It’s the Prices, Stupid
George C. Halvorson is chairman and chief executive officer of Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals, headquartered in Oakland, California. Kaiser Permanente is the nation’s largest nonprofit health plan and hospital system, serving more than 8.6 million members and generating $40 billion in annual revenue.
George Halvorson serves on the Institute of Medicine Task Force on Evidence Based Care and the Commonwealth Commission for a High Performing Health System. He serves on the American Hospital Association’s Advisory Committee on Health Care Reform. He chairs the World Economic Conference Health Governors for 2009 and chairs the International Federation of Health Plans. He has received the Modern Healthcare/Health Information and Management Systems Society CEO IT Achievement Award. The Workgroup for Electronic Data Interchange also awarded him the 2009 Louis Sullivan Award for leadership and achievements in advancing health care quality.
Halvorson has written several health care reform books, including the newly released Health Care Will Not Reform Itself: A User’s Guide to Refocusing and Reforming American Health Care. He also wrote Health Care Reform Now!, Health Care Co-ops in Uganda, Strong Medicine, and Epidemic of Care as guidebooks for health care reform.
Halvorson served as an advisor to the governments of Uganda, Great Britain, Jamaica, and Russia on issues of health policy and financing. His strong commitment to diversity and inter-ethnic healing has led him to his current writing project, a new book about racial prejudice around the world.
Prior to joining Kaiser Permanente, Halvorson was president and chief executive officer of HealthPartners, headquartered in Minneapolis. With more than 30 years of health care management experience, he has also held several senior management positions with Blue Cross and Blue Shield of Minnesota.
Question: Why haven’t we focused on the price differential that exists between other countries and the U.S. when it comes to health care?
George Halvorson: You know, it's fascinating because we're having a debate about the affordability of health care in America, and the vast majority of the people who are in the debate have no sense whatsoever that we actually pay more for health care in this country by the piece than anywhere in the world. In my books I write about the fact that we pay more by the piece, more by the package, more by the patient, more by the procedure. Uwe Reinhardt wrote an article five years ago saying, it's the prices, stupid -- a good article. And yet the debate completely and totally ignores that point. And when you look at the price differences between us and the other countries, we pay three times as much for drugs, we pay twice as much for technology. Every single country in Europe spends less than $1000 a day for hospital stays, and there's not one state in the U.S. that charges less than $3000.
So when you look at the numbers, just the straight unit price, we pay much more in the U.S., and yet that whole issue has not been discussed at any level in the health care debate in Washington. We've dealt with other issues, and good issues; we need to fix insurance in this country. We need to cover everyone, and we really can't improve care to the level we need to for the country until we insure everyone, because we need everyone with coverage and everyone in the database. And we need to fix care so that we can afford to cover everyone. But we also need to have a sense of what the underlying unit prices are, and that part of the debate has been completely off the radar screen.
Question: How would you compare the cost of a physician visit in this country to other countries?
George Halvorson: Well, it's literally an issue that we have a different fee schedule in the U.S. The fee schedule in the U.S. tends to have a lot of variation. In Canada, if you deliver a baby you get paid $475. That's it. If you deliver a baby in Paris, you get paid $1,050. That's it. In the U.S., if you deliver a baby you get paid somewhere between $1500 and $4500. Well, premium -- which is what everybody pays to buy their health care -- premium is the total cost of care divided by the total number of people who have coverage. So if the total cost of care goes up -- if you're paying $4500 for a delivery -- you obviously are going to have a much higher premium than you would in Canada if you paid $475. So why can the cost go up more in the U.S.? Because the marketplace rewards cost increases in the U.S., and it does not reward cost increases in the other countries.
Organizations charge more because they can. And the reason they charge more is because they get the money. I mean, it's very simple, basic economics, and it's about pricing. So in Canada, the doctors can't increase that price, and therefore they don’t. But if they could, they would. There's no way in the world that Canadian prices would voluntarily be where they are today. So health care costs in Canada in total are about half of health care costs in the U.S.
Question: Is the quality of care in other countries worse because of the lower costs?
George Halvorson: They actually haven't. The other countries don't do a very good job on their chronic conditions; they don't do a very good job on their follow-through. They do a much better job of primary care. Every citizen in the other countries ends up with a primary care doctor. They're all private physicians. France is full of private physicians. Netherlands are full of private physicians. In fact, your waiting times for an appointment in The Netherlands are half the average waiting times in the U.S. because they have many primary care doctors and they have a good infrastructure of primary care doctors. But they actually don't coordinate care much better than we do relative to asthma or diabetes. And they're actually working on that. We've got people from European countries visiting Kaiser all the time, studying what we're doing and looking at our care coordination and our linkages and our team care, trying to figure how they can take that back and apply it in their own countries.
