You can't "fix" healthcare with good vibes: a book review
Knock knock. The newsletter’s back. Thank you to reader Jacob for recommending that I migrate it to Buttondown. It’s a great interface and I like it so far. If you’re interested in using it, use his referral link because I forgot. XO -TF
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You Can't "Fix" Healthcare With Good Vibes: A Review Of Why Not Better And Cheaper?
I was literally nude and mad about a podcast the other day. Normally I listen to inane bullshit on my Bluetooth speaker when I’m in the shower—NBA podcasts or Your Kickstarter Sucks or, today, Gene Pitney—but my roommate’s office shares a wall with my bathroom so sometimes I put on something more intelligent when I think his headphones are off. I saw an episode of the usually-interesting The Health Care Blog podcast on my queue so I threw it on. It was an interview with the authors of Why Not Better and Cheaper?: Healthcare and Innovation, and it really fuckin’ bothered me. I want to write about why.
Why Not Better And Cheaper? opens with a cute question:
[W]hy doesn’t healthcare get better and cheaper? The evolution of the cell phones that we carry in our pockets demonstrates that quality can increase while prices fall. Why not in healthcare?
Our answer is that the health sector generates the wrong kinds of innovation. It is too easy to profit from low-value innovations and too difficult to profit from innovations that reduce care costs. The result is a healthcare economy that is profusely innovative yet remarkably ineffective in delivering increased value at lower cost. The consequences of this skew in innovation accumulate over time and make society poorer and less healthy than it ought to be.
The eye-rolling patronization of the “healthcare is like cell phones” tag and a later “healthcare should be like residential lighting” passage aside—I get what they’re going for, but healthcare is not a consumer good and does not behave like one; do they really think so little of their readers?—the main thrust of Why Not Better And Cheaper? is: healthcare corporations along the entire value chain are trying to make as much money as they can, and this means they act in disjointed patterns of self-interest that ultimately harm the whole ecosystem: costs go up without commensurate quality of care. The whole cost-benefit structure is out of whack and a bunch of money is spent on wasteful or ineffective care—probably one of the worst things that can happen.
“Damn, the healthcare industry sure does have some wack incentives” is an irritating observation, written about by hundreds of people at this point. But what if a really smart guy who worked inside of healthcare tried to figure out why? (Health Justice Now just barely slides under the garage door to avoid this label, asg I have never in my life claimed to be a “really smart guy.”)
The really smart guy writing Better and Cheaper is actually two guys. Two twin brothers, the Rebitzers: Robert, a healthcare consultant, was the founding partner of Accenture’s healthcare strategy arm, as well as a VP at UnitedHealth; and James, a healthcare economist at Boston University.
The thing is—these guys are the faces of the problem! Normally my gripe with health economists (well, at least, one of my gripes) is how often their whole deal is a reenactment of the classic “The problems are bad, but the causes are very good” tweet. But here, one of the authors is literally causing the problems they’re writing about!
Robert—“Bad Bob”—led a revamp of claims processing for United Behavioral Health, UnitedHealth’s mental health wing, between 2003–2007. Seven years later, United Behavioral Health would be the target of a class-action lawsuit alleging that the insurer had set up all kinds of roadblocks to receiving mental health care—denying patients care their plans covered with guidelines the American Psychiatric Association (and many others) determined were “inconsistent with generally accepted standards of care.” This included holding children, who have different psychiatric needs from adults, to hyper-restrictive adult standards. Judge Joseph Spero ultimately concluded that United Behavioral Health was focused on keeping expenses down; that UnitedHealth was more interested in protecting its margins than permitting people with mental health or substance use issues from getting care. Which, like—yes! Of course!
In 2019, Spero found that United Behavioral Health had illegally denied mental health claims its plans covered and ordered UH to reprocess claims for 50,000 patients. In 2021, the Ninth Circuit issued a brief and unsigned note upholding United’s appeal of the case; earlier this year, three judges in the Ninth Circuit rejected the plaintiff’s appeal and remanded the case back to circuit court.
I’m not alleging that Bad Bob directly fucked over tens of thousands of people. After all, the Wellstone Mental Health Parity and Addiction Equity Act wasn’t enacted until 2008, the year after Bob’s LinkedIn says he left UH. I am saying that the machine Bad Bob built certainly wasn’t reinvented completely by UH’s massive bureaucracy in the years following his departure, and it abused its patients to the point that Joseph Kennedy called the lawsuit against it the “Brown v. Board of Education of the mental health movement.” This is a less-than-sterling legacy.
