8 ms·

One big problem with medicine in this country is that bad hospitals can't just go out of business and be replaced by better ones. If you want to open a new hosp

by glenra 14y ago

One big problem with medicine in this country is that bad hospitals can't just go out of business and be replaced by better ones. If you want to open a new hospital today, there are hearings in which all the crappy existing other hospitals have to say it's okay before you can get a "Certificate Of Need". So if you had an idea for a new hospital structure that would dramatically improve patient health and cut costs, you wouldn't be allowed to just build it and try it - the existing providers all get a veto. So we have hospitals that hide all the prices and make MORE money if they screw up and introduce complications, and it's ILLEGAL to drive those idiots out of business with a more customer-responsive system. It's like if you couldn't open a new coffee shop without permission from Starbucks or a new restaurant without permission from McDonald's. In anything even vaguely resembling a free market, reforms like this wouldn't need to be pushed by a monolithic central bureaucracy - they'd just spread on their own, with old providers rushing to adopt the modern changes for fear of becoming obsolete. http://en.wikipedia.org/wiki/Certificate_of_need http://en.wikipedia.org/wiki/Certificate_of_need

tosseraccount 14y ago
Looks like the hospitals are using the same techniques as the taxis to keep out the competition.
pekk 14y ago
The free market offers no incentive to give health services to people who cannot pay for it, or don't know that these services will reduce hospitalization by 33% and costs by 22%. Basic health care is not McDonald's because your mother does not die prematurely (and miserably, and expensively) for the lack of McDonald's. The core issue is not about some private business being 'customer-responsive' in the vein of Starbucks. You can, today, start private clinics which are more "customer-responsive" (leave a mint on your pillow, etc.) but how are you going to recoup the costs and in particular, how does that benefit the populace in aggregate?
- HarryHirsch 14y ago
  > The free market offers no incentive to give health services to people who cannot pay for it, or don't know that these services will reduce hospitalization by 33% and costs by 22% Amen to that. The major killers at the turn of the last century were tuberculosis and waterborne diseases, and the free market did nothing to improve living conditions or supply clean water to the urban population then. I am in Portugal right now, where Dr Sousa Martins, a physician who spearheaded the fight against tuberculosis, is considered a saint. Public health is always political issue. It is as true 100 years ago as it is now.
  - tosseraccount 14y ago
    Free market didn't improve living conditions? The supply and demand for more spacious housing and fuel to boil water didn't help things?
    - lukeschlather 14y ago
      For the upper 50%, sure, but the free market failed and generally fails to give the lower 50% of earners access to sufficient resources to do proper sanitation. Treating clean water as a commodity rather than a public utility is a public health disaster. Each household needing expertise and equipment for water purification does not scale.
      - tomjen3 14y ago
        Define failure in this case. Yes the poor have less than the rich, but so what? What is the cost of clean water today? How much for a fridge? As it turns out, 99.9% of us households have a fridge (http://www.eia.gov/emeu/recs/appliances/appliances.html http://www.eia.gov/emeu/recs/appliances/appliances.html). Those weren't really available in 1900, yet I don't remember any huge government subsidy for those (and by keeping your food fresh they prevent diarrhea and improve hygine). I do remember huge, private, factories making them, however. But even then soap is likely also one of those things that really help prevent deceases through proper sanitation -- yet how poor do you have to be to not be able to afford soap?
- tklovett 14y ago
  > The free market offers no incentive to give health services to people who cannot pay for it I'm not sure that's strictly true. For one, if the government is paying for those who cannot afford it (through medicare/medicaid, etc.) then there is money to be made, and thus some incentive. Even if its a relatively small amount, some model could be devised to capture the market as a sort of long tail. Much like Amazon has some incentive to sell even the cheapest, niche items.
- randall 14y ago
  Did you read the article? HQP sounds like a great way to start.
- skue 14y ago
  > The free market offers no incentive to give health services to people who cannot pay for it. That's why we balanced the market with limited regulations, such as requiring Emergency Departments to treat all patients regardless of their ability to pay. It's also why we established Medicare, Medicaid, and the VHA so providers can get paid for treating patients with limited means. With the new health reform, it's why we are providing insurance pools so people who do not have benefits through work can benefit by shared risk and still buy health insurance on their own. Health reform also includes an individual mandate to incentivize everyone who can afford it to purchase health insurance. > these services will reduce hospitalization by 33% and costs by 22%. > how are you going to recoup the costs and in particular, how does that benefit the populace in aggregate? You seem to be making contradictory points.
- tomjen3 14y ago
  While my mother wouldn't die for lack of McDonalds, she would die, prematurely, painfully (and cheap) for lack of food. So I don't see how your argument stand.
- SilasX 14y ago
  >Basic health care is not McDonald's because your mother does not die prematurely (and miserably, and expensively) for the lack of McDonald's It is indeed important to recognize where health care deviates from known "[market-]solved problems". But you haven't shown an important difference there. While mom doesn't die from lack of McDonald's, she does die from lack of food, and yet no one uses that a reason to make trite remarks about how we can't possibly allow a free market in food. Rather, they would recognize that we should leave food production to the market, and simply have the government buy from producers, like we do with food stamps, and then concentrate on making sure that such a system doesn't have bizarre implications for the incentive structure. >You can, today, start private clinics which are more "customer-responsive" (leave a mint on your pillow, etc.) but how are you going to recoup the costs and in particular, how does that benefit the populace in aggregate? The problem is that you're not going to get reimbursed by the government, no matter how much better your service is per dollar than the existing recipients of the money. So no, it's not really anything like a fair competition where market incentives bring in new entrants where existing providers suck. The things is, we are already using a market to provide health care to people unavailable to afford it; it's just that the payer is someone else. So it's import to examine the process by which that money is given out, and whether it's encouraging waste, or if it has an incentive to economize on care to get the best outcome per dollar. And you don't answer that question by saying "this ain't the market" (because it largely is) or dismiss it by asking how they're going to get paid (because someone is already paying for these services).
