Health reform and the iron triangle of health care

When I was in medical school, we had a class on health economics taught by William Kissick. I didn’t pay as close attention as I should have (especially given what I do now). But I remember one thing he stressed. It involved the iron triangle of health care.

There are three aspects of health care systems that are essential: quality, cost, and access (thus the triangle). The problem is that they are in competition with each other (that’s the iron part). I can make the health care system cheaper, but that will inevitably require limiting access in some way or letting quality suffer. I increase the quality of the health care system, but that will be expensive or, again, require limiting access to it. And I can increase access to the health care system, but that will cost money, or result in some hit to quality.

Make no mistake about it. The PPACA is about access. It is about getting more people into the health care system. And it does obey the iron triangle. Regardless of the rhetoric you’ve heard, it does cost a lot of money: $938 billion over a decade, to be exact. Yes, there are new taxes and spending cuts to cover those costs, but they do exist. No one covered millions more people for free.

I teach a class to first year medical students now on health policy and economics. When I talk about this, I always say that anyone who promises you that they can make the health care system cover more people, save money, and maintain or increase quality is lying or a politician.

I bring this up because as the Republicans in Congress start to bring together alternative health care plans, a way to gauge their seriousness is by how much they ignore the iron triangle. If they want to cut costs, that’s fine, but if they propose to do it without decreasing access or decreasing quality? Forget it. The way many other systems cost less than ours is to make sacrifices.  Some may not view the changes as sacrifices (see single-payer supporters), but believe me, others do.

Alternative plans can point to tort reform, or waste and abuse, but these are more complicated than you think and nowhere near the cost savings that are needed.

Say what you will about the PPACA, but the fact that it had to be written and scored forced it to be real.  The goal was to cover more of the uninsured.  To do so will require upwards of a trillion dollars over the next 10 years.  I think there were more efficient ways to do it, but I still think it’s worth the cost.

I tell my students that the health care systems of France, the UK, Canada, and others are not an accident.  Those are democratic societies; the people chose those systems over time.  We may not like some of what they have, including less technology, more restrictions, less access to new drugs, more government regulation, wait times for certain things, gatekeepers, etc.  But those are the ways in which other systems save money and cover everyone.  Those were hard choices, and others make them all the time.

If alternative plans are to be offered, they will need to go through the same rigor of the PPACA. Put it on paper, in detail, and say out loud what you hope to gain and what you are willing to sacrifice. Most of us would welcome a debate on those decisions.

No handwaving.  No promises of magic solutions that somehow save money, increase coverage, and improve quality.  If you do that, you’re lying or a politician.  Or both.

Aaron E. Carroll is an associate professor of Pediatrics at Indiana University School of Medicine who blogs at The Incidental Economist.

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  • James Broselow, MD

    While the iron triangle is a useful concept, there are major exceptions– most of all in reducing medical errors. The U.S. medical system in particular has a long way to go in increasing safety and standardization. For instance, the inexpensive Broselow tape that I invented decades ago has both saved lives and lowered costs. We now have a $10 app out on iPhone, Blackberry, and Android that gives weight-based medical dosages and administration instructions for children. Obviously, this is on the micro, not macro level– it won’t save the health care system. But it obviously will make a difference for the children whose lives are saved. Greater safety through simple mechanisms reduces costs for everyone. On a macro level, we do need to focus on standardization and best practices. 

  • Bob Abrahamson

    Great article.

  • Anonymous

    The iron triangle of health care is a false choice — save money and get worse care — because it fails to recognize the enormous amount of waste in our health care the system and the harm that waste causes, not just to our collective pocketbooks, but to patients. You can save money and improve care by going after that waste, which is estimated to account for about a third of what we spend on health care.

    Of course, you can also save money simply by cutting prices for each unit of service, which other countries have done. And its true, they have also constrained access to some technology and new drugs. But here’s the question Dr. Carroll must answer before claiming that cutting services will inevitably lead to worse quality — and worse health: Why do other developed countries, where access to technology is restricted, have better health statistics? One part of the answer is that much of that technology does not contribute to health. It simply drives up costs.

    • Anonymous

      To cut the waste, are you willing to change the malpractice system?  In most other countries, it is “loser pays.” That in itself drastically self-limits the number of lawsuits and the pressure to order additional, expensive tests. I can’t tell you the number of times I’ve counseled patients regarding tests including potential side effects, the low odds of additional therapy helping, yet the family insists on further testing and treatment without regard to costs.  Was I thinking about meeting them again in court when I signed the orders?  You ‘betcha.  Those things may buy another several months of life, but at what cost to society?  

  • Anonymous

    Or we can have limited access to expensive low quality care that we have now.

