Thursday, February 10, 2005

An Interesting Report from Boston University on Controlling Health Care Costs

An interesting report on entitled "Health Costs Absorb One-Quarter of Economic Growth, 2000 – 2005" from the Boston University School of Public Health has received a little notice in the press. It's long, so I haven't been able to review it in detail, but it makes some pretty good points (although also seems to leave out some important issues that get discussed on Health Care Renewal.)
  • It suggests that waste, bureaucracy, and fraud account for large proportions of health care costs. The data that justifies this assertion, however, is not immediately obvious.
  • It notes that prices are much too high, but seems to imply that this is a generalized pheonomenon. The example it uses, for example, is a general comparison of drug costs in the US and Canada. The report does not seem to grapple with discrepancies of price and value, for example that some drugs seem inordinately expensive compared with their benefit/harm ratio, while others may be quite cheap. Such discrepancies between price and value, of course, seem to occur for all kinds of health care products and services.
  • Its discussion of waste, fraud, and bureaucracy skirts the issue of ill-informed, incompetent, self-interested, and even corrupt leadership of health care organizations. For example, its discussion of fraud seems to focus mostly on that perpetrated by individual providers on insurance companies. How the Allegheny bankruptcy (here, on p. 5) , or the conflicts of interest at the NIH would have fit into this framework aren't clear.
  • It recognizes that physicians actually make most of the important health care decisions for individual patients, and hopes that better informed, more evidence-based decision making will help. In fact, it puts most of the onus of controlling costs on physicians, while acknowledging that this is quite a burden, and that physicians will deserve considerable help with it. However, given its failure to deal with the issue of whether the pricing of particular items is excessive, it is not clear how it expects physicians to control costs, no matter how well they are educated in evidence-based medicine, if they do not understand and cannot influence pricing. Nevertheless, the report's approach to physicians is more sympathetic and understanding of the issues physicians face than much of what has been written about health care policy

All in all, this is a thoughtful work that deserves careful reading and response.

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