Category: Medicine

8 Ways to Reduce Health Care Costs

Currently, most discussion in the United States regarding health care reform is focused on the extent to which health care costs are covered by public or private insurance. However, it will make little difference whether health care is funded privately or publicly if the cost of health care is not held in check. Even with the current predominantly privatized system, the federal budget will be overwhelmed in a few decades by Medicare outlays, which are rising much faster than inflation due to increased health care costs. If the government will not be able to afford paying for health care for seniors, it will hardly be able to provide it for others. Our energies would be better directed, therefore, at reducing the cost of health care.

There are several ways that we can reduce health care costs almost immediately; others will take more time. These approaches are primarily directed at undoing the antiquated system of medical education and hospital regulation, much of which is grounded in the politics of the 1930s. Supposedly non-profit hospitals and universities are able to gouge the public for their services, yet receive federal subsidies. It would be considered abominable if a non-profit charity or church indulged in the extravagances of these institutions, many of which have billion-dollar endowments. Anyone who has seen an $8000 bill for routine testing or a night’s hospital stay should know that the major culprits behind health care cost are the service providers, not the insurance companies.

Indeed, the oft-maligned HMOs are themselves the product of the last great effort at liberal health care reform, the HMO Act of 1973. Prior to the HMO act, most health insurance only covered major illnesses or surgeries, just as auto insurance only covers accidents, not routine maintenance. Ordinary care could be paid out of pocket, or in the cases of the extremely poor, not at all. This was not burdensome, since the cost of a routine doctor’s visit was not much. With the advent of mandatory employer health insurance, much more extensive coverage was required, driving up the cost of insurance premiums. Further, since the patient no longer paid for routine health care out of pocket (except a fixed co-payment), he did not care what exorbitant fee the hospital charged the insurance company. Since patients no longer had any incentive to keep costs down, and indeed were often unaware of the price, the cost of health care could rise, and the insurance companies would pass on this cost in their premiums.

Going further back, our medical education system has relied on a bizarre system of requiring four years of medical school in addition to university, and then three or four years of grossly underpaid internship or “residency”, after which the young doctor emerges with staggering debts often well over $100,000. Given this burden of education and debt, it is no wonder that a large proportion of American doctors choose to become high-priced specialists, leaving a deficiency of general practitioners. Only the extremely intelligent can pass the rigors of U.S. medical schools, where emphasis is placed on the mathematical and analytical aspects of medicine, and less on preventive nutrition and humanitarian aspects. The typical medical school student is intellectually overqualified to be a GP; many highly competent doctors in other countries would not pass muster in U.S. schools, even though experience proves they are quite capable in their profession.

Nurses possess the education necessary to diagnose and treat most common ailments; and pharmacists have the education to prescribe medications, yet both are prohibited from exercising their craft due to our arcane medical system that requires an MD to be involved in every diagnosis and treatment. Given that this same system induces a shortage of GPs, this can only drive up cost. What is worse, these science-oriented, non-humanitarian doctors tend to think everything is to be solved with expensive testing and drugs, especially since ordering tests and drugs takes less of their time than getting to know the patient and his behavior. I once had an “old school” doctor who resigned out of disgust with the increasing pressure to become a pill dispenser.

The residency program, which is supposed to be a time of apprenticeship, is often just an opportunity for the hospitals to exploit cheap labor. Residents often work 100 hours a week, with little sleep, thereby impairing performance, and much of their time is spent on menial administrative tasks unrelated to patient treatment. With yet another three years of lost income, it is no wonder that they all wish to cash in on a high-paying position. To cover their increased debt, they will actually have to be paid more than if they had been paid justly in the first place.

In sum, I propose the following cost-cutting measures:

  1. Abolish Direct-to-Consumer (DTC) advertising for prescription drugs, as this was illegal before the 1990s, and consumers (not to mention doctors) are often poor judges of what medications they should take. Billions of dollars would be saved from this act, since the cost of TV advertising would no longer need to be built into drug costs.
  2. Reform the residency program so interns have the right to demand competitive salaries and reasonable hours. Increasing their salaries should actually lower costs in the long run, as doctors will begin their careers less debt-laden.
  3. Allow RNs and pharmacists to diagnose and treat ailments within their competency. This will reduce costs, as they have lower salaries.
  4. Reduce the cost of medical school (by student grants) or allow admission to medical school direct from high school. Less stringent mathematical requirements should apply to GPs, as mathematical geniuses don’t necessarily make better family doctors. A certain amount of scientific hubris would have to be swallowed here.
  5. Set limits on tort claims related to medical malpractice. This will lower malpractice insurance premiums, greatly reducing the salary demands of doctors.
  6. Stress preventive medicine in medical education, including nutrition and exercise. Less emphasis on surgery, drugs, and high-tech testing as solutions to preventable diseases will greatly reduce costs.
  7. Require full advance disclosure of costs to the patient. Often the patient does not know or care what the cost is, allowing gouging by the hospitals. Ideally, insurance should not cover routine care, which would force caregivers to drive down their prices in order to be competitive among consumers. Emergency care should be price-regulated, since the patient often has no choice of caregiver in such a situation.
  8. The government could demand more stringent accounting from hospitals and universities to account for their non-profit status. If the institution is federally funded, salaries derived from ordinary revenue should be held to the federal executive pay limit. Alternatively, abolish their non-profit status, and dispense with the myth that hospitals and universities are not just businesses.

