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When Americans spend $1 trillion on health care each year--a figure expected to double within a decade--why do one-sixth of our fellow citizens lack health insurance? Must advances in medical research increase costs? How can physicians keep pace with new therapies, and with seismic shifts in the organization and delivery of medical services? Will patients increasingly direct their own diagnoses and care as they acquire more information on their conditions and cures from the popular press and the Internet? With a growing elderly population and rising Medicare costs, we face hard choices on how much health care we want and can afford--but when will serious debate begin?
These were among the issues aired December 11 at Harvard Medical School's Countway Library, where Harvard Magazine invited a panel of experts to examine the state of health care today and to speculate about it in the next century. The December 10 announcement that Aetna Inc. would purchase the health-care business of Prudential Insurance Company--making Aetna the health-insurance and managed-care provider for nearly one in 10 Americans--underscored the continuing transformation of contemporary medicine. The participants in the discussion were:
Lawrence K. Altman '58, M.D., medical correspondent for the New York Times and author of Who Goes First? The Story of Self-Experimentation in Medicine;
Daniel Callahan, Ph.D. '65, cofounder of the Hastings Center, which focuses on biomedical ethics, visiting scholar of social medicine at Harvard Medical School, and author of several books on medical ethics including, most recently, False Hopes: Why America's Quest for Perfect Health Is a Recipe for Failure;
Richard L. Huber '58, chairman, chief executive officer, and president of Aetna Inc.;
Joseph B. Martin, M.D., Ph.D., dean of the Faculty of Medicine and Walker professor of neurobiology; and
Joseph P. Newhouse '63, Ph.D. '69, director of the University's division of health policy research and education, MacArthur professor of health policy and management, and director of Harvard's interfaculty program in health policy.
Edited excerpts of their conversation, which was moderated by Harvard Magazine, follow.
Moderator: What are the best and worst features of contemporary American medicine? Where does our health-care system excel? And where does it appear to be most deficient?
Martin: The best, in many ways, is the culmination of nearly 50 years of extraordinary contributions in biomedical research. The initiation of the National Institutes of Health shortly after World War II and the general support for its activities over those five decades have really poised us to contribute enormously to the understanding of disease and to seeking treatments for it. From the perspective of a medical school such as ours, the best feature is the recognition that within our grasp is the human genome project--the opportunity to study 80,000 to 100,000 proteins that are encoded by our DNA--and to begin to understand in the next century how they contribute to the disorders that afflict humankind.
The worst part is that we are in total disarray in terms of the health-care system. The numbers of uninsured are climbing--past 43 million, I'm told. We are looking at a tiered system of health care, where some of us with connections and money can get the very best care in the world, but a very substantial part of our society is left to struggle to find it. With the costs of health care now escalating very rapidly after three or four years of relatively good control, that's almost certainly going to drive up the share of our gross domestic product expended for health care from its current level of about 14 percent. So we're caught with a set of problems about health-care delivery that have not been resolved through the managed-care schemes of the last five to six years. There's great concern on the part of many constituents that we don't have in view a solution for this great dilemma.
Huber: I certainly agree with Dean Martin that the technological advances in medicine over the last 50 years have been miraculous, and certainly continue to provide new solutions to old problems. I think we'll see even more going into the twenty-first century.
I also agree on what's worst about this system. I'm terribly embarrassed to sit here as an American and have 43 million Americans with no health-care insurance. Now they're not dying in the streets--we pay for their health care. We happen to pay for it in an incredibly inefficient and costly way. To me, from a public-policy point of view, that is disgraceful. That is the real debate that should be going on in Congress, instead of talking about drive-by mastectomies. I have yet to hear of one, but it has a nice ring to it. But there's a genuine issue both with the 43 million uninsured Americans and with Medicare, which with each turn of the wheel becomes more Byzantine and more unworkable.
We shouldn't waste time on what many politicians did during the last election--beating up on HMOs--when most surveys show that the vast majority of people who are covered by today's various forms of health insurance are relatively satisfied. The real issues are those who have no coverage and the increasingly non-working system of Medicare.
Altman: More advances in clinical care and public health have been made in the twentieth century than in all of prior history. The United States led that effort, which was largely paid for by American taxpayers. The discoveries were made at federal centers such as the National Institutes of Health, and at Harvard and many other medical schools and teaching hospitals in this country.
The advances, however, have not always been available to everyone, in part because tens of millions of Americans lack health care. Also, support for public health has lagged in recent years. One reason is that the medical profession has not been as vigorous a leader as it could have been in promoting public health and health policies. Organized medicine has tended to push its vested interests, instead of tackling the wider issues of public health.
On a broader note, we have not devoted enough time to studying health systems in other countries so that we can benefit from knowing about their strengths and mistakes.
Newhouse: If I remember correctly, there has been as much change in life expectancy in this century as in the prior 20 centuries. That of course is not all due, or even mostly due, to medical services. But medical care vies with information technology and defense technology as being among the most innovative areas of the economy.
On the negative side, I certainly agree with what's been said about the uninsured. And I would add to what Larry Altman started with: public-health problems like violence and substance abuse certainly are major issues. They go beyond the domain of traditional medical services. I also think we do not deal very well with medical care at the end of life--care of the terminally ill and chronic care for people who are no longer able to care for themselves. One of the things that has been driving up Medicare costs is expansion of home-health services, which partially go to people who are incapable of completely independent living.
