Healthcare Myth #2 - Increased consumer choice works

In the last post I discussed the inflated health care costs we have in the United States because health care providers here are largely immune :) from free market competition. In this post I'd like to examine the theory that consumer choice leads to higher quality and lower costs of health care. I think this "choice myth" is as bogus as the myth of a free market for health care. Here are my reasons.

First off, consumers make choices for personal benefit, not for group benefit. For things like health insurance, personal choice can drive up costs. As more companies drop health insurance coverage for their employees (in 2000 about 69% of companies provided health care benefits, by 2005 the portion of companies providing health care to their employees was down to 60%) politicians are creating personal health savings plans. The reasoning behind these is that if individual consumers pay for insurance out of their own pocket, they will buy the best care and negotiate for the best prices. The resulting consumer choice should drive insurance costs down. In practice it turns out to work in reverse. The healthiest consumers opt out of buying this insurance (why spend all that money on insurance, they're not likely to get sick), while those with poor health and chronic conditions opt in. Insurance works by spreading the costs of individual risk across a large risk pool. But by allowing healthy consumers to opt out, we end up with a smaller pool of insurees who have a higher proportion of health risks. This is a recipe for higher insurance prices. To end up with lower health insurance costs, we'd need to eliminate choice and mandate that everyone buy insurance. This would result in a large pool of insurees, and make sure that low-risk insurees are pooled with high risk insurees. This idea, of mandatory health insurance, is anathema to Americans (even though we've grown used to mandatory auto insurance). We will fight for our right to choose, even if that choice results in higher costs.

Secondly, consumers often make choices based on fear or fantasy, not science. There are many treatments that are performed routinely to provide a (false) sense of comfort, not because of medical need. These treatments add cost without improving overall health. One of these is mammography. Women over 40 have been told for years that they should have annual mammograms. The science shows that the vast majority of these mammograms are unhelpful. An article in the July, 2005 issue of the Journal of the National Cancer Institute found that regular mammogram screening did not actually decrease deaths from breast cancer. But many medical labs have bought expensive mammography equipment, and we're scared to death of cancer. We feel safer for having the procedure done. Lest you think I am picking on women, men are now buying the same bill of goods on annual prostate screenings. Most men have little need for a regular PSA test, according to the American Cancer Institute, but we often sign up for this procedure "just in case" (and in so doing, we inflate medical billings). We do the same with colonoscopies (out of fear of colon cancer), which the National Cancer Institute says are performed far more often than necessary. These are a few examples of the many medical procedures that we consumers have become convinced over the past twenty-five years that we should have as part of a regular check-up. It is often the case that we sign up for these procedures because they make us feel safer (and medical companies, doctors and labs can make money on them), not because performing them improves health care outcomes.

This is no less true for many medicines. We often turn to over-the-counter and prescription drugs when we are sick, whether or not they will actually help us. For example, many Americans with a cold will ask their doctor to prescribe an antibiotic. Colds are caused by viruses, antibiotics do not work on viruses. Doctors know this, but they will often provide the prescription anyway, because they want to please their patients. In June of 2005 the Journal of the American Medical Association published an article showing that doctors often prescribe antibiotics to make patients happy even though these drugs won't shorten the duration of cough, congestion or lower respiratory tract infections. In fact, this over-prescription of antibiotics has increased the threat to public health from drug resistant disease bacteria. We not only misuse antibiotics, we do the same with cough medicine (scientific studies show that cough medicine has little or no real health benefit), sinus medicines, even vitamins (scientific studies show that taking vitamin C does not prevent colds, nor does it reduce their length or severity). When we are sick, taking something (a magic potion) is "better" than doing nothing, but often the potion does nothing to improve health care. We love all the choices available on our pharmacy's shelves (and said pharmacies respond by growing ever larger), but the science shows that we could eliminate most of the vials and jars in our medicine cabinets and be just as healthy.

A third way in which increased choice has not led to improved health care is in the rise of the specialist. Over the past 25 years the proportion of doctors who choose to become general practitioners (GPs) has shrunk, and those who have become specialists has grown. I suspect that this is not because that's what we need as a population of patients but because that's where the money is for doctors (according to the Bureau of Labor Statistics specialists make 10-100% more than GPs). We'd expect that having more specialists, with deeper medical knowledge, would improve health care, but several studies (such as this one from Dartmouth - http://www.dartmouth.edu/~kbaicker/BaickerChandraSpecialists.pdf) show that an increased use of specialists results in a decrease in health care outcomes for a population. Studies show that the vast majority of office visits can and should be handled by GPs. Saying no to the "choice" of most specialist referrals would lead to both higher quality health care and lower costs. It turns out (as studies like this one from Colorado show - http://www.medscape.com/viewarticle/474281_4) that we'd be healthier if we had more GPs, not more specialists. Most of the time we don't need a dermatologist to treat our acne, or a podiatrist for those pesky bunions. But who's going to tell all those medical students that they shouldn't become podiatrists or dermatologists, but instead should take a salary cut and become family practitioners?

In sum, choice has not reduced health care costs or increased the quality of our health. Choice often leads to insurance inequalities, unnecessary specialist referrals, unnecessary diagnostic treatments and over-prescribed medicines - which do us little real good. We're looking for comfort and trying to alleviate our anxiety about our health, but we're not getting better health care for all the choices we have and the money we're spending. Americans are illogical when it comes to health care and we'll fight (to the death?) for the right to choose our "health" care, rather than let a system like England's or Canada's (or Universal Medicare) provide it for us.