Reflections on Thaler’s “Overcoming Obstacles to Better Health Care”

The article below from the New York Times had been sent to me by a number of persons asking for my views on the ideas contained and the relevance to Singapore. I’ve reproduced the article by Thaler below with my comments in [bold] inserted.

Overcoming Obstacles to Better Health Care

By RICHARD H. THALER Published: February 23, 2013 New York Times

AMERICANS spend far more on health care than people in other countries and we have little to show for it. And as we live longer after retirement, the share that will be paid by the government will rise.

Unfortunately, no single change will transform our health care delivery system into one that we can afford. We are going to have to try lots of new approaches that depart from standard practices.

I have several suggestions that I think would help, including an experiment that would require a change in either state or federal regulations: giving some high-quality health care providers the opportunity to practice in a world without malpractice lawsuits.

To me, the ideal health care delivery system would include:

¶ A fee for health rather than fee for service model. Doctors and hospitals should be paid for keeping their patients well. Paying them for doing more tests and surgeries creates bad incentives. [Agreed; but for this to happen, patients need to be randomly distributed to doctors so that all doctors have an equal chance of getting both ‘easy’ and ‘difficult’ patients. Otherwise, assessing which doctors are doing a good job and which ones are performing poorly will be fraught with bias and wrong judgments. In the Singapore setting, this may mean reducing the ‘market’ element in our health system and assigning patients to doctors for log enough periods that doctors are motivated to worry about preventive health and good disease management. This has to mean moving away from the dogma of the ‘market’ being the most efficient way to drive improvement and innovation and having some degree of a socialized model.]

¶ A scientific, evidence-based approach to everything it does. Although this sounds unobjectionable, as soon as we get into some details you can see that it is easier to say than to do. For example, consider setting guidelines for when to use expensive imaging technology such as M.R.I. and CT scans. [Agreed; but in practice difficult. Even doctors can’t agree for even technologies like mammograms and Pap smears. Perhaps easier to do based on disease like Breast Cancer Stage IA etc. rather than setting guidelines based on the technology in question.]

Not only are such tests expensive, but they can lead to more, sometimes pointless, expensive procedures. A CT scan conducted to investigate a symptom will often find a small unrelated abnormality. These tiny masses are sometimes called “incidentalomas.” The vast majority of them are benign, and further testing can be expensive, worrisome and dangerous, leading to interventions that cause serious side effects or even death. But a few incidentalomas are portents of real disease. The problem is that as technology improves, it can lead to more accidental discoveries, and we need thoughtful guidelines to avoid leaving lots of patients unnecessarily anxious, scarred and broke. [Agreed; but where does patient choice come in? In the USA, there are a plethora of guidelines on screening but patients still make the final decisions and for the vast majority of patients, more tests mean better care especially when someone else is paying! The experience has been that explaining the risks of ‘incidentalomas’ and ‘false positives’ has not been effective in reducing inappropriate testing. Maybe doctors are bad at counseling…]

¶ More employment of midlevel professionals like pharmacists, nurse practitioners and physician assistants, to give primary care physicians more time to talk to their patients. While I don’t want to be treated by someone exceeding his level of competence, many of these professionals are underused. A goal should be to allow all members of the health care team to work to the full extent of their expertise, something that is not currently the norm. This would free primary care physicians to spend more time with patients. [Agreed; government may need to play a stronger forcing function. The ‘medical cartel’ will resist as role substitution in the longer term and carried to its nth limit create the risk of redundancy and cracking of the rice bowl. No doctor will say so openly, and will frame instead as a patient safety issue. Patients and the public will of course also want doctors to do more and be resistant to any changes. Government will need to step in to ensure that the regulatory framework enables para-clinical staff to function at the full level of their expertise, and just as importantly enact a quality assessment process to reassure that the role substitution is safe, more convenient and less expensive for patients and society. In some other countries, the quality assurance role is played by professional bodies but in the Singapore setting, professional bodies such as the Academy of Medicine have no legal clout and are so poorly funded that staying afloat and relevant are challenging enough.]

¶ A requirement that all patients meet with their doctors or trained end-of-life counselors and prepare living wills. I am not suggesting that anyone be required to make any particular choices about these difficult end-of-life questions, merely that patients talk about the trade-offs and make some choices before they are incapable of doing so. [Agreed; challenge in Singapore is that doctors are not trained either by and large and we have a woeful shortage of counselors. Agency for Integrated Care is trying to improve the situation and a national training program and public education outreach has been developed. Advance Care Planning http://www.aic.sg/ACP/%5D

We now spend a disproportionate amount of money during the final months of people’s lives, often with little hope of meaningfully extending them. We should at least make sure that patients are given the opportunity to opt out of spending their final days in a hospital, hooked up to tubes and running up enormous bills. [A further challenge in Singapore is the paucity of palliative care practitioners and hence the widespread availability of palliative care. The economics of specialty selection play a part here; palliative care professionals are so poorly paid for the difficult work they do that society has to wait for doctors and nurses etc. with the passion and the financial wherewithal to choose palliative care as a specialty. Personally, I would encourage the state to intervene and artificially raise salaries for palliative care professionals, geriatric providers and rehabilitation professionals so that the market provides enough of such persons. The externalities they generate should more than justify the increased public spending.]

MANY fine providers do some of these things now, but they face an important impediment. They worry that if they stop administering a test that might cause more harm than good, or take steps to fully use the abilities of assistants, they will be sued for malpractice. As it is now, a doctor or hospital can be sued if the plaintiff can show that “normal standards of care” were not followed, even if those normal standards of care are inappropriate. [This is real, and my thoughts on the role of government as above]

Thus, to encourage high-quality health care providers to adopt sensible practices, let’s offer an inducement. Those with a record of providing high-quality care at good value could apply to the government for a safe harbor from malpractice suits. Organizations that receive this status could require patients to waive their right to sue for adverse outcomes. Of course, no patient would be forced to stick with such a provider, and with the new rules on pre-existing conditions under the health care reform law, those who wanted to retain their right to sue could go elsewhere. And an organization could lose this right if its quality declines.

Courts have previously ruled that such waivers are illegal, presumably because they do not believe patients should be trusted to make this judgment, but the experiment I suggest can test this concept in a limited way, starting with only the highest quality providers.

Personally, I would gladly give up my right to sue. Maintaining it is implicitly costing me money, for which I get little in return. Over the past five years, malpractice insurance companies have paid out to patients only 37 percent of the premiums they collect, according to the National Association of Insurance Commissioners. About 40 percent of that money goes to lawyers, meaning that patients end up with less than a quarter of the dollars that doctors and hospitals pay for insurance. That is a return that makes state lotteries look like good investments. [The issue is not so severe here in Singapore as Singapore courts do not award punitive damages and our legal system also does not permit contingency fees. The key issue is state permission and articulation of what is appropriate practice.]

Tort reform is a complicated subject and not a panacea. Texas capped malpractice awards for noneconomic damages at $250,000 in 2003, yet health care costs have not fallen. But tort reform deserves a better test.

To be clear, I am not proposing that this change be made universally. My suggestion is that we experiment by offering patients the option of selecting a health care provider with a record of quality that requires patients to waive certain rights to sue.

When it comes to my health, I would rather my doctor base her decisions on science rather than what she, or some lawyer, thinks will stand up in court.

Richard H. Thaler is a professor of economics and behavioral science at the Booth School of Business at the University of Chicago.

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