Slowing health costs requires answering 3 simple questions

If we ever slow health care cost inflation to a sustainable pace, it will be because we learn how to ask 3 simple questions when thinking about a medical treatment.

  • Does it improve quality of life for the patient?
  • Does it extend the patient’s life?
  • How much does it cost?

Asking the questions are of course much simpler than figuring out the answer, and far far simpler than deciding what to do with the answer.

The first step is not demonizing even the asking of the questions. This would represent a profound shift in our culture, and is needed. We need to grow up and learn how to talk about limits in medicine. Then we will have to learn how to give practical answers to these questions, and the answers will have to be knowable and usable at the bed side as doctors and nurses are caring for actual people–you, me, my parents, grand parents and kids.

Then we will have to decide what to do with the answers. None of this will be easy.

The good bad news is that there is a good deal of care that is non-productive, which I would define as care that does not improve quality of life or extend life. We should start there. I don’t know how much health care spending could be reduced by stopping care that didn’t improve quality of life or extend life, but this is the correct way to think about our attempts to slow health care cost inflation. We might have to get into the very hard business of deciding that some care that was productive but very expensive shouldn’t be done. But, we might not; we won’t know until we start asking these 3 questions.

Austin Frakt links to the comments of Rep. Issa (R-Ca), who is going to be the chair of the House Oversight Committee in January, who states his openness to using cost effectiveness research to make medical coverage decisions. Issa quite reasonably notes that we have got to learn how to ask questions about whether the use of expensive technology makes sense, and whether patients are getting the least aggressive care that will meet their needs. Austin praises these comments, but also notes that Issa’s use of ‘bureaucrats’ is not helpful in the same way that the use of rationing and ‘death panels’ has been unhelpful, as Issa himself notes.

Any physician who is named to a panel such as the Independent Payment Advisory Committee (IPAB) will immediately be labeled a bureaucrat by anyone opposed to the work of the IPAB. One practical solution is to name one of the Republican members of Congress who is a physician to the IPAB. Heck, make them the chair. Anything that moves us in the direction of beginning to ask these questions.

Donald H. Taylor Jr. is an associate professor of public policy at Duke University and blogs at The Incidental Economist.

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  • IVF-MD

    It’s good to analyze things in this type of logical way. Please forgive me for being a purist on the above.

    In true economic terms, attempts at lowering health care being with two questions:

    A: What would increase the supply?
    B: What would decrease the demand?

    Your first two points are an example of B. If one decides to stop purchasing things that don’t extend quality of life nor quantity of life, then if the supply of those things remains constant then the price will go down as fewer people will be pursuing them (ie demand goes down). So the first two points are valid. The third point above is just a restatement of the original question, so it is tautological, like stating one question to ask that will lower healthcare cost is to ask “what will lower healthcare cost?

    One important part not to overlook is the SUPPLY aspect.

    One can logically ask if the current government health care plan will actually lower cost by asking what will these law changes do to the supply and to the demand for healthcare. Therein lies the truthful answer. :)

  • Smart Doc

    I prefer the time honored Rule of Health Care Insurance:

    Inexpensive, Easy Access, High Quality: You can pick any two, but only two.

    • gzuckier

      I’d be happy to get even two….


    This will only work when the decision is made by someone other than the doctor or the patient or patient’s family. Some would label these as “death panals” as data generated from statistics would be applied to the individual with cost containment as a, if not the, statistical metric of concern.

    With boots on the ground in todays healthcare environment this is how it usually plays out from my direct involvement and observations.

    Does it improve quality of life for the patient?
    My client suffered a loss of opportunity for a better outcome and you (doctor) are liable.

    Does it extend the patient’s life?
    My client suffered a loss of opportunity for a better outcome and you (doctor) are liable.

    How much does it cost?
    You (doctor) put money ahead of the wellbeing of my client? My client, again, has suffered a loss of opportunity for a better outcome and you (doctor) are liable.

    This is not to mention the honest, educated expert opinion by the treating physician that THIS PARTICULAR PATIENT’S condition and expected outcome from treatment has a reasonble chance of being outside of the statistical models predicted poor outcome. What say yee to THIS patient? Do you expect me to play God?

  • buzzkillersmith

    Unfortunately, as the professor should realize, questions one and two are far from simple. Does it improve quality of life? Much of the time the answer is unknown and unknowable. What if there is a 15% chance that it will? Of course the real probability is either 0% or 100%, but we often we can’t know that at the time medical decisions are made.
    It seems that some policy types, want to map that 15% to 0 to save some money maybe. The patient and the pt’s family often have a different view. A huge but relatively unspoken part of this debate has to do with just this issue. Statistics only get you so far, given the fallacy of division. This is really about using the false impression of scientific certainty to decide who gets what.

  • Don Taylor

    Not saying it is easy and obviously there is uncertainty and a distribution of treatment effect and response. By not even asking the questions I think plenty of patients are consenting to things they wouldn’t choose if they had more information. Only way to find out is to ask the questions…..
    above is another way of saying demand is artificially high and the two (supply and demand) are of course endogenous.
    of course I don’t want you to play God, our culture just needs to realize that since everyone eventually dies further care to forestall this no longer works and by asking these questions more openly this event is less likely to sneak up on us.

