The elderly are skimping on care

About 1 out of 5 older Americans are cutting back on health care spending, according to Employee Benefit Research Institute.

They are buying more generics (good), splitting or reducing dosages (not so good), and delaying or skipping physician appointments (likely pretty bad). About 1 out of 3 who are cutting back say they are in poor health.

This happens in a bad economy, when people need to decide which essential expenses can wait. However, skimping or eliminating health care is rolling the dice on health and risking more costly care later on.

 

Only a few spend the most

Efforts to cut health-care costs are complicated by the fact that medical dollars are spent on a relatively tiny sliver of the patient population. High-deductible plans will not make much of a dent in that group.

The healthiest 50 percent of Americans spend only about 3 percent of health-care dollars. On the other hand, more than $1 out of $5 health-care dollars are spent on the sickest 1 percent. The top 5 percent accounted for about half of total spending in 2009.

Technology and the market power of monopoly health-care organizations drive the lion’s share of medical inflation. Unless we want a highly regulated health-care system, those two factors are out of our control. The only other way to control health-care spending is to use less of it. We need the healthiest 50 percent to stay healthy.

The financial burden of disability

Treating chronic disease consumes more than 75 percent of U.S. health-care dollars, and is expensive for patients and their families. But when the condition morphs into disability, it can be devastating.

According to a Spanish study, the cost of moderate disability is about 40 percent of household income. That rises to 70 percent of income when the disability is severe. About 90 percent of those with a serious disability is in a state of moderate poverty, and more than half is in a state of extreme poverty.

Those with severe disability and no insurance virtually sentenced to a pauper existence.

A $1,000 genome in a day

Life Technologies Corp. has unveiled a device designed to sequence an entire genome in one day for $1,000.

The $1,000 benchmark is an important one. Personalized medicine has the ability to guide prevention and illness treatment, and allow drug companies to develop more targeted pharmacological therapies.

The good news is that the price is dropping so fast that the direct-to-consumer market may well blow away. That is good news because those “kits” do not tell you much.

Legitimate genetic testing often is lumped with over-the-counter drugstore tests.

Medical-device manufacturers sell test kits to hospitals, clinics and laboratories. The Food and Drug Administration regulates these products, whose results are interpreted by trained health-care providers. Laboratories also develop their own genetic tests, which are overseen by the Centers for Medicare and Medicaid Services.

By contrast, Walgreens postponed selling the Pathway Genomics genetic test in May 2010 after the FDA challenged its legality. The government appears to be deciding whether the retail products are medical devices, which would require regulation, or simply consumer information.

Direct-to-consumer (DTC) genetic tests are about probability, not certainty. Environment, behavior and luck conspire to determine whether genes will express themselves. In other words, someone who eats right and exercises may well offset a genetic propensity to gain weight.

At its best, in-home genetic testing empowers patients to manage their health and assess personal risks. However, DTC testing is predictive, not diagnostic. It attempts to assess susceptibility to, and probability of, disease – not its presence. The worst-case scenario: Consumers can easily conclude that a disease mentioned in the DTC profile will occur in the future – regardless of its statistical probability.

A Government Accountability Office (GAO) investigation of four companies found misleading test results and “egregious examples of deceptive marketing.” Federal officials sent real donors’ samples to four companies and posed as fictitious customers to inquire about results. According to the GAO, the companies produced different results for identical samples and told customers they had low risks for diseases they already had.

A 2006 report argued that “the potential harms (of DTC genetic tests) outweigh the potential benefits.” A Federal Trade Commission “facts for consumers” bulletin cautions that “having a particular gene doesn’t necessarily mean that a disease will develop; not having a particular gene doesn’t necessarily mean the disease will not.”

Australian journalist Ray Moynihan was far blunter in an article titled: “Beware the fortune tellers peddling genetic tests.”

He said, “For anyone concerned about the creeping medicalisation of life, the marketplace for genetic testing is one of the last frontiers, where apparently harmless technology can help mutate healthy people into fearful patients, their personhood redefined by multiple genetic predispositions for disease and early death.”

OK, maybe next year

How are those New Year’s resolutions coming along?

Special K, which marked January 2 National Weigh-in Day, surveyed women on weight management. An astounding two-thirds of women started or renewed a weight management plan on January 1. About half also do so for a special event, and that rises to 57 percent in the spring apparently to get “bathing-suit ready.”

Unfortunately, polls show that about 25 percent have abandoned their resolutions by now, and only 10 percent will be sticking with the resolutions a year from now. Gyms and many self-help entrepreneurs build their business models on recycled resolutions.

The price elasticity of alcohol

The biggest alcohol deterrent? Price.

According to Canadian researchers, setting a minimum price can curb binge drinking. For every 10 percent increase in the minimum price, people drank about 9 percent less wine and more than 3 percent less hard liquor. Beer consumption, it turns out, barely budged.

