2009 March 08 Sunday
Health Care Employment Still Expanding

An aging population, rising costs of medical care, and government funding of old age and poor folks medical care combine so that even during a time when the number of jobs is rapidly shrinking the health care sector is still hiring.

Employment figures for February are out today, and the numbers are a horror show: The economy lost some 651,000 jobs during the month. But health care added some 27,000 jobs.

Great news if you are in health care. Bad news for net taxpayers, employers, and those who need to pay for medical care.

This really is amazing and speaks to the need to fix the causes of rising health care costs. For example, do we really need to spend big money on the final few months of life? Also, we really need Total Quality Management philosophy brought to medical care to cut down on the errors and duplication and the huge amount of time waste.

Ever tried to help an elderly family member navigate thru getting appointments and running back and forth between specialists in their separate offices at different locations? You show up and they can't find the records or the records of tests from another specialist or hospital haven't arrived yet. Or your appointment got canceled and they didn't tell you. Or my favorite: you go to some clinic, pay for what you think are all the services they provided, and then you get a bill a few weeks later from some lab company you never heard of for a test you got while at the clinic. It boggles my mind that medical care providers can handle such huge sums of money without consolidating their billing. Imagine you went to get your car fixed, paid the bill, and then got a bill a month later for the alternator. You'd think that was totally retarded. But the medical profession does this as a normal business practice. How stupid and inconsiderate.

Update: Among the ways we could make substantial cuts in medical costs: use cheaper labor. I keep coming across studies like this one that shows nurses can diagnose and treat sleep apnea for lower cost and just as well as doctors.

They assessed the patients' sleepiness on the validated Epworth Sleepiness Scale (ESS) and set the minimal clinically significant change at +/- 2 points. They also assessed other outcomes of sleep, including quality of life measures, executive neurocognitive function on maze tasks and maintenance of wakefulness tests and CPAP adherence. In all, the study assessed almost 200 patients with moderate to severe OSA who were randomly assigned to the simplified or traditional model.

The patients in the nurse-led group spent about 50 minutes longer with the nurse than the patients in the physician-led groups, but were seen by physicians 12 percent of the time. Patients in the physician-led group, meanwhile, had an average of 2.36 consultations with physicians, as opposed to 0.18 for patients in the nurse-led group.

Despite these obvious differences, none of the secondary outcomes measured showed significant differences between the groups, and differences in ESS scores between groups were lower than the pre-determined minimum for clinical significance.

Notably, the patients in the nurse-led group were diagnosed and treated for $722 U.S. dollars less per patient than those in the physician-led group, but did not suffer from inferior care or outcomes.

Automate and let people use lower priced service providers. I would like to see more lab tests in drug stores. A friend tells me he can get a blood lipid test for cholesterol and triglycerides done at a drug store near him for $20. I would like to see a lot more of that. This would let people monitor the results of dietary and exercise changes.

Share |      By Randall Parker at 2009 March 08 02:08 PM  Economics Health

Thai said at March 8, 2009 4:15 PM:

Randall, may I suggest another way of looking at this?

Statements like "do we really need to spend big money on the final few months of life?" will ALWAYS be answered with a resounding "yes"- think about it a little more.

To illustrate my point, we could develop models (actually we have them already) that predict the probability of survival, and when survival reaches a certain threshold, we could "pull the plug", discontinue spending and let a person die. And doing this would indeed cut health care spending dramatically. But after you made this change, and reanalyzed health care spending data at the new lower level, you would still find that we spend the majority of our money near the end of life (unless you want society to move to a kind of Logan's Run model where we all live according to a kind of socially demanded "aptosis"). Health care spending is most definitely fractal, of this I am quite certain.

