At least the ankle wasn't broken

Photo: Laurel Fan (Flickr CC)

Most issues related to health care fall safely outside this blog's frame of reference. But pricing is close enough for me to share a recent experience.

My wife recently went to the emergency room for what turned out to be a badly sprained ankle rather than the break it could have been.

We just received the bill. It's for $2,742 for the general services provided at the hospital plus $719.47 for the X-Ray. I estimate that the total time we interacted with various people at the hospital (from administrators to nurses) to be no more than 15 minutes (and it was probably closer to 10). Just the general services alone equate to a billing rate of $10,968 per hour.

Which just goes to show how completely detached the charges for care are from the actual costs. In fact, when we went to the hospital, we were not paying for the visit and the care received per se--we were just presenting an opportunity for the hospital to pass on some of its overall running costs.

With our employer insurance, we are in the fortunate position as we look at the bill to just shrug, say "that's crazy" and move on. In this pricing system, we, as the consumer, play no active role and can have no hand in helping to regulate the market.

How do you get to your Carnegie Hall?

Photo: NYCArthur (Flickr)

The story goes that a New Yorker (Arthur Rubinstein, in some versions) is approached in the street near Carnegie Hall, and asked, "Excuse me sir, how do I get to Carnegie Hall?" He replies, "Practice, practice, practice."

There's another version of that story that I once saw in an ad (I can't remember for what). The question was the same but the answer was: "Well, I wouldn't start from here."

As I read Anu Gawande's article in The New Yorker about health care reform, titled Getting There From Here, it was this second version of the Carnegie Hall story that I remembered. Gawande's argues that pragmatic reform of the health care system built around the mess we have is preferable to any of the start-from-scratch proposals on the table (single payer or free market).

No-one can accuse him of having a rose-tinted perspective as he summarizes: "Yes, American health care is an appallingly patched-together ship, with rotting timbers, water leaking in, mercenaries on board, and fifteen per cent of the passengers thrown over the rails just to keep it afloat. But hundreds of millions of people depend on it...There is no dry-docking health care for a few months, or even for an afternoon, while we rebuild it. Grand plans admit no possibility of mistakes or failures, or the chance to learn from them. If we get things wrong, people will die. This doesn’t mean that ambitious reform is beyond us. But we have to start with what we have."

Gawande bases his argument on the idea of path dependence. Shouldn't I already know about path dependence? I don't know. Anyway, it describes how decisions today are influenced and limited by decisions made in the past, even though past circumstances may no longer be relevant or optimum. Witness the QWERTY keyboard still going strong today even though it was designed originally to slow people down so they wouldn't jam the typebars on their typewriters.

In path-dependent processes, early events play a critical role in the market outcome. Take America's transportation system. Early decisions to base it on gasoline-powered automobiles (as well as a few well-timed interventions by the auto makers) have created an entire infrastructure that make it very difficult to do things differently.

What path dependence tells us it that, when people have devoted a lot of time and resources into a particular way of doing things and they have become efficient organizing themselves around a system, it can be really difficult and counterproductive to try and start from scratch. Applied to health care that means building on our flawed current system. Applied to business that means choosing business model evolution over reinvention (except when your industry is hit by a massive asteroid).

Such thinking doesn't need to lesson our ambition. We all can strive to get to our own Carnegie Hall. But we need to get try and get there from where we are now instead of where we might wish we were.

What's a trillion? Big but how big?

Although everyone gets that a trillion is a big number, most people don't have any idea how big.

In a recent speech about health care at the Commonwealth Club, Dr. Ezekiel Emanuel, felt that it was important that his audience got a better grasp on a trillion. He was setting the stage for his health care proposal by talking about the "big three" health care problems: Coverage, Cost and Quality: Too many not covered, too expensive and not good enough quality.

His data point on cost was that we spend $2.2 trillion on health care every year. To hammer home that $2.2 trillion really is a very, very big number, he translated dollars into seconds:

Q: How long ago (do you think) was 1 million seconds? A: Last week
Q: How long ago was 1 billion seconds? A: Round about when Nixon resigned the White House
Q: How long ago was 1 trillion seconds? A: 30,000 BC

Helps put our national debt into perspective as well.

Note on Dr. Emmanuel:
Dr. Emmanuel is the Chair of the Department of Bioethics at The Clinical Center of the National Institutes of Health (and brother of Rahm Emmanuel, Barack Obama's Chief of Staff). He is a proponent of of a complete restructuring of health care, eliminating its provision through employers and replacing it with a voucher system paid for via a value added sales tax. Audio of the whole speech is here. Interesting if you're interested in health care.