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Driving Down Healthcare Costs: Inspiration from Abroad

Policymakers stumped about how to lower stratospheric healthcare costs should look abroad, where a number of countries are finding creative solutions to chronic doctor shortages. A new piece in the Economist profiles transformations in the delivery of medicine:

But this demand for health care looks unlikely to be met by doctors in the way the past century’s was. For one thing, to treat the 21st century’s problems with a 20th-century approach to health care would require an impossible number of doctors. For another, caring for chronic conditions is not what doctors are best at. For both these reasons doctors look set to become much less central to health care—a process which, in some places, has already started. . . .

The trick is repeated in other areas of health care. India’s LifeSpring hospitals slash the price of childbirth by augmenting doctors with less expensive midwives. The costs are about one-sixth of those in a private clinic. The Aravind Eye Care System offers surgery to about 350,000 patients a year. Operating rooms have at least two beds, so surgeons can swivel from one patient to the next. Most important, for every surgeon there are six “eye-care technicians”—young women recruited and trained by Aravind—who perform the myriad tasks in the operating room that do not require a surgeon’s training.

Other problems have inspired other solutions, with technology filling gaps in the labour force. The Bill and Melinda Gates Foundation supports a programme that uses mobile phones to deliver advice and reminders to pregnant women in Ghana. In December the foundation and Grand Challenges Canada, a non-profit organisation, announced $32m in grants for new mobile tools that will help health-care workers diagnose various ailments. In Mexico, worried patients can phone Medicall Home, a “telehealth” service. If a patient needs care, Medicall Home can help to arrange a doctor’s visit. But about two-thirds of patients’ concerns can be addressed over the phone by a doctor (often one only recently qualified).

Many of the most effective techniques may not even be particularly high-tech. Simple home monitors can help health providers keep the number of unnecessary doctor’s visits to a minimum, ensuring that patients come in for emergencies but removing the need for an in-person appointment for regular checkups.

Nurses and other assistants can provide care more cheaply than doctors, whose expertise is generally not required for routine cases. Health systems can be reorganized to take better advantage of them:

Workers with a lot less training than doctors can still be highly effective. Physician assistants in America can do about 85% of the work of a general practitioner, according to James Cawley of George Washington University. A pilot programme of rural health-care workers in India—the type that the health ministry wants to expand—found that the workers were perfectly able to diagnose basic ailments and prescribe appropriate drugs. In some areas non-doctors actually look preferable. A review of studies of nurse practitioners in Britain, South Africa, America, Japan, Israel and Australia, published in the British Medical Journal, determined that patients treated by nurses were more satisfied and no less healthy than those treated by doctors.

Naturally, some reforms will prove less effective than promised. Yet the wealth of new ideas is extremely encouraging. More than anything else, the solution to the problem of runaway healthcare costs is innovation, both in medical technology and in the delivery of care to patients. In many other fields, costs have been reduced by bringing the responsibility for many important decisions out of the hands of expensive experts and closer to the consumer. These new techniques provide the first draft of a rough outline on how to create such a system in medicine as well.

There is a very long way to go to build a health system that works for the 21st century. Little by little and bit by bit, people are finding ways of moving forward. The one mistake we must not make is to freeze existing structures and practices in place.

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  • Anthony

    “Yet the wealth of new ideas is extremely encouraging.” Now, how do we transmit wealth of ideas to health care providers vested financially to America’s high cost health care infrastructure? How do we educe their buy in?

  • Kansas Scott

    One key to the long-term success of expanded use of non-MDs for healthcare matters is for the non-MDs to retain an awareness of what they don’t know.

    I agree with the expanded use of lesser trained professionals. The expanded availability of healthcare services are badly needed. It just seems hard for humans to know what they don’t know. Everyone gets into trouble when they lose their ability to say “I’m stumped” and pass the patient on up.

    There is a long-existing relationship between nurses and physicians in this country. The relationships with newer medical “inbetweeners” still need further growth.

  • Gene

    The American legal profession will work tirelessly to “freeze existing structures and practices in place.” What health care provider–hospital, HMO, etc.–will expose itself to the certain barrage of lawsuits filed by patients dissatisfied with care given by technicians and PAs?

    And re two patients getting surgery in the same room: sounds like a gold-plated HIPAA violation to me.

    Really, you should not have hit the “publish” button on this w/o bringing the legal profession into the cast of characters.

  • MW

    You list a lot of good ideas which can make incremental improvements. We need all of these, and many, many more.

    But you miss the biggest issue — that of incentives. Under our current health care system most people are largely spending someone else’s money. As a result they don’t care much about costs.

    We need to create a system where the patient is incentivized to lower costs. If they can save health care dollars, they can keep some of the savings. Health savings accounts combined with high deductible insurance plans get the incentives right.

    If everyone had that type of plan, we would be amazed how cost would come down!

  • thibaud

    Ghana! India! Innovation!!

    Pay no attention to that 20% administrative surcharge from the for-profit health insurance leeches!

    Never mind that healthcare costs are far more effectively contained in Sweden and the rest of northern Europe, with better outcomes. Nope, none of that filthy s0CiALi$m for us. We follow the Ghanaian path here.

  • WigWag

    Oh good, we’re now going to take advice on how to fix our health care system from the likes of India and Ghana. I have two questions; (1) Has Via Meadia lost its mind? (2)Why is Via Meadia so much more anxious to look to Ghana and India for solutions than to France and Israel?