Callahan: One thing that's consistently forgotten is that most of the improvement in health status has been as a result of improved socioeconomic and educational status. Even in the case of the great increase in life expectancy, perhaps 60 percent to 70 percent of that has come from social and economic factors, not medical progress.
To me, the great puzzle in our present situation is why we are so terrific on the technological side--so aggressive, entrepreneurial, imaginative--and yet so regressive on the social side. European countries, by contrast, began in a very progressive way and installed universal health care after the Second World War. It worked very effectively. They controlled costs.
There's a genuine paradox here. It may be that the very qualities that made us a leader in technology don't work very well on the social side--namely, our individualism. The desire for profit is a very powerful motive here, as is the desire for expensive, high-tech medicine. There are all sorts of things we seem to love as Americans that very much work against having a universal health-care system, because we create a drive which makes it very hard to afford, and makes it very hard for people to be willing to pay the extra money to get. Everybody loves the progress. But they're not prepared to share this with everyone else and put up the money as taxpayers--or, as employees, to pay for it.
Newhouse: I disagree with Dan Callahan about how well the Europeans have controlled costs. They certainly have spent less at each point in time. And what they give up for spending less is certainly not completely clear--it may not in fact be all that much. But if one looks at the rate of increase in health-care spending since 1960 net of inflation--not share of gross domestic product, but the actual cost of health care--that's been pretty similar across most developed countries. The most prevalent explanation is that the rate of technological change we've been talking about, the increase in medical-care capability, is common to all these countries. We started from a higher base, but they're also introducing the same technologies we are. In the end, the rate of increase in almost every country has been outstripping the rate of growth of the economy: this is what's causing the shoe to pinch harder and harder. Furthermore, a lot of the systems, elsewhere and to a fair degree here, are financed with public money, so there's a further problem in terms of raising public money to pay for this. The Europeans do better at keeping the costs down, but their increase seems to be about the same.
Huber: As a shareholder-owned company, we have a large business internationally. As country after country tries to shed its non-functioning national health-care system and move to some form of market-driven system, it's a very big business opportunity for us, so we have major health-care operations in about a dozen countries. We have yet to go into Western Europe because we're waiting until the system bankrupts, which will not be long. In France and Germany, health-care costs are now around 30 percent of the national budget. Even though they're rich countries, they will not be able to afford the continued increase at a national level.
We have a very good business selling supplemental covers to Canadians, who love their much-lauded system as long as they're well. But the minute they get sick, they jump in the family car and drive south. So we have a vigorous business selling supplementary hospitalization and major-medical policies to Canadians to be treated in the U.S. Their system has a very clear system of rationing by queuing.
It's very interesting to see every country from New Zealand to Mexico or some of the less-developed countries all trying to find a way to transition to something that would be a little more like our system, almost always with some safety net which remains from the national health-care system.
Martin: Having grown up in Canada and had my first practice of medicine in Quebec in the early 1970s, I've kept fairly close touch on things. It was an ideal arrangement then. Every patient I saw carried a credit card. They came in to see you and the fees were set. You ran their card through your machine and you were paid in 30 days. It was wonderful because you never thought when the patient entered your office door whether they were Medicare, whether they had insurance or didn't. Most physicians, once they got over the "socialism-communism" aspects of it, were quite happy.
That has fallen apart rather remarkably over the last decade as federal funds have shrunk to less than 20 percent of the provincial budgets. And the provincial governments have had major difficulties finding the money to make up what the federal system has not been able to provide. So withdrawal of services, the queuing that you referred to, and rationing are real, visible parts of how the system works now.
The health of Canadians is very good in general. Their infant mortality rates put ours to shame. But the opportunities to get special care are diminishing. That's why they do take advantage of our medical services--those who can afford to.
Newhouse: The numbers we tend to cite are all about life expectancy or mortality rates. That's what we can easily measure across countries. But much of medical care is fairly distant from mortality--for example, cataract operations and intra-ocular lenses or artificial hips or even, to take a fairly low-tech example, motorized wheelchairs. When I was a kid and saw a wheelchair, either somebody was wheeling it around with their arms or somebody was standing behind it pushing it. Now you see somebody pushing buttons with their hands. That doesn't enter mortality statistics very directly.
So there's something of a disconnect between saying we spend more than everybody else and saying we don't get very much for it. We don't really know exactly what we're getting for it. We certainly can identify some waste in our system. But there's presumptively waste in every system. If you get down to asking exactly who is getting what service and how much good is this service doing them when they get it, we don't really have those data.
Huber: You have touched on what I would consider the future of health care. It is really going to be who is able to harness the power of information technology to measure results. Without being disrespectful, I consider the U.S. health-care delivery system the largest cottage industry in the world. There are virtually no performance measurements and no standards. We all know the studies about these incredible variances in the instances of certain procedures across the population, which there is no rational way to explain. The fact that New Yorkers have two and half times as many hospital bed days per thousand as people who live in Oakland--you can go down the list of statistics--there's no rational explanation for it. Trying to measure performance, to measure outcomes, and to bring some degree of standardization to this system is the next revolution in health care.
I would love to see some form of collaboration with the academic-medicine community to use the information that we collectively have--we at Aetna, and the whole managed-care industry--that can begin to demonstrate outcomes and compare them.