And FYI, having seen unbelievably negative reactions BY SOME PATIENTS AND FAMILIES when simple cholesterol medications are withdrawn on end stage cancer patients, don't kid yourself how much Americans OF ALL LEVELS OF INTELLIGENCE simply deny the reality of death. Many people will refuse to accept these models just like many people refuse vaccinations. Who pays for it when they do? Who pays for the slight loss of herd immunity when people refuse vaccinations?

I assume what you really mean to address the issue of REGIONAL VARIATION in end of life spending (which is completely a different issue). And in truth even this is very complex issue. We can definitely solve it as a society. My question to you is "what are you willing to give up in order to solve it?"

And consolidating your bill under today's high cost structure might be more convenient but it would just be a larger bill. Don't kid yourself.

Randall Parker said at March 8, 2009 4:44 PM:


I suggest this solution: When someone has 2 months left to live Medicare calculates how much it will cost to do aggressive treatment and how much it costs to just do palliative care. Then Medicare offers to pay the estate half the difference if the dying patient opts to receive only palliative care from that point forward. I bet a lot of people will opt to give their spouses and children big chunks of cash rather than use all that money on a pointless attempt to stay alive.

Regional variations: I'm aware of them. But what causes them? More doctors in Miami than in Minnesota? (and I chose those as two known outliers)

tim said at March 8, 2009 6:22 PM:

My father was a blue collar welder, fairly dysfunctional he spent lots of time laid off. He made just under 750K over the course of his lifetime in inflation adjusted 2007 dollars. He passed away at 67 in 2007 due to smoking (heart and lung failure) over the course of about two years. His end of life medical care was closes to 250K (a couple of relative minor heart surgeries, putting in stents, after a pair of heart attacks) he also had the subsequent follow care, regularly seeing specialists, drugs, oxygen etc... but nothing particularly drastic or complicated.

To put this in a more family context and include mothers income which is about ~2 million over 40 years and still going. This averages to about ~50K, adding in my fathers earnings, our family averaged ~65K. So my fathers end of life medical expenses, total over 9% of my parent's lifetime earnings. To be fair insurance premiums aren't included in the lifetime earnings, but I see my fathers end of life costs as pretty typical and my parents earnings as fairly average, and I just don't think the math adds up. BTW, my father probably would have died during his first heart attack, reducing 95% of his medical expense, if it happened 20 years ago.

Thai said at March 8, 2009 6:36 PM:

Without sounding critical of your idea, which I'll admit has merit, I think A LOT of people would be VERY offended at even the suggestion. Cognitive dissonance is rampant in all of us. Personally I don't think this is the best way for us to do it. I am not sure it is a message we really want to spread as a nation. It is unnecessary to do this in other countries and theirs is the direction I think we should go.

Regional variation and its causes: "all of the above". "Yes", per capita # physicians pays a role, but so do cultural differences in the community, cultural differences of the physicians and nurses, etc... (Miami is a VERY different place than Minnesota as I am sure I needn't remind you).

Please understand there is similar geographic variation in health care spending in the Veteran's Administration. If the VA is not able to control its variation in the same way the NHS is, how could a private-public hybrid system do it?

If you were going to make stereotypes, what would a geographic map of your stereotype of the "medical consumer personality" look like? Now see how well your stereotype matches this map?.

Some communities I have worked in, every elderly patient seems to have advanced directives on their chart and patients/families are very up front about saying "don't do too much at the end". Other communities I have worked in cannot even fathom having this discussion with me. Variation is huge in America in a way it is not in many other countries.

Think of health care systems as comprised of "sub-structures". These sub-structures can be of low complexity or high complexity. Every county in the word has a different proportion of these complex structure depending on its unique characteristics and history. Some counties might have a balance of sub-structures that look significantly different from other countries for unique reasons.

Right now, America's health care system has a lot of highly complexity structures within it. I will let you decide for yourself whether this makes sense for our population as a whole or not (certainly the Democrats feel it is not). Dismantling a few of these highly complex structures would most definitely pay for a lot of low complexity structures.