  • Anonymous

    Dr. Ronald Sautter overestimates the effect of defensive medicine on the waste in the health care system. Yes, defensive medicine (worrying about malpractice suits) is one factor driving unnecessary care, but it’s not the only factor, and it’s not even the largest factor. And unnecessary tests are just one example of an unnecessary service. So in answer to your question, sure, let’s have tort reform. But there will still be a great deal of waste in the system.

  • davisliumd

    The iron triangle is a myth.  It is certainly something I was taught in medical school.  However, there are plenty of examples in other areas and industries where products and services offered were “so complicated and expensive that only people with a lot of money can afford them, and only people with a lot of expertise can provide or use them.”   Professor Clay Christensen of Harvard Business School offers this possibility very convincingly in his book Innovator’s Prescription –  He notes through plenty of examples, how telephones, computers, and
    airline travel moved from only accessible to those with the resources to
    become available and affordable to all.

    He isn’t lying.  He isn’t a politician.  His book is one of four which are required readings, in my opinion, for medical students and residents.

  • Paul Dorio

    Two great points – one in the article:

    Politicians will not “fix” the healthcare system, especially if they continue to feed us the hogwash line that they can cut costs, keep quality and improve access for more people. 

    And another great point in the comments:

    The article ignores the obvious elephant in the room: that of increasing, and paying for, “standardization and best practices,” as Dr Broselow noted.

    As an interventional radiologist, it is painfully obvious to me that the scenario that was described by Dr Sautter happens all too often. Too many times, patients and/or their families indicate that “they want everything done.” Patients and families who are starting to go through the grieving process don’t think rationally and don’t care that their  desires for “doing everything possible” cost taxpayer dollars (in the case of Medicare patients). They only care that every attempt is being made to “save” their loved one. If there was standardization of practices, algorithms that were requirements, and an understanding by the public that these types of care limitations existed, then costs could certainly decrease, while quality of care would increase. Meanwhile, access to care could expand because of the net decrease in costs and perhaps we’d end up with a cost-neutral system yet cover more individuals.

    What we in this country are going to see happen, as it is inevitable, is economic austerity and health care austerity. Otherwise, access will decrease when the government continues to cuts costs by decreasing reimbursements to providers and, hence, decreases quality of the overall healthcare system.

    Standards and best practices. It could work. If we let it and if we are willing.

  • Anonymous

    Very enjoyable and thought provoking article, and replies.  Dr. Carroll’s points are well taken and relevant.  I have often thought about the issues raised by davisliumd:  if complicated industries like computer, telecommunications and airlines can develop and refine products and services that have become more advanced and versatile, AND at the same time cheaper…then why can’t healthcare do the same?  I admit I haven’t read any of Dr. Clay Christensen’s offerings.  I have read some of the works of Regina Herzlinger (also from Harvard) along similar lines (I think).  The thinking sort of goes like this:  let’s apply a lot of the successful business tactics to medicine (lean thinking, six sigma, etc) and we’ll achieve our goal of universal access, reduced (or at least controlled) costs, satisfied patients and great outcomes.  

    A big problem here is a cultural one, or maybe it’s misaligned incentives and constraints.  Patients and their families generally have an entitlement mentality when “consuming” healthcare.  (Doctors, on the other hand, generally have a ‘fee for service’ mindset.) People seldom inquire about the cost of some health service or product, not until, that is, it will directly impact them financially.  Another way to put it: not until the entitlement curtain starts to fray.  Doctors are part of this culture, too.  We (doctors) rarely tell patients up front what something is likely to cost (partly because we often don’t know and partly because it’s unseemly).   Does this happen with computers or cars or hotels?  Of course not.  When consumers go out to buy computers or cars, or rent a hotel room, one of the first (if not THE first) things they inquire about is cost.  And unless your company is sending you to Orlando for a meeting, the entitlement mentality is just not a factor.  And the purveyors of these fine products and services have price figures at their fingertips and readily will answer most any question about cost.  

    One of the ways other developed countries have achieved universal healthcare has been to keep citizens’ expectations of healthcare under control.  That sounds sort of Kafkaesque, but it’s true.  They have been able to do this, in part, because countries like the UK started their programs when medical care was inexpensive.  It was when health insurance was placed in corporate benefit packages (in the US) almost as an afterthought. As these systems grew, and as healthcare advanced, governments planned and made pro-active decisions about things like access, new technology, coverage, etc.  So the citizenry “grew up” with healthcare systems that were like a public utility.  It was there when you needed it but without the hype and unreasonable promises.

    Until we (everyone) can get our expectations and incentives under control and arrive at an economically sustainable place (as in: “I already feel like I’m in a better place”), we will continue to suffer through all the problems already mentioned and will never effectively deal with the “iron triangle” of healthcare.