The public-policy issues that that brings up are not for us to decide. But we can provide the information that will allow a more meaningful debate in bringing standards, best practices, and measurement of outcomes and performance to this huge industry. That is going to happen.
Callahan: Listening to you, I think of the enormous resentment and resistance on the part of so many physicians to what sounds like the industrialization of medicine. Namely, that we've got to treat this as we would any other industry, to bring in the usual methods of cost-control, assessment, and evaluation, and to persuade people to live by the evidence we come out with. Which of course flies in the face of a physician ethic which is very oriented toward individual benefit, toward the art of medicine and not just the science of medicine. We have an American public that doesn't particularly go for that, either.
Even when we begin getting results about what actually works and doesn't work, a lot of the results are ambiguous. I have a good sense that the American public is quite willing, if somebody pays for it, to go for treatments that are not very effective but might save my life even if statistically it's not a good treatment. Even if the odds are one in a hundred, if it's my child or my wife, then let's go for it.
So we've got a very strange situation on our hands. People want better and better treatment. They want constant improvement in medical care. They want it paid for by somebody else. They're not interested in just doing things that bring 100 percent good outcomes; they want support for things that don't have very good outcomes in general, but might be good for them in particular. Hence I see an enormous cultural problem here.
Huber: This revolution is going to be every bit as contentious as the last one. The last one was bringing some form of utilization management to the industry. I think that's slowly becoming accepted. The next frontier is this. We see through our health plan hundreds of thousands of members who are diagnosed with heart disease. More than 50 percent of those with ischemic heart disease are not being prescribed beta blockers, the generally accepted procedure. We see a way to be more proactive, to put into action preventive medicine which can save us money, but hopefully provides much better quality of life for our members. It is making sure that adequate treatment is being given. Then when we do get a request that one of our members with an ingrown toenail wants to have an MRI, we might question that. If the member insists on having the MRI, maybe he should pay for it out of his own pocket.
Callahan: As we look down the road, the great crisis is Medicare, health care for the elderly, say after 2010. The projected deficits are enormous. How do we educate the baby boomers and others to think about that future they're going to have to live? The one thing you can say is they're not going to get the kind of coverage their parents and grandparents got. That seems most unlikely. What should they come to expect in the future? What should they ask for and what should they demand? And what should they be prepared to sacrifice and give up?
My sense of many baby boomers is, by God, they want it all. I'm struck by it in my own children in their thirties: they want to live to be a hundred, they love all of the progress, and they don't want to have their taxes raised. But they want all that stuff paid for. How in the world are we supposed to educate this generation? However things turn out, however much rationing they have, they will still live longer lives than anybody in the history of the human race. They may feel a lot of discomfort, but they will still do pretty well.
Huber: What is the number--that 50 percent of the Medicare expenditures are in the last six months of life?
Newhouse: Around 30 percent in the last year--and that percentage has been very stable for 20 years. It is far from clear if there's anything wrong with that.
Huber: I can cover anything. I can write a policy that covers every conceivable experimental procedure, any number of in vitro fertilizations, and even hair transplants, as long as somebody pays for it. We don't make those [coverage] judgments. We can price it out, and if some payer, typically an employer, says, "I want that for my employees," terrific. I'll throw in Viagra, too. Whatever the buyer of the product wants, we can produce. Unfortunately we haven't done a very good job of making that clear.
Martin: One of my concerns--which you've alluded to, Mr. Huber--is the way in which the medical establishment has been laggard in information technology. Look at the difficulties Oxford Health Plans [a large HMO company in the New York metropolitan area] had in managing their system to produce data to know what their actual costs were, for example. That same deficiency tends to extend to academic medical centers. We do not have our act together as well as we should to manage what we do. It's been forced upon us in the last four years, because we have got constraints coming from all directions. But we're not ready yet in terms of our hospital structures to manage as efficiently as we ought.
I wanted to ask the panel about the issue of medical advances and medical technology--whether that really increases health-care costs, or at some point actually leads to efficiencies and benefits that reduce costs. Is medical research a good thing? Can we argue for medical-device improvements as a direction to reduce costs eventually? Or should we stop doing research and just take what we have?
Newhouse: We all started out agreeing that the medical-technology advances were the high point of what had gone on in medicine. That's because we all think they have improved human welfare and the quality of life. Whether they save money is another matter. We choose to spend lots of money on things that we like, that we want, that we don't think save money. The way to think about saving money--certainly Dan Callahan has emphasized this in many of his books--is that insofar as these things are extending life, as opposed to just improving the quality at a given point in time, we're basically deferring spending into some later period. We're all going to die. Whether we'll become decrepit, and for how long, is a raging debate.
What will happen in the future is crystal-ball gazing, but in the past it's very impressive that if you go decade by decade since 1940, we and other countries have had medical-care costs go up 4 to 5 percentage points per year per person after inflation. Since the economy grows at the rate of 1.5 percent to 2 percent a year, that creates the problem. Do we want to buy everything the medical establishment has on offer? It reminds me of our attitude toward the space program in the 1960s. We said, "Well, if we can go to the moon, we ought to go to the moon." That has largely been our attitude about medical care: if we can do it, we ought to do it--maybe not for the uninsured and maybe not for everybody, but if I'm an insured person, do it.
