By Kim Bellard, December 17, 2014
The U.S. Mint reports that it now costs 1.7 cents to make a penny; nickels are slightly better, costing "only" 8 cents to make the 5 cent coin. This is economics the way health care practices it.
According to Christopher Ingraham of the Washington Post, we could save $100 million annually by eliminating both coins. Or we could change the metal composition to make them cheaper, but that would create havoc with vending machines. So we just blithely chug along, mostly because we've always had them and the businesses that revolve around them don't want to change.
See how this is like health care?
What made me think about this was a recommendation from Britain's National Institute of Health and Care Excellence (NICE). They now say that midwife-led birthing units are safest, and advised more women to consider them for low risk pregnancies. They believe this could account for as many as 45% of live births. Moreover, they think home births are just as safe as births in a hospital. The Netherlands is considered the leader in home births, at a little under 25%. The U.S. has 1.36% home births.
The literature -- often drawn on Netherland's data -- generally supports the NICE recommendation, but not everyone is convinced. It would be very easy to weigh all the factors, and conclude that even a relatively small increase in risk is not something you'd want to take for your own baby, and opt for the "traditional" OB/hospital delivery.
This is where the penny analogy starts to really apply. These decisions on risk reduction are not without financial consequence. A vaginal delivery with no complications averages about $10,000, whereas a birthing center costs under $2,500, according to Childbirth Connection. I assume home delivery is less expensive.
In a piece for The New York Times, professor/physician Aaron Carroll notes that the ACA-created Patient Centered Outcomes Research Center is explicitly prohibited from considering cost effectiveness. Its website says: "We don’t consider cost effectiveness to be an outcome of direct importance to patients."
In theory, value-based purchasing will help us address these decisions. In practice, though, most of the value-based purchasing arrangements I am aware of -- and that certainly is not an exhaustive list -- reward providers whose outcomes are simply what we'd hope for, may penalize them slightly for disappointing results, and are indifferent about if the care could have safely been done elsewhere for less.
I'm beginning to think that trying to reshape our health care system through value-based purchasing, cost-effectiveness, or even greater transparency may not work. The "killer app" may not prove to be any of those high-minded strategies but rather a much more basic one: convenience.
Indeed, one of the earliest urgent care chains attributes its inspiration to the example of McDonald's. We are, after all, the nation that invented fast-food, decided even that wasn't fast enough and so invented drive-throughs, which we use for over half of our fast food. We liked the convenience of them so much that we've extended the approach to banks, car washes, pharmacies, even weddings and funeral homes. The concept of drive-throughs itself is rapidly being supplemented and even superseded by mobile apps, allowing consumers not to even have to get in their car.
Health care cannot ignore these consumer demands for more convenience.
Walgreens' chief medical officer recently noted that: "The idea of convenience ... is really becoming a dominant theme in health care." It's no coincidence that Walgreens has been investing in in-store clinics, has a 24/7 Pharmacy Chat option, and just rolled out a direct-to-consumer physician virtual visit app, similar to American Well's Amwell service. Not to be topped, Kaiser is now offering EMT home visits, in addition to its array of in-office and virtual visit options.
Our traditional approaches to care delivery have revolved around convenience for the providers, not the consumers. Many consumers, especially younger ones, find ridiculous the notion that they have to call for an appointment that may end up weeks away, go to an office or facility that may not be close, only to wait there with sick people, and perhaps be sent to some other office or facility for more services. They'd rather get their care via their mobile devices and/or in their home, and the technology is increasingly allowing that for many health concerns.
We've come to recognize that health care is one of the few industries where technology typically not only doesn't lower costs but usually adds to them. Maybe, though, expecting providers whose revenue is at stake to focus on cost-effectiveness is asking too much of them. Focusing on convenience shouldn't be.
Focusing on convenience is simply a way to make sure we're focusing on the consumer (AKA "patient"). Isn't that supposed to be the point?