The Rebitzers are not the major villains in the story of American healthcare, but they’re among its goons, and thus I am disinclined to look charitably upon the aw-shucks-terism of Better, Cheaper’s “discoveries” about how the profit motive within American healthcare harms patients. “We’re trying to find the guy who did this” is a cliché internet meme because it keeps happening: people who make choices that harm others have all kinds of fora in which to pontificate how things went so wrong without ever contemplating their role.
(Absent from the book’s discussion are the other kinds of harm healthcare capitalism wreaks—impoverishment; deprivation; the kinds of problems healthcare executives and healthcare economists rarely have to deal with. This book is the kind of thought experiment the market permits you if you're an executive or an economist and not someone who has to live with the actual, fleshy-bloody consequences of health policy; that private actors do not invest in long-term social good is something known by everyone who has to shoulder the load of crumbling infrastructure and decimated public programs.)
The Rebitzers identify three core problems which need to be addressed in order to make healthcare “better and cheaper:” inadequate competition, misaligned incentives, and professional and social norms. The first two are basic healthcare economics analyses: the government’s ideal role is to protect the ability of corporations to maximize profits and shareholder value, while keeping them from making the self-destructive decisions to which that compulsion inevitably leads them. There’s a lot written about drug patents and clinical trials; the incentive disconnect between patient demand and third-party payors; entrenched players jacking up costs while refusing the switchover costs of innovation; shit like that. The Rebitzers note that, often, real positive reforms of healthcare capitalism are directed by government intervention, as the state is the only actor that bears the consequences of long-term health outcomes—the big glowing dick of Medicare flies to the sea and others incapable of acting first (or made too timid by the risk of reducing profits) follow—but never permit their imaginations to wonder what more substantial government involvement in healthcare finance would look like.
The third focus of Better, Cheaper; a transformation of “norms,” is entertainingly silly. “Healthcare needs new narratives emphasizing the importance of innovations focused on value creation and cost reduction,” the brothers write. I believe this to be an effort to acknowledge that healthcare is not a fungible commodity but a complex set of unquantifiable social and commercial interactions—your relationship with your doctor, their relationship with their peers and trends within the profession, commercial relationships between hospital administrators, department heads, and vendors; and so on. The Rebitzers are concerned primarily with the role norms and narratives play in creating and propagating innovations in cost or quality; to them, physicians ought to see themselves not only as healers but stewards of cost management and their approach to prescription and care should be steered by a commitment to financial prudence. Through the collective effort (caused by what, the Rebitzers leave vague) of shifting cultural norms within the profession of medicine, corporations can be driven to invest in better care independent from financial motivations.
Except: even the most copacetic vibes can be—will be!—completely perverted by the same forces with whom the brothers are hoping to play nice. You can’t make a Faustian bargain (or, as I call it, “a bargain”) and expect to come out ahead. The brothers believe that the same rambunctious forces which have caused the problems they’ve identified 1) can be shepherded into doing the right thing through gentle discipline and financial incentives, and 2) will not just go on to invent new kinds of profitable problems once they figure out the rules.
The Rebitzer brothers anchor their assessment of the power of social norms in the rise of the palliative care model. To understand palliative care you must understand the hospice—the two movements are distinct, but it was from the hospice that palliative care emerged, and the integration of hospice care into modern medicine is the mark to which palliative care ascends.
Hospices offer relief for patients who have terminal illnesses, usually with six or fewer months to live. While hospices have been operated for over a thousand years, the rise of modern pharmacology in the mid-20th created new opportunities for care. The wide availability of morphine, for example, meant that gravely ill people could spend the end of their lives without pain. Cicely Saunders, a British nurse and social worker, spent her years working at St. Joseph’s Hospice to develop a new, contemporary approach to death and dying, and opened the first modern medical hospice (in the Anglo West, at least), St. Christopher’s Hospice, in London in 1967. St. Christopher’s, designed under principles of patient-centered social work, was much more than just a place to go die: it had beds for 54 patients and capabilities for home care while offering residential and childcare services to hospice workers.