What is on offer by medicine keeps expanding, and historically has been costly. We have new capabilities. On top of that come the baby boomers and the Medicare issue. Not surprisingly, both here and elsewhere the elderly spend more than the non-elderly--in the United States, about three times as much. Our problem is that we're going to go from about 3.9 workers per elderly person today to 2.3 workers per elderly person in 2030. So who is going to pay for the care of the elderly? How is that burden going to be shared between the elderly and the non-elderly? The same issue applies to Social Security, of course. So we have a very contentious set of issues over the next few decades.
Callahan: I believe that technology does drive up costs, partly because it keeps people alive who would otherwise die, and it enables them to do things they couldn't earlier have done. So even if technological improvements benefit individuals, you might not find them cost-saving in the aggregate. The interesting question is, are we inventing a kind of technology that's going to be increasingly unaffordable, that's going to force us into a two-tier system because we can't possibly pay for all of the progress for everybody? The future looks like it's going to have a lot of terrible tensions built into it by virtue of this.
Newhouse: We clearly have a two- or even many-tiered system, as do many countries. We have it to a greater degree.
Martin: I think we have a three-tier system now. We have people like those seated around this table, who have insurance and know how to get what is the very best. Maybe that's the top 20 percent. We have a very worrisome middle group who have been members of HMOs or who are individually employed. The third tier, of course, are the uninsured. Concerning that middle group, I was very interested in a recent New York Times article commenting on the escalation of price that leads healthy individuals to drop their insurance, creating a [proportionately] increased severity of medical needs within the remaining group of insured, which pushes the prices up higher, and then creates more drop-outs.
Huber: It becomes a vicious circle.
Newhouse: This has always been a problem in the individual and small-group markets. That's why we have group insurance, and why other countries have public insurance.
Huber: We do not participate in the individual-insurance market. There's no way to underwrite.
Martin: What are we going to do with that problem? It's really serious.
Huber: I agree with you. One factor that didn't get pointed out in that article was how many times Teddy Kennedy and his friends, in our best interest, mandate yet another series of things that have to be included in health insurance. Many small employers who don't offer health coverage come to us and say, "We'd like to offer it, please give me a plain vanilla, 'basic cable' form of health insurance." And I tell them I can't write that because now there are about a thousand mandates in all the states and federal government, and I have to include each one of them. The employer says, "No, I don't want that. I don't want in vitro fertilization." And I have to tell him, "But in your state I have to include it." And so our ability to write a "basic cable" type of coverage for a small employer becomes prohibitively expensive, and that employer doesn't buy.
More troublesome is that with the next wave of mandates, I'm forced to increase the prices--so that the employer who has insurance today drops it. I don't know what the solution is. I don't know what the solution is for the individual who cannot join any group.
Newhouse: Before we beat up too much on the mandates, let me say something about what our legislators are responding to. Partly they're responding to providers of various services who are lobbying them to please cover their services. And there are the people that come in and say, "Please don't cover my service." I'm actually more worried about the latter.
But there's also the adverse selection problem that goes on at the individual level. By the time I discover I may want in vitro fertilization, for example, it's too late to write insurance against it because my risk is known, so it basically becomes an uninsurable service at the retail level.
So from a public-policy point of view you then have an all-or-none choice: either everybody has it in their insurance policy, or nobody has it. If you mandate that everybody has it, then there's going to be some push-back on the financial side--some people are going to drop their insurance. This may well be a service that I or my children will want and would have been willing to pay for. But that's not the choice that's open: everybody buys it or nobody buys it. There are a number of services like that.
Moderator: It's not just the billing and the complexity of what kinds of health plans patients have--a lot of new technology is being deployed, lots of new pharmaceutical therapies, lots of in-hospital procedures. How does the primary-care physician--the solo practitioner, the general and family practitioner, the internist--cope with the number and variety and complexity of new therapies? In the future, are we going to be able to deliver primary-care services through generally trained doctors? If not, what happens to the physician's role as your social adviser and your caregiver? How do you equip people to deliver that care? A lot is resting on that front-line primary physician.
Martin: In the traditional medical-school curriculum, we have focused almost entirely upon patient care as taking charge of a disease and trying to do what you can with it, whether acute or chronic. Only recently has that been expanded to consider public health and health-care outcomes. We do almost nothing in terms of the business of medicine, instructing our young physicians about what the managed-care role is like. And they're increasingly worried as they finish medical school that they don't feel prepared for that part of the world. We're going to have to do something about that.
Second, if you look at the primary-care practitioners, there's an enormous degree of angst and unhappiness. How medicine is practiced, and the inability to spend time with the patient, have created a real crisis in the perception of what medicine is all about. Physicians are very disgruntled and unsure about their future.
Altman: The question related to technology. We often overlook the fact that, historically, this country's economic strength derives from technological advances. The Wright brothers led to Boeing. Henry Ford helped create the automobile industry. Bill Gates is the latest technology wizard. Technology is an inherent part of our culture and heritage. Americans learn that point starting in their earliest education. So it should not be surprising that doctors and the public look favorably on advances in medical technology such as CAT scans and MRIs, even if the procedures do not increase longevity.
But there is much more to medical practice than technology. Doctors have not done a good job of informing their patients and the public about the non-technologically oriented conferences and discussions that take place out of their sight, but that directly affect their care.
