A while back, I talked about the importance of trying to keep healthcare costs as low as reasonably achievable. Today, I'll try to delve into the much more difficult discussion of how that might be accomplished.
Reducing healthcare costs, or at least slowing the rise in those costs, is a tricky proposition. These costs have grown faster than inflation for a reason - controlling healthcare expenditures is hard! Certainly, if I had an amazing insight into how to accomplish the goal of reduced healthcare costs, I wouldn't be posting it on a blog - I'd be selling my consulting services to the government or insurance companies or hospitals.
However, when you break it down, there's really only two ways to keep costs down. Healthcare can be broken down as a set of discrete services, so we either need to reduce the total quantity of services provided, or we need to reduce the cost per service provided.
Reducing Quantity of Services Provided
The principle here is fairly simple. If you want to spend less money on say, antibiotics, simply prescribe fewer antibiotics! Or better yet, prescribe no antibiotics, ever. Of course, antibiotics have value - many infections are untreatable without them. Not using them at all would be a very bad idea.
Yet, there are some situations where antibiotics are unnecessary or even harmful. Simple, acute upper respiratory infections, for example, are often viral, for which antibiotics do nothing. Prescribing antibiotics for such an infection is very likely to be useless (there's also some evidence that even with bacterial infections, they're not very useful either, though this is a somewhat more complex area of discussion). Eliminating prescriptions of these antibiotics would save money without significantly impacting health. The Choosing Wisely Campaign attempts to address this sort of waste. Both American and Canadian campaigns have sprung up to encourage physicians - and to a lesser extent, patients - to be more discriminating about what medical services they actually necessary and when to employ them.
There are also some more limited instances where a service in healthcare is entirely unnecessary. Apparently we used to intentionally put people into comas by overdosing them with insulin. That wasn't a great idea... Eliminating useless or harmful services also saves money. While it's much harder to tell that a particular diagnostic test or therapy is completely useless for all people in all circumstances, there are almost certainly some of these services being employed in mainstream medicine today. Identifying these practices is worthwhile from both a medical and economic perspective.
Reducing Cost of Services Provided
While lowering the quantity of services is relatively straight-forward as a concept, reducing costs of each service is not.
What goes into the cost of a healthcare test or treatment is complex, but again, we can break it down into components - personnel, supplies, and durable equipment (including facilities).
1) Personnel
Healthcare takes people to work. Lots of people! People-heavy fields are expensive though and healthcare is no exception. That almost everyone in medicine is generally well-educated adds to this cost. There are a wide variety of professions within the healthcare system, but I'll focus on physicians. Physicians are moderately numerous and get paid a lot. Even small percentage reductions in numbers or salaries of physicians can meaningfully reduce healthcare costs.
Having fewer physicians is a non-starter. Each physician and there are already widespread concerns about overworking these providers. Physicians will increase significantly in number as medical schools have increased their class sizes to keep up with demand. That leaves salaries. Again, physicians receive good compensation. After overhead but before tax, most physicians make $200,000 a year. A few make a bit less, many make significantly more.
Reducing physician salaries, while hardly a sustainable strategy for minimizing healthcare costs, can be part of the solution. That's what the Ontario government did.
2) Supplies
There are numerous supplies that get used once in medicine and then tossed or consumed. There are often good reasons for this - we're not going to reuse needles, for example - but nevertheless, there are certainly instances where we overuse supplies or use supplies that are more expensive than necessary. For example, I did an observership in a clinical teaching unit (CTU) which naturally had many learners. We saw nearly a dozen patients, all of whom had some sort of communicable disease, but most without anything really all that serious or likely to spread. Yet, all 5 or so of us doing rounds put on full protective equipment, even though half of us just stood in the back, well away from the patients. Meanwhile family members pop in and out of the room with no equipment whatsoever. Me wearing that equipment is hospital policy and that policy exists for a good reason - but in this case I probably cost the hospital at least $20 without much in the way of appreciable benefit to them, the patients, or myself.
The major consumable supply in healthcare, however, is pharmaceuticals. We spend a lot on drugs. And a fair bit of that expense is likely unnecessary. Too many name-brand drugs ordered when generics would be just as effective. Physicians may prescribe too many antidepressants, too many anti-psychotics, too many antibiotics, too many ADHD medications, and too many statins, just to name a few. Fewer drugs prescribed means lower healthcare costs.
If you can still treat people effectively without using as many medications or other supplies or other supplies, costs are likely to fall. This is sometimes a bit hard to untangle from the above discussion of simply reducing services and there is a bit of crossover here, but conceptually, the goal is to provide the same treatment (i.e. addressing the patient's medical concerns), only with cheaper, fewer, or no drugs.
3) Durable Equipment
Last, but not least, we have the stuff that sticks around for a while. This can range from something as simple as my stethoscope, to the giant hospitals where I will do most of my training. There's not a lot of low-hanging fruit here to pick on, because generally durable equipment are fairly big, one-time expenditures that last for at least a decade, so a fair bit of thought gets put into them. I spent a ton of time researching what stethoscope was right for my needs. Likewise, no one builds a hospital on a whim.
If there are costs to be saved here, it's likely in the utilization of these durable goods and finding ways to encourage practices that draw on lower-cost durable goods, which often goes hand-in-hand with reductions in personnel or supplies costs. For example, outpatient clinics generally require less infrastructure than inpatient wards. Doing more outpatient work saves on infrastructure costs (though it saves a lot more in day-to-day costs). An MRI machine costs well over a million dollars, while ultrasound machines cost less than $100k - if we can get away with doing more ultrasounds and fewer MRIs, then we probably save on equipment costs by buying fewer MRI machines.
Closing Thoughts
I've given a fairly simplistic rundown of some of the major ways in which healthcare spending could be reduced. While I hope I've given a good sense of what could be done, I haven't really touched on the how these approaches could be accomplished. That requires a much more complex discussion of government policy, economics, legal considerations, and human psychology.
I also haven't discussed the drawbacks to slashing spending - and there certainly are some. Whenever you try to cut away the bad expenditures, you risk cutting away some good ones as well. It's undeniably true that antibiotics are over-prescribed in some cases, but people often need antibiotics! There's always a chance that in stopping needless use of antibiotics, some people will not get them when it is appropriate.
Similarly, every action has unintended, sometimes undesired secondary effects. Cutting physician salaries saves money, but if it reduces access to the healthcare system, it may result in sicker people who require more expensive services down the road. There are certainly methods to anticipate and minimize unwanted secondary effects, but no change is made in a vacuum and it can be hard to predict what the full effect of a policy change will be in 10+ years.
It's a complicated discussion and while I've tried to simply the problem, there are no simple answers. Yet, as a physician-in-training, I believe it's an important one - for the sake of my profession, my future patients, and for my community as a whole.
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