I have been reading a lot about economic bubbles lately. There may be a commodities bubble. There may be an agriculture bubble. We all know about the housing bubble that burst (it’s spreading around the globe now).

Well, that got me wondering. Could there be a health care bubble?

Not being an economic whiz, I turned to some online resources.

The Financial Dictionary says: “A temporary market condition created through excessive buying, and an unfounded run-up in prices occurs.”

Some have argued that we buy too much health care. The foundations of rising prices are not clear cut.

Next to the trusty Wikipedia to find a foolproof system to determine when a market is bubbly. Turns out there are no hard and fast rules. Excerpts follow:

The cause of bubbles remains a challenge to economic theory. While many explanations have been suggested, it has been recently shown that bubbles appear even without uncertainty, speculation, or bounded rationality.

OK, good to know.

Most recently, it has been suggested that bubbles might ultimately be caused by processes of price coordination or institutionalization.

We have laws in place to discourage price coordination, but a true market has little impact in determining health care prices. Institutionalization: health care is highly regulated.

Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often identified only in retrospect, when a sudden drop in prices appears. Such drop is known as a crash or a bubble burst.

So we won’t know until afterward.

Not extremely helpful. But take into consideration some of the issues we’re dealing with: building boom, worker shortages, Medicare’s trust fund issues, drug costs (up), labor costs (up), expensive new technology (the efficacy is debatable in some products)…care to add more?

Very little in health care is governed by real market incentives (that could be good or bad, depending on your thoughts). The problem remains: it all just keeps going up. The spending may be able to continue; it may not; but reality is that health care continues to become more expensive. Because we try to sustain all parties (and try to keep them happy) in the health care industry, the requirement (like, when we have no choice) for change is quickly arriving.

If we get to that point (when reform is not by choice, but by necessity), some party(s) must lose. That is when the health care bubble will bust.

A play on a couple of hospital myths/realities.

Our employer based health insurance system distorts the real cost of health care.  Some (rightfully so) attribute our current consumption activities to this distortion.

A classmate was relaying a conversation last week that she had had with a group of law students.  She asked, “How much do you think open heart surgery costs?”  One response, “a couple of thousand bucks.”

The WSJ Health Blog wrote a couple of weeks ago about San Francisco restaurants reacting to a local mandate to provide health insurance to employees.

Since the beginning of the year, San Francisco businesses have been required to offer health insurance to employees or pay a fee to the city to fund health care.

Some restaurants are passing the fee on to consumers in the form of a health surcharge, which shows up on the bill as a flat fee ($1 per person, or so) or as a percentage (like sales tax).

Interesting thought.  A surcharge at the bottom of a Wal-Mart receipt?  Or a hotel bill?

Can you imagine GM placing a line item at the bottom of the sticker on a new car detailing a $1,500 surcharge for health insurance (back when they offered it to retirees).  Not that it would change the bottom line price.  But do you think that would make someone think twice about purchasing the vehicle?

The Regional Communities blog is “A weekly compilation of news links about and for regional communities pursuing local and regional development.”

This week our own system is lucky enough to have made the cut for the post Population Shifts, suburban slums, and hospitals.  Have a regional read.

Coincidentally, a couple of relevant mafia stories…

If we’re in need of a scapegoat for any health care insurance reform, Dr. Jonathan Kellerman has found the party in a biting Wall Street Journal opinion piece:

The health insurance model is closest to the parasitic relationship imposed by the Mafia and the like. Insurance companies provide nothing other than an ambiguous, shifty notion of “protection.” But even the Mafia doesn’t stick its nose into the process; once the monthly skim is set, Don Whoever stays out of the picture, but for occasional “cost of doing business” increases. When insurance companies insinuate themselves into the system, their first step is figuring out how to increase the skim by harming the people they are allegedly protecting through reduced service.

Once they affix themselves to the host – in this case dual hosts, both doctor and patient – they systematically suck the lifeblood out of the supply chain with obstructive strategies. For that reason, the consequences of any insurance-based health-care model, be it privately run, or a government entitlement, are painfully easy to predict. There will be progressively draconian rationing using denial of authorization and steadily rising co-payments on the patient end; massive paperwork and other bureaucratic hurdles, and steadily diminishing fee-recovery on the doctor end.

He actually suggests ridding ourselves completely of insurance, it’s worth a read.

The Guardian, last week, had an intriguing story on how to do (good) business like the mafia.  Despite some of the questionable tactics employed by the mafia over the years, Clare Longrigg writes there are lessons to be learned from organized crime.  My favorite (of the seven):

Rule 6: Reinvention

In case of a political scandal, or a business failure, it is vital for the new boss to be able to distance himself from the whole affair. Indeed, he may find it useful to take on a new persona altogether. When Stuart Rose returned to Arcadia after three years to rescue it, he said: “What is interesting is that people here think I haven’t changed, but I have been gone three years. I am not the same Stuart Rose, I have changed a lot.”