Primary care and even speciality medicine are increasingly difficult to practice because of the vast increase in medical information. Consider medical genetics. Newspapers, magazines, radio, and television report many genetic advances almost weekly. The reports come from researchers and journals. Many of them hype their findings to push their vested interests. Confusion often results when patients ask doctors about news reports of new findings, or even demand that they get the experimental therapies. But clinicians have little time to keep up, and surveys show that many lag in applying new therapies and knowledge in their practice. Moreover, some new findings--or the promise held out for them--fall by the wayside when, for example, the laboratory findings are not supported by sound epidemiological studies.
A supposed benefit of managed care and health maintenance organizations is that they can help the doctor by providing information services to the patient. With younger Americans now being raised on computers and the Internet, information will be available in a way it was not to older generations. How people will learn to cope with all this material remains to be seen.
Mr. Huber said his industry did not do a good job of informing the public about its services and problems. I would take a broader perspective. Doctors have not done a very good job of explaining medicine to the public. Doctors have left it to others to do, and have only lately begun to correct the problem. But many of the efforts have aimed more at marketing than at educating patients.
Consider what Sir William Osler, perhaps the most revered physician of the twentieth century, said in one of his aphorisms: "Believe nothing you see in newspapers--they have done more to create dissatisfaction than all other agencies. If you see anything in them that you know is true, begin to doubt it at once." Little wonder that doctors have failed to communicate with the public, but the failure to do so has been costly to medicine and society. However, there are many ways the medical profession can take the lead. One is by helping to teach elementary and high-school students. If students start learning about the complexity of the issues involved in health and health policy at a young age, I believe we will have a healthier society and one able to make more informed decisions about public policy.
Huber: One of the major thrusts we have developed is the website InteliHealth ["www.intelihealth.com"]. One of the objectives is to provide practitioners and patients access to about two million pages of some very detailed clinical information, particularly with respect to virtually every drug on the shelves of any pharmacy. That has the potential to be a very valuable tool for primary-care physicians. The problem is that only a relatively small percentage of them know how to use it. We pay panels of experts to discuss the latest techniques in hip-replacement surgery or whatever. We create videos and send them out to every surgeon in our network. How many look at it? I don't know. We try with the Academic Medicine and Managed Care Forum to get together the top 40 or so academic medical schools in America and provide grants to help them use our database, or theirs, to better measure outcomes, to use it for predictive purposes, to risk-stratify our membership, to see if information technology can be better employed to practice disease management.
Callahan: Mr. Huber, you mentioned earlier action to prevent medical problems. I find it one of the great puzzles these days that we're getting much more sophisticated lay people. They know how to use the Web, usually to get information about medical technology and drugs. But meanwhile the prevention statistics look horrible--exercise is down, obesity is up, smoking is not going away. Somehow, we don't seem to have gotten anywhere with the most primitive stuff, whereas everybody's going to get smart as hell about looking up the likely side-effects of their hypertension medicine, having lived a lousy life prior to getting the hypertension. How do you change this behavior?
Huber: We work with our first tier of customers, the plan sponsors--any institution that has employees. We try to design plans that offer incentives to their employees to practice some of the basic things. We do it through the only way we can--an economic incentive. With the plan sponsor, we will offer lower co-pays for people who are nonsmokers, for people who do a certain amount of exercise. It's imperfect, but it's an attempt.
We also look at the ability to begin to do predictive work. Citing again the universe of our members who are already diagnosed as having congestive heart failure, can we predict which 5 percent are going to have an acute attack next month? Can we do something today to get them in to see their physician and to suggest a procedure that will keep them out of the hospital? I would venture that the member who doesn't have an acute case and doesn't spend five days in the hospital bed has a better quality of life. We increasingly can do predictive work that becomes better and better as we refine it. That to me is really an exciting part of the whole process.
Newhouse: Let me go back to whether technological change is going to overwhelm the primary-care physician. I actually prefer the term "expansion of medical capabilities" to "technological change," because a lot of people just think of technological change as a machine. And there is a lot of change that isn't that, like new procedures.
We alluded to information technology. Some of that is going to help the physician. If you're a doctor at Brigham and Women's Hospital and you order a drug, you enter it into a computer. And if there's a problem with the dosage you ordered or an interaction with other medications, the computer's going to spit it back at you and the patient won't get the drug. We know that there are a non-trivial number of adverse drug events that could be prevented. This is one area where information technology can help. A different area where managed care could really add value is trying to improve the coordination among physicians and in terms of post-hospital discharge care--which has been a difficult problem because once you hand the patient to another site, the people at the first site tend to lose track of that person.
Martin: The issue of knowledge and how to bring it into practice in the primary-care physician's office is a real worry. Mr. Huber's numbers on congestive heart failure are a perfect example. Two years ago, we initiated a primary-care course which we take to three sites in the United States: Boston, Miami, and Los Angeles. Of the 250,000 primary-care physicians in the country, we have interacted with about 25,000, who have come for a three- to four-day update on common diseases, what the most recent data tell you about how to manage those patients. It has been just extraordinarily successful. There needs to be that kind of practical condensation of the information so the physicians can keep up.
