via @sophia-epistemiaâs recommendation (emphasis added):
This is a pattern of introducing middle-men that has proliferated throughout the finance side of health care: âHmm, this part of our enterprise sure is expensive! Why donât we spin it off as an independent business or outsource it? Surely some enterprising entrepreneur can figure out a way to do it more cheaply than we can, so weâll just black box the problem and pick the lowest bidder to solve it for us.â
Hereâs another example of that pattern. Medicare, the Federal health insurance for the elderly, insures people directly. But the Federal program for the poor, Medicaid, does not. Instead the Feds give the money to the state to run a Medicaid program. Here in Massachusetts, ours is called MassHealth. The federal government has outsourced the actual insuring of poor people to the state.
So the state insures poor people? Not exactly, here in Massachusetts. MassHealth is (mostly) not an insurance program. MassHealth funds insurance. Itâs an insurance subsidy program. The actual providers of insurance are commercial insurers who offer MassHealth-approved plans.
This, by the way, is the big crucial concession of first Romneycare and then Obamacare to the health insurance industry: the state wouldnât take over insuring people directly, thereby putting the insurance companies out of business. The state would pay the insurance companies that already existed to do the job for the state. And the citizenry would have a choice of insurance products from a market place of multiple insurance companies. That is what made these plans the conservative answer to the liberal preference to single-payer. Back when they were considered conservative.
So when you get on MassHealth you get a choice of providers/plans. There are, last I checked, five. So your MassHealth-approved and âfunded insurance company provides you health insurance?
If you choose Neighborhood Health Plan, and you require mental health care (one of several types of health care for which something similar is true) you will quickly discover that Neighborhood Health Plan (which, btw, is the name of the insurance company not the insurance plan) doesnât have a network of psychiatrists and psychotherapists. They have outsourced the mental health component of their insurance product to another company, named Beacon Health Strategies.
I mean Beacon Health Options. They were just acquired by/merged with Value Options, and thatâs the new name.
I assume all this divisioning is saving someone money, over what they think theyâd be spending otherwise. But I canât help but note that some share of the wages for at least one Medicaid employee, one MassHealth employee, one Neighborhood Health Plan employee and one Beacon Health Whatevers employee â minimum â have to come out of the premium for that patient, regardless of whoever is paying it.
Because it has to. There is no other money input into the insurance side of the system, besides the premiums. But I get ahead of myself.
The proposition that multiplying the number of parties and institutions that have to get a cut of every premium somehow reduces expenses is⌠eyebrow-raising. Iâm not saying itâs not true, Iâm saying that if it is, it says something pretty appalling about the comparison case.
But what I want to discuss is not the most charitable description, because I think these things werenât just ineffective at keeping costs down. They were more like boring holes in the hull.
Hereâs a thing you need to know about The Beer Game: the reliably produced behaviors in the game are the product of humans being reliably human. The chaotic results are not required or enforced by the game. Rather the players in the game respond to the gameâs stimuli in a counterproductive way. There is an alternative way to behave (the theoretical maximal condition of losing only $200) that is vastly better. But people reliably donât do that because they have certain beliefs, intuitions, guesses, assumptions, and biases.
The whole point of the exercise is to bring to conscious attention these unconscious beliefs, intuitions, guesses, assumptions, and biases, so that they can be unlearned.
Allow me a digression from the whole of health care into that special mess with which I am most familiar: mental health care.
The DSM-III came out in 1980. This was Spitzerâs DSM, the New! Impoved! Scientific! DSM for a new rational age. Insurers promptly adopted it â and promptly went through it and decreed certain diagnoses to be things they would and, more importantly, wouldnât pay for.
The following will be Sanskrit to many of you, but: DSM-III introduced the multiaxial diagnosis system. The payers took one look at Axis II and said, âHeeeeeeey, you canât actually treat that stuff can you?â and psychiatry said, âNo, thatâs the stuff thatâs permanent,â and payers said, âOh, cool. Thanks!â and promptly made the presence of an Axis II disorder diagnosis grounds for terminating (paying for) mental health care, because, hey, Axis II disorders âarenât curableâ, so money spent of them â or on someone who had one â was âwastedâ.
This is how a diagnosis of Borderline Personality Disorder â introduced with DSM-III â became so deeply prejudicial and stigmatizing: putting it on someoneâs paperwork could basically terminate their insurance. (Also, I have a hunch this is one of the things behind the idea that mentally retarded people canât be benefited by psychotherapy; mental retardation is also an Axis II disorder and I wonder if the Axis II == âno mental health treatment allowedâ thing played out there, as well, but thatâs outside my orbit.)
This failed to rein in costs. (Actually, Iâm confident the Axis II thing bit them in the ass really hard: people with untreated BPD/o generally consume emergency room resources like whoa.) So they examined the problem and they noticed something that I posted about: that you canât tell how well someone is functioning just from a diagnosis. Ah, okay, weâve had been asking for the wrong information! Screw diagnosis! If Susie is stable on her meds and getting along fine, why should we pay for her to get psychotherapy just because she âHas Major Depressive Disorderâ? Sammyâs depression isnât so well controlled, so, sure, weâll pay for psychotherapy for Sammy, but, clearly, we need to know how impaired the patient is.