The reason the costs are lower is not because they do a better job of coordinating that care; it's because they pay less for every piece of care. Prescription drug costs in the U.S. typically are about three times as high as the same drug in Canada. CT scans are double, triple in the U.S. what they are in the European countries. So if you pay more -- I mean, the opportunity in the U.S., the really big opportunity, is to do a better job delivering great care. What we need to do is take the diabetics of this country and deliver care for diabetics that is so consistent and so dependable and so high-quality that we cut the number of kidney failures in half, we cut the number of people who go blind in half. There's great opportunity there. So I think we really need a care improvement agenda in America to make care better. And that's the great opportunity here and the other countries. The other countries actually are complaining about their cost trajectory. They're running at 10 percent of the GDP, and we're running at 17.6. But they're still seeing the costs of care going up because their populations are getting older, they're prescribing more drugs, they're doing more tests. All of the same things are true; they just start from a lower base because they pay a lower unit price.
Question: Where is our investment in care being concentrated?
George Halvorson: Well, it's about -- first of all, 75 percent of the costs of care come from people with chronic conditions. About 80 percent come from people with comorbidity, so they have multiple conditions. So we have a lot of people who have asthma, congestive heart failure, diabetes, coronary artery disease, and those are the people who are incurring most of the cost in health care. We have a very small number of people who are incurring most of those costs, so 1 percent of the population is about 35 percent of the cost; 5 percent of the population about 50 percent; 10 percent of the population's 80 percent of the cost. So if we went to that 10 percent of the population who are 80 percent of the costs and did a much better job of delivering care to those people, we could make a huge difference in the cost of care in America, and we could also make care better. And that's the opportunity: the real opportunity is to make care better by focusing on the people who really need team care and delivering that care and doing it in a systematic way. And the best way of doing that is to have computer support for your care. The best way of doing that is to have all of the information about each of the patients all of the time.
So we need -- all the information about the patients needs to be available real-time, and the caregiver in the exam room who's dealing with a patient needs to understand all the information. And most of the time in the United States, because we are so splintered relative to the care delivery system, doctors taking care of a patient only know the prescriptions they've written; they only know the tests they've taken; they don't know other diagnoses; they don't know other treatments; they don't know other procedures. And so everything is chopped up into pieces. And when you chop it up into pieces and deliver care piecemeal, that's extremely frustrating for the patient. It's also frustrating for the caregiver, and it's inadequate care.
And the only way you can link that care is to get that data on a computer. You can't link it -- there's no possible infrastructure you can imagine of, you know, thousands of trucks driving around town shuffling pieces of paper from doctor to doctor where you could end up with the kind of information coordination you need. You've got to get that information into a computer, and then you need to have the doctor able to access that information so for a given patient they know what the next treatments need to be, and also so there can be care plans about each patient. Right now the care plans are also very silo'd and isolated, so a doctor who's treating a patient for allergies does not link up with the oncologist, who does not link up with the internist, who does not link up with the cardiologist.
And so you end up with these doctors each doing separate care plans, and there are people that have 24 and 28 prescriptions that they're taking, with no coordination between them. And some of them counter-indicate, creating danger, actually, for the patient. We just need a systematic approach to care in this country. And we can do it. We spend twice as much money on care as any place else in the world, and we have a computer infrastructure for every other aspect of the economy. There's no reason not to apply systematic thinking, programmatic thinking and team-based thinking to care. It should happen. And if it doesn't happen, we're going to continue to have the same kinds of outcomes that we have now, with twice as many people with failed kidneys.
Recorded on November 18, 2009
Americans pay more for health care than any other industrialized country. Yet why does the debate totally ignore this point?
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The Oedipal complex, repressed memories, penis envy? Sigmund Freud's ideas are far-reaching, but few have withstood the onslaught of empirical evidence.
- Sigmund Freud stands alongside Charles Darwin and Albert Einstein as one of history's best-known scientists.
- Despite his claim of creating a new science, Freud's psychoanalysis is unfalsifiable and based on scant empirical evidence.
- Studies continue to show that Freud's ideas are unfounded, and Freud has come under scrutiny for fabricating his most famous case studies.
Few thinkers are as celebrated as Sigmund Freud, a figure as well-known as Charles Darwin and Albert Einstein. Neurologist and the founder of psychoanalysis, Freud's ideas didn't simply shift the paradigms in academia and psychotherapy. They indelibly disseminated into our cultural consciousness. Ideas like transference, repression, the unconscious iceberg, and the superego are ubiquitous in today's popular discourse.