If you look at a day in the life of a primary-care physician, they get up in the morning, go to the hospital, and make rounds from 7 to 9 to see their patients. Then they go to their offices and work from 9 until 6. From 6 until 8 they dictate notes on the patients and they fill in forms that the secretary or the assistant can't figure out. And then they go home at 9. And start over again the next day. They do that five and a half days a week, and they end up on call once or twice every couple of weeks. They're often up all night on those nights.
That's the way their life is at the moment. And it is not fun. And they're not making big salaries. They're doing that and earning $100,000, or in pediatrics $80,000. So it's not like they're working to make big bucks; they're working to survive. It's tough for them to go home and pick up the New England Journal or Annals of Internal Medicine. So we have to craft some help for those people.
Callahan: Interestingly, we have not talked much about managed care, which is topic number one for many physicians. I happen to think managed care is the way of the future. No matter if we eventually get universal health care, it will feel like managed care one way or the other. Is managed care capable, over the long run, of reforming itself--for instance, giving physicians enough time with their patients, as well as giving patients some choice? The question I put to Mr. Huber is, right now there are lots of problems: you have the mandate problem on the one hand, you have excessive demands--the unwillingness of people to give up anything--on the other. Is managed care reformable in principle, even if we don't in practice know exactly what to do tomorrow?
Huber: I would obviously say yes. The managed-care industry is a young industry. Oxford is a wonderful example of how the industry is transforming. The amateur hour is over. Oxford and a number of other innovative managed-care companies were founded by visionary, charismatic entrepreneurs, and that worked very well during the first phase of the industry. The industry changed.
We process 650,000 claims a day. We handle 250,000 to 275,000 phone calls a day. This is not a business any longer for charismatic, visionary entrepreneurs. It's a ruthlessly professional business in the way that people who can manage these large volumes of transactions well are going to be the survivors. So that is the transformation, not unlike a lot of other industries.
The industry has been through a couple of phases and I think there are a couple more to come. The first phase of what managed care did to health care and insurance was that we transformed from buying retail to buying wholesale. We bought medical services wholesale. And then we provided it at a wholesale price, with a little mark-up, to our customers. We have no belief that there is any more we can take out of the wholesale price. We're well into the second phase now, which is managing utilization, managing the most absurd types of utilization--the MRI for the ingrown toenail.
The third phase, which we're moving into now, is increasing disease management: using the data we have access to, converting that data into meaningful information, and then doing something about it. The fourth phase, which I alluded to earlier on, is when we really begin to apply standards and true performance measurements to this huge industry, and try to implement the best practices.
Callahan: But what kind of hope can you hold out to the young primary-care physicians who say 10 minutes is not enough time to see a patient and I'm under constant pressure?
Huber: Getting back to Dean Martin's comments, first, we've got to make the bureaucratic part of the process easier; and we can. The challenge is to get physicians to deal with us electronically. If they can, we can greatly simplify the two hours they have to spend on the forms each night. We have claims filed all the time that don't give the provider name. We don't know who to send the check to. The electronic system won't take the claim unless it's complete. We can basically process claims on-line real-time and give the physician his money instantaneously. That will go a long way toward making their lives simpler and giving them more time to spend with their patients.
But I'm afraid the "good old days" are gone forever. We would stand up and applaud--and we might even cough up a buck or two--if the academic-medical community would spend more time on training physicians how to live in this new world.
Moderator: What difference does it make when those consumers show up with the Harvard Health Letter or the long list of things they've taken off the Web--descriptions of symptoms, of diseases, of potential treatments, medical-product advertising? Is that making a difference in the way the doctor perceives the patient, in the delivery of care, in the ability to devolve some of that care from a trained physician to somebody else?
Martin: "Doctor, can I take St. John's-wort with my Prozac?" The doctor doesn't know, actually, because he's not sure--there aren't data on that. An informed public as a growing percentage of the patient population is a really important development. Internet access to all this information is unscreened, and the patient is usually incapable of sorting out the good, the bad, and the ugly, so that it's a real problem. Patients increasingly come in with their answer to what they've got, and wanting you to tell them why you're not doing that. That's only going to become more of a challenge.
Huber: In our business, pharmacy cost is the most rapidly increasing component, growing about 17 percent per annum. It's from the retail advertising of pharmaceutical products. I can tear something out of Time, and the doc at the end of the day is probably basically going to say, "Why fight city hall?" So he writes a piece of scrip, and we end up paying for it.
Newhouse: Has anybody seen any numbers on whether there are more educated consumers--a higher proportion--or whether the educated consumers are more educated? Dan Callahan and I were on a committee a decade ago that was involved in a health-promotion effort, part of which was a media campaign to reduce the consumption of dietary fat. One media consultant who talked to our committee said, "About a quarter of the population is already committed to reducing dietary fat. They're not eating red meat, and whatever you do isn't going to affect them. Then there's about another quarter you're never going to get to. And then there's maybe 50 percent of the population whose dietary habits you could have some hope of changing."
Now I wonder if 25 percent of the patients come in saying, "I was just reading my 'Science Times' and they told me that...," or they've downloaded something from the Internet and they're waving it in the doctor's face--and the rest of the population is coming in and saying, "Doctor, I just want you to tell me what's best for me." Have those proportions changed over time?
Altman: I don't think we know, other than from anecdotes. Most physicians I know appreciate having informed patients because it is easier to communicate and explain problems. Undoubtedly, a certain percentage of doctors are threatened when patients come in with information the doctors do not know. But medical schools can teach doctors to say "I don't know" without losing face when they don't know or medicine does not have an answer.
