Healthcare: Why do we need medical policies?

In my last blog post, I discussed how US health insurance companies decide what to pay for, what information they need to make decisions on paying for care, and some of the ways they go about making those decisions. I only briefly discussed why medical policies are required and why there’s a lot of complexity around health care. I hope to shed some light on this and help people understand the difficulty that both Providers and Insurers have in dealing with the cost of health care.

First, not all diseases are equal. This one is pretty obvious, but I’m not even talking about how severe the diseases. That’s vitally important of course, but even a “minor” disease can lead to long term impacts to quality of life because we don’t know how to treat the disease. In some of these cases it might just be embarrassing, such as if I eat Gluten and I’m out and about the next day. I’ll probably have some serious issues and won’t be able to enjoy myself while I’m out. There are two reasons for that. One, it’s not really obvious what condition I have. Two, there’s no treatment to allow me to eat gluten other than “avoid” wheat, barley, and gluten. Which in many cases is rather difficult.

This brings me to the second reason why there’s a lot of difficulty – it’s difficult to even diagnose what disease people have. So, for gluten issues you have only a few options, one is a blood test to looking for an immune response to a gluten or to have a colonoscopy to see what sort of damage has been done to your large intestines. Because of this lack of precision, in many cases it can lead to the matching the wrong treatment for the right disease, vice versa, or wrong treatment for the wrong disease in the most extreme cases.

Precision of Diagnosis and Precision of Treatment matrix

In the above picture from “The Innovator’s Prescription” it’s clear which diseases are “better” to have, those in the upper right. While those in the lower left are much harder to treat and have less consistent outcomes. For anything in between the cost and quality of care is really dependent on the experiences of your provider. I believe that this is where insurance companies can add a lot of value. Using medical policies and partnering with providers they can artificially expand the experience of a provider through providing the latest scientific research and results for a treatment and disease interaction. This will help allow providers to focus on care while getting the latest medical news from their network of insurers.

This really puts the model on it’s head as the provider can take advantage of the diverse networks they are part of to learn different components of research based on the focus of those providers. I think that a true partnership between insurers and providers really will drive down health costs.

This complexity is unfortunate, but is truly part of our human condition. One way to reduce costs is to increase the amount of research that pushes care into the upper right from the bottom left. Otherwise, it’s difficult for an insurer to determine which providers are taking advantage of patients and which ones are honest. There’s imperfect information on both sides and the patients pay for it in the long run.

Are patents going to impact how doctors treat a patient?

Today Ars Technica reported on a case before the US Supreme Court and how the court is assuming that the usage of scientific data, which has been publish, is a valid patent. This is a pretty scary scenario. What do you mean? Well, the patent is related to how the levels of some chemical impact the dosage of a drug. That’s it. If you have level X in your blood you should have dosage Y. The patent holder created a device to test the level of the chemical in your blood which then suggests a dosage level. The Mayo clinic developed their own test and  have been administering the test on their own without paying anything to the company. The arguments in the court essentially assume that this is a valid patent.

Should this patent be valid though? Seems like something that could be patented. Based on what is considered patentable, this should fall under mathematical formulas. Essentially, this is a matter of correlation and basic regression analysis. During a drug trial you can determine a correlation between the impact of a dosage of a drug on the current level resulting in a lower level of the chemical. This is really how all medicine works. If you can reduce costs by creating your own tests and administering it yourself then that’s great. Hospitals should be encouraged to do this if they are large enough.

This is what Doctors do. They read literature about the medicine the condition it’s supposed to impact and what sort of connection there is with the dosage levels and the response rate within the patients. Every doctor has to use a test to determine the level of a chemical or some condition. This can be the pulse (irregular heartbeats), blood pressure (pressure cuffs), blood sugar (A1 test) and the list goes on. In each case the doctor is able to assign a proper dosage prescription based on the study of patients. If a doctor was required to pay a licensing fee for each and every case of this our currently exorbitant costs of health care will seem cheap. Like when we used to complain about $1.50/gallon for gas.

The other problem with patenting something like this is that it’s likely to be highly unenforceable except for when a large institution like the Mayo Clinic. Individual practitioners will be safer than large clinics, but they could be impacted as well. If they are required to use an extremely expensive proprietary testing methodology rather than have the ability to use any testing method it will drive up prices and may put doctors out of business.

If the court rules on this as if these types of patents are valid, we will need to push to have patent law changed again. The last change moved things in general, in the right direction but a lot more work needs to be done.