Meds To Cut

The most respected standard source on the effectiveness of medical treatments is the British Medical Journal‘s Clinical Evidence.  This summarizes 2500 treatments studied:

BMJ Clinical Evidence Pie Chart
(Here is a summary of older reviews. Hat tip to Harold Lehmann.)

I’ve said we should cut medicine in half, and have so far proposed two methods:

  • Raise the price of medicine, first by reducing subsidizes then by increasing patient cost-sharing or by adding taxes.
  • Bring in docs from places where spending is low to impose their style of practice on places where spending is high.

Let me add a third proposal:

  • Cut insurance coverage for treatments using BMJ ratings: first cut those likely to harm and unlikely to benefit, then cut those with benefit harm tradeoffs and those of unknown effectiveness.

Since randomized experiments and cross regional regressions usually find zero correlation between health and medical spending, we should presume that treatments of unknown effectiveness are on average ineffective.

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  • Alan

    This is exactly the approach taken by the NHS when assessing *new* treatments and drugs. The National Centre for Clinical Evidence (NICE) decides whether to pay for treatments based upon cost-benefit analysis. Obviously this is “rationing”, “putting a price on life” etc and was explicitly designed to control costs by denying expensive, advanced treatments of low/moderate benefit (compared to cheaper, more available treatments). It would be of interest to see this extended to *all* treatments – obviously “alternative” measures such as acupuncture and chiropractic would be first against the wall, not such a bad thing.

    • Alan

      Sorry, should have made clear that NICE is a UK agency and controls National Health Service spending, not private spending.

  • Constant

    There is nothing stopping a private insurance company from implementing this. In an approximately free market it would probably be extremely popular because of the low cost. Unfortunately, what we actually have in the US is far from an approximately free market. For example, in my job so much of the cost of medical insurance is swallowed by my employer (in a form that I cannot recuperate if I choose to forgo it) that it is irrational for me to choose anything less than an extremely expensive (objectively, and to my employer) plan for which I pay peanuts (as my part of the cost). As a customer of health insurance, I have little incentive to deny myself absurdly comprehensive medical insurance.

    • Joe Teicher

      Really, I have my doubts. For instance, my guess would be that any cytotoxic cancer drug would at best get the “Trade off between benefit and harms” ranking. I mean come on, they make your hair fall out. But can a health insurance company provide a prescription drug benefit and not provide chemotherapy? Not in illinois (picked because I live there). Here is an excerpt from illinois government’s mandated benefits page:

      “If a policy provides prescription drug benefits, it must also provide benefits for any drug that has been prescribed for the treatment of a type of cancer, even if the drug has not been approved for that specific cancer by the FDA. The drug must be approved by the FDA and must be recognized for treatment of the specific cancer for which it has been prescribed by an established reference compendia, three of which are specified within the law.”

    • Carl Lumma

      How is it lower cost? It’s only lower cost as an aggregate, in that fewer interventions would be purchased. But doctors and “insurance policies” (really payment plans) benefit from intervention purchases. Patients are ill-posed to argue with doctors, and conventional medical records are a significant barrier to changing doctors. (in the U.S. at least)

  • Mario

    I think a great way to cut medical spending would be to get insurance companies to offer customers a percentage of the cost of any treatment they refuse. This would bring back the principle of making the patient feel the expense of the treatment without shutting the poor out of the market.

    • Jess Riedel

      This would greatly encourage patients to fake or induce illness so that they would be prescribed treatment, which they could then refuse.

      • Mario

        True, but that’s not a scam that would be easy to perpetrate and it would be very difficult to repeat. Strict penalties on doctors and a blanket denial of coverage to people found to be committing fraud should be enough to keep it to a minimum. Overall, those wanting to make a quick buck off of insurers would probably be better off refusing insurance altogether and keeping their money than paying premiums and faking illnesses. I don’t know how one could fake illnesses lucrative enough to make back the cost of the premiums without eventually having to pay all of it back through rate increases.

      • Robert Koslover

        I agree with Jess Reidel. And it’s not just criminal patients to worry about. See, for example,

      • Mario

        If physician/hospital fraud already exists, as per the article, then the fact that it would likely continue to some extent is not a good reason to oppose this.

      • Robert Koslover

        Mario, with all due respect, I think you are missing the point. The Government’s involvement, with its lesser competence in managing money when compared to the private sector, is a key factor in encouraging and enabling fraudulent activities. I gave you a specific example of a major and highly-comparable Government medical program being defrauded. So, given that, you defended adding new Government medical programs by asserting that hey, if fraud is already there, then so what if it continues? Really? The solution is to expand already failing systems? I must confess that I don’t find that very persuasive.

      • Robert Koslover

        Mario, Just to clarify, I am referring to this issue under the assumption that you are talking about this being a government-imposed rule or law, without input from the affected businesses. Should an insurance company decide to pursue this on its own, then I expect it would: (1) do so for reasons of making money, not simply appealing to political constituencies, (2) do so with full knowledge of the market and realistic expectations for what to expect, and (3) do so with anticipation of the possible frauds and with planned mechanisms to manage them. In that case, however, your idea of “get insurance companies to offer customers…” means that you are simply offering a suggestion to those insurance companies, not a Government-mandated rule. Is that what you meant, Mario? If so, then I have no argument with you. And if so, why not send your suggestion to several health insurance companies and see if they agree? After all, if it really is a good idea, and if they can see how it would help them save money (which is what their business is all about) then they will surely embrace your wisdom (no kidding, and no sarcasm) and will be grateful to you for your brilliant (again, no kidding, and no sarcasm) suggestion.