Despite this renown, Freud's ideas have proven to be ill-substantiated. Worse, it is now believed that Freud himself may have fabricated many of his results, opportunistically disregarding evidence with the conscious aim of promoting preferred beliefs.
"[Freud] really didn't test his ideas," Harold Takooshian, professor of psychology at Fordham University, told ATI. "He was just very persuasive. He said things no one said before, and said them in such a way that people actually moved from their homes to Vienna and study with him."
Unlike Darwin and Einstein, Freud's brand of psychology presents the impression of a scientific endeavor but ultimately lack two of vital scientific components: falsification and empirical evidence.
Freud's therapeutic approach may be unfounded, but at least it was more humane than other therapies of the day. In 1903, this patient is being treated in "auto-conduction cage" as a part of his electrotherapy. (Photo: Wikimedia Commons)
The discipline of psychotherapy is arguably Freud's greatest contribution to psychology. In the post-World War II era, psychoanalysis spread through Western academia, influencing not only psychotherapy but even fields such as literary criticism in profound ways.
The aim of psychoanalysis is to treat mental disorders housed in the patient's psyche. Proponents believe that such conflicts arise between conscious thoughts and unconscious drives and manifest as dreams, blunders, anxiety, depression, or neurosis. To help, therapists attempt to unearth unconscious desires that have been blocked by the mind's defense mechanisms. By raising repressed emotions and memories to the conscious fore, the therapist can liberate and help the patient heal.
That's the idea at least, but the psychoanalytic technique stands on shaky empirical ground. Data leans heavily on a therapist's arbitrary interpretations, offering no safe guards against presuppositions and implicit biases. And the free association method offers not buttress to the idea of unconscious motivation.
Don't get us wrong. Patients have improved and even claimed to be cured thanks to psychoanalytic therapy. However, the lack of methodological rigor means the division between effective treatment and placebo effect is ill-defined.
Sigmund Freud, circa 1921. (Photo: Wikimedia Commons)
Nor has Freud's concept of repressed memories held up. Many papers and articles have been written to dispel the confusion surrounding repressed (aka dissociated) memories. Their arguments center on two facts of the mind neurologists have become better acquainted with since Freud's day.
First, our memories are malleable, not perfect recordings of events stored on a biological hard drive. People forget things. Childhood memories fade or are revised to suit a preferred narrative. We recall blurry gists rather than clean, sharp images. Physical changes to the brain can result in loss of memory. These realities of our mental slipperiness can easily be misinterpreted under Freud's model as repression of trauma.
Second, people who face trauma and abuse often remember it. The release of stress hormones imprints the experience, strengthening neural connections and rendering it difficult to forget. It's one of the reasons victims continue to suffer long after. As the American Psychological Association points out, there is "little or no empirical support" for dissociated memory theory, and potential occurrences are a rarity, not the norm.
More worryingly, there is evidence that people are vulnerable to constructing false memories (aka pseudomemories). A 1996 study found it could use suggestion to make one-fifth of participants believe in a fictitious childhood memory in which they were lost in a mall. And a 2007 study found that a therapy-based recollection of childhood abuse "was less likely to be corroborated by other evidence than when the memories came without help."
This has led many to wonder if the expectations of psychoanalytic therapy may inadvertently become a self-fulfilling prophecy with some patients.
"The use of various dubious techniques by therapists and counselors aimed at recovering allegedly repressed memories of [trauma] can often produce detailed and horrific false memories," writes Chris French, a professor of psychology at Goldsmiths, University of London. "In fact, there is a consensus among scientists studying memory that traumatic events are more likely to be remembered than forgotten, often leading to post-traumatic stress disorder."
The Oedipal complex
The Blind Oedipus Commending His Children to the Gods by Benigne Gagneraux. (Photo: Wikimedia Commons)
During the phallic stage, children develop fierce erotic feelings for their opposite-sex parent. This desire, in turn, leads them to hate their same-sex parent. Boys wish to replace their father and possess their mother; girls become jealous of their mothers and desire their fathers. Since they can do neither, they repress those feelings for fear of reprisal. If unresolved, the complex can result in neurosis later in life.
That's the Oedipal complex in a nutshell. You'd think such a counterintuitive theory would require strong evidence to back it up, but that isn't the case.
Studies claiming to prove the Oedipal complex look to positive sexual imprinting — that is, the phenomenon in which people choose partners with physical characteristics matching their same-sex parent. For example, a man's wife and mother have the same eye color, or woman's husband and father sport a similar nose.
