On the state of health - 1

There was an interesting comment over at TF's place stating (and I can't for the moment think of a reasonable response to it) that the Federal government "has no place in providing health services". As should be well known to readers here, that is certainly not the case in NZ. Mind you, the commenter did continue to say that it was a State responsibility, and that perhaps is the reason why I am at a bit of a loss about it.

There is one very direct parallel between NZ and the US though, and it centres on the role of the private system and medical insurance providers.

To that end there was a very interesting and somewhat blood-chilling little article in SST this week...

RISING HEALTHCARE costs have reached crisis point, pushing families to give up their health insurance and fall back onto the straining state system, says Ian McPherson, chief executive of Southern Cross Medical Care Society.

The not-for-profit insurer saw claims rise by $61 million in the year to June and McPherson said factors behind the claims blowout included the amount private surgeons earned and costly new medical technologies with little or no proven clinical benefit.

For the time being, my salary package includes medical insurance through Southern Cross at a cost of something like $35 per week. That looks like increasing by a bit in the near future.

"How much will people be able to continue to pay and not object?" McPherson asked.

"We have seen a significant downgrading from policies that are far more general to policies covering the extreme emergencies. It is difficult for people to downgrade any more. There is a significant number sitting on the bottom rung and about to jump off into the public system again."

Exactly.

Rising costs for Southern Cross could also feed the already rapid rise in the state's healthcare bill. Consultant Paul Winton, author of a report in August – Health, New Zealand's untreated addiction – said current trends suggested healthcare costs could grow from 20% of core government spending to 40% in 15 years.

McPherson said Southern Cross had begun engaging with GPs on the premium-affordability crisis, and the subtext is clear – the insurer wants to see GPs direct patients away from the more expensive private surgeons.

"We are not going to tell GPs who to refer their patients to," McPherson said, but "we would like GPs to be mindful about the cost rather than referring out of habit. Giving them an incentive to help manage our budgets is something we are exploring with them now."

Southern Cross has been developing a network of affiliated providers, but McPherson said as yet it would be a step too far to require their use in the same way a car insurer would require a claimant to go to an approved panelbeater.

Now there is little wrong with the Southern Cross response to the problem so far as I am concerned.

The truth of the matter is though that McPherson's prognosis in the opening paras is only too true. Even given the present premium levels there is little chance that I will be able to afford the present cover into my retirement. There is no question that I will become increasingly reliant upon the public health service. Not that I have any problem with that, as it has certainly been "good value" for me.

McPherson said there were instances where it appeared that profit motive and not clinical outcomes were driving that price upwards.

He cited the example of robot-assisted prostatectomy surgery which costs $30,000 compared to the $15,000-$20,000 of conventional surgery, without evidence of faster recovery or better clinical outcomes.

Southern Cross's reaction in this case was to pay only a "contribution" to the cost of the robot-assisted surgery.

Why were surgeons using it? "Because it is fun. Because it is interesting. Because you can get a margin on your investment."

Hmmm, sounds a bit like "boys toys" no?

Let's set the parameters here.

First, medicine is about curing diseases, mending injuries, and providing palliative care for the dying.

Second, it is a very highly skilled and for most a stressful occupation. (I am basing that on the comments made to me by the three medical doctors in the club I belong to). People who fit those parameters in any field deserve to earn more than those of us who cruise below the radar doing little more than subsist. There is also, as any capitalist will tell you, the need and justification for recovering a return on capital invested; let's face it, I will tell you that as an accountant.

Terry Moore, president of the Private Surgical Hospitals Association, said: "We are conscious of the increases in costs which ultimately, if left unchecked will mean fewer people will be able to afford to go private themselves."

Moore said uncontestable clinical proof of new technologies could take years to emerge, but acknowledged they were stoking cost escalation along with wages and surgeons' fees.

McPherson also hit out at fees in his annual report to members last month. "We hear the argument that [surgeons] are part of a globalised workforce; we point out that if their prices increase to reflect overseas rates, fewer New Zealanders will be able to afford private surgical services."

Boscawen [right wing MP] is of similar mind, arguing that the globalised workforce is more of a westernised workforce, because the wages earned by quality doctors from India, for example, where cataract surgery is cheap, are having no effect on the fees charged by private surgeons here.

Moore countered: "Surgeons are generally independent practitioners and contractors so they pretty much set their own fees in a competitive market, but I don't think the fees have gone up much more than the medical inflation rate. They have become more efficient so they are probably earning more, but probably working harder for it and doing more procedures."

He said rising premium costs for health insurers were also driven by the sheer number of procedures being done, not just the cost of each one.

All true, well I have difficulty disagreeing with most of it so it must be. No confirmation bias here!