A bar in a college town during “happy hour” is a perfect laboratory to gauge the effect of price on alcohol consumption. Cash-strapped young adults jam these establishments where binge drinking is acceptable, even encouraged.

University of Florida researchers analyzed more than 100 studies spanning four decades on price elasticity of alcohol. The results were consistent: When prices go down, people drink more. When they go up, people drink less.

In fact, price decreases alcohol consumption more effectively than law enforcement, media campaigns and school health classes. And price is most efficiently manipulated by taxes.

Doubling alcohol taxes would reduce alcohol-related deaths by more than one-third, traffic accidents by 11 percent and sexually transmitted disease by 6 percent, according to one study. For example, a fifth of gin in New York State had a tax of $.55 in 2010. It also estimated that a 10 percent increase in retail price would reduce drinking by 5 percent.

But alcohol prices are going in the other direction. Federal and state alcohol taxes have declined significantly since the 1950s when adjusted for inflation, as has the overall price of alcohol. That is likely a result of high profit margins on alcohol and the industry’s powerful lobbying presence in state capitals and Washington.

 

Shopping with a blindfold

The Government Accountability Office recently cited the barriers faced by consumers in getting cost information. For example, insurance companies refused to share rates negotiated with health-care companies, calling the information proprietary.

One of the key principles behind high-deductible health plans (HDHPs) is to create more discerning health-care consumers. In theory, health-care providers will compete for customers on price and quality, lowering the former and increasing the latter. However, the existing tools to do this are primitive and mostly useless.

For example, California requires hospitals to publish their official prices, known as charge masters. However, these have little value because hospitals charge any of dozens of prices for the same procedure, depending on negotiations with different health plans. UCLA Medical Center included this unexplained entry on its published charge master: GRMS EXT PIECE HOWMED STRYKER. Price $10,290. That, by the way, is a prosthetic bone.

Contrast this with other consumer goods, for which prices are clearly marked and easily compared. Product details are listed and readily available. Expert and consumer reviews usually exist. These tools do not exist in health care.

More than 30 states are considering or attempting to pass legislation to increase price transparency. Three bills were introduced in Congress in 2010 to do the same.

There has been little urgency to help HDHP enrollees up to this point. They remain a small, if growing, segment of the insured population. Most patients are fully insured and pay a small portion of their health-care costs.

Patients shopping based on price are at a disadvantage because they do not know what they need. Every disease or condition needs a different mix of care. Attempting to figure that out without a physician’s guidance can be a foolhardy exercise. Consumers have a much easier time with simple procedures such as those offered in retail health clinics, or for prescription prices.

And, of course, few feel like shopping when they are ill.

Patients also have a difficult time trying to determine quality of care. This is an example of how efforts to provide the consumer with more detailed information may backfire. Many erroneously believe higher cost of care means higher quality. That line of thinking might encourage providers to raise their prices simply to enhance the perceived value of their services.

Consumers do not even shop around for health services not customarily covered by insurance, such as LASIK surgery and dental crowns. These services are ideal for comparison shopping: they are not urgent; there is no need for further diagnosis; there is usually one price per provider, and the out-of-pocket cost can be steep.

Kids and exercise: More positive evidence

A systematic review of previous studies in this month’s Archives of Pediatrics & Adolescent Health confirms what has been confirmed many times before: There is an association between physical activity and academic performance in children.

Physical activity in children peaks in early adolescence and declines significantly thereafter. The Cooper Institute tested the fitness of 2.6 million Texas children in 2008. More than 33 percent of girls and more than 28 percent of boys in the third grade passed six fitness tests. That number decreased at each grade level, with less than 9 percent of 12th graders meeting healthy standards on the six tests. One study pegged the greatest decline in physical activity between the ages of 13 and 18 as students take on increasing academic responsibilities and acquire drivers’ licenses. Others say the decline is more pronounced between ages 15 and 18.

Schools at all levels, strapped for funds and striving to improve academic performance, have decreased or eliminated physical education. But studies have consistently shown that time devoted to physical activity does not harm academic performance and, in some cases, has enhanced achievement. Better fitness has been shown to increase concentration, school attendance and positive classroom behavior while decreasing disciplinary problems.  The Cooper Institute testing found significant school-level correlations between fitness and better performance on state standardized test and fewer disciplinary problems involving drugs, alcohol and violence.

Of 14 studies published between 1967 and 2006 analyzing the link between physical activity and academic performance, 11 found a positive association. About 2,000 California schoolchildren were given fitness and standardized academic tests. About two-thirds of students were below the state fitness standard for their grade levels, and standardized test scores dropped more than one point for every extra minute it took to complete the one-mile walk/run test.

It is ironic that the U.S. education system is trying to improve academic performance by cutting back on what is scientifically proven to improve academic performance.