the cost of medicine

Monday, March 5, 2018

Hope springs eternal this time of year for sports fans. Baseball teams have invaded Florida and Arizona to get ready for the season, while the NFL Combine in Indianapolis showcased top college football players. General managers, scouts and coaches have to evaluate the talent and their potential to lead a team to victory. But there is a difference in their decision making. Each NFL team has a salary cap and any extra money spent on a star quarterback is money not spent on a lineman to protect him, or a defensive player, or even a punter. In baseball, there is no cap (though there is a luxury tax for owners who are to extravagant) and teams are freer to spend as they choose to try to win a World Series.

As it turns out this difference in philosophy also plays out in the basic economics of medicine. The United States spends an almost unlimited amount of money to provide medical care, while other countries tend to be more frugal in their spending, having a budget (or in NFL terms, a spending cap) to provide medical services to their population. Whether one system is better than another is up for interpretation, but it is clear that different approaches exist.

Demand

There seems to be an unlimited demand for medical care, and as research finds new ways to treat diseases that were once thought to be uniformly deadly, the demand for new therapies, technologies and medications will continue to grow.

Another problem with unlimited demand is that some of the illnesses and injuries are self-inflicted, and there is no easy way to refuse care to those in need. Smoking has no positive benefit to the smoker and is a major risk factor for heart attack, stroke, COPD, and cancer. Second hand smoke increases asthma in infants and children and is increases the risk of cancer. Drinking and driving kills thousands and injures millions every year in the US. Marijuana use may increase the risk of pedestrian injuries.

Supply

If there is an increasing demand, there should be an increasing supply of services to provide the care needed, and this is where one might compare the NFL and baseball. Please know that there is no right or wrong, but rather, different approaches to care for people.

The NFL salary cap model

Imagine the Canadian system, where a single payer (the provincial government) has to decide how to allocate its budget to provide all medical care, from well-baby visits and immunizations to ambulance/helicopter transports and trauma centers plus everything in between. A need of one community has to be balanced with the need in another and not everybody gets what they want. The medical resources have to be allocated to meet all needs. This works in a society where people are willing to wait their turn for care and to be bumped in line if somebody sicker comes along to take their place.

Each province lists its waiting times based on procedure and location, from heart bypass surgery to hip replacement to cancer surgery. Emergency room wait times are also available on line. This is Ontario’s link.

Sometimes, the decisions are harsher. Red Deer is a small city of 100,000 people located half way between Edmonton and Calgary. Should somebody have a heart attack, their hospital does not have the capability of doing heart catheterizations to reopen a blocked artery. That patient has to be transported to either of the larger cities for a heart cath and mortality rate is 50% higher. Alberta Health Care has decided not to build a lab in Red Deer; medical funds are allocated elsewhere.

The Major League Baseball payment system

In the US, health care funding is a complicated mess with public and private insurance that does not provide coverage to all and often leaves people bankrupt due to illness and injury. People without insurance often forgo basic preventive exams like mammogram and colonoscopy, or blood pressure and diabetes screening, because of the price and inability to pay, only to then be diagnosed late when treatment is less effective and much more expensive.

Rationing of medical care does not occur at the governmental level but at the provider level, where people are turned away because of the inability to pay. How sad that federal laws were required (EMTALA: Emergency Medical Treatment and Active Labor act passed in 1986) to demand hospitals care for women in labor and people who may be in the midst of a medical emergency. Appreciate that hospitals are just buildings where care occurs, but the law was needed to remind the business managers that people came before profit.

Like baseball, every city and town is different and the owners of the local health care delivery decide how much or how little they will invest in the community. Not every team spends like the Yankees and Red Sox, and the quality of care across the country is not uniform.

 

The cost of health care is independent of the system that delivers it. It’s all about supply. Hoe many kids can you immunize for each alcohol-induced liver failure? How many more people might survive breast cancer if the money spent on opioid addiction research were redirected? Rationing and reallocation of medical resources occurs regardless of geography and payment model. It all depends on whether you like baseball or football.

 

 

 

 

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