With Provenzano’s new directives, not only did the negative headlines cease, but he managed to dissociate himself from the scandals that had gone before. Like everyone else, he had emerged from Cosa Nostra’s most violent decade with his reputation in tatters; his advisers helped him to “get his virginity back”, in Giuffrè’s interesting phrase. With the help of his PR-savvy advisers, he made sure no one associated him with the violent years, and created his image as the peacemaker.

“When I got out of prison,” Giuffrè recalled, “I found Provenzano a changed man; from the hitman he once was, now he showed signs of saintliness.”

One of the best aspects of my MHA program (and one of the reasons I chose it) is a clinical rounds class that places MHA students with a hospital service for five weeks to observe medical students, interns, residents, fellows, and attendings do  rounds.  I have often heard that learning on the job is the best way to learn; this experience is no different, a key to understanding others and learning about what they do is to immerse yourself in their situation.

One of the important differences that separates health care from other “business” is that most providers—who are directly responsible for admitting patients into the hospital and thus, relied upon in order for hospitals to make money—are not employees of the hospital.  It is understandable why problems develop.

The age-old health care management problem involves a disconnect between providers and management—most likely to do with a lack of communication.  This class, while admittedly too short, is an effort to help administration students (most with limited clinical experience) gain an understanding of the medical education process (and a general look into the provider’s decision-making process).

I’ve always respected physicians, but my respect has increased dramatically after just a few meetings with my care team.   Decision making can be difficult as there is always some uncertainty in the decision making process.  Limiting that uncertainty is a key to making good decisions.

Here is what I’ve come to understand well: Uncertainty rules the day in medical care.  And patients expect miracles.  While the competent provider (of which I have yet to meet one on the other side) often has a good idea/understanding of a patient’s medical problem, they just never know for sure.  Here’s the problem: (constant!) vague and incomplete information.  Besides a detective, who else deals with so much constant uncertainty?  Or if that isn’t enough, how about dealing with uncertainty and knowing the decisions made could have a negative impact on another human life?

Differences between providers and administrators will always exist.  The two have very different job descriptions with very different expectations.  The differences create a necessary balance.  While only for a short period of time, being exposed to providers doing their job is helping me visualize those differences.  The hope is that this experience will translate to a better understanding of it all.

our own system makes its Health Wonk Review (”a biweekly compendium of the best of the health policy blogs”) debut at Workers’ Comp Insider.

While we leave the true wonkery to the real professionals, I think the questions we ask here can add to the debate.  Have a read.

The dutiful student in me forces the usual time spent blogging to be spent studying for a final exam.  In lieu of a full-fledged post, here are some links to explore…

The Atlantic has an article exploring the subprime mess and what it means to American suburbia, “A structural change is under way in the housing market—a major shift in the way many Americans want to live and work.”  After years of trying to get away from the shadows of the skyscrapers downtown and moving to the cookie-cutter neighborhoods of suburban living, Americans are moving back downtown.  What does this mean for hospitals—both downtown and the sprawl of medical services that occurred with the population as it moved outward?

I’m big on primary care and its role on helping us get out of the mess we are in (and the larger mess we’re going to be in in a few years).  The Healthcare Economist blog has a good post on a recent study on the effect of family physicians on health improvement, “When FP supply is instrumented by age-related capitation it has markedly larger and statistically significant effects. A 10 percent increase in FP supply increases the probability of reporting very good health by 6 percent.”

Enjoy.

A couple of items dealing with welcomes…

Per usual, Beth Israel Deaconess Medical Center is doing something extraordinarily right (at least in my opinion). I’ve written before on the difficulties of navigating a large hospital, especially on first visits. While many organizations offer information desks, BIDMC is being proactive in delivering help to individuals who walk through their front door by utilizing “greeters.” Their job “is to be available to help people find their way in the hospital, including escorting them as necessary to find the right place in our 2 million square feet of space.” (Applause!)

The second item of note is a welcome of our own. When our own system started, my full intention was for it to be more than just me trying to carry this conversation (hence the our in the title, and all the we talk from the beginning). I’m excited to welcome Matt Vestal (read about him here) to our blogging team. Matt and I often have stimulating discussions on all-topics-health-care and his questions/insight/ideas will add value to this blog and contribute to our evolving search for the definition of sustainable health care.

Again, if you consider yourself a health care amateur, and feel like you have something to offer to our own system, contact me!

There’s a mess going on in California regarding the retroactive termination of insurance benefits well-covered by The Health Care Blog, so go there for the wonkery.

But what caught my attention was in the fine print of the post: “(FD I am a HealthNet individual policy holder and they haven’t “recivved” me yet. Then again I haven’t had a claim in 3 years!)”

A big push of consumer-directed health insurance and high deductible health plans is to get consumers involved in care decisions, more or less taking away the perception of free care that often arises when patients are well covered by traditional insurance policies.  The ethics, along with the pros and cons, of this notion can debated later.

What struck me was the exclamation of pride of not having a claim in three years.  I don’t want to spend any time in a clinic or hospital either, but when do no claims become a bad thing?  Obviously we are not privy to the specifics of the individual policy, however, as some experts claim, HDHPs may prevent patients from seeking needed care.

My question is, will a period of no claims become a competition of pride amongst us?  A boasting of sorts?  Maybe.  But is it a good thing?