And since voters tend to look at the issue from their own patient centered point of view, agreement on sub-structure complexity is hard to reach.

Do we have lots of generalists, or do we have a world with lots of sub-specialists?

Bob Badour said at March 8, 2009 7:11 PM:

More doctors? I dunno. More lawyers... absolutely.

Does anyone have statistics available on regional variations in malpractice insurance premiums? Or the prevalence of malpractice suits comparing Minnesota with Florida?

Red Baron said at March 11, 2009 5:14 PM:

As for using extenders over physician labor, why didn't we think of this the medical profession??? (I am being sarcastic if it didn't register)

I think the question you need to be asking to understand the issue better is what % of all patients are seen by "mid-level practitioners" (MLPs for short; nurse practitioners or physician assistants). Or better still, if you want to look at it the way we look at it in the medical profession, what % of all "RVU's" seen (an RVU is a measure of the amount of work a particular patient's medical complaint takes a treating health care provider to see. Ankle sprains and sore throats have low RVUs, heart attacks, gunshot wounds to the chest and hemolytic crises in sickle cell patients with a fever have high RVUs).

Some conditions, blood pressure checks, OSA (Obstructive Sleep Apnea), pharyngitis, ankle sprains, etc... are low RVU conditions (we say low RVU/patient) and are usually quite easy for MLPs to see and treat (which is why you see MLPs staffing minute clinics in CVS, Walmart, etc... as well as an increasing % of MLP labor in primary care and urgent care settings)

I suggest instead of asking the question you asked, a better question to ask is "what percentage of conditions can be seen by MLPs?" (Hint, we ask this in medicine all the time and it is clear it is a larger and larger % of all visits. But you must be clear, it is highly dependent on the environment you are talking about).

Some conditions should not be primarily treated by MLPs. It depends on the complexity of medical decision making, etc...

But using them "because you want to save money" is not at all the same as actually being able to save money using them.

For it is a simple fact that MLPs NATIONALLY are not nearly as efficient as physicians (and there is a very wide spread in the efficiency/productivity of physicians themselves).

Many physicians are more than twice as efficient as MLPs on een the most basic issues (so they see 2 patients with a sore throat for every 1 patient with a sore throat an MLP sees in an hour).

So although MLPs may cost 1/2 as much, if they see

This issue is VERY complex, but let me add there was a huge trend to move MLPs into both Emergency Departments and the OR many years ago (we use them in all the hospitals I work at, as well as the urgent care center we staff). Many of these hospitals we unable to effectively manage them and I know MANY emergency Departments which pulled their MLPs when the productivity/quality numbers started working in the wrong direction.

The system is not nearly as dumb as you think. The problem is a lot more complex than you think.

Don't always believe everything you read when you it comes to health care in America.

Red Baron said at March 11, 2009 5:38 PM:

Sorry, a sentence was cut off...

"So although MLPs may cost 1/2 as much, if they see only 1/2 the number of (similar) patients in 12 hours, the system has not saved any money at all". And in fact it may actually increase costs as MLP benefits are a larger % of their salary than physician benefits.

But the the problem is WAY more complex than even this.

Say 4.2 patients/hour present to a particular facility. If the MLPs can only see 2 patients/hour, a facility will need to hire 3 MLPs to see patients but in so doing it now becomes overstaffed by 1.8/6 or 30% or it can have 2 MLPs but it will be understaffed by 0.2/2 or 10% (staffing and patient volume have what we call in the business "sweet spots"- when a staffing-volume missmatch occurs, the costs go up dramatically. In fact, it is this staffing "sweet spot" issue issue that is the number one reason emergency departments are closing (slowly) all over the U.S. They are trying to become more efficient with economies of scale for night shift staffing, etc... Putting 1 doc who can see 4 patients/hour in the same facility might mean the facility will only be overstaffed by 5% (which is more tolerable than 10%- which in truth would probably still be tolerated unless you were talking about VERY sick patients where the safety risks would go up dramatically from under staffing- but again, these would not be patients MLPs should probably see anyway) and since benefit costs are a larger % of MLP labor, using the physician would be even more efficient than this analysis suggests.