  - ahoyhere 14y ago
    > and yet no one uses that a reason to make trite remarks about how we can't possibly allow a free market in food We do not have a free market in food. Even if you ignore subsidies entirely… Have you not heard of the FDA? Upton Sinclair? Health inspections for restaurants? Requirements to enrich certain food products, pasteurize others? How about the pet food and baby formula from China (free market!) that was found to have melamine and other poisons in it? A free market in food results in low quality, unsafe, non-nutritious food. Or things that masquerade as food but aren't. On that note… History will look back at many of our legal "foodstuffs" of today and call them as awful as Radon Water: http://www.periodictable.com/PopularScience/2004/08/2/index.html http://www.periodictable.com/PopularScience/2004/08/2/index.... Like slums (see my other comment) -- people will pay to live in slums, you know, the free market creates them --- a free market for food provides for a few and poisons the rest. Not unlike the healthcare situation in the US.
- glenra 14y ago
  > The free market offers no incentive to give health services to people who [...] don't know that these services will reduce hospitalization by 33% and costs by 22%. Your argument proves too much. You might want to think through the logic in some other area of life. Maybe gas prices at the pump, or candy prices at the supermarket counter. Cheaper and better comparable products DO tend to win over time, do they not? If X is 22% cheaper (while being better as well) than Y, the people who buy a LOT of this good, whatever it is, have a HUGE incentive to switch. In the case of health care, the big movers would be (a) health insurance companies, (b) other companies that offer health coverage to their employees. Additionally, of those who buy health coverage or health care directly as individuals there are bound to be some customers who are unusually price sensitive or unusually anal about doing price comparisons. On the margin, THOSE people will switch, and their friends who look to them for guidance will also switch. Just that movement alone might put a company out of business and thereby protect everyone else too, but you also have to think about natural churn. Even if existing customers and existing big companies and existing insurers are all too lazy to switch, as NEW companies and individuals look for their FIRST contract, they'll do a comparison and see that 22% savings. Last but not least, ignorance is somewhat curable. When X is 22% cheaper to provide (while also better) than Y, X can sell the service for less AND have a higher profit margin...and will use some of those profits (or expected profits) to ADVERTISE. They can TELL the people who "don't know" the stuff that they need to know. I recommend putting up billboards near the competing hospitals. :-)
- bjhoops1 14y ago
  > The free market offers no incentive to give health services to people who cannot pay for it Yes, thank you. I've said it many times before - the Free Market cares about your problems to the exact extent that you can Pay for them. Any benefits that happen to flow to the impecunious are incidental (though still nice when they do occur).
skue 14y ago
That may be true, but it misses the point. No single hospital will transform healthcare. The entire structure needs to change - and that's exactly what is happening today. The trend right now is moving away from hospital-based care and towards an outpatient-based "medical home" model. In the new model, health systems (not necessarily hospital systems) are given bundled payments for managing a set of patients instead of fixed fees for each exam or procedure. This incentivizes health systems to encourage wellness and rewards them for more aggressively treating the sickest patients and keeping them out of the hospital. This is better for everyone, especially the patients. It turns out that a small percentage of patients with multiple chronic conditions generate much of the cost of our healthcare spending. One way to keep these patients healthy and out of the hospital is to hire companies that specialize in intensive home-based treatment like the company profiled in the article, HQP. TL;DR The path forward is keeping patients healthy and out of hospitals, not building new ones.
- 3825 14y ago
  So instead of paying for health insurance if we get sick, the system promises us that we will pay for managed care all the time. Isn't that the promise of HMO? What is different between a "Medical home"? Do we need government action or does Ted Kennedy's 1973 HMO Act provide enough leeway for this kind of managed care?
  - skue 14y ago
    The new term is Accountable Care Organization (ACO), and don't worry, an ACO is very different from an HMO. In fact, they changed two out of the three letters. Seriously speaking you are right, this is a risk. I have asked this same question many times to senior folks involved with health reform. I haven't heard a 100% convincing answer, but I'm most of the way there. Here are the key differences: 1. More MDs, fewer MBAs. HMOs were generally run by insurers (payers) far removed from patients. ACOs are being created primarily by hospital systems and physician groups, sometimes in partnership with a payer (which has more experience managing risk). 2. More/Big data. We have a lot more data, and we've gotten a lot smarter about how to analyze it. So instead of simply rationing care, we can identify and then focus on areas to improve quality and cut costs. Also, the (unsteady) march towards electronic health records (EHRs) should improve this even more. 3. Quality measures. We can leverage data to force providers to compete on quality. See http://www.medicare.gov/hospitalcompare/ http://www.medicare.gov/hospitalcompare/ for a simple example. 4. Freedom to change plans. In the past, once you had a pre-existing condition you were stuck because no other health plan would accept you. Once plans are prevented from doing this, patients will have the freedom to look elsewhere if they feel their care is being limited. Update: Added additional info to point 2.
joshgel 14y ago
This isn't just with hospitals. It basically happens with every aspect of medicine. Insurance, procedures, lab costs, drug costs, etc etc