A Behavioral Approach to Social Disease

Criticism of Pope Benedict’s recent remark on the effectiveness of prophylactics fails to distinguish between the moral and physical aspects of using such devices. As the supreme teaching authority of the Catholic Church, the Roman pontiff is concerned mainly with the moral aspect of venereal disease transmission. Condom usage fails to address the moral cause of sexually transmitted disease – namely, promiscuity – and indeed may encourage it by creating a false sense of security. In this sense, prophylactics are not a solution to the problem, but may even exacerbate the problem.

Many commentators have misconstrued the Pope’s statement as making the untenable assertion that condoms are physically ineffective. While it is unquestionable that prophylactic devices significantly reduce the chance of infection, there are sound statistical reasons for doubting their ability to contain epidemics. We will examine these reasons briefly, to show that condoms, to some extent, fail as a solution to the STD problem even in a physical sense.

According to the FDA, when condoms are used properly and consistently, the rate of pregancy in one year is 3%. Based on actual use, with human error and negligence, the pregnancy rate with condoms is 14% in one year. Without protection, the pregancy rate is 85%, so the figures cited reflect condom failures in 3.5% of optimal users and 16% of actual users in a given year. However, we must also consider that those who became pregnant likely had multiple failures in that year, since it is difficult to become pregnant on the first attempt. Even with optimal fertility (25%) it typically takes 4 months, so those who became pregnant likely had 4 or more failures per year. Assuming a Poisson distribution of failures, this means there’s an average of 1.25 failures per year with optimal usage, or 2.25 failures per year based on actual usage.

Again using Poisson statistics, I compute from the above that the chance of one or more failures per year is over 70% based on optimal usage, and nearly 90% based on actual usage. Based on the U.S. average of 58 acts of intercourse per year, there is a 2% failure rate per act with optimal usage, and a nearly 4% failure rate with actual usage. These results are consistent with other studies showing that condoms slip off completely 1-5% of the time.

In a society where the prevalence of STD is low, the failure rate of prophylactics is low enough to provide adequate protection, since it is improbable that a failure will occur while with an infected partner. However, in many African countries, the prevalence of AIDS and other STDs is in the range of 10-20%. This makes it a statistical near-certainty that a person will acquire that disease in a decade or so, if partners are changed constantly, even if condoms are used properly and consistently. Thus condoms are not an effective solution to the STD problem in high-prevalence areas like Sub-Saharan Africa.

People can minimize their risk even in high-prevalence areas by remaining monogamous with a partner who is known to be uninfected. In this scenario, multiple prophylactic failures pose little or no additional STD risk. A promiscuous person, by contrast, is exposed to the full risk of the high prevalence rate in the general population. This risk can be reduced by having one’s partner tested in advance, but the clandestine and spontaneous nature of promiscuous encounters operates against the likelihood of such precaution.

These theoretical expectations are corroborated to an extent by the actual epidemiology of STDs. In the United States, more than 50% of AIDS cases are among homosexual males, a tiny subgroup (3% of men or 1.5% of adults) where extreme promiscuity is common, and having as many as 100 partners per year is not rare. More than half of all syphilis cases in the U.S. are in the South, particularly among blacks, where promiscuity among the youth is rampant, and 48% of black women aged 14-19 have an STD. Still, in most cases, the prevalence of disease is low enough for prophylactic use to contain its spread. Such is not the case in Africa, where adultery and prostitution are practiced with much greater frequency than in the West, enabling AIDS to become an epidemic in the heterosexual population.

