Commoditization: The Rise of the Clones

I’ll start this segment with something that sounds like a sure-fire soporific, guaranteed to put you to sleep. Just hold your eyelids up while you read through the next paragraph – I promise that there is a very important point coming up shortly. While reading some of Nicolas Terry’s more recent work on the effectiveness and safety of EHRs, in particular a 2013 article in the Journal of Legal Medicine, I came across part of a paragraph that, although sterile in the academic fashion, startled me.  As backdrop, Terry was discussing a 2009 paper by Michael Christensen and Dahlia Remler in the Journal of Health Politics, Policy and Law. In that paper, the authors were discussing market failures as responsible for impeding IT development and adoption. Their primary point is that market failure is due to misaligned incentives, observing that providers (doctors) are the ones who pay for EHRs, although insurers and payers welcome EHRs. Although the point is absolutely correct and astute, the writing did not make my pulse race in the same way that it does when reading F Scott Fitzgerald’s The Great Gatsby, for instance. However, then I read:

`Christensen and Remler identify several failures common to general IT adoption, … However, they argue: “[F]antastic gains of [IT] have outweighed those barriers in most industries and aspects of both public and private life. Why does health care [IT] lag so far behind?” One answer is patient heterogeneity. Going down that imperfect information road also implicates provider heterogeneity.`

These couple of lines hit me like a ton of bricks. As in, “Mommy, aren’t all doctors the same? They’re not?”  Yet, once I started to think about it in the context of the Affordable Care Act (ACA), I realized that an implicit presumption of `physician homogeneity` underpins and pervades most, if not all aspects of any associated planning, logistical or economics analysis. This covers costs, competency level, experience, and degree of availability, and a few other criteria that might cause one to differentiate among possible choices. We have been reduced to utterly generic commodities in the business model of the ACA. Thus the first year doc who eked into a mediocre medical school and barely completed his residency program last June is viewed (economically and logistically) as equivalent to a section head or chair at Harvard or Johns Hopkins with 40 years of experience, or to a similarly eminent private practitioner. Sadly, much of the present treatment of physicians within today’s hospital environment accurately reflects this viewpoint, as described in the previous essay.

I can only wonder what the response by a hospital president would be when informed that his lunch engagement at Per Se (Thomas Keller’s Michelin 3-star gastronomic restaurant in Manhattan) was changed to a meeting at McDonald’s, to achieve cost savings based on chef homogeneity.

Along similar lines, and also very important, is the implicit (business) presumption that there is no consequence to a patient’s medical care if one switches insurers, and as a result, switches treating physicians on a yearly basis. During the past two years, the ACA has initiated new markets for health insurance, as well as new ways of buying it, via online exchanges. But these new markets have also seen dramatic price variations, or changes in policies, that cause many consumers to switch plans each year. The present administration is actively encouraging comparison shopping and switching as a way to avoid steep increases in premiums, and to promote competition among insurers. Indeed, among states that use, about 60% of enrollees had switched to a different plan for 2016. This extent of switching is being trumpeted as a success, validating the economic model and incentives in play here. And I agree, from a perspective focused exclusively on near-term cost control, budgetary objectives may be fulfilled. In a system of identical robot physicians all seamlessly sharing complete information about a patient, this logic would be impeccable.

Unfortunately, in the human world, I believe that this model will most likely lead to greater long-term system costs, particularly for patients with complex medical regimens. Sadly, for these patients, without the continuity of care from a familiar doctor, I would often expect to see a substantial relative decline in their long-term health, and greater complications from medical or surgical interventions. I fear that this would likely be accompanied by a concomitant increase in medical costs that would be significantly larger than the projected systems savings achieved by controlling insurance rates. Why would that be? There are a number of reasons, but the following few points should already voice my concerns.  Many doctors will feel less invested in the long-term health of patients if they believe that the patients will be with them only for a short while. There will be fewer incentives for a doctor to develop a master long-term personal health plan for the patient, to push for diet and exercise management and balance, to indicate timely screenings, or to `pull strings` in extenuating circumstances, each of which would be beneficial to both the patient and to the system. And many patients will not have developed the trust in a physician to adopt an `unusual` change in their habits that could be very helpful, and will not feel free to discuss `something minor` or confidential that if properly addressed, could make a world of difference to their health. Moreover, the bottom line change here, I fear, will also often come with a quality of life drop, as well, in addition to the added financial pain.

So we need to be very careful with our budget exercises. If we presume or seek genericity, we may yet achieve mediocrity.