Economics of Spine Care

Published on 11/04/2015 by admin

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Last modified 11/04/2015

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66 Economics of Spine Care

Overview of the Economy and Healthcare

The year 2008 ended with great economic changes and challenges to be addressed by the incoming Obama administration in 2009. The biggest names in the financial world, such as Lehman Brothers, Merrill Lynch, Bear Stearns, Wells Fargo, AIG, and Citibank were plummeting into ruin. Icons of American industry such as GM, Ford, Chrysler, and others such as Circuit City, were facing complete failure. These financial problems swept the globe in a wave of uncertainty. Many turned to the federal government for bailout support. The government chose an avenue of giving large companies billions of dollars in bailouts and stimulus packages to try to avert a total meltdown of the economy. It is proposed that saving these large businesses as well as creating jobs through highway improvement and other shovel-ready projects will increase confidence in the financial system and let people feel confident enough to spend money to fuel the economic recovery. This is a somewhat confusing issue, however, because a large part of the problem was based on too much credit without enough savings and now, in the short term, the government hopes to change the present course of recession with more spending. How well this course of action works will not be determined for several years. On an individual level, millions have lost their savings for retirement, and millions have lost their jobs, leading to the loss of homes and even access to health insurance.

Health care represents some of the best and worst in the United States. Great advances continue to be made in imaging and other diagnostic procedures, implants are continually patented and developed, and widespread use of the Internet has produced a much more educated patient than in years ago. However, problems with our health care system include the many uninsured (due to lack of availability, lack of affordability, and persons opting to not pay for insurance although they can afford it), workers becoming uninsured through layoffs or illness, workers with insurance having requests for treatment denied by insurers, escalating costs, decreasing physician reimbursements, lack of access, frivolous medical-related lawsuits, unnecessary procedures being prescribed, and inadequate quality assessment and feedback systems. With respect to costs, new terms, such as “medical foreclosure” and “medical bankruptcy” have been added to our vocabulary in recent years.

The amount of resources consumed by health care continues to grow rapidly, well ahead of the pace of inflation. In 2007, the estimated spending was $2.2 trillion and was expected to rise to $4.3 trillion by 2017.1 At that time, it is estimated that health care spending will represent 19.5% of the gross domestic product. The paradox lies in what Americans are getting for their health care dollars. While the United States spends more on health care than any other country, in 2004, it ranked twenty-third in life expectancy for men and twenty-fifth for women.2 Approximately 20% of Americans between the ages of 18 and 64 years do not have health insurance.3 Among the working population in this age group, the average premium for workplace-based health insurance rose more than 115% from 1999 to 2008, burdening both employees and employers.4 One of the problems for this group is insurance being linked to employment. If someone loses his or her job, he also loses his access to affordable insurance coverage. Many in this group also feel that even if they have insurance, once a health problem arises, they are often denied coverage for treatment.

On the other hand, insurers struggle with escalating costs charged for newly developed drugs and implants, as well as the potential for add-on technologies to be used during an operation or a course of treatment. They also are accountable for meeting the demands of their investors to consistently produce a competitive profit margin. The Internet has helped greatly in educating patients about various health-related conditions and potential treatment options. However, the Internet, along with direct-to-consumer marketing, has produced patients with greater demands for their health care providers to prescribe particular medications and perform various procedures that the consumers may not otherwise ask for.

The concept of competitive effectiveness is at present (April 2009) a topic being addressed in Washington as a solution for rising health care costs. Although on the surface the concept is irrefutable, there is much concern that when Washington makes these decisions without significant physician and patient input and then adds cost-effectiveness, health care rationing, such as is seen in Canada and England, might well result.

One possible scenario to address the 47 million uninsured as well as revamping health care insurance might be a government-sponsored program to subsidize health savings accounts (HSAs). This would make the patient the source of purchasing health care and, just as with purchasing a car, the consumer would purchase what is needed based on comparative analysis of different procedures, providers, and implants. Pay-for-performance, which insurers are proposing, would be carried out in HSA scenario to the individual and not capricious treatment decisions made by the insurance companies. In addition, such a system would afford patients the much-sought after portability.

Other areas of health care have changed drastically during the past several years. There is much less trust in the FDA’s ability to adequately monitor the safety of food, medications, and medical devices; use and promotion of products off-label has come to merit investigation by the FBI and other federal agencies; concern has arisen over the financial relationships between industry and physicians; and, for many years, physicians have felt obligated to practice defensive medicine to help ward off exorbitant malpractice lawsuits.

Overview of Spine Care

Spine care is far from immune from the challenges health care is facing. Guyer described this paradox in spine care with the excitement of numerous new devices and treatments contrasted with financial challenges.5 As previously mentioned, there is a problem with the physician–medical manufacturer relationship. As the health care market became more competitive, spine companies looked to new ways of improving and marketing products. At the same time, declining reimbursements led physicians to look for other avenues of revenue. This led to companies teaming with surgeon-consultants to design new implants. The companies provide the engineering expertise and the surgeons provide expertise in knowing what types of devices are needed and what designs are most feasible for use. Unfortunately, some companies and surgeons elected to abuse this productive collaboration and instead turn it into an unethical practice of payment for use of certain products and payments for services that were never rendered. This has resulted in a declining interaction between industry and physicians, reduced funding to support research and education, public disclosure of financial relationships and investigations, and arrests for inappropriate payments to physicians as well as for off-label promotion by physicians and corporate employees. Groups such as Advamed have emerged, and continue to refine guidelines for interaction between industry and physicians. Others have suggested banning any relationship or support from industry to physicians or organizations. This drastic a measure would undoubtedly have severely detrimental effects on research as well as new product development.

Although back pain is a multibillion-dollar problem annually in the United States, there is surprisingly little solicitation for federal grants to support research in this area. Ultimately, without corporate support, back pain research and education would be severely limited, a step that cannot be beneficial by any measure.

Back Pain in a Changing Population

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