    Life expectancy in Israel is 82.0 years; life expectancy in France is 80.7 years; life expectancy in the United States is 78.2; life expectancy in Idia is 64.7 years; life expectancy in Ghana is 60.0 years.

    The infant mortality rate per one thousand births is: France-3.37; Israel-4.07; United States-5.98; India: 30.15; Ghana-80.1

    The lengths that Via Meadia will go towards pretending that there is a viable solution to the health care crisis in the United States that avoids the inevitable; a single payer system, is remarkable.

    It’s simple really; those who oppose a single payer syestem hate the government so much that they would prefer lower life spans and higher infant mortality rates to a true fix for the broken system that we have.

    Professor Mead’s suggestion that we look to India and Ghana rather than France and Israel really says it all about how intellecutally bankrupt his position is.

  • thibaud

    Ghanaian “innovation”, Kickstarter, 3D printers are for Mead as green jobs are to Van Jones.

    Fewer unicorns and more grown-up, fact-based analysis, pls.

  • MarkE

    You won’t see this kind of cost cutting innovation with single payer where the government is the sole provider and sole payer for healthcare. We have always known of abuse of the marker by monopolists and are just becoming aware of market abuse by monopsonists. In the case of single payer the government is both a monopolist and monopsonist.
    If you want to see rapid cost cutting innovation, cut the Medicare price controls, cut the government subsidies for healthcare, and cut the mandates on insurance companies. Cutting back on the enormous regulatory of healthcare delivery in other ways would also be helpful. Then instead of having a “psuedomarket “ for healthcare we would have a real market for healthcare.

  • thibaud

    Ghana, right. You’re just messin’ with us, aren’t you, Mr Mead?

    If not, then why do you pompously proclaim on these boards that “good media” is distinguished by the ability to distinguish “noise from news”?

  • thibaud

    @8 MarkE – aside from the canard that the public option cannot co-exist with supplemental private insurance plans – that’s why it’s the public “option,” mind you – could you please explain to us how much price elasticity there is in demand for, say, an appendectomy?

    Or for something as prosaic as an X-ray. Good luck trying to extract that most basic attribute of a functioning market, the market-clearing price for an easily-obtained, widely-available near-commodity item, from a clinic or a benefits office at an insurer.

    We can keep denying our own experience and the experience of every one of our peers, but the reality remains that the surest way to greater efficiency for a large and complex nation is to spread costs across the biggest risk pool imaginable.

    Without this core feature of any sane and modern health insurance system, every other reform is just tinkering at the margins.

  • WigWag

    One of the things Professor Mead is fond of criticizing is all of the editorializing that goes on the news pages of the New York Times. Fair enough; I think he’s right.

    But what exactly should we think about Professor Mead being “inspired” by the marvelous health care innovations of Ghana?

    The Professor tells us that when it comes to driving down health care costs he’s seeking “inspiration from abroad.” It’s funny that he’s made the decision to look towards Africa and India and avert his eyes from the OECD nations.

    As far back as 2008, the United States expended $7,538 per capita on health care while France spent $3,696. For just about half the money per capita, France achieved a longer average lifespan and a significantly lower infant mortality rate. Since 2008 the discrepency has gotten worse; the U.S. spends considerably more and gets considerably less in return.

    As a matter of fact, compared to every other OECD nation, the United States spends dramatically more on health care yet suffers from poorer results.

    Yet despite the fact that all the developed nations of the world spend dramatically less for results that are equal or better to ours, Professor Mead choses to seek inspiration from Ghana.

    Who knows where Professor Mead will seek inspiration next as he searches for remedies to the high cost of American healthcare. Somalia? Liberia? Zimbabwe? Afghanistan?

  • thibaud

    Mead really should cease with the attacks on tendentious hackery. In just the last two days, he has

    – grossly distorted the historical record of the UK royals’ attitude and behavior toward the Nazis, ignoring their persistent efforts to keep Churchill out of power and ensure that Hitler was appeased;

    – completely misunderstood the current and recent social position and political influence of the Russian Orthodox Church, effectively showing himself to be Putin’s willing stooge;

    – made a complete hash of Utah’s health insurance policies and promoted Ghana as a model;

    – floated ludicrous theories about economic salvation through 3D printing, crowdsourced funding for startups and the like.

  • David Pinsen

    One of the reasons health care is so expensive is that physicians are so lavishly remunerated, often by procedure (often per procedure, and — when they own the labs, as they sometimes do — by test). To the extent that most compensation for many physicians comes from government (via Medicare and Medicaid), they are becoming quasi-public employees. As such, it makes little sense to pay them as if they are entrepreneurs/small business owners.

    The law of supply and demand suggests that one way of lowering health care costs would be by increasing the number of physicians. A way to do that would be by changing the laws requiring qualified foreign physicians to redo their entire residencies here before practicing. American physicians have so far successfully blocked attempts at that.

    As for increased use of nurse practitioners and physician assistants, a concern isn’t that they can’t treat minor ailments but that part of what we pay physicians to do is to determine what is a minor ailment and what is a more serious one. That’s a crucial diagnostic step and a tough one to skimp on without consequences.

  • John Skookum

    “Physician assistants in America can do about 85% of the work of a general practitioner”

    The other 15% is pretty important, and attempting to scrimp on it will cost a certain number of lives per year. How many is tough to say, but it won’t be zero.

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