Archive | August, 2012

Dear Dr. Gawande

26 Aug

Dear Dr. Gawande,

        As the nation (or media’s) most foremost health policy expert, I must object to your recent article comparing hospital chains to restaurant chains.  Since I am pretty sure the New Yorker will not publish my letter to the editor, I will share this letter publicly with my dear readers. 

       Comparing health care to the Cheesecake Factory is ludicrous. Anyone in health policy knows that health care is meal ordered by one person, eaten by another person, and paid for by a third. Competition does not bring down prices in health care because patients do not know what they want and do not know how much it costs and there are no standard national prices. This is not like choosing between Olive Garden and Carabba’s.

       There are narrow niches which could be competitive like the cited example of the author’s mother’s knee replacement. But these are elective procedures in which the patient has time and knowledge about exactly what he/she needs. That is not most of health care or most patients. Low spending regions in the United States are generally dominated by local monopolies. The CMO at Scott & White Hospital in Temple, Texas (a low spending region) openly told me competition increases prices in America.

       What motivation do hospital chains have to bring down actual prices? Consumers don’t pay hospital bills directly, and CMS rules forbidding charging anyone lower than the Medicare rate effectively rule out any downward pressure on prices. Instead hospital chains focus on increasing volume and usually fraudulently as Hospital Corporation of America has done with cardiac catherization labs. Most of these chains will be like HCA and not like semi-noble physician-run enterprises like the Cleveland Clinic or Mayo Clinic.

       Quality of care contracts will not lower costs much either. A recent study (New England Journal of Medicine, September 8, 2011) comparing spending in Massachusetts Blue Cross/Blue Shield’s quality contract with non-quality contracts showed that quality contracts merely slowed the increase in health care spending by 1.9% or a princely $15 per quarter per enrollee. Meanwhile Partners Healthcare’s anti-competitive contract with Blue Cross/Blue Shield contributed $1 billion in excess profits.

         You are the eloquent defender of changes already in progress, pretending that those in charge of healthcare will be like the ICU quality improvers and not like hedge fund managers only interested in bilking the public. A for profit health care systems means that medical clinics and facilities want to make more money, every quarter, every time.

        The proletariazation of American physicians from Jeffersonian small businessmen into wage labor for “Hamiltonian” hospital systems will not make health care better or more affordable or even higher quality. It will concentrate wealth and power further to distant elites. Health care quality improves for the uninsured and insured (NEJM, July 5, 2012) when more people get insurance. A nonprofit, universal health care system will lower overhead and standardize payments and care. Fairness is cost-effective.

        Hamilton may have brought America money, but Jefferson brought us justice. Beware of technocrats who think that tweaking a corrupt and unjust system will fix its ills and not their salaries.   



A working physician