But such studies don't often show strong correlation. One study reporting "a correction of 92.8 percent between the relative jaw width of a man's mother and that of [his] mates" had to be retracted for factual errors and incorrect analysis. Studies showing causation seem absent from the literature, and as we'll see, the veracity of Freud's own case studies supporting the complex is openly questioned today.
Better supported, yet still hypothetical, is the Westermarck effect. Also called reverse sexual imprinting, the effect predicts that people develop a sexual aversion to those they grow up in close proximity with, as a mean to avoid inbreeding. The effect isn't just shown in parents and siblings; even step-siblings will grow sexual averse to each other if they grow up from early childhood.
An analysis published in Behavioral Ecology and Sociobiology evaluated the literature on human mate choice. The analysis found little evidence for positive imprinting, citing study design flaws and an unwillingness of researchers to seek alternative explanations. In contrast, it found better support for negative sexual imprinting, though it did note the need for further research.
The Freudian slip
Mark notices Deborah enter the office whistling an upbeat tune. He turns to his coworker to say, "Deborah's pretty cheery this morning," but accidentally blunders, "Deborah's pretty cherry this morning." Simple slip up? Not according to Freud, who would label this a parapraxis. Today, it's colloquially known as a "Freudian slip."
"Almost invariably I discover a disturbing influence from something outside of the intended speech," Freud wrote in The Psychopathology of Everyday Life. "The disturbing element is a single unconscious thought, which comes to light through the special blunder."
In the Freudian view, Mark's mistaken word choice resulted from his unconscious desire for Deborah, as evident by the sexually-charged meanings of the word "cherry." But Rob Hartsuiker, a psycholinguist from Ghent University, says that such inferences miss the mark by ignoring how our brains process language.
According to Hartsuiker, our brains organize words by similarity and meaning. First, we must select the word in that network and then process the word's sounds. In this interplay, all sorts of conditions can prevent us from grasping the proper phonemes: inattention, sleepiness, recent activation, and even age. In a study co-authored by Hartsuiker, brain scans showed our minds can recognize and correct for taboo utterances internally.
"This is very typical, and it's also something Freud rather ignored," Hartsuiker told BBC. He added that evidence for true Freudian slips is scant.
Freud's case studies
Sergej Pankejeff, known as the "Wolf Man" in Freud's case study, claimed that Freud's analysis of his condition was "propaganda."
It's worth noting that there is much debate as to the extent that Freud falsified his own case studies. One famous example is the case of the "Wolf Man," real name Sergej Pankejeff. During their sessions, Pankejeff told Freud about a dream in which he was lying in bed and saw white wolves through an open window. Freud interpreted the dream as the manifestation of a repressed trauma. Specifically, he claimed that Pankejeff must have witnessed his parents in coitus.
For Freud this was case closed. He claimed Pankejeff successfully cured and his case as evidence for psychoanalysis's merit. Pankejeff disagreed. He found Freud's interpretation implausible and said that Freud's handling of his story was "propaganda." He remained in therapy on and off for over 60 years.
Many of Freud's other case studies, such "Dora" and "the Rat Man" cases, have come under similar scrutiny.
Sigmund Freud and his legacy
Freud's ideas may not live up to scientific inquiry, but their long shelf-life in film, literature, and criticism has created some fun readings of popular stories. Sometimes a face is just a face, but that face is a murderous phallic symbol. (Photo: Flickr)
Of course, there are many ideas we've left out. Homosexuality originating from arrested sexual development in anal phase? No way. Freudian psychosexual development theory? Unfalsifiable. Women's penis envy? Unfounded and insulting. Men's castration anxiety? Not in the way Freud meant it.
If Freud's legacy is so ill-informed, so unfounded, how did he and his cigars cast such a long shadow over the 20th century? Because there was nothing better to offer at the time.
When Freud came onto the scene, neurology was engaged in a giddy free-for-all. As New Yorker writer Louis Menand points out, the era's treatments included hypnosis, cocaine, hydrotherapy, female castration, and institutionalization. By contemporary standards, it was a horror show (as evident by these "treatments" featuring so prominently in our horror movies).
Psychoanalysis offered a comparably clement and humane alternative. "Freud's theories were like a flashlight in a candle factory," anthropologist Tanya Luhrmann told Menand.
But Freud and his advocates triumph his techniques as a science, and this is wrong. The empirical evidence for his ideas is limited and arbitrary, and his conclusions are unfalsifiable. The theory that explains every possible outcome explains none of them.
With that said, one might consider Freud's ideas to be a proto-science. As astrology heralded astronomy, and alchemy preceded chemistry, so to did Freud's psychoanalysis popularize psychology, paving the way for its more rapid development as a scientific discipline. But like astrology and alchemy, we should recognize Freud's ideas as the historic artifacts they are.
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