats demonize "managed care" and talk about never interfering in the decisions made by doctors and their patients. And then they go on to laud disease management programs. What do they think disease management if not managed care? Of course we did managed care the wrong way in the 1990s, when it got away from its base of closed panel HMOs. But that doesn't mean that you don't try it again. And the key to that is getting over this fallacy that your doc knows best. He and she often doesn't know best and we have got to find ways to make sure he or she gets the information in a timely fashion to help you make the right decisions. We also need rules and pay schemes that give docs the incentive to check on what the research says or what the best protocols are, and then follow them. We also need feedback to docs so they can see how their pattern of practice differs from national norms and norms in places with lower utilitzation. Here is where the solution starts. Alot of the other "problems" in the health care system could be eliminated or reduced if we do that right.


Laurel, Md.: It's great that someone has figured out a way to make medicine more cost-effective because, frankly, Americans would like to see medicine removed from the area of economics. They don't want poor people to go without care the wealthy receive, while at the same time they want to use their own economic power to obtain the options they want.

Both candidates last night cited how much the cost of health care has gone up, ignoring the amount that is available and how much of it people consume. Like computers, the availability of a technology makes it a "need."

But diet and exercise aren't, as long as coronary bypass surgery is available...

Steven Pearlstein: Yes, the debate last night was disappointing on this issue. You'd like to think the presidential candidates would do a better job at the next two debates but I wouldn't bet my Blue Cross card on that.


Burke, Va.: You talk about physician resistance in this area - why are doctors and other medical professionals so slow to change?

Steven Pearlstein: Everyone is slow to change, that's human nature. It is particularly difficult when you are dealing with a group of people who really think they do know what they need to know and that the system works best when they control it. So getting them to share decisions with patients and computers and people who have done outcomes research is difficult. Then there is the financial problem: if docs and others in the industry help the world cut down on the amount of health care consumed, then their incomes will go down. Or will they. The way it should work is that insurance companies should steer people to the doctors and the hospitals with the best records not only in terms of treatment quality and health outcomes, but in terms of efficiency and cost (which often correlate, by the way). And if they do that, then the inefficient providers will either have to get better fast, or be driven out of business. So at least at this early stage, doing the "right" thing could also be very good for business. We just have to get the information and information systems out there so this market dynamic can work.


Reston, Va.: Great story. I wish we have similar centers around here....Are organizations which focus on containing spiraling health care costs?

Steven Pearlstein: ...and improving health outcomes and patient satisfaction. One of the interesting things about this, which I didn't have space to get into, was how the questionnaire patients use also tracks the results of treatment against the patient's original expectations. And this is one of the metrics they use not only to understand the patient's mindset when treating him/her, but they also use it to constantly tweak the program, both in the area of expectations and outcomes. As to your comment, I bet there is some program around here working on this, but probably none as far along.


Washington, D.C.: We heard a lot about medical malpractice rates in last nights vice presidential debates. How much can collecting and managing statistics like these bolster a doctor's defense in such cases?

Steven Pearlstein: Not sure. But I would suspect that better evaluative tools, which can be used to "grade" doctors and hospitals and labs, would help drive the truly horrible performers from the business, even when the medical societies and other professional organizations fall down on the job, which they almost always do in this area.


Fairfax, Va.: What is the response from insurance companies?

Steven Pearlstein: Blue Cross/Blue Shield, which remains big up there, is very much a part of this program and is helping to fund it and push it along. They are also working, as I understand it, on alternative payment systems so that the center does not have an incentive to use surgery or more intense/expensive treatment when something less intensive would do as well or better. That gets into things like capitation and paying a flat fee to treat a disease, irrespective of how it is treated. You need lots of good data from large numbers of case in order to price those things correctly, which is why the IT component here is so crucial. But the insurers ought to love this development.


Arlington, Va.: So why the embrace of technology in this case? Every time I receive a hand-written prescription, I sense the reluctance of most doctors to step into the digital age.

Steven Pearlstein: Yes, they are reluctant. Some of it has to do with cost, because there are big scale efficiencies in going to a high tech system and medicine is still delivered by lots of docs in small practice groups and individual labs. For this to work, that is one of the structural changes that may need to happen. Its easier to do up in Lebanon, NH where there is essentially one big hospital that can take the lead, since all the docs have to practice there. But in urban areas, there may have to be an attempt to tie doctors more closely to one hospital whose IT system he or she can be part of.


Kensington, Md.: Dartmouth example sounds like staff/group model HMO practice.

Steven Pearlstein: You got that right. An old idea and a good idea, updated.


Washington, D.C.: Enjoyed the article and hearing more about the good work being done at Dartmouth. Can you address the role of pharmaceuticals and medical technology in the provision of quality, cost-effective care? The arguments seem polarized between blaming pharma and medical device manufacturers for nearly single-handedly raising health care costs or between giving technology all the credit for providing groundbreaking cures and innovative procedures.

Steven Pearlstein: If doctors had good information about the cost-efficiency of prescription drugs, and were encouraged/forced to use that information in crafting their treatment, then overuse or misuse or underuse of drugs would all be greatly reduced. It would also exert downward pressure on prices. In the long run, however, we also need to address a separate question, which is whether the U.S. can continue to fund virtually the entire cost of developing drugs, or should we force other wealth nations to shoulder a fair share of that burden, which they now shift off on us through the mechanism of their national health systems and price controls.


Oakton, Va.: Although we indirectly pay the doctors/hospitals, they do not give us the time of day. So how can we, the consumers of health care, the patients, make a difference?

Steven Pearlstein: Find ones who do and only deal with them. That's how other markets work.


Steven Pearlstein: Thanks, folks. Hope to see you next week.


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