Paradigm lost: provider concentration and the failure of market theory.

In classic market theory, increased concentration among providers leads to higher prices for consumers. In the world of contemporary health policy, many stakeholders echo the classic market theory, blaming high health care prices on the increased concentration of providers, such as occurs when hospitals merge or are acquired by other hospitals. Thus, the consolidation of providers has become a convenient target for policy makers who want to be viewed as actively pursuing solutions to the growth in health care spending. Yet many of the factors fueling increased provider concentration are widely believed to be desirable, or practically unavoidable. Meanwhile, health care prices are increasing at historically low levels. Thus, there appears to be a contradiction between efforts to contain health care prices and the fact that aggressive policies aimed at reducing provider concentration might be ineffective and could even have the unintended effect of stunting positive developments. In a group of Health Affairs articles, William Sage and Paul Ginsburg and Gregory Pawlson respond to this conundrum by proposing a range of policy alternatives that, in this author's opinion, are either impractical or counterproductive because they have their roots in classical economic models of an industry with pervasive market failure. More effective and practical responses may be less theoretically elegant but more realistic and more reasonable.

Dignity-driven decision making: a compelling strategy for improving care for people with advanced illness.

The concept of dignity-driven decision making builds on previous efforts to define and develop patient- and family-centered care for people with advanced illness. More a framework than a rigid structure, the dignity-driven decision making model emphasizes the centrality of a collaborative process in which patients, most of whom are elderly; their families; and clinicians work together continuously to define the goals of care and how best to implement them. The early experiences of some organizations already practicing dignity-driven decision making in their care suggest that the model can improve patient care. Whether the system of care can produce enough savings to pay for its increased costs in the form of additional clinicians and managers is not yet known. Policy-driven actions, such as payment reform and closer alignment of quality incentives with the model's objectives, will be integral to further development and dissemination of the model.

High cost of stage IV pressure ulcers.

BACKGROUND: The aim of this study was to calculate and analyze the cost of treatment for stage IV pressure ulcers. METHODS: A retrospective chart analysis of patients with stage IV pressure ulcers was conducted. Hospital records and treatment outcomes of these patients were followed up for a maximum of 29 months and analyzed. Costs directly related to the treatment of pressure ulcers and their associated complications were calculated. RESULTS: Nineteen patients with stage IV pressure ulcers (11 hospital-acquired and 8 community-acquired) were identified and their charts were reviewed. The average hospital treatment cost associated with stage IV pressure ulcers and related complications was $129,248 for hospital-acquired ulcers during 1 admission, and $124,327 for community-acquired ulcers over an average of 4 admissions. CONCLUSIONS: The costs incurred from stage IV pressure ulcers are much greater than previously estimated. Halting the progression of early stage pressure ulcers has the potential to eradicate enormous pain and suffering, save thousands of lives, and reduce health care expenditures by millions of dollars.

Market failure and the failure of discourse: facing up to the power of sellers.

The United States spends far more than other countries do on its health care system, but comparative data strongly imply that Americans are not receiving their money's worth. There is much hand-wringing about spending, but little attention is paid to the main culprit: lack of market power by purchasers-something that exists in nearly all other countries. This lack of attention is not surprising, however, given that having an open discussion could ultimately lead to more regulation-and a major redistribution of resources away from providers and back to employers, individuals and families, and taxpayers.

The landscape in 2009: a conversation with Bruce C. Vladeck, by Birnbaum Michael.

Michael Birnbaum interviews Bruce C. Vladeck about the landscape for national health reform in 2009. Vladeck, who worked under President Clinton directing Medicare and Medicaid as administrator of the Health Care Financing Administration, discusses some of the challenges and opportunities facing the Obama administration. By comparing the current political and economic environments with those he faced while working in the Clinton administration, Vladeck argues that this time around America might be ready for pragmatic reforms leading toward universal coverage. He explores the future of employer-based coverage; problems and solutions for America's aging workforce; poor customer service in Medicare; the "Medicaid Stigma"; the promise of immigration; and the trade-offs between access, quality, and cost in the American system. Finally, Vladeck offers a silver lining to the current economic catastrophe. As he sees it, common sense and results may be taking the place of ideology in policy making and policy analysis: "The intellectual hegemony of neoclassical economics has been blown out of the water."

Fact and fiction: debunking myths in the US healthcare system.

The United States has the most expensive and complex healthcare system in the world. Despite the magnitude of funds spent on the system, Americans do not achieve the high standards of health seen in other developed countries. The current model of health insurance has failed to deliver efficient and effective healthcare. The administrative costs and lack of buying power that arise out of the existing multipayer system are at the root of the problem. The current system also directly contributes to the rising number of uninsured and underinsured Americans. This lack of insurance leads to poorer health outcomes, and a significant amount of money is lost into the system by paying for these complications. Experience from other countries suggests that tangible improvements can occur with conversion to a single-payer system. However, previous efforts at reform have stalled. There are many myths commonly held true by both patients and physicians. This inscrutability of the US healthcare system may be the major deterrent to its improvement. A discussion of these myths can lead to increased awareness of the inequality of our healthcare system and the possibilities for improvement.

How useful is 'vulnerable' as a concept?

The relationship between socioeconomic status, ethnicity, and chronic illness, on the one hand, and health status, access to health services, and quality of health care received, on the other, is a central and critical axis of health services research and health policy. However, it is not clear that the use of the term "vulnerable" to apply to individuals, groups, or populations helps very much from either an analytic or a policy perspective. This brief essay explores two instances of "vulnerability" far outside the prevailing paradigm, and it further identifies problems with the term.

Paying for hospitals' community service.

U.S. hospitals incur costs of $25-$50 billion annually in providing "community service," primarily in the form of health professions education and standby costs. They also provide approximately $30 billion in uncompensated care. Historically, such "community service" costs have been subsidized explicitly by Medicare and implicitly in the prices paid by private payers. The sustainability of that system is highly uncertain. With a growing number of uninsured patients, allocating nonreimbursable costs to paying customers can create a "death spiral," in which fewer paying customers bear a larger proportion of such costs. The obvious solutions to this problem all have serious limitations.

Economic and policy implications of improving longevity.

With all the rhetoric surrounding the impending "entitlement crisis" produced by the "graying of America," there has been surprisingly little serious analysis of the social and economic implications of increased longevity and the doubling of the number of elderly people that will occur in this country over the next 30 years. This article identifies five critical areas in which the effect of demographic change will be significant. First, patterns of work life and labor-force participation will almost inevitably change. Second, government expenditures now financed largely by payroll and federal income taxes will increase, whereas those financed by state and local property taxes will fall, at least proportionately. Third, the post-World War II pattern of suburbanized, automobile-dependent communities will pose special challenges to serving an aging population, and new adaptations will need to be developed. Fourth, intrafamily caregiving patterns will necessarily change. Fifth, the level of disability and dependence of older people, for which the rate of change is inherently unpredictable, will have a major effect on all these and other phenomena. Whether one views the net effect of all these changes as a positive or a negative, it is necessary to begin thinking a lot harder and more systematically about all of them.

Medicare as a catalyst for reducing health disparities.

As the nation's largest purchaser and regulator of health care, Medicare is positioned to be a leader in reducing racial and ethnic health disparities. Its leverage was demonstrated in 1966-the year of Medicare's inception-when hospitals desegregated as a condition for receiving Medicare reimbursement. Since then, Medicare has contributed to dramatic improvement in the health of the elderly and disabled minority population, although disparities between minority and white beneficiaries remain. A National Academy of Social Insurance study panel is exploring how Medicare could use its leverage to reduce disparities, for both its beneficiaries and the rest of the nation.