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Harnessing Technology in Health Care

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Harnessing Technology in Health Care Powered By Docstoc
					Harnessing Technology in
Health Care

         David M. Cutler
     Department of Economics
        Harvard University
Is it better than Prozac?
Common Views About Medicine
   High-tech innovation adds to medical
    spending, and that is bad.

   Technology is the cure for most economic
    problems.

   Thank God for lawyers and people in red
    states. They make me feel a lot more secure.
The Full-Length Version
                  This talk is based on
                   my research over
                   the past decade,
                   which I have written
                   a book about.
Two Types of Medical Innovation
   High-tech care for cardiovascular
    disease
       CABG; angioplasty with stent


   Diabetes disease management
       Medical and non-medical management of
        chronic disease
  Use of Angioplasty and CABG in
  New York State
                               Procedures per 100,000 aged 45+

   6
                                                                            PTCA
   5

   4

   3
                                                                             CABG
   2

   1

   0
       1980      1985       1987         1989   1991   1993   1995   1997   1999    2001



Source: Cutler and Huckman, JHE, 2002.
Issues in High-Tech Care
   It’s very expensive
       Cost of CABG is about $30,000, and cost of PTCA
        is about $20,000.
       Medical management costs about $10,000.


   Is it effective?
       People live a lot longer than they used to.
       But a lot of use is in patients where clinical trials
        have not been performed.
Why do we spend more on
medical care?
   Because we can do more.
       Price increases are a small part of the story
       Quantity and quality increases are

   Examples:
       Cardiovascular disease
       Low birth weight babies
       The mentally ill
        Changes in Medical Care for
        Severe Heart Disease (MI)
   1950 Standard               Today’s Standard
       Bed rest (6 mos +)          Pharmaceuticals to
                                     restore blood flow;
                                    Intensive diagnostic
                                     therapies
                                    Invasive
                                     revascularization


                                    Cost = $30,000 in
       Cost = $0                    present value at age
                                     45
        Changes in Medical Care for Low
        Birth Weight Infants
   1950 Standard                 Today’s Standard
       First incubators,             Neonatology unit;
        experimentation with           artificial surfactant;
        warming, etc.                  ventilators; etc.




       Cost = $0                     Cost = $70,000 in
                                       present value.
        Changes in Medical Care for
        People with Depression
   1950 Standard                        Today’s Standard
       Mental institutions for              SSRIs
        very ill; little for others
       Lobotomy, ECT,
        Insulin therapy




        Costs have doubled in the past 20 years, as we
        treat more people
Is It Worth It?
   Mortality
   Quality of life
 The Single Biggest Factor in Reduced
 Mortality -- Cardiovascular Disease

                      900
                      800
 deaths per 100,000




                      700
                      600
                      500
                                                  SG’s smoking
                      400                         report
                      300
                      200
                                                                  Anti-HTN       Spread of invasive
                      100                                         meds           technologies

                       0
                            1900   1910   1920   1930   1940     1950   1960   1970   1980     1990   2000


Life expectancy at age 45 has increased by 4½ years.
Matching Benefits and Costs --
Cardiovascular Disease
   Benefits                      Costs
       About 3 years of              Spending on CVD is
        longer life (4½ in             about $30,000 in
        total for CVD) is a            present value from
        result of medical              age 45 on.
        advance.




Is it worth it ($10,000 for a year of life)? Almost
certainly, yes.
There is waste too
 AMI Treatment in the US and Canada

             35
             30
             25
   Percent




             20
             15
             10
              5                       US
              0                       Canada
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             R
Conclusions About High-Tech
Care
   We spend more, but it’s worth it.
   There is still a lot of waste.
Chronic Care
   Process and outcomes for diabetics
        Care Management for
        Diabetics
                                                   Passing, but just barely
                  100


                  80

                  60
        percent




                  40

                  20

                   0
                        HbA1c     HbA1c        Dilated      Lipids   Lipids    Nephropathy
                        testing   control   retinal exam   testing   control      exam


Source: NCQA data.
                                             Big failure
We Know We Can Do Better
   Study of HealthPartners, an HMO in
    Minneapolis, MN
       Largely group model
       Implemented diabetes improvement
        program in the mid-1990s (starting in
        1994)
          HP Program
Primary Components of Diabetes DM Programs:
* Dissemination of guidelines   * Performance feedback to physicians
* Provider education            * Patient reminders
* Member education              * Case management
* Screening programs            * At-risk lists
      The Impact of Organizational
8.8
      Innovation
8.6
8.4
8.2
                                             Mean HbA1c levels and
  8
7.8
                                             percent of tests for diabetic
7.6                                          patients, HealthPartners
7.4
7.2
      1994 1995 1996 1997 1998 1999 2000


100

 80                                        Percent tested
                                           w ith HbA1c below
 60                                        9.5%

 40                                        Percent tested
                                           w ith HbA1c below
 20                                        8%

  0
      1994 1995 1996 1997 1998 1999 2000
The public debate
   Does disease management save
    money?
      “According to CBO's analysis, there is
      insufficient evidence to conclude that
      disease management programs can
      generally reduce overall health spending.”
          October 13, 2004.


   Why the differing standards?
Waste and Value
                                         Value of Services
                                  Low                              High

                           Low

                                                   Health promotion
   Intensity of Services



                                             (Follow-up/monitoring)



                                        Chronic disease management




                                    Episodic acute and chronic care
                                           Heroic interventions
                           High




                                           (surgeries, tests, …)
Waste and Value
                                        Value of Services
                                  Low                       High

                                                                   Traditional
                           Low
                                                                   reimbursement
                                            Follow up/monitoring
   Intensity of Services




                                            Disease management




                                             Fancy Stuff
                           High
Waste and Value
                                        Value of Services
                                  Low                       High

                           Low

                                            Follow up/monitoring
   Intensity of Services




                                                                   Managed care
                                                                   era

                                            Disease management




                                             Fancy Stuff
                           High
Waste and Value
                                        Value of Services
                                  Low                       High

                                                                   Quality-based
                           Low
                                                                   payment
                                            Follow up/monitoring
   Intensity of Services




                                            Disease management




                                             Fancy Stuff
                           High
What’s Needed
1.       An evidence base that supports good
         care.
          Profiling of: individual MDs; groups of
           physicians; hospitals; insurance
           companies
What’s Needed
1.       An evidence base that supports good
         care.

2.       A system that admits and learns from
         mistakes
     •     Malpractice reform
     •     CQI
What’s Needed
1.       An evidence base that supports good care.
2.       A system that admits and learns from
         mistakes

3.       A payment system that rewards quality.
          Provider reimbursement
             Assign points for meeting quality standards and take
              away points for missing them, with funds awarded
              based on annual points.
             Measures of quality: Process, Outcomes, Satisfaction
          Lower patient cost sharing for effective care.
What’s Needed
1.   An evidence base that supports good
     care.
2.   A system that admits and learns from
     mistakes
3.   A payment system that rewards
     quality.
4.   A system that covers everyone.
A Vision of the Future Health
System
   Has less wasteful care and more valuable
    care.
       Overall spending may be higher or lower

   Has sustained cost increases, for new
    technologies.
       Makes sure financing system is stable


   Insures everyone.

   Challenges and rewards for high value.
If we fail…
 “Speaking for myself, I too believe that
 humanity will win in the long run.
 I am only afraid that at the same time
 the world will have turned into one
 huge hospital”
   - Goethe, May 1787 letter
If We Do It Right…

				
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