Common wisdom tells us that the more people are insured, the more preventative care happens, the less complex and expensive illness we treat, and so the less we have to spend on healthcare overall.

This logic was a large part of the rationale for the Affordable Care Act. As President Obama said in his 2009 address to Congress, “There’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.”

Interestingly, that's all wrong.

As the New York Times recently reported, "There’s strong evidence from a variety of sources that people who have health insurance spend more on medical care than people who don’t. It also turns out that almost all preventive health care costs more than it saves." Jonathan Gruver, an MIT Economist, goes on to explain: “It’s a nice thing to think, and it seems like it should be true, but I don’t know of any evidence that preventive care actually saves money,”

Long story short, good preventative care saves money for individual patients. It doesn't, however, save money overall since it costs more to help everyone avoid the disease than it does to treat the few people who would have ended up getting it. Plus, as we've explored in other posts, the newly insured also tend to place a burden on providers and hospital systems, since these patients tend to be sicker than average.

So if treating complex illness is expensive, and preventing illness is expensive, is there any way that we can be active about saving money as providers and administrators?

Yes. I think there are a few things to keep in mind, even as it can seem discouraging when the "right" thing (preventative care) doesn't ultimately save costs to the overall system.

First, medical providers often know what the best course of treatment is for an individual patient (even with a healthy consideration of costs), even if the population-level design can be murkier. Plus, as the New York Times reports, cost savings do happen when providers are able to make sure that work isn't duplicated or wasted. For instance, medical collaboration can keep patients from falling between the cracks during transitions. And telemedicine can decrease overall costs in a hospital system, decrease length of stay, and improve readmissions. Dr. Brent C. James affirms that this type of measure can decrease costs, calling it the “do it right the first time" approach.

 

To explore how telemedicine decreases costs and improves care, click here: 

Healthcare in the US is almost unfathomably complex. Plus, it's always changing, such that it can be very hard to notice trends in any useful way.

However, we are at an especially volatile and important moment in medicine, with the reverberations of the Affordable Care Act still playing out. Just in the past few weeks, I've noticed a few trends that I think every ACO, every hospital, and every medical provider should have their eyes on.

3 shifts in medicine that will probably impact you in the next year:

• Insurers will be demanding "more" from providers and hospitals.
  On one hand, insurers are squeezed by higher-than-expected costs of the newly insured. Many are now requesting rate increase approval from the government. As the New York Times reports, "The rate requests, from some of the more popular health plans, suggest that insurance markets are still adjusting to shock waves set off by the Affordable Care Act." On the other hand, many insurers are merging, which gives them more leverage over hospitals and providers.  The pressure to increase revenue and cut costs, combine with increased power from mergers may well add up to more demands on providers and hospitals.
• Non-traditional care contexts are becoming the norm.
  Because of shifts in what is able to be reimbursed under the Affordable Care Act, there are new delivery mechanisms being pioneered. For instance, there is a current boom in diet clinics, due to ACA reimbursement for obesity consultations and treatment. It's likely that as care outside of doctors' offices increases (with other medical providers being the ones actually interfacing with the patient), healthcare collaboration (especially using telemedicine tools) will become more important. Collaboration will need to happen more, and across the spectrum of care, in order for patients not to fall between the cracks.
• Home care is a growing segment of medicine, and we're (mostly) not doing it well.
  Data is beginning to suggest that there are more homebound people than ever before, and they're sicker. Plus, there are more caregivers who are older family members and need support themselves. This type of dynamic means that medical providers are responding, and finding ways to provide care at home. For instance, there is a growing group of geriatrics practices that make housecalls. And if those housecalls have to be made by specialists because there is insufficient technology to allow collaboration at a distance, that's going to be unsustainable. If these trends continue, we'll need to find ways for the people providing the home care to be supported by other medical providers, in efficient and effective ways.

For decades, medical providers had the luxury of ignoring macro trends. These days, however, I think that we ignore these dynamics at the peril of ourselves, our practices, and our patients. For us to act with wisdom, sustainabily, and in service of good medicine, we must act with these things in mind.

And really, that is more of a privilege than a burden.

 

To learn how iClickCare can help you adapt to these shifts, click here: 

 

When hospitals and providers decide to use telemedicine as a tool, ROI and cost effectiveness is always a factor. Telemedicine makes it more cost-effective to see our patients and provide a high level of care, so of course that is part of the equation. 

But a recent New York Times article got us thinking. The author does specifically advocate for a thoughtful usage of cost effectiveness data in care decisions. But also he acknowledges that the approach can go very wrong. For instance, he tells the story of an Oregon woman who was denied a $4,000 per month lung cancer treatment by Medicaid because it wasn't deemed cost effective... and then was told that Medicaid would, in fact, cover drugs for physician-assisted suicide since she now had few other options.

Situations like this make many medical providers -- and patients -- want to run for the hills and declare "cost effectiveness" a dirty word.

Despite the US medical system being among the most expensive in the world, we do provide some of the best and most innovative medical care in the world. We've innovated approaches to care that resonate across the planet. And we've all heard horror stories of the illogic and bad care that can happen when providers are treated like factory workers, prioritizing efficiency and cost savings above all else. 

So what is the answer? Should cost effectiveness be considered in care decisions and policy?

Perhaps like everything else, it is an issue of balance. It is clearly unsustainable to ignore cost effectiveness altogether -- and costs in one area of the medical system will eventually affect others. On the other hand, blanket policies that eliminate classes of care are bad medicine and sometimes inhumane. So, as so often is the answer, the providers must use their judgement. Even when it comes to costs, medicine is both an art and a science.