Newhouse: Or they may have been trained not to say it. Just as patients are different, doctors are obviously different, too. And I suspect that patients sort themselves: the patients who are active consumers get themselves disproportionately to doctors who are comfortable treating active consumers, and the patients who are passive get themselves to doctors who are comfortable with that style.
Moderator: We have been talking about physicians and patients in their offices. We have also talked a couple of times about different tiers of care and different tiers of patients. Now, what is the public role in this? We obviously have the federal government paying a lot for Medicare and for basic research, and regulating drugs and devices. If we sort out what kind of care works and what doesn't seem to work, and there needs to be some debate about what we're going to pay for, what is the public role? We had a public debate in 1994 about a big, government-driven restructuring of health care, which for whatever reasons did not result in a wholesale remaking of the system. Now could we look at what the government role will be in the future?
Altman: We have lived through a revolutionary period in the way health care is financed. After World War II, and even later, health care in this country was mostly a private, entrepreneurial system. Since the introduction of the federal-state health insurance plans Medicare and Medicaid in the mid 1960s, medicine has become much more a public institution. The taxpayer now funds the vast majority of the income of physicians and researchers and medical educators. Because the public pays for part of virtually every aspect of the medical or health system, the public can exert important controls over it. That holds true for private universities like Harvard. The Food and Drug Administration has important regulatory controls over private drug companies. Other government agencies have important controls over private health carriers. In that sense, the public plays a large role as an overseer of the medical system through elected officials and government bureaucrats.
I do not believe the public has exerted as forceful control as it might have. I suspect that will change as more and more taxpayer expenditures are involved and as people raise criticisms about the costs and quality of care they receive, or perceive that they get. In its government-watchdog role, journalism should be doing more.
Newhouse: Of course the public sector does what the market can't do, or doesn't do well. For example, the market is not likely to provide much basic research, so the public sector does that. For better or for worse, we have chosen to go with employer-based health insurance in this country; the public sector is then left to fill in where employment-based insurance doesn't work very well. It doesn't work very well for the elderly, because they're mostly no longer employed. It didn't work very well for the population that Medicaid originally covered. And of course it doesn't work well for the uninsured.
In the next few years there is clearly going to be enormous controversy around patient-protection legislation. What exactly are managed-care patients entitled to? This will go on both at the federal level and at the state level. How effective government can actually be in doing this is another question. But there will be efforts to legislate in this domain.
Huber: It's irresistible. We have the system we have, where health care is a voluntary benefit--I emphasize voluntary--that employers generally offer their employees. There are a lot of things wrong with that system. But it is the system we have.
Within that framework, I wish that the political debate was less on patients' rights and more on the uninsured and Medicare. To me those are genuine issues. The issues with patients' bills of rights--some of those are silly, and most of what's involved we do already. Is it the role of government to mandate what's included in a private contract, when there is a whole group of people who have no coverage? I wish that there would be more focus on that group.
We would certainly support anything that obliges us to disclose to the public what they're buying from us. We have in the industry an independent organization, the National Committee for Quality Assurance. Force us to disclose that we do or don't have that accreditation. There's a whole series of disclosure measures that we would find very acceptable. But as long as we have about 600 competitors, we think that there still is a lot of choice for the public in buying the product that we provide.
We think it's not particularly good public policy that the government dictates what products are offered. We would like them to offer us the ability to have different types of plans that people can choose from. That's terrific. But the mandates--where every member of Congress wants to be the U.S. Surgeon General--I'm not sure that that's particularly good public policy.
Martin: I'd like to answer the question about the public role from the perspective of the typical medical school. Although academic medical centers don't provide a majority of the medical care, it's a substantial part of the medical care across the country. And we are a disproportionate contributor to care for the indigent and those without insurance. So we are a very important safety net.
So how does the medical school do its job? About 30 percent to 40 percent of our budget is NIH support, and we're very grateful for that. Second, prior to the failure of medical reform in 1994, our systems worked on cross-subsidization of our activities, so that public payers helped us take care of the uninsured and the private insurers helped us take care of the under-insured. The surgeons helped us subsidize the pediatricians. That cross-subsidization was irrational, but nevertheless provided an opportunity for about one-quarter of each dollar that our faculty earned to be turned back into the support of the academic mission of research and education. That's drying up because of the pressures on costs and on income, so that the subsidies are really disappearing. The faculty practice plan income makes up another 40 percent of the average medical-school budget. So if you add research and the patient-care contribution, you have about three-quarters of a medical-school budget. It's a very fragile economic environment in which we currently work.
Callahan: How should we be educating the public these days? Ever since the Clinton health-plan debate in 1994, I'm constantly struck by the enormous ambivalence of the public toward all of these issues. People want everything, but they don't want to pay for everything. They hate government--on the other hand they're for mandates. How would we like to educate people: Here are the things you have got to think about, the hard choices that are going to have to be made? I'm not sure we can do this effectively.
Somehow, in this country, nobody talks about a socialized department of defense or a socialized police force. In Europe, health care is treated much like those basic social institutions. They squabble around the edges, whereas we squabble about fundamentals. Even in educating the public, you immediately get into ideological battles, which makes it exceedingly hard. I don't think people really have a very good sense even of how to think about this.