The relationship between behavior and epidemiology is not always straightforward. For example, in the United States there was an eightfold increase in genital warts in females from the early 1950s to the late 1970s (rising from 13 to 106 per 100,000). Gonorrhea incidence rose to epidemic proportions in the 1970s and 1980s. These changes are generally attributed to the liberalization of sexual attitudes, leading to greater promiscuity. However, an infectious disease is caused by an organism, so it may be influenced by biological factors, as seems to be the case with the gradual decline of gonorrhea in Europe and Israel since 1970, as well as its resurgence in the late 1990s.

Still, the ability to contain STD transmission through the usual means of prophylactics seems ineffective in the long run when not accompanied by more fundamental changes in behavior. In the U.S., where condoms and sex education have been ubiquitous for decades, 65 million people have viral STDs. (American Social Health Association (1998), “Sexually transmitted diseases in America: How many cases and at what cost?”) Over 50 million of these have genital herpes (Fleming DT et al. (1997), “Herpes simplex virus type 2 in the United States, 1976–1994,” New England Journal of Medicine, 337, 1105–1111. NIAID estimates range from 45-60 million.) Considering the entire U.S. population aged 14 and over is 242.9 million (in 2006), this means about 27% of the postpubescent population has a viral STD, and 21% has herpes. If this is success, what does failure look like? Faced with these facts, only the hardhearted could deny that even a highly developed “safe sex” public policy is unable to contain STDs in the long run.

Indeed, with the prevalence of herpes exceeding 20% in the U.S., condoms can no longer serve as an effective means for containing the epidemic, because their failure rate is not low enough to stop the spread of the disease among promiscuous people. With an average of at least 1-2 failures per year even when used properly, it is only a matter of time before someone with multiple partners in an exposed community becomes infected. This is not to say that condoms are altogether ineffective, but they can only slow the epidemic, not stop its spread.

Emphasis on condom use rather than reforming behavior is predicated on the assumption that it is difficult or undesirable to get people to change their sexual behavior. However, the entire enterprise of promoting prophylactic use involves getting people to do precisely that. There is no reason in principle why the same educational effort could be applied to encouraging people to at least limit their number of partners, if they cannot be absolutely monogamous. When sexual disease is highly prevalent, it is utterly misleading to claim that promiscuous behavior is “safe sex” when condoms are used. Risk is best minimized by knowing one’s partner well, and limiting changes in partners as much as possible. While this should be obvious, it has not received due emphasis in public health education. This reticence may be grounded more in the liberal sexual morality of policy makers and educators than in sound reasoning.

It has been known for ages that promiscuity is at the root of “social diseases.” Historically, these diseases had been marginalized in Europe and her colonies, confined mainly to the indecent practitioners of prostitution, adultery and fornication. With the destigmatization of these practices, sexual disease has gone into the mainstream, and will likely remain there as long as people fail to maintain a salutary monogamy, or at least a very limited polygamy. Long-term monogamy or limited polygamy has been the dominant paradigm of most human cultures for good reason, and has survived the test of experience. It is bad policy not to discourage foolish behavior, and even worse to tacitly encourage it, by claiming that it can be made safe.

Modern Western medicine has become notoriously negligent in addressing the behavioral causes of disease (e.g., nutrition, exercise, sleep), and instead increasingly emphasizes the use of expensive drugs and devices to address maladies after the fact. We see the same approach with sexual diseases: the solution is in a device that can be bought and sold, rather than in correcting behavior, which costs nothing, but requires patience and a modest amount of discipline.

None of this implies that prophylactics play no role in solving the STD problem, for they do indeed reduce the rate of transmission. For this reason, many contend that it is injurious for religious organizations like the Catholic Church to oppose the use of contraceptives, and effectively encourage the spread of disease. However, the same religions that oppose contraceptives also condemn adultery, fornication, and prostitution in even harsher terms. It is hard to believe that there are people who would have no qualms about committing the major offenses of adultery, fornication or prostitution, yet scrupulously heed their church’s strict teaching against contraception while committing those acts. Those who flout their church’s teaching on marital fidelity will almost certainly have no scruples about using contraceptives.

This appears to be borne out by religious statistics: only 20% of nominal Catholics in the U.S. (1999) accept official Church teaching against contraception, which is consistently the least popular of any doctrine surveyed (even less so among youth), being held only by the most scrupulously orthodox. By contrast, 68% accept that a Catholic must have his marriage sanctioned by the Church. The idea that religious teaching against contraceptives encourages STDs rests on the fallacy of divorcing such injunctions from the context of their full sexual ethic. I have yet to hear of any Catholics who heed Humanae Vitae yet live promiscuously (if such a thing were possible), so I must dismiss this as a straw man.

