Illusory Promises of Future Health Care Cost Savings (and Increased Profits for Osteoporosis Screening Now!)

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The Boston Globe today has an excellent exploration of how lobbyists inserted language in the health care reform bill to effectively double payment for bone densitometry.   Medicare recognized that it was overpaying for osteoporosis screening tests, and cut prices.  Lobbyists for the scan manufacturers, physicians who perform scanning, and drug companies which sell osteoporosis medication cried "foul." As a result of a $3 million lobbying effort,  the price for a scan will go up from $50 to $97.


Here are two comments from (Democratic) legislators who got campaign contributions from the scanning industry and inserted this language into the health reform bill:


Representative Shelley Berkley (D-Nevada)

“You have to view these things through common sense. And it doesn’t take a genius to figure out that providing bone density tests for elderly Americans will save this country billions of dollars,’’ said  Berkley. “In addition to saving taxpayers money, it will prevent suffering that people with osteoporosis have.’’


Senator Blanche Lincoln (D- Arkansas)
“Part of her effort to strengthen and improve Medicare includes recognizing when a particular test with enormous potential to prevent health problems and significant promise of cost-savings is being taken out of doctors’ offices because providers can’t afford it,’’ said Lincoln spokeswoman Marni Goldberg. “That’s a flaw in the system that needs to be addressed.’’


The article notes that the cost of osteoporosis-related fractures is $19 billion per year. 


Both of these representatives are just plain wrong.   We should screen women at risk for osteoporosis - so that we can prevent fractures, prevent premature death, and give these women (and some men too) more Quality Adjusted Life Years (QALYs).   


However, when we make screening more available it costs more money.  It does not save money. In fact, depending on the analysis, each QALY saved by screening costs between $55,000 and $450,000.   Nothing wrong with doing screening.  But we should not offer false hope that this screening will save billions of dollars. 

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Government Capital Assistance to Physicians: Will it Increase Health Care Costs?

Here’s an interesting problem.  Kaiser Health News  this morning suggests that government loans to physicians will ultimately increase the costs of health care.   Physicians and other clinicians borrowed a total of $2.5 billion as part of the economic stimulus.  This is on top of $19 billion in government funds to help clinicians implement electronic medical records.

Physicians invested these borrowed funds in expansion, and probably did this in areas that have high margin (as would any other business!)

Examples cited:

è $1.5 million for MRI expansion in Florida

è $3.4 million for expansion of physician-owned orthopedic space in Kansas

è $3.9 million for cosmetic dermatology services in Texas

Will this increase the cost of health care?  Absolutely.

Did these loans to clinicians help get the economy moving?  Absolutely.

Here’s the paradox – health care is a major driver of the American economy.  It’s critical to lower the growth in health care, so that we can make investments in other portions of the economy (like education, energy conservation, and road repair).  But it’s awfully painful to make cuts in health care.  In our lackluster economy, health care has been the one portion of the economy that has been reliably growing!

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Different attribution rules lead to different assessments of physician efficiency

Warning – a wonky post.

Ateev Mehrotra and colleagues from RAND have analyzed how different rules about what physician is responsible for a patients’ care can lead to impressively different efficiency scores for physicians.   

They evaluated 2 years of medical and pharmacy claims data from 1.1 million commercially insured members in Massachusetts, representing about 80% of those with employer-sponsored insurance.   Claims were assigned to episodes of care using Episode Treatment Groups, ETGs, an industry standard.    Then, twelve ‘attribution rules’ were used to assign the costs of each ETG to one or more physicians.  These rules ranged in how much professional or evaluation and management cost a physician must be responsible for to be credited with the cost of the episode.  Some of the rules allowed crediting a single case to multiple physicians, and others did not.    Each physician was allocated to a high, average or low cost group (and some physicians were in a fourth group, without 30 evaluable episodes). 

The choice of ‘attribution rule’ mattered a lot.  Compared to the ‘standard’ rule,  different attribution assigned a physician to a different efficiency group between 17 and 61% of the time. 

This is an especially elegant study.  Mehtrotra standardized prices so that this evaluation is really all about utilization, not cost per unit.  In the ‘real world,’ though, cost per unit helps drive overall cost – so it’s possible that this study should be repeated without standardizing cost.   The researchers provide data in an appendix showing that most of the difference among the different attribution rules is movement of efficiency categories – not movement between efficiency category and insufficient sample size.  

This matters.   We recognize there is a large utilization difference between “efficient” and “inefficient” physicians.  If the measurements of physician efficiency are this unreliable, it is far harder to develop tiered networks to encourage patients to use more efficient physicians.    This also helps explain physician unhappiness at being assigned to different tiers in different health plan rating systems.

This might be another reason we should profile groups of physicians, rather than individual physicians.  

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