But there are some interesting contradictions. For example, the hospitals (Moore, above) are trying to argue that "economies of scale" ideas do not apply; "rising premium costs for health insurers were also driven by the sheer number of procedures being done, not just the cost of each one." I would have thought that (as my wife found out when she had cataracts removed from one eye) being able to "mass produce/production line" operations would lead to some savings. If it costs the insurer $4M to provide 1100 cataract operations then does increasing the number by 20% mean a 50% increase in cost? It does if "industry" is currently running at or above capacity.

There is a secondary impact too, coming out of the combination of developing technology (and that is everything including drugs and personal skills) together with societal expectations. The best indicator I can give for this effect I wrote on some while back (2006?? Sheesh!) is the example of herceptin - a treatment drug for a specific kind of breast cancer. That example ended up as a $3 million programme to treat roughly 20 women per year or about $150,000 each.

No one can blame those women for wanting (or deserving) the best possible treatment, and outcome. Exactly the same justification existed in the 1970's when open heart surgery was being developed by the likes of Barratt-Boyes and the other researchers in US, Europe and South Africa. Today, that surgery is routine. Auckland Hospital does two or three operations per day at a cost each of (I was told) about $75,000.

[To be continued...]

State of Health - 2

Returning to Southern Cross, the pressures of increasing demand for new treatments and higher technology solutions are having impact. It is leading to the prospect of large increases in premiums. In many cases the premiums are already too high to be affordable - note SC's own comments on people not renewing, or down-grading, current cover.

Further, these impacts are being felt in the public health system as well. The herceptin debacle was eventually funded (in the first year) out of Auntie Helen's Charity Fund (otherwise known as "The Prime Minister's Discretionary Fund") but I do not doubt that it is now an established part of Vote Health.

If we look behind the political rhetoric and wailing and gnashing of teeth there is a very fundamental problem with the provision of health services. Essentially, no one wants to die. I can't blame people for feeling that way. After all, we have the ability today to ensure the survival of some 1% of all live births who when I was born would have been "sad but inevitable consequences" of premature birth. I would be one of the last to try and suggest that we should turn our backs on that ability. We have the ability to turn around the lives and health of reprobates like the ol' probligo with what is now a relatively routine opration, complex but routine. On pure observation, there must be some 1,000 people a year whose lives are improved immeasurably if not saved as a result. Those having pacemakers fitted come into a further 1000 a year. That is just one hospital.

The problem of the cost is one that has actually been with us for a lot longer than we might want to admit. It is not limited to NZ either.

If I return to the commenter whose thoughts started all of this off, I wish him and TF and everyone fighting the good cause against Obama the very best of luck. Why? Because the choice is very simple.

Generally, private insurance and health providers are by their very nature required to make a return on their investment if not an additional return for those whose money made the investments in the first place. The argument in favour of public provision is based (in theory) on universal cover and no profit.

Irrespective of how you add those two quite different proposals there are common impacts upon how much has to be paid for them. I have covered those already.

The truth is that there is a limit between cost, availability, technology and outcome; a "mathematical" limit as well as economic and "social".

The ultimate and universal outcome for all is death. The "social" end of the limit wants that outcome minimised as far as possible and delayed for as long as possible given that it is a certainty for all (at least at present). There is much that can be argued about the causes and nature of a person's death. I do not think that this is the place for that debate other than to suggest that its inevitability has to be recognised.

The ultimate technology would have to be (effectively) eternal life. There was comment made last night on tv that in the Middle Ages the average life span was 30 years. A man of 40 would be considered elderly. A man of 60 years almost unheard of. Needless to say, aging diseases such as cancer, alzheimers, coronary heart disease were unheard of and unrecognised. In the 1800's in Europe and America, the average lifespan might have increased to 55. In the past 15 years the average lifespan for men in NZ has increased from 71 to 82; the life expectancy of a newborn is something like 62, but once past the age of 15 it increases to 85. It is expected that the number of people reaching 100 years in 60 years time will be double that of the present day. In very large part that increase in life expectancy is the result of improving technology.

The ultimate in availability is universal. It is here that most of the heat and darkness arises. "Why should I pay..." is fundamental to both sides; with the sentence ending "...for anyone else" on one side and "...more than the true cost" on the other leading to "...more than I can afford" again on the other side of the lake. What must be decided by society, not by the medical profession or the government, is who should be able to access medical services. The "rich" will always be able to afford to buy; "rich" because that is a matter of perspective as much as it is of fact (compared to half of NZ I am a "rich" man yet as I said at the beginning paying for personal medical insurance is almost out of reach).

The decision on public health services needs to come back to the fundamentals I began with - curing diseases, mending injuries, and providing palliative care for the dying.

The debate must centre on the immediate cost of treatment against the benefit to society of the likely outcome. Is that a simple judgement? Not in my book! What is certain is that it is a necessary debate. Nor can the availability of health services be limited to those with the ability to pay. There has to be a universality in health services. The scope of that universality has to be unlimited. That means that the universal care will necessarily provide services which are below the available technology and ability.

