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Center for Pain Management, West Hempstead, NY
To the Editor:
I congratulate you on publishing Bloomfield’s (1) enlightened study and the accompanying editorial by Adhikari and Sibbald (2). I was happy to see somebody focus on savings in medical expenditures when cost sharing is a part of the reimbursement scheme. The best example is the medical savings account (MSA). The RAND health insurance experiment reaffirms basic human nature as it relates to medical expenditures (3), however, the best and most objective way to evaluate the economic impact of a given insurance program on expenditures is the Medical Loss Ratio. This is simply the percent of premium dollar used for reimbursement of medical claims. Managed care stock prices will rise and fall when the Medical Loss Ratio approaches 80% and 87%, respectively; this is not very different from the historical Medical Loss Ratios of the indemnity plans at the outset of managed care. The Medical Loss Ratio of MSAs runs in the 35%–40% range. This should tell us something about the ability of managed care to control medical expenditures. The Medicare and Medicaid programs are subsidized; this implies medical costs paid on behalf of the beneficiaries are greater than 100% of the premium taken in. This should tell us something about the ability of these government programs, as they exist today, to control medical costs.
Although taxing premiums could infuse money to care for the uninsured, as Bloomfield suggests, the history of this sort of arrangement is one of disappointment. Routinely, legislatures use monies that are earmarked for special purposes to fund other projects far afield of the original intent. Some examples: tobacco settlement funds for road improvements, Social Security receiving IOUs in exchange for using trust fund monies for general use, lottery funds earmarked for education diverted for general use, etc. I would suggest that the most efficient and humane way to supply medical expertise to the uninsured indigent is to allow the physicians to care for these people free of charge (no Medicaid or other reimbursement) in exchange for meaningful tax savings (4). For example, ask most private practitioners if they would donate 1 week for a 5% reduction in marginal income tax rates. When compared to the costs of the Medicaid program, the lost tax revenue would be laughable. Hospitals could make their own arrangements, although they do quite well with the current reimbursements from Medicaid.
A great motive behind the use of technology in the critical care setting is for technology to act as an extension of the physician allowing him to remotely assess a patient’s condition and respond to it, using the change in the technological parameter as a gauge of success or failure of the intervention; a feedback loop. This is the core of monitoring. This allows the clinician to attend to more than a single patient at once or be elsewhere when making these decisions. Absent the technology, the only real way for the physician to adequately care for the critically ill patient is to be present at the bedside continuously and manually examine, observe, intervene, and reappraise the results of the intervention. The focus on outcomes as a guide to usefulness of a given technology in the critical care setting misses this point entirely. As mentioned by Bloomfield (1), certain technologies, such as dialysis and ventilators, are lifesaving interventions that simply prolong life ("Halfway" technologies according to Weisbrod) and others are disease ending, such as AICDs ("High" technologies according to Weisbrod). Critical care is that medical pursuit that uses these "Halfway" and "High" technologies in the relative short term to accomplish the goal of stabilizing the patient until they can heal themselves. Monitoring technology, on the other hand, simply makes our job easier and allows us to adequately care for many more patients at once. The economics of monitoring are really the same as any retail pursuit. Small costs for tests used very frequently for clinical monitoring (e.g., blood gases) will rapidly outstrip the costs of expensive, technologically advanced monitors used over and again (e.g., TEE). It is the clinician’s ability to synthesize a successful plan using the information from the technological device (high price or low) that ultimately relates to patient outcome.
References
Department of Anesthesia/Critical Care Medicine, Mayo Clinic Jacksonville, Jacksonville, FL
In Response:
I wish to thank Dr. Herschman for his kind letter of support. In particular, the concept of a "medical loss ratio" seems to be a barometer by which managed care might control expenditures. However, experience from the 90s has demonstrated managed care’s inabilities to control rising health care costs. Again, our lack of attention to the concepts told to us by health care economists (moral hazard, asymmetry of information, and technology) has lead to double-digit inflation in health care. In particular, technology has been responsible for a significant portion of inflationary costs. The concept of "medical loss ratio" would have to be looked at and further validated.
My major thesis was that we have not researched enough about the cost-effectiveness of the technologies that we utilize in health care (i.e., drugs, equipment, diagnostic tests, techniques, procedures, and health system organization). Notice, that we are not just talking about just costs; but we are trying to examine dollar amount per QALY year life saved. The cost-effective amount most often quoted is $50,000/QALY year life.
Simple things that we do can be quite costly and not give us optimal results. For example, Neuhauser and Lewicki (1) published an article in 1975 to examine the incremental health costs of employing six-stool guaiac testing to screen for colon cancer. In it, they demonstrated a model to show how such an inexpensive test can lead to rise in incremental health care costs from $1,175 to $47,107,214.
Likewise Angus et al. (2) and Manns et al. (3) have looked at the cost-effectiveness of the new drug activated protein C, which has shown some promising results in the treatment of sepsis. Data may seem to indicate cost-effectiveness of this therapy in certain subgroups of septic patients. Data like this is important to know with the reality of double-digit inflation in health care. However, as Adhikari and Sibbald (4) have indicated, as demand for critical care services continues to rise, so will cost. For the future of health care, we must continue to evaluate the cost-effectiveness of the technologies that we utilize. But a major question is whether society will accept the amount of $50,000/QALY year as being enough?
References
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