John La Puma, M.D.

John La Puma, M.D.

Americans love a bargain. Getting our money's worth is a national game and, in some quarters, runs to an obsession. Cash-back credit cards, airline miles for just about everything, phone services with no long-distance fees. Extra-value meals are happy meals, and bigger (though less nutritious) than ever.

But are Americans getting a health care bargain? Should the cost of care be information a patient should possess to give informed consent to treatment?

Few patients know that their monthly premium goes for everyone else's care too. What people and their employers pay monthly supports the health plan that delivers care, or sometimes delivers and finances it too. This supports population-based health — the unsung moral basis for managed care. Unsung because Americans have a hard time pulling for public health and cannot see that too little care for someone else could also mean too little care at home.

Neither doctors nor patients usually know the real costs of the medical encounter. Not for the lab tests, or the confirmatory consultation, or the late night phone call for four more Zocor for the patient who calls on his way to Missouri and forgot his meds. All have direct and indirect quantifiable costs.

From a moral perspective, insulating doctors and patients from costs is crazy. Who can make an informed choice or express real preferences or balance competing interests if they are unknown? Who can blame insecure physicians who see practice incomes stagnant or declining, and who eye the annual report of the branded supplement company with respect and wonder?

Fantasy land

Separating people from prices distorts moral impulses in a predictable way. Where else do we hear, "It doesn't matter how much it costs — go ahead and buy it. Someone else pays." Maybe on a trip to Disneyland or in a dream. But definitely in a fantasy land.

Who should pay and how they should be allowed to participate in decision making is the real tension in managed care. HCFA began prospective payment for hospital services, and thus the ethical issue of futility was born. (Before HCFA paid prospectively, did anyone talk about futile care at the end of life? Or medical futility near the end of life? No!)

Managed care promoted capitation as a fair payment and delivery mechanism. Thus, extent of coverage and payer status became ethical issues. (Do you remember ever hearing, in 1980, "This is the first hospital admission for this 61-year-old Blue Cross Blue Shield indemnity patient"? Or from a nurse, "She has Aetna. Maybe you should recheck her chem panel this month again"? No!)

If doctors and patients knew exactly how much the components of care cost, perhaps all would choose differently than they do now. Perhaps individual physicians would not cut their prices to HMOs without improving their own productivity. The result is a decline in market share and income.

Informed consent consists of three elements: adequate information, reasonable understanding, and volition. Of course, how much information is adequate, what constitutes reasonableness, and which circumstances are coercive and which are merely persuasive are subject to interpretation.

I think informed consent to ordinary outpatient treatment should include its costs. Why? Here are five reasons.

  • It's honest. These are the patient's own costs, not those of his employer or health plan, except that the patient never sees them.
  • It provides objective information. Outcomes research focuses on quantifying points that are important to both patient and physician. Surely cost is one of those points.
  • It creates familiar ground for discussion. Adults are accustomed to weighing the benefits and burdens of spending money to obtain valuable services and goods.
  • It enables patient autonomy. People increasingly make choices about whom to see and where to go for health care. Cost matters to patients.
  • It answers questions about why health care is so expensive. Anyone with a smidgen of interest in accounting would want to know why things cost as much as they do. People deserve an explanation, and once they see the numbers, they'll want one.

On the other hand...

What's wrong with telling patients how much things cost? Here are five arguments:

  • Patients have different ideas of how much is a lot. Educational level, savings patterns, family priorities, and other nonmedical factors are not aspects of patient care that physicians have been trained to ask about.
  • Economically disadvantaged patients will be frightened off by the numbers. These are the same patients who have the highest prevalence of serious chronic, and often, terminal illness — heart disease, stroke, diabetes, HIV, and cancer. They can only be disadvantaged further by hearing prices they cannot afford.
  • Health care should not be decided by cost, but need. Why bother doctors and patients who would prefer to make decisions based on medical facts instead of financial ones?
  • Health care is unlike other consumer services: It is a right, not a privilege or luxury. The cost of a baby's vaccines cannot be compared to the cost of a lawn mower.
  • Straight answers about an electrocardiogram's actual cost, versus the price charged for it, will be hard to come by. Few people will understand why, if the paper costs 10 cents, and the electricity costs 1 cent, and paying off the machine costs $1 per use, an EKG is $59.

It's true that some things are no bargain at any price. The triple-meat Big Mac. The New York pizza with three ZIP codes. Eaters know the cost of their meal. But what they don't know — that their bypasses will be more than 20 grand, and that they are likely to be a direct result of their lifestyles — will kill them.

People who are protected from costs cannot look out for themselves. They cannot know whether they are getting a fair deal, a raw one, or a bargain. Doctors cannot price their services equitably. Patients cannot judge what or how much to buy. But don't tell America that until it pays the bill.

John La Puma, M.D., is a Chicago-based internist and author of Managed Care Ethics: Essays on the Impact of Managed Care on Traditional Medical Ethics, Hatherleigh Press, New York, 1998. He is director of the C.H.E.F. Clinic at Alexian Brothers Medical Center in Elk Grove Village, Ill.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.