  • Steve Keizer

    Great article, one that has stimulated an intelligent debate (thanks to all who have contributed thus far).  I hope my contribution continues this discussion in the manner that has preceded.

    I do believe that healthcare is a topic that can (and should) be discussed passionately and at length, but I do agree that the concept of the “iron triangle” is one that is false.  You can at minimum improve on any two of the three corners of the triangle at any time without adversely affecting the third corner of the “iron triangle”.  This can be done with innovation.  New technology can bring about better treatments that save hospital time (saving money), electronic health records (if they ever come about) could eliminate duplication of testing (defensive or otherwise) and using operation research techniques to optimize the patient experience and flow instead of the traditional “doctor-centred” care model can improve access.  I strongly believe that the coordinated care delivered by an accountable care organization that integrates all the resources available to meet the needs of the patient is what is needed (what the customer wants).

    Lean and Six Sigma are used in the manufacturing industries and have cut the “iron-triangle” out of the areas in which they have been applied.  While the healthcare industry will not have nearly as much standardization (since each patient is a unique job), there are plenty of opportunities in which a smarter application of healthcare would improve at least two, if not all three of the corners in the iron triangle.  Manufacturing traditionally always thought of the cost/quality trade-off, but they more recently agreed that concept was a falsehood and you could improve on both quality (which is meeting your customer needs) and cost at the same time.

  • Arvind Cavale MD LLC

    I tend to agree with some of the comments that the concept of the iron triangle need not be so. In my own small practice (dealing with thousands of diabetics) we have proved that high quality, patient-directed care can be less expensive than conventional care. Sacrifices, if any, have to be made by every individual in his/her choices, such as food choices or utilization of resources, etc. An informed and selective consumer of health services is what will drive innovation in quality and cost of care. The Achilles heel of PPACA is the the assumption that outcomes of medical intervention is solely dependent on the provider of care. In fact, the most costly (chronic) diseases are more dependent on patient behavior than physician action. There is no effort to correct that through legislation.

    BTW, if anyone thinks an ACO is the answer, he/she is either a politician or someone trying to set up an ACO. Six Sigma and the sort are nice terms that are applicable to very small areas of health care (we should prevent it from becoming “industry” unless we consider patients to be like cattle or chicken).

    Appropriate and timely care is usually less expensive, of better quality and can be accessed by many. We should not let politicians and government decide what the criteria are…these must be left to each individual patient, as long as he/she is willing to be a responsible adult and an informed patient.

  • John Kaegi

    The Iron Triangle in its own legacy system requires trade-offs as you point out, but there IS a way to increase access, reduce cost and improve quality.  It just requires doing things differently, as you imply by highlighting the Canadian, UK and French systems, but doesn’t require rationing healthcare as those do!  It’s called wellness and prevention.  Changing health habits, making people healthier thereby avoiding high downstream costs shrinks your iron triangle considerably.  Fewer people needing care equals more access; fewer chronic conditions equals lower costs for participants and insurance pools; healthier people leads to improved healthcare quality (more time and attention to those who need it).  No one says it will be easy, and it may require draconian measures such as employers requiring health assessments and penalizing employees for poor health behaviors, but those systems work in employer on-clinics such as those that Healthstat manages.  It takes effort — a holistic, paternalistic, centrally-managed program by the one entity that has leverage over consumer health behaviors — employers.

    John Kaegi
    Chief Strategist
    Healthstat Inc.

    • Anonymous

      John, you may have achieved some success in you efforts, but I don’t think you can apply you closed system success to the patient population at large. If you had spent the years I and others have with patients trying to promote healthy life styles you would know that you can’t succeed in our open society. Why do you think lap-band surgery is so popular? Answer: dieting is HARD! Your program might work in China. In the US setting up such a program, enforcing it or incentivizing it, and policing it would cost way more than any saving to the health care system. Plus, who wants to live in China? 

  • Anonymous

    Even if you exercise, don’t smoke, don’t drink in excess and keep your weight down (i.e. preventive life styles) to reduce CAD, diabetes, and some other chronic diseases, you still can’t prevent aging and related problems of stroke, dementia, most cancers, Parkinson’s, vision loss, hearing loss, arthritis, incontinence, renal disease, etc.  Most healthcare costs are utilized by the elderly, 25% of Medicare goes to the last year of life.  Rather than a focus on “prevention” I think the focus should be on addressing end-of-life care, palliative care, homecare services, etc.  

  • Maggie Keavey Kozel

    There is a flaw in this iron triangle argument.  It assumes that the method of payment remains constant.  If we design a more rational payment system (I would choose single payer, universal coverage) that emphasizes what we need rather than what the health care industry can get us to purchase (a CT scan a day keeps the doctor away), then what we have is a whole new triangle.

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