1. competition harms healthcare competition increases deaths

8/14/2019 1. Competition Harms Healthcare Competition Increases Deaths

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Healthcare

1. Competition harms healthcare

Competition increases deaths in health care

BBC News, "NHS competition 'costs lives', 29 January 2003,http://news.bbc.co.uk/2/hi/health/2701899.stm

The rate of deaths from emergency admissions for heart attacks was used to determine quality ofcare. This measure is widely used in the United States.

They [Professor Carol Popper and colleagues at Bristol University's Centre for Market and PublicOrganisation] compared death rates in those hospitals with no local competition - one in three trusts- with those that had to compete for business.

They found the death rates among these patients were much the same in the early 1990s.

However, they discovered death rates started to vary once competition took hold in the healthservice.

According to their study, death rates were highest in those areas that had to compete for business.

Competing private insurers waste money on health-care.

Jerry Adler and Jeneen Interlandi, The Hospital That Could Cure Health Care, NEWSWEEK, Nov

27, 2009 http://www.newsweek.com/id/224585/page/1

But a visit to Cleveland Clinic makes it hard to avoid the conclusion that if you're looking for"waste" in the health-care systemdefined as expenses that do not directly contribute to medicaloutcomesa good place to look is the nation's cobbled-together system of competing privateinsurers. Nissen, who considers himself less bound by the need for circumspection, points outthat "the overhead for private insurers is 29 percent. For Medicare, it's 3 percent. If what's leftover is what you can spend on patients, I think 97 percent is a much better deal."

Competition between medical insurance companies wastes $210 billion every year.

Jerry Adler and Jeneen Interlandi, The Hospital That Could Cure Health Care, NEWSWEEK, Nov27, 2009 http://www.newsweek.com/id/224585/page/1

The same study estimated that another $210 billion is wasted each year on medical paperwork.That, though, is one potential savings that has mostly eluded Cosgrove. At the clinic's patients'accounts office, rows of cubicles are piled high with file folders and printouts, testimony to its

dealings with thousands of different health plans from hundreds of insurance companies all overthe country. Thousands of times a day, clerks pick up the phone and get put on hold like anyoneelse who calls an insurance company. Industry estimates put the average cost of handling a phonecall at $3, to each party. This is the hidden cost of competition; whatever else a government-runhealth-insurance system would accomplish, it would impose a uniform billing system on thecurrent one, in which clinic's 2,000 doctors require 1,400 clerks to handle their billing.

Joshua Mirth 1/5 Healthcare Brief
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Competition may lower quality in heatlh care

Vicki Fong (Penn State University), 8 April 2005, "Health care competition may not result in better

quality", Public Health News

For several decades, competition within the health care industry has been touted as the way to curb

rising prices by reducing inefficient practices and improving quality and safety. But a study of 341HMOs suggests that more competition may not automatically solve price and quality-of-careproblems as hoped for by legislators, regulators and employers.

"Our findings show that less, not more, competition was associated with better health planperformance in several -- though not all--factors," says lead author Dennis Scanlon, associateprofessor of health policy administration at Penn State. "This finding seems counterintuitive, but itis possible that more HMO competition may result in providers finding it difficult to respond tocompeting quality initiatives. Also, competition may be focused more on driving down the plans'premiums, resulting in less attention to quality."

Zero Sum competition in health care reduces value

Michael E. Porter (University Professor, Harvard Business School), Elizabeth Olmsted Teisberg

(Associate Professor of Business Administration, Darden Graduate School of Business

The University of Virginia) Sometime, "Redefining Health Care: Identifying the Root Causes", HarvardBusiness School, May 2006

Health care competition is not focused on delivering value for patients. Instead, it has becomezero sum: the system participants struggle to divide value when they could be increasing it.Although health care offers tremendous value, the unnecessary costs of zero-sum competitionundermine and erode that value. It is the zero-sum competition in health care that has created theunacceptable results detailed in Scoping the Problem: high costs, low or variable quality, under-

and overtreatment, too many preventable errors in diagnosis and treatment, restrictions onchoice, rationing of services, limited access, and a raft of costly lawsuits.