Not an attractive thought.

What really is wrong with NZ's health system?

If you thought that what I wrote about the US health system was "strong", then take a quick browse through Tracey Barnett's effort in last Saturday's Herald. (probligo health warning; this op-ed might endanger the health of well-meaning Americans). One of the milder cuts -

I love America. It's the only country in the world where citizens pack an AR15 to go a'courting their President. When an economy is stressed, the truly wacked fringes always manage to find centrestage.

I went back to visit family last month, and there was Old Glory, limping along with the biggest single tax revenue drop since the Great Depression, like Paris Hilton with maxed-out credit cards and nothing to wear.

Alongside, and regrettably not on the net, was a small table setting out the current health spends for eight nations as a percentage of GDP. A fair measure as it closely relates to average personal income and is devoid of currency considerations. So, from memory, NZ ranked about 4th on that list with 9.6% just behind Australia and Waaayyyy behind the US at something like 16%. Now that is truly, when you consider the size of the US defence budget and the fact that two concurrent wars is costing little more than twice that proportion, truly frightening thing to consider.

The point was made though, that at the present rate of increase health spending in NZ will reach 22% of GDP by the year 2020 and that is even more frightening.

John Armstrong applied his well-muscled left arm to what the government is currently trying to do.

Was there political interference? Or did the high-powered taskforce charged with reviewing the public health system tailor the final version of its report in full awareness of the acute political sensitivity over the health portfolio?

Or did the group's members simply change their minds at the last minute and drop some of the more contentious things they had been planning to recommend?
...
That is because draft copies of the report leave little doubt that something or someone persuaded the review group, which was chaired by former Treasury boss Murray Horn, to water down or remove some of its more controversial suggestions before the final version was presented to the minister.

Even in its final form, the report has a fair degree of political risk attached to it.

The review group's reform recipe would gut the Ministry of Health and set up a National Health Board which would be responsible for allocating funding of health services with the intention of improving access to services and hospital productivity.

The recommendations bear a marked resemblance to National's hugely unpopular health reforms of the early 1990s which were designed to get more efficiency into the delivery of health services by forcing hospitals to compete with one another.

...and so on.

There is a fairly large matter here in the middle though which has far more to do with medicine and only a secondary look in at money.

I think, with some certainty, that the Bible refers to "man's allotted span" of "three-score years and ten". Now the ol' probligo isn't making any promises to pull the plug at his 71st birthday bash.

One does have to wonder at the western, Judeo-Christian, desire for eternal life in this world in preference to the next.

It is late, I am tired and cranky.

Is it any wonder that health budgets are inflated though, when faced with this kind of problem (once again from Saturday's Herald) -

The flood of alcohol-related hospital admissions during weekends is compromising the ability of hospital staff to tend to general admissions, doctors say.

The situation has prompted doctors to call for a rise in the age at which people can buy alcohol, The Press reported.

Wellington emergency department specialist Paul Quigley said large numbers of young people were coming in with alcohol-related injuries.

"This stuff is all preventable and it's very frustrating when you have people with heart pains or serious respiratory problems having to wait because staff are dealing with teenagers who have broken their wrist or been in a fight because they are drunk," he said.

One emergency department said patient numbers could double on Thursday, Friday and Saturday nights.

The bulk of admissions by people under 30 at weekends was directly related to alcohol, Dr Quigley said.

There was little remorse, and often those admitted appeared pleased with themselves.

Leave them in the gutter. What say you?

What really is wrong with America's health services?

In some respects it is quite sad to read the right-wing ranting of the US Right (aren't they always?) against the Obama administration's attempts to make something of the "health system".

First question that comes to the probligo's rather twisted mind is the perennial "Why does it need fixing? Every administration in living memory has tried to fix - with varying degrees of success - America's "public health system".

Be clear here, if the proposals of the Obama administration is patterned on the British National Health then America has every right to "be afraid, very afraid". But that does not answer or avoid the question.

OK, first up is this -

As the Remote Area Medical Foundation’s huge, free health clinic winds up its eight-day run at the Forum in Inglewood this evening, organizers said they expected to be able to treat all patients who were given wristbands – or refer them to doctors who will provide free care.

During the organization’s first venture into a large, urban city -- and its longest-running health clinic in its 25-year history -- volunteer dentists and doctors helped deliver free medical care to thousands of patients. Many seeking care camped out overnight or slept in their cars; hundreds of others were turned away. Some had traveled from as far as San Francisco and Phoenix for the chance to be treated.

Final tallies were not available, but doctors performed an array of medical services, from root canals and mammograms to HIV tests and the dispensing of free eyeglasses.

Those final tallies are posted on Ramusa's website -

RAM LA Results

The following totals are from patient records in hand and, due to an unknown number of misplaced papers and lost data, are lower than actual numbers.