The success of St. Christopher’s and the compelling moral clarity of the hospice movement set amid a growing concern about elder care in the West—this was just after Medicare was passed and On Death And Dying came out, and not far removed from the release of The American Way Of Death, which I strongly recommend for a fun beach read—sent Saunders across the globe to grow the hospice movement. Florence Wald, the dean of the school of nursing at Yale and early booster of Saunders, opened the first modern hospice in America, the Connecticut Hospice, in 1974. The movement grew; in the 80s, Reagan included Medicare hospice benefits in the Tax Equity and Fiscal Responsibility Act of 1982 (and Clinton solidified them as a guaranteed benefit a decade later), which started decades of standardization, research, and various bureaucratic putzing-about which is all fascinating in its own right but completely beyond the scope of what I’m trying to say here.
The palliative care movement is an extension of hospice care which focuses specifically on patients with life-limiting, instead of life-ending, illness. The Rebitzer brothers credit Diane Meier’s work in the late 90s and early 2000s, when she was the head of geriatric care in the Mount Sinai hospital system (where I got my vasectomy!), with kickstarting the growth of the palliative care movement. By 2014, two-thirds of hospitals with 50+ beds had a palliative care program (note that nonprofit and public hospitals adopted palliative care programs at 5x and 7x the rate of for-profit hospitals).
The brothers assert that this happened “without the benefit of favorable economic incentives, [instead relying] on the power of professional and social norms… to mobilize what amounts to a movement for a new way of caring for the seriously ill.” I would dispute this Brave Little Toaster-ass claim: first, palliative care wasn’t invented ex nihilo; it emerged from a robust hospice movement; second, it benefited by favorable economic incentives—following decades of research into the cost-effectiveness of hospice care (how garish!), a 2009 paper in the Journal of Pain and Symptom Management found significant Medicare savings in hospitals which implemented palliative care programs and suggested that expansion of hospice care beyond the final days or weeks of life would save Medicare even more money. But Diane Meier, who without question did essential work assembling a team of caregivers and wrangling philanthropic organizations, is a hospital administrator, and it’s critical to the project of healthcare economics literature that courageous hospital administrators are lionized.
This cursory history of hospice and palliative care brings us to a gruesome present: hospice care, and the palliative care which often precedes it, is a cesspool of fraud and heinous patient abuse. Medicare pays hospice providers a flat daily rate—up to $670/day for patients with the highest reported level of need—on what is essentially the honor system. At the lowest tier, home care, Medicare pays $151/day; a hospice purporting to provide at-home services to a small roster of 19 patients can pocket a million dollars a year. This all adds up to a $17 billion elder-abuse fuckfest for a largely for-profit industry (70% of hospices are for-profit) increasingly owned by private equity firms. Between 2006–2016, Medicare spending on hospice care grew by 83%, far above general Medicare spending growth, while the count of hospice beneficiaries only increased by 53%. Where does that cost increase come from, and at whose expense?
Two recent answers:
In November 2022, ProPublica’s Ava Kofman wrote for The New Yorker an infuriating and heartrending expose of hospice fraud. You should make time to read it, for a bunch of reasons—it’s tremendous. She chronicles the extensive fraud at AseraCare and the sham legal process that let it escape consequence. AseraCare is a national hospice chain owned by BeverlyCare, a national nursing-home chain with a long rap sheet of patient abuse that paid $175m to settle a lawsuit alleging that it had committed massive Medicare fraud, which itself was purchased by a private equity firm in 2005. (Wow!) Kofman identifies a few ways that AseraCare and others exploit the Medicare hospice system:
Medicare asks hospice providers for a refund if their average length of patient stay exceeds six months—patients are expected to die, after all. Malevolent hospices kick patients off of critical services at the six-month mark. Or worse: one hospice provider instructed nurses to overdose patients who were crossing the eligibility threshold.
Hospices will canvass poor neighborhoods and enroll ineligible or unneeding patients. On one hand, this has the gnarly side-effect of making those patients ineligible for care they were already receiving, like medication, diagnostic procedures, or even dialysis; on the other, it can make some of the worst people in America a lot of money.
