Seemed Like a Good Idea: The State of Evidence in Health Care Management
Aug 23, 2023
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The podcast discusses the lack of evidence-based approaches in healthcare management and the resistance to change in the health sector. Topics include evaluating evidence-based patient care, improving transition of frail patients from hospital to home, inefficiencies of fee-for-service payment, lack of evidence-based practices in healthcare management, impact of clinician licensing on quality of care, and financial incentives for physicians and healthcare decisions.
Licensing and federal tax code hinder innovation and evidence gathering in healthcare.
Clinician licensing can hinder coordination of care and integration of healthcare systems.
Group purchasing of health insurance limits individual choices and discourages innovative models.
Fee-for-service payment models incentivize more services over optimal patient care.
Provider licensing and certification create barriers to entry for new and innovative healthcare professionals.
State certificate of need laws restrict the establishment and expansion of healthcare facilities.
Deep dives
Licensing: Negative Impact on Innovation and Evidence Gathering
Licensing has negative impacts on both innovation and evidence gathering in healthcare. It may hinder efficient innovation and discourage collaboration among healthcare teams.
Federal Tax Code: Negative Impact on Innovation and Evidence Gathering
The federal tax code, particularly the tax exclusion for employer-sponsored insurance, has a negative impact on both innovation and evidence gathering in healthcare. It discourages individual health insurance decision-making, group purchasing of health insurance, and ties health insurance to jobs.
Clinician Licensing: Negative Impact on Innovation
Clinician licensing can have a negative impact on innovation in healthcare, particularly when it comes to coordination of care and integration of healthcare systems.
Group Purchasing of Health Insurance: Negative Impact on Innovation
Group purchasing of health insurance, particularly through employer-sponsored plans, can hinder innovation in healthcare by limiting individual choices and discouraging the adoption of more innovative insurance models.
Fee-for-Service Payment: Negative Impact on Innovation
Fee-for-service payment models can have a negative impact on innovation in healthcare, as they may incentivize healthcare providers to provide more services rather than focusing on optimal patient care.
Provider Licensing and Certification: Negative Impact on Innovation
Provider licensing and certification requirements can create barriers to innovation in healthcare, as they may limit the ability of new and innovative healthcare professionals to enter the market.
State Certificate of Need Laws: Negative Impact on Innovation
State certificate of need laws can have a negative impact on innovation in healthcare, as they may restrict the establishment of new healthcare facilities or the expansion of existing ones.
Health Insurance Regulations: Mixed Impact on Innovation
Health insurance regulations can have a mixed impact on innovation in healthcare, as some regulations may encourage innovative practices or coverage options, while others may create barriers or limit competition.
Patent and Intellectual Property Laws: Mixed Impact on Innovation
Patent and intellectual property laws can have a mixed impact on innovation in healthcare. While they can incentivize and protect innovation, they can also create barriers to competition and limit access to affordable healthcare.
Pharmaceutical Regulation and Approval Process: Mixed Impact on Innovation
Pharmaceutical regulation and the approval process can have a mixed impact on innovation in healthcare. While they ensure safety and efficacy, they can also create lengthy delays and high costs, inhibiting the development of new drugs.
Reimbursement Systems: Mixed Impact on Innovation
Reimbursement systems, such as fee-for-service or capitation models, can have a mixed impact on innovation in healthcare. While fee-for-service may incentivize overutilization, capitation may limit access to necessary care. Alternative reimbursement models that reward quality and value may encourage innovation.
Data Privacy and Security Regulations: Impact on Innovation
Data privacy and security regulations can have both positive and negative impacts on innovation in healthcare. While they protect patient privacy and ensure data security, they may also create barriers to sharing and analyzing data for research and innovation.
Antitrust Laws: Impact on Innovation
Antitrust laws can have a significant impact on innovation in healthcare, as they aim to promote competition and prevent monopolistic practices that could hinder innovation or limit patient choice.
Insurance Network Adequacy Regulations: Impact on Innovation
Insurance network adequacy regulations can impact innovation in healthcare by influencing the structure and composition of healthcare networks and limiting patient access to innovative providers or services.
Certificate of Need Laws: Impact on Innovation
Certificate of need laws, which require healthcare providers to obtain state approval for certain facility expansions or investments, can impact innovation in healthcare by creating barriers to entry or limiting the flexibility of providers to respond to market demand.
FDA Regulations: Impact on Innovation
FDA regulations can have a significant impact on innovation in healthcare, particularly in the pharmaceutical and medical device sectors. While they ensure safety and efficacy, they can also create lengthy approval processes and increase costs, affecting the pace of innovation.
The impact of payment models on healthcare behavior
The podcast discusses the impact of different payment models on doctors' behavior and patient care. It highlights the potential influence of financial incentives on the decision-making process of doctors, using an example of a cardiologist who may be motivated to schedule unnecessary visits to increase revenue. The podcast also mentions a study, the Rand Health Insurance Experiment, which found no significant differences in health outcomes among different payment models, but did show reduced healthcare spending under certain financial incentives. The question of whether these incentives produce socially beneficial behaviors on the part of physicians is also raised.
The need for evidence-based evaluation of healthcare interventions
The podcast emphasizes the importance of evidence-based evaluations of healthcare interventions. It mentions the lack of evidence supporting the effectiveness of prevention and promotion efforts, as well as the need for standardized outcome measures. The speakers suggest conducting randomized controlled trials (RCTs) to answer critical questions in healthcare, such as evaluating the impact of horizontal and vertical integration in hospital systems, as well as the effectiveness of evidence-based healthcare management. The discussion also touches upon the value of breaking up hospital systems in concentrated markets and the potential benefits of reference pricing when implemented by consumers themselves.
Why has the health sector of the economy uniquely resisted changes in products, productivity, and services that improve consumer satisfaction or reduce prices and spending? One reason, according to the book Seemed Like a Good Idea: Alchemy versus Evidence‐Based Approaches to Healthcare Management Innovation, is that decisionmaking on medical delivery or insurance innovations is often not evidence‐based and sometimes contradictory to evidence. This book explores reasons why the health sector lacks such evidence and why managers often don’t use the evidence that does exist. Please join us for a discussion with the authors and Cato director of health policy studies Michael F. Cannon that will explore government policies that cause producers and consumers to leave money on the table.