    • buzzkillersmith

      You’re evading the real issue. Asking the questions is easy as pie. I just did that. The hard part is that there are often no answers. I’m all for giving pts information. The problem comes in those numerous cases where what is good for society in terms of finances requires real sacrifice on the part of individual patients. No amount of questioning or dialogue will get you past that. It comes down to who has the power.

      • Adam Rothschild, M.D., M.A.

        I am not a decision analyst, but I have studied some decision analysis. I know that the decision analysis community does, indeed, have formal techniques for objectively (or at least quasi-objectively) measuring quality-of-life. They also have techniques for performing cost-benefit analysis. I do not accept as a refutation of Dr. Taylor’s thesis that we can’t answer his three questions because it is impossible to do so. It is possible. I would also like to point out to buzzkillersmith that it is not true that “the real probability is either 0% or 100%” This quote represents a misunderstanding of probability. Yes, an even will either happen or it won’t, but we won’t know that until after-the-fact; probability is about predicting how likely events are to happen before they happen. This is what makes probabilities useful in decision making. You estimate the probability of a given outcome and analyze the costs and benefits along the way and work to maximize expected utility.

  • IVF-MD

    DT, absolutely right. The demand has been set artificially high by having it subsidized by other people’s money.

    The same would happen (and does happen) with any other thing in life. If something is subsidized so that part of the payment is coming from somebody else, then the price to all people, as a whole (those who benefit from it and those who help pay for it) goes higher and higher , even though the price that the end-user pays is not necessarily higher. As a result, healthcare costs go higher and higher. We are seeing it in action.

  • Margalit Gur-Arie

    Well, yes, of course, but aren’t the first two questions an integral part of decision making already? Surely physicians don’t mindlessly recommend therapies…

    The problem I see is that for most cost-significant treatments the answers to the first two questions is Maybe and Perhaps, not to mention that “quality of life” is not an objectively measured quantity.

    When combined together, and raised in a policy making panel, all three questions point towards determinations made based on ability to pay, since a formula will have to be reached allocating acceptable cost for various degrees of positive answers to the first two questions. And I can assure you that a Republican member of congress sitting on IPAB and deciding policies for Medicaid coverage will be most “sensitive” to the third question.

    • Alice

      I think if you want to flip the coin the Democrats are using our money to gain votes for programs I think are run inefficiently…it is part of the problem in Ohio and Wisconsin…I am for the right to form unions…but I am tired of union officials and Democrats messing around to gain votes with other’s money and rarely is accountability part of the solution.

  • Donald Tex Bryant

    I think that it is going to be very difficult to have physicians as a whole adopt this set of questions, as a whole, especially the last one. Suppose we stated the objectives in a more positive point of view: Am I, the physician, rendering the best quality of care possible? I believe that most physicians believe that they are within the limits given in their environment of practice. Of course, this environment is affected by many outside factors, such as threat of being sued, as has been mentioned many times on this blog.

  • John Kaegi

    Asking and responding to the answers to these three questions may reduce h/c costs, but not appreciably. 70% of ALL h/c costs are due to 5 chronic “diseases” and about 50% of ALL h/c costs are due to poor health behaviors. Bringing h/c costs to normal economic inflationary trends will require much greater focus on wellness and proactive intervention. That won’t happen until 1) FFS compensation ends (replaced by salary and bonus for panel wellness) and 2) h/c is centrally managed with sticks and carrots to engage reluctant patients in their own behavioral changes.

  • Chris Wigley

    I generally agree with John Kaegi, with the rider that these approaches are going to be very slow to show results, as we will have to wait until all of us with one or more of the chronic diseases have died!
    However the key question to me is “How much does it cost?”. Because to longer term answer to this is “How do we reduce the cost”. This is the true ‘elephant in the room’ because to do this requires that excessive profits be eliminated from the whole system. Excellent modern drugs are sold, for a reasonable profit, in India for less than one tenth the cost in the US and Canada, yet many of the drugs sold in the US and Canada are actually made in India at the same facilities. Ridiculously excessive bureaucracy in the insurance industry increases the cost of insurance at the same time as it deprives many of health insurance. Even the medical profession is at fault in their own professional protectionism – we really do not need to see a doctor to renew a routine blood pressure or inhaler medication, and many simpler cases can be diagnosed by a nurse.

  • Bill

    I think you need to change the driving factors in medicine. You need to, over time, start paying when the patient is healthy and not paying when they get sick. I know it is an ideal but as long as we pay for illness treatment there is little incentive for us to achieve ideal health. Every doctor alive would love to get $100.00 a month from 1,000 patients if he never had to see them. The problem is the transition plus the fact most people think illness is a normal state. Maybe we should challenge that idea. If no one asks the question how do we know the answer?

    • Alice

      In countries that use the monthly stipend patients tie up the system. Japan and the UK are two examples. This means resources on mostly curable problems are expended unnecessarily on problems that usually take care of themselves. The smorgasbord mentality.

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