Jan 22, 2016

Interview Transcript

Dr. Kyle: Healthcare costs are higher in the United States than in any other country and they continue to grow faster than inflation. So what can we do to slow this down? I'm Dr. Kyle Bradford Jones, a family physician at the University of Utah School of Medicine and we're talking about this on The Scope.

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Dr. Kyle: I'm joined today by Dr. Norm Waitzman who's a Professor of Economics at the University of Utah and Co-Director of the University of Utah's Health, Society and Policy Program. So, Dr. Waitzman, we hear a lot about bending the cost curve as well as decreasing costs. Is there a difference between that and, if so, what is it?

Dr. Waitzman: There is a difference. If costs go up at a slower trajectory, if they tend to increase at the rate of inflation, then we don't have to basically take resources away from one area and allocate it to the healthcare sector. When healthcare costs increase at a rate that's higher than the rate in the general rate of productivity growth or the general rate of GDP growth in the country, then basically it's going to take away from all of the resources that we devote to education, transportation. Bending the cost curve means to basically align the trajectory of costs with the general trajectory of growth in the economy. At least there might be areas that certainly costs could actually go down. But that's been almost unheard of in our country.

Dr. Jones: But what are some things we can do to bend that cost curve?

Dr. Waitzman: Well, I think that we've already started down the road in some ways. We rely on our providers to provide us with the best information and services. The reorganization of care where there's specific types of payment does not reward doing more, but provides better value for what you do and ultimately generates greater satisfaction amongst the patient population. The question is to whether that's going to be sustained.

Dr. Jones: Now, there's also been a lot of talk about waste in healthcare. Up to a third of what we spend can be considered wasteful. You mentioned things such as improving the quality, improving the value of healthcare. How much does that relate to decreasing that one-third of waste?

Dr. Waitzman: One-third is spent where we could have gotten, say, the same value with two-thirds of the spending, that's the way it's characterized. Winning that one-third back entirely is going to be nearly impossible. If you consider pockets of where we certainly . . . the value to cost relationship is low.

For example, the end of life care. A very considerable amount of resources are spent towards the end of life. And the incentives of the system have been to generally provide more. Many of the patients and their families see this as almost part of the protocol for end of life and there is a great deal of guilt involved if that care is not provided. But in fact, when we have people receiving hospice care or palliative care oftentimes where the terminally ill patients are going to be put through types of regimens that provide nearly no value, then there's opportunity to reduce the provision of care. It has to be done delicately.

We saw the subject of the so-called "death panels" arise in the passage or in the early development of the Affordable Care Act. That was a misnomer and both sides of the aisle were actually onboard with respect to providing end-of-care guidance. Incentives partially involve the culture and the provision of care and it involves the payment system. What do we do in the case, for example, of these PSA tests, for the proliferation of screening tests like the PSA or like mammography, where there was a great deal of optimism that these were going to isolate early on the trajectory of disease to the point where it was going to be more costly and more consequential?

Dr. Jones: PSA for prostate cancer.

Dr. Waitzman: That's exactly right. So most of the results of those tests would indicate some form of either additional diagnostics, biopsy and maybe even prostatectomy whereas if we let the case take its course, there would have been very little consequence. There have been estimates that 1 in 14 of these prostatectomies really have any value. So there's this kind of error where we're over-treating in some cases and everybody who gets these would swear, even with their incontinence, their sexual dysfunction, all the problems that arise with respect to these treatments, they would swear that this was the right thing to do because they might have been the 1 in 14.

So you're dealing with all these kinds of calculations and equations and the society is paying both individually and broadly with respect to this type of what could be characterized as waste. So it has to be an alignment of value and cost.

So reigning in healthcare costs, too, has to take cognizance of the complexion of healthcare problems in the country. Parts of our chronic medical care issues are very costly, of course. They're amenable to interventions that generally are not cures. They're going to be managed over their entire life with various regimens. There's an incentive for pharmaceutical companies and device companies and for it to come up with basically these types of interventions that are going to be long term. They're very lucrative, but at base, and distally with respect to the origins of these problems, you're looking at an obesity crisis in the country.

You're looking at reduction in physical activities. There are great stresses in much of the life of Americans today. And so, ultimately, reigning in healthcare costs is not going to be the burden strictly of the medical care system but it's going to be placed on policies and on the reconfiguration of lifestyles and the encouragement of those lifestyles, which align with lower healthcare costs as well.

Dr. Jones: What can individual patients and consumers of healthcare do to try to decrease our costs?

Dr. Waitzman: Consumers oftentimes can't make the decision between highly effective and less effective care and they're relying on the community to do this. So I think that part of it has to be when we talk about "we," we're talking about the providers, we're talking about payers, we're talking about the employers in terms of being attentive to the structure of the benefit of an insurance program, the structure of a panel of providers, the structure of incentives in those providers.

So I'm not saying that we as individuals cannot be attentive to lifestyle choices, which might reduce our own healthcare risk of chronic disease. So we are individuals that make our own decisions with respect to the choice of getting care and then navigating the system. But we are also political in terms of participating, in terms of the debate surrounding healthcare provision and policy. So I'd say that we need to basically be citizens, political beings as well as being attentive to our own personal lifestyle when we talk about our own individual decision-making.

Dr. Jones: So to summarize, it sounds like policies surrounding healthcare, but also more broadly and even the culture of how we address healthcare, how we consume it, so to speak, it kind of all plays together to decrease these costs, correct?

Dr. Waitzman: That's right and I mean in the way that you characterize that now, the way I think about it, it almost is like it all matters so we can throw our hands up. But we do need to prioritize in a certain way and when the opportunities are there we need to strike. So I think that one thing that we need to be attentive to, in particular, as we're going forward now with the healthcare system, with the rise in pharmaceutical costs, is how we're going to organize care in a way that's going to provide this cost to value equation.

One thing that's conflicting right now is that if we integrate care under these accountable care organizations, which show that when you integrate, basically you have panels of providers that are overseeing the entire population. There's a seamless delivery through the medical care system. You're escorted in a very logical way and information is shared throughout that system. So you have a coordinated, team-based care. All of that is beneficial.

On the other side, we're seeing a concomitant consolidation of healthcare organizations. So where you might have had 40 competitors, you're winnowing that down over time and so when you lose competition, that gives greater power to those accountable care organizations. So I think that we need to be attentive going forward as to how that's going to resolve in terms of continuing to bend the cost curve, so to speak.

There are other facets with respect to prioritizing care. So I hope as a result of our conversation, people aren't throwing their hands up and saying, "Everything matters."

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