  • Douglas Knight

    Does this method scale? Once an information source is powerful, will it be corrupted? This applies to your first two methods as well, but not as much.

  • James

    Given that most medicines are prescribed, the point of leverage would seem to be the medical practitioner that is doing the prescribing.

    If the court systems were the expedite the path for civil and malpractice suits against practitioners that provision marginally defensible treatment protocols, the number of hard to defend prescriptions would drop dramatically.

  • James

    typo correction

    Given that most medicines are prescribed, the point of leverage would seem to be the medical practitioner that is doing the prescribing.

    If the court systems were to expedite the path for civil and malpractice suits against practitioners that provision marginally defensible treatment protocols, the number of hard to defend prescriptions would drop dramatically.

  • Eric Johnson

    There is a lot of room for differences of opinion about medical matters. Even though there is a lot of reason to think we are overspending on medicine, deciding the value of some treatment X is not a simple matter.

    What the British Medical Journal is talking about with regard to some treatments lacking sufficient evidence (by a conservative scientific standard), is lightyears away from those treatments equaling malpractice.

    Notice that 45% of treatments are insufficiently supported per BMJ. A good estimate of the fraction of doctors who use such treatments, then would be 100%. They have 6-10 years of postgraduate study in the subject, yet you want to turn over control to lawyers, judges, and juries?

    Human beings have been purchasing stupid stuff for trillions of years. It’s none of my business. We all know this matters primarily because of Medicare, not because people are going to destroy civilization by spending their own money on medicine at their cost and their discretion. I agree that it’s a huge problem to be weighing down the economy something awful to mandate this kind of purchase for every man, woman, and senescent child.

    The solution here is a free market. Ie, no Medicare. Or, a different standard for Medicare, in which not everything is paid for. Medicare would be a spartan, bare-bones plan, and quite conservative effectiveness standards would apply. If people just have to spend a zillion dollars on X, they can go make some money, or save some, or it’s just too bad. This is the only sensible thing to do if we cannot go on paying for Medicare as it is. But it will be a dark day before the soft -nosed “how can you put a value on human life” people realize this.

    But outside this context (of socialist health programs), government is already doing far too much to regulate medicine – not too little.

  • Ryan Cousineau

    Eric: the utter lack of evidence behind a lot of these treatments is a huge and acknowledged problem in medicine. Given that those highly-trained doctors have turned out, among other things, to be fatally careless about hand-washing (and much more so than less-trained nurses), I doubt their experience and training is particularly useful at helping them find effective treatments among the clinically unproven ones.

    I hope the point of leverage against useless prescriptions will be science (not law or Medicare), as we get more careful about testing current medical practice.

    The penalty of useless medicine is opportunity cost, and especially the concern that non-evidence-based treatments are either standing in place of better options, or actively harming patients.

  • andrew c

    2500 treatments studied doesn’t mean they are all applied with the same frequency. Show me the same data with the size of the pie slices proportional to the number of times the treatment is applied.

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  • Hal Finney

    There are two different issues here which often get mixed up. One is whether a treatment is effective. The other is whether a treatment is cost effective.

    It’s one thing to say that we won’t pay for treatments that are not effective, or perhaps equivalently, treatments that do more (medical) harm than good. This seems reasonable. We are aiming to help people, not harm them, and treatments that do harm, or do nothing helpful, shouldn’t be paid for.

    But most discussion skips right past this and jumps to the issue of cost effectiveness. It is far more problematic to say we won’t pay for treatments that are not cost effective. This requires weighing the dollar value to the patient of a beneficial treatment. In effect we have to put a price tag on the patient’s life and health.

    While there may be good arguments in favor of this, it is important to see the enormous gap between this issue vs the problem of ineffective treatments. If merely eliminating treatments that are not beneficial can already reap great savings, as sounds likely, then we have much less urgency to wade into the murky philosophical waters of weighing human life and health in monetary terms.

    • Douglas Knight

      That’s all correct, but the slice that this study labels as ineffective is only 1/5 of the assessed slice. (plus some of the “likely to be effective”) RH is right to say:

      Since randomized experiments and cross regional regressions usually find zero correlation between health and medical spending, we should presume that treatments of unknown effectiveness are on average ineffective.

      but he was careful not to admit that we should presume this about the 54% studied, as well. (ie, I claim the choice of which 54% to study has only a small bias towards effective treatments. That’s implied by RH’s comment: the alternative is to conclude that unstudied medicine is the harmful part). The main problem is that individual studies are massively biased to showing effectiveness, compared to aggregate studies. It’s not just that the aggregate studies show medicine doesn’t work; they also show that the individual studies are wrong. (One explanation that doesn’t involve corruption is that doctors who do studies are more competent than typical doctors. Also, patients in studies get more attention, raising compliance.)

      One effect of focusing on cost-effectiveness is to raise the bar to fight this bias. And it’s not as bad as most instances of fighting bias with bias, since cost-effectiveness is the right thing to do, if it can be done correctly. But there’s a big cost of getting people to accept it at all.

  • Glen

    The “trade off between benefits and harms” category confuses me, and it makes you somewhat skeptical of the graph as a whole, since I would have thought the treatments were categorized by net benefits. Don’t all medical treatments involve both costs and benefits? Maybe they mean that it’s a particularly close trade-off. Or maybe they mean that the trade-off depends on the individual case — although that, too, is surely true of all treatments.

    • Glen

      I meant to say “makes me somewhat skeptical of the graph as a whole.”

  • sheila

    oh i totally agree with jessie riedel, she sounds like a real smart girl!

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