Zero-sum competition in health care is manifested in a number of ways, none of which createsvalue for patients:

Competition to shift costs

Competition to increase bargaining power

Competition to capture patients and restrict choice

Competition to reduce costs by restricting services

Competition bad for health care

Kohn, Alfie, No Contest: The Case Against Competition, Revised Edition, 1992, Houghton Mifflin,

New York NY, ISBN 0-395-63125-4, p. 239-240

A similar dynamic is now at work in the field of health care, where many institutions are being

pressured for the first time to become competitive. More hospitals and clinics are being run be



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for-profit corporations; many institutions, forced to battle for customers, seem to value a

skilled director of marketing more highly than a skilled caregiver. As in any other economic

sector, the race for profits translates into pressure to reduce costs, and the easiest way to do it

here is to cut back on services to unprofitable patients, that is, those who are more sick than rich.

This is exactly what insurance companies are doing under the banner of competitiveness;

denying coverage to those who need it most. In many cases, there is not even any greaterefficiency to show for the greater inequity. Among providers, competition has led to a stunning

round of spending on facilities and equipment in an attempt to lure patients form other providers

and never mind if the new facilities are [unnecessary]. The result: hospital costs are actually

higher in areas where there is more competition for patients.



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2. Cooperation good for healthcare

Doctors at the Cleveland Clinic cooperate, and it's the most efficient hospital in America.



As Cosgrove [CEO Dr. Delos M. Cosgrove, a former cardiac surgeon] told a Senate hearing inJune, the [Cleveland] [C]linic's business practices offer a potential model for the Americanhealth-care industry as it strains to bend the ever-rising cost curve. The evidence was in the 2008Dartmouth Atlas of Health Care, which reported that of the five medical centers ranked best byU.S. News in 2007, Cleveland Clinic provided the most cost-efficient care, measured byexpenses incurred during the last two years of life$31,252, nearly 50 percent below the mostexpensive. The clinic's distinctive feature is that in contrast to most other American hospitals,where doctors are essentially autonomous professionals, at the clinic physicians work on fixedsalaries and yearly contracts. An outsider might describe this relationship as "employer-employee," although Cosgrove [CEO Dr. Delos M. Cosgrove, a former cardiac surgeon] prefersa teamwork analogy; he calls Cleveland Clinic "the world's second-largest group practice" (after

Mayo Clinic, which is organized similarly). This saves money in many small ways, such as onexpenses for medical supplies and devices. "Because we're all on a team," says Dr. Joseph Sabik,chairman of thoracic and cardiovascular surgery, "instead of stocking 30 different heart valves,we can stock two or three, and unless there's a good medical reason to do otherwise, that's whatwe use." And it saves money in one large way, by divorcing doctors' income from the number ofprocedures they perform. That, in turn, reduces the incentive for unnecessary tests, whose cost tothe economy was estimated at $210 billion a year in a recent report by PricewaterhouseCoopers.

Cooperating drove down costs of medical care for Duke University


27, 2009 http://www.newsweek.com/id/224585/page/1But in 2006 Cleveland Clinic abandoned the traditional departments in favor of 25 "institutes"organized by disease or organ system. This works well for patients, who don't care whether theirback pain is cured by a rheumatologist, a neurologist, or an orthopedic surgeon. But, says ReginaHerzlinger, an expert in health-care economics at Harvard Business School, it runs afoul of thedominant fee-for-service system of medical billing, which discourages cooperation across fields.When Duke University Medical Center set up a disease-management system for congestive heartfailure, coordinating the efforts of cardiologists, primary-care doctors, pharmacists, and nursepractitioners, it drove down the cost of treatment by 40 percent in a single year, while reducingreadmissions and improving outcomes. But that highlighted the central paradox of health-careeconomics: a patient's "cost" is the hospital's "revenue." The unintended result of the Duke

experiment, says Herzlinger, was that the unit lost tens of millions of dollars a year. The chiefbeneficiaries were the insurance companies, which saved on reimbursements.

Eliminating competition between doctors drove up quality.



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At Cleveland Clinic, by contrast, the institute system worked because all its doctors were alreadyon salary. This eliminates the competition for patients between departments, and the incentive fordoctors to perform additional tests and procedures. The system also "drives our quality up,"Cosgrove says, because it frees doctors to concentrate on their practices, not the minutiae ofrunning a small business


1. competition harms healthcare competition increases deaths

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