by glenra 14y ago

tosseraccount 14y ago

Looks like the hospitals are using the same techniques as the taxis to keep out the competition.

pekk 14y ago

The free market offers no incentive to give health services to people who cannot pay for it, or don't know that these services will reduce hospitalization by 33% and costs by 22%. Basic health care is not McDonald's because your mother does not die prematurely (and miserably, and expensively) for the lack of McDonald's. The core issue is not about some private business being 'customer-responsive' in the vein of Starbucks. You can, today, start private clinics which are more "customer-responsive" (leave a mint on your pillow, etc.) but how are you going to recoup the costs and in particular, how does that benefit the populace in aggregate?

HarryHirsch 14y ago
> The free market offers no incentive to give health services to people who cannot pay for it, or don't know that these services will reduce hospitalization by 33% and costs by 22% Amen to that. The major killers at the turn of the last century were tuberculosis and waterborne diseases, and the free market did nothing to improve living conditions or supply clean water to the urban population then. I am in Portugal right now, where Dr Sousa Martins, a physician who spearheaded the fight against tuberculosis, is considered a saint. Public health is always political issue. It is as true 100 years ago as it is now.
- tosseraccount 14y ago
  Free market didn't improve living conditions? The supply and demand for more spacious housing and fuel to boil water didn't help things?
  - lukeschlather 14y ago
    For the upper 50%, sure, but the free market failed and generally fails to give the lower 50% of earners access to sufficient resources to do proper sanitation. Treating clean water as a commodity rather than a public utility is a public health disaster. Each household needing expertise and equipment for water purification does not scale.
    - tomjen3 14y ago
      Define failure in this case. Yes the poor have less than the rich, but so what? What is the cost of clean water today? How much for a fridge? As it turns out, 99.9% of us households have a fridge (http://www.eia.gov/emeu/recs/appliances/appliances.html http://www.eia.gov/emeu/recs/appliances/appliances.html). Those weren't really available in 1900, yet I don't remember any huge government subsidy for those (and by keeping your food fresh they prevent diarrhea and improve hygine). I do remember huge, private, factories making them, however. But even then soap is likely also one of those things that really help prevent deceases through proper sanitation -- yet how poor do you have to be to not be able to afford soap?
tklovett 14y ago
> The free market offers no incentive to give health services to people who cannot pay for it I'm not sure that's strictly true. For one, if the government is paying for those who cannot afford it (through medicare/medicaid, etc.) then there is money to be made, and thus some incentive. Even if its a relatively small amount, some model could be devised to capture the market as a sort of long tail. Much like Amazon has some incentive to sell even the cheapest, niche items.
randall 14y ago
Did you read the article? HQP sounds like a great way to start.
skue 14y ago
> The free market offers no incentive to give health services to people who cannot pay for it. That's why we balanced the market with limited regulations, such as requiring Emergency Departments to treat all patients regardless of their ability to pay. It's also why we established Medicare, Medicaid, and the VHA so providers can get paid for treating patients with limited means. With the new health reform, it's why we are providing insurance pools so people who do not have benefits through work can benefit by shared risk and still buy health insurance on their own. Health reform also includes an individual mandate to incentivize everyone who can afford it to purchase health insurance. > these services will reduce hospitalization by 33% and costs by 22%. > how are you going to recoup the costs and in particular, how does that benefit the populace in aggregate? You seem to be making contradictory points.
tomjen3 14y ago
While my mother wouldn't die for lack of McDonalds, she would die, prematurely, painfully (and cheap) for lack of food. So I don't see how your argument stand.
SilasX 14y ago