Next time you go into a medial environment, where it is very busy, there is more opportunity to fit MLPs into the labor mix more easily, where volume is slow, it becomes way more complex.

Life is not so simple, even if it sometimes seems that way to an outsider looking in

Randall Parker said at March 12, 2009 7:16 PM:

Red Baron,

I get it. Very useful comments.

Emergency room labor: Why not tie emergency rooms to other medical services so that a doc can shift between different roles depending on work volume? Are ER docs unable to, say, work in a walk-in conventional clinic? I got one of those Immediate Medical Center places down the street from me and I go there on the (very rare) occasions when I see a doc. Couldn't a clinic like that, if it was across the street or down the hall from an ER, share labor as traffic ebbs and flows?

Okay, then let me ask you a more general question (if you are still there): How would you prevent medical costs from continuing to grow faster than the rate of inflation? Is it futile to even try? Are we just going to end up with health care at 20% of GDP?

Red Baron said at March 12, 2009 10:32 PM:

Of course they can, but:

1. Why use such specialized labor when lower cost labor like MLPs CAN be cheaper for less complex tasks
2. You still need economies of scale. Split things in two and you lower the volume of each.
3. There are significant regulatory issues specifically when to comes to hospitals/EDs/clinics mixing with each other
4. The simple time of walking back and forth between two physical locations itself becomes a significant limiting drag on productivity. This is the reason (for instance) the specialty of hospitalist medicine has taken off in recent years. It was simply too inefficient for docs to go back and forth between the hospital and their offices. When you have someone making $200,000+/year, you do not want them sitting idle or walking around not seeing patients very long

You can use Emergency Medicine as a surrogate for all other medical specialties. Their issues are just the same as ours.

The biggest factor causing escalating costs? I think that is quite clear to everyone. Patients do not have any reason to slow down their utilization. Most plans allow you to go as much as you want without significant out of pocket costs (this is especially true for the biggest plan of them all: medicare). You pay the fees monthly but after that the feeling is "use it as much as possible".

That and there is no control on the super utilizers. In the same way it is hard for most people to comprehend that there are a few billionaires in the world and that most of the wealth in the world is owned by them, it is hard for most people to understand there are a few people who spend most of the money and there are no control on these people in America. Remember, 1% spend 24% and 5% spend 50%. If the right 1 person in 20 is controlled back to the level of everyone else, all health costs in America would be cut by 50%.

Think about it. Cut all you want on the rest, it will be insignificant compared to those few people http://www.ahrq.gov/research/ria19/expendria.htm

People just have no idea how much these "frequent flyers" really spend. It is beyond their comprehension.

There are a few who remind us of it http://covertrationingblog.com/

(And hint, they are not immigrants)

Kralizec said at March 14, 2009 11:20 AM:

Pooling wealth and using it in common seem often to be promoted as unifying a people, but it appears such orders really promote division. Everyone sees what is available and desires to acquire it for himself, his family, and his friends, in the many senses of "friend." For although the wealth may be held in common, it cannot really be used in common; food may be held in a common storeroom, but in the end it must go in the mouth of someone. Nor is wealth really even held in common; someone guards and distributes it, and someone decides who receives it and how much. And if a few men, perhaps 537 men, or perhaps their nameless staff, control the allocation of $3,000,000,000,000 annually, it seems someone will employ every feasible strategem to take control of that enormous sum or even to redirect 1% of 1% of 1% of it. It seems the Americans must suffer arguments, corruption, tyranny, war, and death for the enormous error of their ancestors in having set in motion the accumulation of such wealth in the hands of a few hundred men. Becoming cash cows of the Chinese rulers who hold their bonds seems to be the mildest fate that awaits them.

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