Huber: It's going to get worse before it gets better. Looking just briefly at the possible solutions for the 43 million Americans who have no health coverage, we would suggest that the place to start would be to look at what it would cost to provide a "basic cable" type of coverage for those people.
Once we agree on that, then the second part--who pays for it--is a lot easier. Because we're paying for it now, by the cross-subsidies. We're paying for it in every hospital: look at what the hospital charges, from $3,000 per bed-day for a fee-for-service insured patient down to zero for the uninsured public patient. There's a better way. How do we pay for it? It's a huge number. That is a major public-policy issue. I think it's solvable, but no one wants to tackle it.
Callahan: But first you have to persuade conservatives even to tolerate the idea that maybe we should have some sort of public agreement on a basic package to be subsidized by government. And then you have to persuade liberals that this minimal coverage is not simply a sneaky way of giving the poor some second-rate package to deal with the problem. You've got ideologies on both sides.
Newhouse: There's good news and bad news on this front. If you do the arithmetic, 15 percent of the population is uninsured. They get some services now--let's say they get half of what the insured get. So that means it would cost an extra 7 percent to 8 percent beyond what we spend now to cover all the uninsured up to the level of everybody else. It's not an enormous number.
The bad news is that if you start to go down this route, it's not really just the 43 million, because once you provide your plain-vanilla policy there are surely going to be some employers who say to themselves, I can give my employees quite a raise if I stop providing insurance and tell them to go get that plain-vanilla policy. So exactly how much private insurance would be left is very problematic.
The other issue is Medicare. It has some problems out there in the future, and even now it doesn't provide, for example, out-patient drug coverage. That's an increasing problem for the elderly.
Huber: Totally irrational.
Newhouse: And we don't have any benefits for chronic long-term care. One either has to essentially pauperize oneself or find some inventive way to give away one's assets to obtain Medicaid coverage, so many people are paying large sums for care in their old age. These are problems beyond the problem of the uninsured.
Moderator: What is your vision of a health-care system that would be good for the country?
Huber: When I ask that in Washington, I always get a lot of hemming and hawing. But it ultimately comes down to the present system, kinder, more efficient, nicer. I almost never get some new, totally different system. People want to cover these obvious holes in the system, which I believe is doable.
Newhouse: There is no doubt we could do better at filling these holes. But the notion that some magic system out there will be problem-free I think is fanciful. I tell my students it's really which set of problems you choose to live with. You study health policies so you can better analyze what those problems will be, and judge different courses accordingly.
Callahan: I long ago concluded that half of the problem of illness is worrying about illness. I have a friend who recently went through a lot of horrible operations. He said the worst part is the anticipation of what's going to happen. Once you actually start doing it, you can put up with it.
I think a lot of people just worry about what health-care costs are going to do to them. So whatever the system might be, the first requirement is that it provide people with a sense of economic security--that their life may be ruined in many respects, but it's not going to be economically ruined by virtue of getting sick. This means that you're going to have to provide some sort of a basic insurance package. But you're not going to provide everything. You have to provide people with security but say, there are going to be some things at the margins you may not get.
Altman: We don't study history and we don't teach medical students history, which to me makes medical schools trade schools, not professional schools. Because if you don't teach the history of your profession to your new initiates, it's hard to see how you can expect them to have any perspective. I don't think we have enough perspective on the economics of the financing or the payment of medical care. If you look over the way medical care has been paid for over the last century or longer, it has been evolving. In the early part of this century, it was all fee-for-service. For many people, it was barter: they would provide a service or a product to pay the doctor. Then you got into health insurance with Blue Cross-Blue Shield.
I think we're still evolving. I wouldn't want to predict where we will end up, but you hear many people talking about how the only solution will be a single-payer system--generally the government. That's trading one problem for another set of problems, because it's hard to see what service the United States government provides for all citizens. One is the Internal Revenue Service, which certainly is unpopular. You have the Post Office system. If you want to argue that it's good, everybody gets their mail, then why do we have Federal Express? Because the Post Office system fails in that regard. People who think that the single-payer system is going to be a utopia are going to have some surprises. Joe Newhouse is right, it's a trade-off of problems.
Moderator: Dr. Martin, what about those first-year medical students to whom you gave their white coats at the beginning of their studies last September? What kind of practice are they going to have?
Martin: The patient demands and requests for assistance are going to get greater. That is going to drive costs up. In the near term at least, there will continue to be more anti-HMO sentiment and more publicity about how you have got to assert yourself--you should have rights as a patient. All that's going to increase the costs.
I do not see any uniform solution. I don't think that a single-payer system is within the future at all. So it's going to be a patch-up. Joe Newhouse's idea--trying to understand where the problems are and to think of patch-up solutions to each of them--is probably what we will see happen.
I must say that the people coming into medical school these days are the highest quality people I've ever seen entering medical school--in terms not only of wanting to do well but having great aspirations to do good. They want to be doctors. They want to take care of people. We have to prepare them to be sure they can do that in the very best way they can without destroying that aspiration for what being a doctor really means.
There's no other profession where you can sit down in a room with somebody you've never met before and ask them the most intimate questions regarding their life. And they are willing to answer them. That's the sort of holy sanctum or relationship between the doctor and the patient that has to be preserved somehow in the midst of this maelstrom.