>Basic health care is not McDonald's because your mother does not die prematurely (and miserably, and expensively) for the lack of McDonald's It is indeed important to recognize where health care deviates from known "[market-]solved problems". But you haven't shown an important difference there. While mom doesn't die from lack of McDonald's, she does die from lack of food, and yet no one uses that a reason to make trite remarks about how we can't possibly allow a free market in food. Rather, they would recognize that we should leave food production to the market, and simply have the government buy from producers, like we do with food stamps, and then concentrate on making sure that such a system doesn't have bizarre implications for the incentive structure. >You can, today, start private clinics which are more "customer-responsive" (leave a mint on your pillow, etc.) but how are you going to recoup the costs and in particular, how does that benefit the populace in aggregate? The problem is that you're not going to get reimbursed by the government, no matter how much better your service is per dollar than the existing recipients of the money. So no, it's not really anything like a fair competition where market incentives bring in new entrants where existing providers suck. The things is, we are already using a market to provide health care to people unavailable to afford it; it's just that the payer is someone else. So it's import to examine the process by which that money is given out, and whether it's encouraging waste, or if it has an incentive to economize on care to get the best outcome per dollar. And you don't answer that question by saying "this ain't the market" (because it largely is) or dismiss it by asking how they're going to get paid (because someone is already paying for these services).
- ahoyhere 14y ago
  > and yet no one uses that a reason to make trite remarks about how we can't possibly allow a free market in food We do not have a free market in food. Even if you ignore subsidies entirely… Have you not heard of the FDA? Upton Sinclair? Health inspections for restaurants? Requirements to enrich certain food products, pasteurize others? How about the pet food and baby formula from China (free market!) that was found to have melamine and other poisons in it? A free market in food results in low quality, unsafe, non-nutritious food. Or things that masquerade as food but aren't. On that note… History will look back at many of our legal "foodstuffs" of today and call them as awful as Radon Water: http://www.periodictable.com/PopularScience/2004/08/2/index.html http://www.periodictable.com/PopularScience/2004/08/2/index.... Like slums (see my other comment) -- people will pay to live in slums, you know, the free market creates them --- a free market for food provides for a few and poisons the rest. Not unlike the healthcare situation in the US.
glenra 14y ago
> The free market offers no incentive to give health services to people who [...] don't know that these services will reduce hospitalization by 33% and costs by 22%. Your argument proves too much. You might want to think through the logic in some other area of life. Maybe gas prices at the pump, or candy prices at the supermarket counter. Cheaper and better comparable products DO tend to win over time, do they not? If X is 22% cheaper (while being better as well) than Y, the people who buy a LOT of this good, whatever it is, have a HUGE incentive to switch. In the case of health care, the big movers would be (a) health insurance companies, (b) other companies that offer health coverage to their employees. Additionally, of those who buy health coverage or health care directly as individuals there are bound to be some customers who are unusually price sensitive or unusually anal about doing price comparisons. On the margin, THOSE people will switch, and their friends who look to them for guidance will also switch. Just that movement alone might put a company out of business and thereby protect everyone else too, but you also have to think about natural churn. Even if existing customers and existing big companies and existing insurers are all too lazy to switch, as NEW companies and individuals look for their FIRST contract, they'll do a comparison and see that 22% savings. Last but not least, ignorance is somewhat curable. When X is 22% cheaper to provide (while also better) than Y, X can sell the service for less AND have a higher profit margin...and will use some of those profits (or expected profits) to ADVERTISE. They can TELL the people who "don't know" the stuff that they need to know. I recommend putting up billboards near the competing hospitals. :-)
bjhoops1 14y ago
> The free market offers no incentive to give health services to people who cannot pay for it Yes, thank you. I've said it many times before - the Free Market cares about your problems to the exact extent that you can Pay for them. Any benefits that happen to flow to the impecunious are incidental (though still nice when they do occur).

