Friday, December 29, 2006

Middlemen and a Health Care System Dominated by Bureaucrats and Managers

The Wall Street Journal today wrapped up its series on "middlemen" in health care. The summary article has some telling quotes, and some very important data. To start with the quotes,

A lot of the money goes more toward fattening middlemen's bottom lines than toward improving the quality or efficiency of American health care. 'At the end of the day, the only reasonable conclusion is that we waste a huge amount of money on the most nuttily cumbersome administrative system in the world,' says Henry Aaron, a Brookings Institution economist.

While the middleman business booms, health-care costs keep rising, the ranks of the uninsured grow, and paperwork expands as each party in the system tries to enlarge its slice of the pie. 'There's more money to be made by monitoring cash flow than monitoring patients,' says David Cutler, a prominent Harvard University health economist.

And here are the statistics. According to the article, the majority of people who work in doctors' offices, 1.8 million out of 3.3 million, do so in non clinical jobs. Nearly a majority of people who work in hospitals, 2.3 out of 5.5 million, do so in non clinical jobs. So currently almost 50% of people who work in what appear to be the most clinical settings are not doing clinical work.

Health care has been taken over by clerks, bureaucrats, and managers.

This appears to be the fruit of the movement began in the 1980's to break the medical "guild," which some economists held responsible for the high cost of health care (see post here).

The results has been even more rapidly increasing health care costs, decreasing access, stagnant quality, and of course, dispirted professionals tired of contending with myriad clerks, bureaucrats, and managers, most of whom do not seem to understand health care or believe in its values.

And this horrendously complex, bureaucratic non-system is a fertile breeding ground for the conflicts of interest and outright criminality we discuss so often on Health Care Renewal.

Some happy new year to us from the WSJ.

1 comment:

Anonymous said...

While rather long, we have this letter to the editor of the 12/29/06 WSJ, to close out the year.

Concerns About Big Pharma Lecture Circuit
December 29, 2006; Page A9
Your article on how pharmaceutical companies use "medical education" to build new markets for existing products ("Drug Firm's Cash Sways Debate Over Test for Pregnant Women," page one, Dec. 13) proves that rhetoric still trumps science in influencing physician behavior. More than 100 years ago, traveling salesmen touted the miraculous benefits of patent medicines sold from the back of their wagons, even though there was no evidence to support their claims. Now, it is traveling professors collecting $2,500 for an hour's lecture, plus first-class tickets and accommodations, to deliver the same message. In an era where there is a national consensus that evidence-based medicine improves patient outcomes, it is appalling that physicians would take these outrageous fees to represent pharmaceutical companies based on beliefs and not data, sometimes pleading ignorance when required to sign financial-disclosure statements or claiming that it is on the behalf of patients.

It isn't the responsibility of the pharmaceutical industry to stop this behavior. Companies are obligated to maximize value for their shareholders. But physicians have a higher level of responsibility to their patients and families. The FDA has created a stringent review process for approving new drugs or new applications for an existing drug. To subvert this process not only puts patients at risk, but lowers the public trust in all physicians. Corporate executives now face criminal and civil penalties for misrepresentation. Physicians should be held to the same standards.

Jon C. Bowersox, M.D., Ph.D.

Professor and Vice Chairman
Department of Surgery
University of Cincinnati

(Dr. Bowersox was previously global director of medical affairs for a major American pharmaceutical company.)

While I would like to see more corporate enforcement, the writers point is well taken.

Steve Lucas