In June, Gretchen Morgenson of NBC reported on the hospice division of HCA Healthcare, fka the Hospital Corporation of America (founded by Bill Frist’s father). HCA is the largest hospital group in the country and seemingly cannot go a day without doing something evil—most infamously, it committed billions of dollars’ worth of Medicare fraud under the administration of the horrifyingly-countenanced, somehow unkillable current Florida senator Rick Scott. 26 doctors and seven nurses reported to NBC that HCA administrators both explicitly and implicitly pressure hospital staff to move patients into hospice care well before it’s necessary.
Morgenson writes: “Although this can harm patients by withdrawing lifesaving treatments, the push can benefit HCA two ways: [...] It reduces in-hospital mortality rates, a closely watched quality measure, and can free up a hospital bed more quickly for HCA, potentially generating more insurance reimbursements from a new patient.”
The friendly computer is bent to awful effect here: HCA has developed an algorithmic “vulnerability index” which recommends patients for palliative care; one-third of HCA’s palliative care consultations ultimately move patients to hospice. I’m not opposed to risk scoring in the abstract; it makes sense to try to identify people who are at highest risk of death. But it is irresponsible to divorce the products of academic curiosity from the profit-pursuing pressure which dictate their implementation. After all, this is just good business: if a patient dies in hospice, their death isn’t “counted against” the hospital’s record; furthermore, HCA ties executive bonuses to hospital mortality rates. HCA’s hospice transfer rate is about twice that of the national average.
Back to the Rebitzers: “The logic of norms suggests that they can stimulate cost-reducing innovation to the extent that cost reduction is: 1) consistent with one's duties and obligations, 2) perceived as furthering an ethical rather than an economic interest, and 3) aligned with social and professional standards of conduct.”
Sure thing, brother.
I harp on this harebrained idea that “norms can make healthcare better,” and specifically the Rebitzers’ example of the triumph of palliative care, because it renders the struggle in its plainest form: if an opportunity exists to make money at the expense of patients, no force on earth can prevent the profit motive from exploiting it. Noble intentions have proven themselves powerless to prevent profiteers from wielding the hospice movement like just another spear pressed into the flank of Christ.
This is the thing from which Better, Cheaper—from which every goddamned healthcare economist and healthcare administrator—forces itself to avert its eyes: the problems of healthcare about which it puzzles are inherent features of the structure of healthcare for profit; the harm is sculpted by the inevitable movements of healthcare under capitalism; no delicate arrangement of soft incentives can stop it. I am not aghast that a book probably intended for self-impressed MBAs provides an insufficiently Marxist accounting of capitalism, but to spend two whole careers shoveling coal into the furnace and then emerge soot-covered and grinning with a book deal to say—gosh, it sure seems like market forces are generating the wrong kind of innovation; what if we could adjust them slightly—the gall! You’ve watched them condemn suffering senior citizens to die scared in uncaring homes and beds soiled with shit and sweat in order to make a buck, and you think this can be corrected with vibes?
In a certain sense, I respect the Medicare fraudster more than the pedigreed pipsqueak healthcare economist: his despicable reckoning of the healthcare system is internally coherent. At least he sees the thing for what it is.
Why Not Better And Cheaper? is a book written by two men whose whole ways of being have been predicated upon the benevolence of a hideous and exploitative industry. Their analyses of its problems are hamstrung by an unwillingness to address its fundamental nature. Thus the Rebitzers permit themselves the fantasy of being enlightened insider-outsiders; men who, coming upon a wildfire, stop to name all of the trees. Their book is a manual for comfortable people who hope to play pretend at healing the world and make a lot of money doing very little in the process.
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Thanks for reading my newsletter. I have a few more things I’m thinking through but this has been really stuck in my craw for a few weeks. Right now I’m reading a lot about medical debt and medical bankruptcy; if there’s anything particularly interesting in your world on that topic or others, I’d love to hear about it. I’d love to learn more about regulatory appetites—there are a lot of regulations on the books to stop healthcare companies from doing bad shit, but I keep finding that the bodies which can enforce them just choose not to—here's an example from literally this morning. Also, if you have ideas about party composition in Baldur’s Gate 3 or interesting ways to spec a Githyanki cleric, I’m interested.
Also, I wrote a long piece about independent wrestlers and healthcare costs for Defector since I last rapped at you. It's the best thing I've written, I think, and it's very much not just for "wrestling people"—I just think wrestlers have interesting jobs that leave them particularly exposed to all the gnarly consequences of America's healthcare system.