skue 14y ago

That may be true, but it misses the point. No single hospital will transform healthcare. The entire structure needs to change - and that's exactly what is happening today. The trend right now is moving away from hospital-based care and towards an outpatient-based "medical home" model. In the new model, health systems (not necessarily hospital systems) are given bundled payments for managing a set of patients instead of fixed fees for each exam or procedure. This incentivizes health systems to encourage wellness and rewards them for more aggressively treating the sickest patients and keeping them out of the hospital. This is better for everyone, especially the patients. It turns out that a small percentage of patients with multiple chronic conditions generate much of the cost of our healthcare spending. One way to keep these patients healthy and out of the hospital is to hire companies that specialize in intensive home-based treatment like the company profiled in the article, HQP. TL;DR The path forward is keeping patients healthy and out of hospitals, not building new ones.

3825 14y ago
So instead of paying for health insurance if we get sick, the system promises us that we will pay for managed care all the time. Isn't that the promise of HMO? What is different between a "Medical home"? Do we need government action or does Ted Kennedy's 1973 HMO Act provide enough leeway for this kind of managed care?
- skue 14y ago
  The new term is Accountable Care Organization (ACO), and don't worry, an ACO is very different from an HMO. In fact, they changed two out of the three letters. Seriously speaking you are right, this is a risk. I have asked this same question many times to senior folks involved with health reform. I haven't heard a 100% convincing answer, but I'm most of the way there. Here are the key differences: 1. More MDs, fewer MBAs. HMOs were generally run by insurers (payers) far removed from patients. ACOs are being created primarily by hospital systems and physician groups, sometimes in partnership with a payer (which has more experience managing risk). 2. More/Big data. We have a lot more data, and we've gotten a lot smarter about how to analyze it. So instead of simply rationing care, we can identify and then focus on areas to improve quality and cut costs. Also, the (unsteady) march towards electronic health records (EHRs) should improve this even more. 3. Quality measures. We can leverage data to force providers to compete on quality. See http://www.medicare.gov/hospitalcompare/ http://www.medicare.gov/hospitalcompare/ for a simple example. 4. Freedom to change plans. In the past, once you had a pre-existing condition you were stuck because no other health plan would accept you. Once plans are prevented from doing this, patients will have the freedom to look elsewhere if they feel their care is being limited. Update: Added additional info to point 2.

joshgel 14y ago

This isn't just with hospitals. It basically happens with every aspect of medicine. Insurance, procedures, lab costs, drug costs, etc etc