Wednesday, December 17, 2014

The Convenience Truth

The U.S.  Mint reports that it now costs 1.7 cents to make a penny; nickels are slightly better, costing "only" 8 cents to make the 5 cent coin.  This is economics the way health care practices it.

According to Christopher Ingraham of the Washington Post, we could save $100 million annually by eliminating both coins.  Or we could change the metal composition of the coins to make them cheaper, but that would create havoc with vending machines.  So we just blithely chug along, using coins that few of us would miss and whose costs exceed their value, mostly because we've always had them and the businesses that revolve around them don't want to change.

See how this is like health care?

What made me think about this was a recommendation from Britain's National Institute of Health and Care Excellence (NICE).   They now say that midwife-led birthing units are safest, and advised more women to consider them for low risk pregnancies.  They believe this could account for as many as 45% of live births.  Moreover, they think home births are just as safe as births in a hospital.  The Netherlands is considered the leader in home births, at a little under 25%, although that rate has been dropping in recent years.  The U.S. has 1.36% home births

Although I don't have any first hand evidence, I'm willing to bet that Dutch women aren't built any different than U.S. women, and don't love their children any less.  The non-hospital birth rate in the Netherlands versus the U.S. must be due to cultural and structural differences, not medical ones.

The literature -- often drawn on Netherland's data -- generally supports the NICE recommendation, but not everyone is convinced.  A lot of factors come into play, not just the specifics of the pregnancy itself but also how midwives are trained, how far the home or birthing center is from emergency services, and so on.  It would be very easy to weigh all the factors, and conclude that even a relatively small increase in risk is not something you'd want to take for your own baby, and opt for the "traditional" OB/hospital delivery.

This is where the penny analogy starts to really apply.  These decisions on risk reduction are not without financial consequence.  A vaginal delivery with no complications averages about $10,000, whereas a birthing center costs under $2,500, according to Childbirth Connection.  I assume home delivery is less expensive.  As NICE's Dr. Mark Baker said about hospital births: "Yes, it's a very expensive way to deliver healthy babies to healthy women.  Saving money is not a crime."

Sadly, I can't even imagine a public body in the U.S. making such a bold recommendation.  I can't even imagine having a productive discussion on this topic in the U.S.  Just try and see how quickly it leads back to "death panels."

In a piece for The New York Times, professor/physician Aaron Carroll notes that the ACA-created Patient Centered Outcomes Research Center is explicitly prohibited from considering cost effectiveness.  Its website says: "We don’t consider cost effectiveness to be an outcome of direct importance to patients."  


Dr. Carroll uses the clever example of a pill that would extend your life one day, but cost $1 billion, versus a pill that cost $1 million but might extend your life 10 years.  We think we know how to decide about the former -- I hope -- but decisions on choices like the latter get murkier (e.g., Sovaldi...).  And it's always easier to keep paying for things that we've historically paid for, even when their value becomes more questionable.

In theory, value-based purchasing will help us address these decisions.  In practice, though, most of the value-based purchasing arrangements I am aware of -- and that certainly is not an exhaustive list -- reward providers whose outcomes are simply what we'd hope for, may penalize them slightly for disappointing results, and are indifferent about if the care could have safely been done elsewhere for less.  Does anyone think there is a health plan in the country which would dare reward midwives for the savings they provide through home births, or penalize OBs for hospital deliveries?  The data say we should, but I think I can safely say we won't.

There is a way out of this mess, but it may not be what you think.

I'm beginning to think that trying to reshape our health care system through value-based purchasing, cost-effectiveness, or even greater transparency may not work.  The "killer app" may not prove to be any of those high-minded strategies but rather a much more basic one: convenience.

Indeed, one of the earliest urgent care chains attributes its inspiration to the example of McDonald's.  We are, after all, the nation that invented fast-food, decided even that wasn't fast enough and so invented drive-throughs, which we use for over half of our fast food.  We liked the convenience of them so much that we've extended the approach to banks, car washes, pharmacies, even weddings and  funeral homes.  The concept of drive-throughs itself is rapidly being supplemented and even superseded by mobile apps, allowing consumers not to even have to get in their car.

Health care cannot ignore these consumer demands for more convenience.

Walgreens' chief medical officer recently noted that: "The idea of convenience ... is really becoming a dominant theme in health care."  It's no coincidence that Walgreens has been investing in in-store clinics, has a 24/7 Pharmacy Chat option, and just rolled out a direct-to-consumer physician virtual visit app, similar to American Well's Amwell service.  Not to be topped, Kaiser is now offering EMT home visits, in addition to its array of in-office and virtual visit options.  

Our traditional approaches to care delivery have revolved around convenience for the providers, not the consumers.  Many people still like to see their doctor in person, and to go to the hospital when they have serious health issues.  Thus, hospital births.  The rise of urgent care and  ambulatory surgical centers illustrate consumers' appetite for lower cost, more convenient options -- even though not everyone is convinced these options are as safe.  Perhaps home births will end up following this pattern as well.

Many consumers, especially younger ones, find ridiculous the notion that they have to call for an appointment that may end up weeks away, go to an office or facility that may not be close, only to wait there with sick people, and perhaps be sent to some other office or facility for more services.  They'd rather get their care via their mobile devices and/or in their home, and the technology is increasingly allowing that for many health concerns.  Not everything, mind you, but more than we realize now.

We've come to recognize that health care is one of the few industries where technology typically not only doesn't lower costs but usually adds to them.  Maybe, though, expecting providers whose revenue is at stake to focus on cost-effectiveness is asking too much of them.  Focusing on convenience shouldn't be.

It may not initially be about cost -- smartphones are more expensive than the mobile phones they are rapidly displacing -- but once consumers start opting for more convenient options, it's hard to see that costs won't plummet, as the traditional care silos start to fall.

Focusing on convenience is simply a way to make sure we're focusing on the consumer (AKA "patient").  Isn't that supposed to be the point?

1 comment:

  1. To have value based purchasing you need to preserve choice as a part of the healthcare system. If your interested see for some detail on how this can work.