Tuesday, January 08, 2013

Typical and atypical healthcare

The more socialized healtchare systems of western Europe ("European medicine") do some things very well. So does Cuban medicine, and Honduran medicine, Chinese medicine, etc. Kaiser does some things very well, as does the VA. But none of these systems do everything well, and all of thses systems, including the European ones benefit from America’s willingness to take the risks necessary to advance medical science for the benefit of all.

If you look at the medical system of the Europeans, and Cubans, etc. you will notice that they do a good job of providing a particular type of medical services. So does Kaiser and the V.A., and if you were an astute reformer, you would immediately perceive both a rational approach to reform, and immediately spot the problems with current healthcare reform legislation.

All reform begins with a simple task: classifying aspects of the thing to be reformed into groups according to their beneficial and non-beneficial attributes. Now we can do this with healthcare in any number of ways; trauma and non-trauma, catastrophic and non-catastrophic, preventive and acute, experimental and non-experimental, pre-existing and not, publicly financed and private pay, etc. Whether or not reform is successful depends crucially on which distinctions are selected as the bases of reform. When it comes to talking about cost savings, the classifications degenerate into rationing on the basis of condition (like the Oregon medicaid system) on the basis of who the patient is (e.g. Obama’s reference to patients who are better off taking pain pills), or on some homogenized metric of efficacy (comparative research panels.) Each of these approaches requires a trade-off at the expense of liberty and values of individuals, and this is the reason why “Obamacare” is unpopular, and actually antithetical to the purpose of healthcare.

A more reasonable approach is to realize that there is a natural discriminant in healthcare services: typical and atypical care. Typical care is that which you receive for uncomplicated pnuemonia, coronary artery disease, diabetes, etc. It includes preventive care and management of chronic diseases. Atypical care is everyting else: ICU stays for complicated pnuemonia, costs for defensive medicine, experimental care, elective surgery, the more exotic imaging techniques, care for extremely premature babies, etc.

Europe and China and Cuba (and Kaiser and the VA) do very well with typical care for a very straightforward reason: typical care is relatively inexpensive. If so inclined a national formulary could consist only of drugs that Target provides for $4 a month. Furthermore, the vast majority of people could get by with only typical care. It would suck for some people if we didn’t provide for end of life ICU care, or organ transplants or reconstructive surgery, but these would affect a comparatively small portion of the population. If you reformed healthcare to only provide for typical care, the cost effectiveness would sky-rocket, at the expense of course of those for whom typical care is not good enough.

Over time, things that start out as atypical become accepted and routine (and cheaper) and naturally become typical type of care. Laparoscopic surgery, statin drugs, PET scans, Herceptin, and so forth. Subsidizing atypical care eventually benefits everyone because it advances the state of the art. Admittedly, there is a huge amount of waste in the atypical category, including defensive medicine, futile care and needlessly expensive interventions where cheaper ones would suffice. We Americans put up with this for a number of reasons: 1.) because as mentioned, it advances the state of the art for everyone, 2.) because we have adopted a societal ethic that we will not discriminate on the basis of health, and 3.) that we will not intrude on the patient’s determination of what an acceptable quality of life or benefit of therapy is. Note that ineffective or inefficient therapies would not be accepted as “typical,” or if that is already the case, be replaced by better therapies that start out as atypical.

 An astute reformer would begin by assuring access to “typical care.” This is in fact the only thing that the European model has done, with very little downside, because those nutty Americans are traditionally disposed to uderwriting the benefits of care that others regard as atypical. If you were so inclined you could reform American healthcare to cover “typical” care and let people contract individually for “atypical care” and get the best of both worlds.

Of course what Congress has done is to do the opposite. An insurance mandate is an artifice by which atypical care is treated as typical. It imports the inefficiencies of providing extraordinary and costly care into a market designed for cost effective and predictable care. It imposes the inflationalry pressures of private third party payers on a portion of the system that should be actuarily sound, and necessitates the replacement of discarded efficiencies with explicit rationing. Worse, it shoehorns providers into a system where the mandated inefficiencies will be addressed by preferentially treating those who are less ill, (which not surprisingly is more cost effective than treating very ill people) thus discriminating against those who receive adequate care now, and would receive such care in Cuba, China etc.

You are correct when you note “if you increase Medicare payments with no thought about the effectiveness of what you are buying your country will go bankrupt even faster.” This is exactly what “Obamacare” does. It divorces payment for medical services from a rational allocation based on the expected risks, benefits and costs. It stifles innovation because it falsely treats newer and promising therapies as typical care before experience and ingenuity have enhanced their effectiveness, and efficiency. In short, no one, including Europe, could afford it if everyone’s healthcare system were like Europe’s. And our tradition of liberty and personal autonomy wouldn’t take well to it either.


rielouise said...

Europe is a continent, not a country, consisting of a large number of heterogeneous countries.

Do you have the same health care system as Canada or Mexico simply because you happen to share the same continent?

z9z99 said...

You may notice that the original post contains the second person singular pronoun. The post was orignially a response to another poster on the Healthcare BS blog, and the original commenter referred to "European" healthcare. Regardless, your comment expresses a distinction without a difference. The contrast is really between U.S. healthcare and non-U.S. healthcare. Note that the post references China and Cuba as well. You are correct that Europe is a continent; beyond that, your comment contains nothing of significance, neither supporting or refuting a particular point. It does not address the substance of the underlying post, and is no more useful than a spelling flame.