6,344 patients registered for 14,561 patient encounters (approximately 2.3 services per patient)

3,827 volunteers, largely non-medical support (It is believed that patient encounters could have doubled if medical professionals licensed in states other than California had been allowed to volunteer their services at this clinic.)

3,182 dental patients – 2, 274 teeth extracted and 5,438 teeth saved, 1,889 cleanings

2,266 vision care patients with 1,984 pairs of prescription eyeglasses made on site and fitted

8,775 general medical visits

Total value of care: $2,821,383

Thanks to everyone who made it possible for so many to receive so much during Remote Area Medical’s 8-day free clinic at The Forum in Inglewood, CA.

All that in 8 days.

But what is this saying? This is their Mission Statement -

The Remote Area Medical® (RAM) Volunteer Corps is a non-profit, volunteer, airborne relief corps dedicated to serving mankind by providing free health care, dental care, eye care, veterinary services, and technical and educational assistance to people in remote areas of the United States and the world.
Founded in 1985, Remote Area Medical® is a publicly supported all-volunteer charitable organization. Volunteer doctors, nurses, pilots, veterinarians and support workers participate in expeditions (at their own expense) in some of the world's most exciting places. Medical supplies, medicines, facilities and vehicles are donated.

OK, so Inglewood, CA is a remote part of the US, huh!

The other side of this came (serendipitously) through me old mates at ALD.

What are the alternatives to public (read government) health resources? Obviously, "private" providers. Capitalism in action. And this is how it works . OK, I accept that Wendell Potter might have a few irons to heat, but if a half of what he says is fact then it gives a fairly chilling picture.

...Potter, who is from Tennessee, read in a local paper about a free healthcare expedition being held in Wise County, Virginia. He decided to check it out. Walking through the fairground gates, Potter saw hundreds of people waiting in the rain while physicians attended to patients in animal stalls or on gurneys lying on the rain-soaked pavement. Tents had been pitched across the fairground lawns, creating a scene “like something that could’ve been happening on a battlefield or in a war-torn country.” Tears mixed with the rain to cloud Potter’s vision. “What I thought was: ‘Is this the United States?’ It was so remote from my reality. It just seemed impossible.”

RAM in action again...

But the most chilling thought expressed by Potter rings with total clarity in my personal experience of health insurance here in NZ.

Why are there so many in the US who do not have (private) health insurance? Many to most probsbly can not afford it. That simple.

Potter also provides a good reason why some people can not afford private insurance.

It is because they have been priced off the market... Read the whole interview.

State (of) Health

I have been through this debate before, many times, and it has nothing to do with justifying the “nanny state” criticism of state welfare or public health services.

I live in a “collective” society, that is if you accept the epithetic nomenclature of the far right. NZ used to describe it as “cradle to grave” welfare and one (very brave Christian) Prime Minister called it “Applied Christianity”, but that came to a grinding and bankrupt halt in the 1970’s. We still have extensive welfare and health systems and I for one am fairly glad that we do.

I have health insurance, have had for some 25 years.

When I took out that insurance, one of the conditions that I had to sign on the application gave the insurer the right to access to my (existing) health records. Those records confirmed (because I had disclosed them on the application) that I had a (fairly serious) heart murmur and varicose veins. I was given a choice. Normal insurance at $1500 annually and the heart and varicose excluded from cover, or $2,100 and a $1,000 excess on all surgery. About 22 years later, the State provided me with free surgery and a good job well done to replace the mitral valve.

Now into my 60’s, I am very fortunate that for the moment my health insurance is provided by my employer. The annual cost is now $2500 annually. It will increase to close to $3,000 by the time I retire and at that point I will need to make some serious decisions.

But that is only part of the story.

Recent news in this country has a dispute of some considerable heat developing between all of the health insurance providers (there are 2 major and 4 minor) and most specifically the largest, and their customers.

The dispute has arisen over what the insurance provides, and what it does not. It is important to emphasise right from the beginning that there is no governmental intervention in the services provided by the insurers, or the cover that is provided.

Central to the argument is a new drug from the US (not herceptin this time) for the treatment of some cancers. It has been approved for use in this country but the government health bureaucracy has not yet purchased the drug for use in the state health system, primarily on the grounds of cost. This means that your doctor can prescribe it, you can get it readily from the pharmacist, provided that you pay the full price for it. There is no government subsidy.

So, buy the drug. Use it. Claim the cost from your insurer. Simple!

NOT!!

Turns out that the insurer has the contractual right to exclude (no reason required) any treatment not “approved”. Their general rule apparently starts with “not subsidised by the government”.

So, I have to ask, why am I paying for insurance?

UPDATE.

This clip is pertinent, or so I am informed. If it is not, then I apologise. I have not looked because I spend enough time on the dial-up as it is without dragging in video. Broadband? Waddat?