The fallacious argument above is made possible by a stubborn refusal to acknowledge the association between promiscuity and venereal disease.
This is evident in educational propaganda, where even monogamous intercourse is depicted as unsafe if lacking a condom, while promiscuous acts with a condom are safe. This completely inverts the actual degree of statistical correlation, and is therefore antithetical to the facts. How will a monogamous person magically acquire an STD? If the spouse is covertly unfaithful, any disease contracted through adultery will be passed on anyway when the couple tries to conceive. Many health educators not only neglect, but studiously avoid making a correlation between promiscuity and STD. By giving the false assurance that condoms are effective protection for a promiscuous person when disease prevalence is high, such educators are effectively prescribing the disease that it is their duty to prevent, by encouraging the behavior that is at its root.

Studies Show Most Do Not Understand Statistics

In this election season, repeated citations of polls provide reminders of how little even most educated people understand about statistics. I should like to review a few basic errors that cause most people to overvalue the accuracy of polls and other studies based on statistical samplings and correlations.

Journalistic polls often state a “sampling error” of 3 or 4 percentage points. This sampling error is a measure of the statistical error resulting from taking a sample of several hundred or several thousand random people out of the entire population represented. It does not include other sources of error, such as systemic sampling bias resulting from favoring, say, urban over rural respondents, women over men, etc. Thus the total error of a poll is usually more than the stated sampling error. This is why voter exit polls turn out to be inaccurate more frequently than their sampling error would indicate. If the error were truly 3 percent, we would expect the poll to be accurate within that margin of error two-thirds of the time, following a normal distribution.

Understatement of the error is also common in economics. Recently, former Treasury Secretary Robert Rubin opined that the current financial crisis was a “low probability” event, following conventional economic models. However, as Benoit Mandelbrot has pointed out, conventional economic models of asset valuations substantially underestimate risk, since they assume a normal Gaussian distribution of variations in price when a Cauchy distribution would be more accurate. Higher mathematics aside, we could gather as much when we consider that “low probability” events occur with remarkable regularity and frequency. Rubin’s understatement of error in his economic model leads to a tragic failure to appreciate that there may be systemic reasons for our propensity for bubbles and busts; instead, he regards the crisis as a freak occurrence.

Worse still is when polls are advanced to support claims for which they may have little relevance. Telling us that a majority of economists support Candidate X is not an economic argument for Candidate X, any more than a majority of physicists supporting Candidate X would prove the candidate is good for physics. If anything, it tells us about the political affiliations of economists or physicists, which is sociological data, not a scientific argument. Hard science does not work by taking polls of scientists, but demands that reasons be produced for a position.

Medical studies are often interpreted by journalists to prove causality when they only show statistical correlation. A good rule of thumb is to never assume causality unless a clear aetiology can be shown. Here, common sense may serve as an adequate substitute for mathematical expertise. When the consensus on medical wisdom constantly changes in a matter of decades, we can be sure that the facts were never as firmly established as originally claimed. Medical studies understate their errors by failing to take into account measurement error and systemic error in their statistical analysis. Further, they usually show correlations or “risk factors” without demonstrating causality. For these reasons, the certitude of medical wisdom should be viewed skeptically. Lastly, the claim “there is no evidence that X is dangerous” can simply mean no adequate study of the matter has been done.

In all these cases, a healthy skepticism combined with common sense can guard against most statistical fallacies, even when mathematical sophistication is lacking. Mathematics, after all, is wholly derived from intuitive, rational principles, so it cannot yield absurd results. When a presentation of statistical results seems completely contrary to reality, it is usually a safe inference that there is a wrong assumption underlying the analysis. Even sophisticated statisticians can err, though they calculate impeccably, if they misconstrue the assumptions or conditions of the question they believe they are answering. When studies claiming 90 or 95 percent accuracy prove to be inaccurate more than 10 percent of the time, it doesn’t take a mathematician to realize that there is a lot of overclaiming in the soft sciences.

Update: 29 December 2008

To give a current example of misleading statistics, a new study claims that teens making abstinence pledges are no less likely to have premarital sex than those who do not. If that sounds counterintuitive, it is because it is not true. Pledgers indeed are less likely to fornicate, but the current study decided to control for factors such as conservatism, religion, and attitudes about sex, and compared pledgers and non-pledgers with similar characteristics. Unsurprisingly, this yielded no difference, since the pledge itself does not magically cause abstinence, but rather the underlying attitudes and values are the cause. This is a far cry from showing abstinence programs are ineffective. It would be like saying education is ineffective, but rather it is knowledge that changes behavior. Once again, competent scientists blinded by their biases can make inapt choices of groups to compare, and make interpretations that do not follow.