What happened next is that the insurance industry moved to what is known as the âimpairment modelâ. It wasnât enough for a treater to tell the payer what the patientâs diagnosis is, the treater was expected to indicate the present impairments. Apparently, payers came up with their own lists of what impairments they would pay for mental health services to treat.
I say, âapparentlyâ, because they didnât tell the treaters. However, clinicians surmised these lists existed and some enterprising folks reverse engineered the lists.
Now, on one hand, this impairment model approach sounds very enlightened: diagnoses are deprecated, and understanding the presentation of a personâs actual mental health condition is centralized. The problem is, however, that the other hand is trying to pick your pocket. Weâre still talking about payers (insurers) trying to figure out reasons they shouldnât have to pay for medical care. And their justification here isnât just that if youâre doing fine with your Major Depressive Disorder, you donât need therapy, itâs that if you are getting out of bed in the morning, getting to work, doing a job, earning a living, and meeting most of your obligations, and managing to eat and sleep and bathe, then that is the definition of âfineâ and you are doing fine, no matter what you feel like. The impairment model is concerned with, duh, impairments: about what you can do, or more properly what you canât. It is unconcerned with suffering. It is unconcerned with subjective experiences. Feel worthless, numb, miserable, canât stop thinking of all the people you loved who have died? They donât pay for that to be treated if youâre still keeping it together.
Now, note that in the diagnosis model, the treater can just write âmajor depressive d/o, recurrent, moderateâ on the bill and be done with it. But thatâs not how the impairment model works. They didnât say, âHereâs the list of things weâll pay for you to treatâ; they were all cagey. Instead, they said, âGive us a little report on the patient, explaining why the patient needs treating.â So now, clinicians are doing substantially more documenting just out of the gate and because theyâre then subsequently playing â20 Questionsâ with the payer to get payed, thereâs more back-and-forth.
Well, gee, that didnât get costs under control, either.
âOkay, look,â said some insurance companies. âThis isnât working. You guys keep explaining how all these patients are being so impaired by their conditions, and that canât be right. Surely there canât be that many behaviorally impaired people among our customers! [Clinicians everywhere: âBWAHAHAHAâ] So from now on, we want you to explain not just what the problem is, but what you propose to do about it, and how its been going so far. No, we know you wrote a treatment plan, yeah, we required you to do that, no, we want a new thing on a different form. In addition.â
And on it goes. When I started at psyjob five years ago, we had to do treatment plans with both the diagnosis and impairment models, but then also fill out the insurance companyâs form (âunit requestsâ) every so often to justify further treatment. Just as I showed up, I was informed that the new thing is that we needed to add a symptom checklist to the treatment plan. Okay. We were told that some of our payers are now demanding that we also track patient status with a standardized outcomes measure (think: a one page questionnaire the patient fills out), so weâve added that, too. Okay. We were told that one of our insurers now requires that we fill out a two-party form for coordinating care with the patientâs PCP: we fill out the mental health half, send it to the PCP, who is supposed to fill it out and send it back to us. We already requested an annual physical report, but we have to do this, too, now.
Seeing children on MassHealth? You now have to fill out a CANS assessment every 3 months. In addition to all the other paperwork already required by the state.
Who knows what new documentation tomorrow will bring? Nobody knows what it will be, but we all know it will be something, because the people trying to control costs are certain that if they just get enough information out of treaters, they will be able to figure out how to pay less for treatment.
As attentive readers will have long been noticing, Iâm talking about coordinative communication.
This was, in fact, the place that the previously published Massless Ropes, Frictionless Pulleys: Coordinative Communication originally was going to go, before I factored it out. If you havenât read it, you might want to go do that before proceeding. If you have read it, you might want to re-read it here.
What Iâm describing in the two histories Iâve just shared â one about healthcare over all, and one about mental health specifically â are examples of how the demands for coordinative communication in the healthcare sector in the US absolutely exploded over the course of the last 40 years. The first also illustrates payers, both insurers and the state, recoursing to organ-ization in an attempt to manage the proliferating costs of coordinative communication, and, apparently, it failing to do so.
My hypothesis is this: that two things happened.
The first thing is that the expenditures on health care began to escalate exponentially as a function of the increased health care available to buy, and this process, which had been slowly gathering steam through the 19th century and into the 20th started rounding the curve of the hockey stick in the 1960s and 1970s.
Which brings us to the second thing that happened: the response. Just like in The Beer Game, players in the game reacted to the surge in demand, by attempting to do things to reduce costs. Wrong things. Precisely the wrong things.
There is a quote, famous among system dynamicists, from Jay Forrester, father of the field:
  âPeople know intuitively where leverage points are. Time after time Iâve done an analysis of a company, and Iâve figured out a leverage point â in inventory policy, maybe, or in the relationship between sales force and productive force, or in personnel policy. Then Iâve gone to the company and discovered that thereâs already a lot of attention to that point. Everyone is trying very hard to push it IN THE WRONG DIRECTION!â
It is my contention that in the US, the naĂŻve response to the phenomenon of rising health care costs due to medical innovation was to increase coordinative communication, which counterintuitively caused costs to increase even more, and because that cost increase was not attributed properly to the increased coordinative communication, the answer to the problem of rising costs was seen to be ever more coordinative communications.
This was an economic death-spiral.
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