Yesterday’s New York TImes includes an excellent primer on avian flu (A(H5N1)), one that executives at managed care firms would be well-advised to read and file away. For those without the time or inclination to do so, here’s a couple interesting take-aways.
To get your attention, the World Health Organization estimates that if the bird flu becomes contagious among humans, an infection rate of 25% is possible. Estimates are that this would lead to deaths totaling 400,000 in Europe and 200,000+ in the US.
1. To date, bird flu has infected about 200 humans and killed approximately 100 that we are aware of. This last qualifier is key; as most of the infections have occured in underdeveloped countries, reporting may well be suspect. However, for a disease that has been in existence for over ten years, the death toll has been very low indeed. This leads some experts to surmise that avian flu is not likely to “jump” to human-human transmissability – if it hasn’t in ten years, it likely never will.
2. The death rate may not be nearly as high as indicated above, as some infected people may have relatively mild cases for unknown reasons. Again, under-reporting would skew the numbers.
3. BUT. The disease also did not move out of southeast Asia for ten years, then exploded across the entire continent in the space of a few months. This somewhat refutes the argument that since the disease has yet to become transmissable between humans it won’t over the long term.
4. Flu pandemics are unpredictable, vary widely in their lethality and the profile of victims, can occur any time of year, and are very difficult to prevent via vaccine and treat via drugs, as the virus is highly adaptable.
Fitch Ratings has doen their usual excellent work preparing a review of the potential impact of bird flu on the insurance industry. While Fitch notes that most of the financial impact of a pandemic woudl hit life insurers and reinsurers, it also provides its perspective on the effect on other lines of insurance, notably health.
What does this mean for you?
Better to be aware and prepared for something that never happens than unprepared for a crisis.

A survey by a small business trade association in California found that 91% of respondents rated health care cost and availability as their chief concern, outweighing workers comp, energy costs, and governmental regulations. Only 2% of the 430 respondents said health care was a low priority.
Amazingly, 44% don’t require any employee contribution for insurance. It could be that this 44% primarily includes businesses where all employees are family members.
Equally amazing, fully 52% supported a Canadian-style single payer system; 90% also support purchasing pools for smaller employers.
11% of the respondents offer HSA-based health insurance.
What does this mean for you?
Even more evidence that likely voters want the health insurance mess solved.

I am no economist. Some will likely howl in agreement, others knowingly nod their heads while tapping out their pipes so as to not get ash on their tweeds (them are the economists). I do know a good bit about health insurance, health care, and the rather messy intersection of the two. With that disclaimer/caveat, here goes my take on an esoteric economic theory.
Jason Shafrin’s post on Baumol’s cost disease was picked up by Kate Steadman for the latest Health Wonk Review – as a few other bloggers and commentors on Managed Care Matters had been bludgeoning me with this economic term, I figured I better find out what it is. So, here’s the definition.
Basically, it holds that when there is little or no growth in productivity the result is that unit costs tend to inflate. As docs and nurses can’t increase productivity as fast as it increases in other industries, prices have to go up faster to make up for that differential.
OK – I’m not sure I agree w Jason’s underlying premise – which seems to be predicated on clinician time as the key determiner of health care cost. What about technology adoption rates, the rise in pharmaceutical utilization and pricing, the aging population’s increased demand for services, etc. While I will grant that labor costs are a major driver of hospital expenses (see California’s minimum nurse staffing headaches), and hospital costs are one of the biggest influences on total medical expense, there are so many other factors that one cannot attribute the sickness of our system to one single factor.
I’d also point out that physician cost inflation has held relatively steady at about 7.7% for several years (although costs jumped last year due to higher Medicare utilization by docs) , while Rx and hospital costs have varied widely. And, as physician expense is s relatively small part of the overall health care cost equation, I don’t see how Baumol’s cost disease is the over-riding factor here.
That said, I certainly agree with Jason’s conclusion that health care costs will continue to grow as a percentage of individuals’ expenditures.

I don’t see how consumer directed health care as presently conceived is going to work (“work” defined as significantly reduce health care cost inflation). Among other problems with the concept, most of the dollars are spent by folks with chronic or very expensive acute conditions that have costs far above their deductibles eliminating any incentive for these folks to worry about costs.
But I’ll suspend logic for the moment to consider another issue. If consumer-directed health care is going to work, consumers will have to know what their health status is, what their health status means in terms of potential morbidity, and what health care (for those conditions) might cost them. Then, if they want to be “educated consumers,” they will need to have current, accurate information on the costs and outcomes of health care providers in their geographic area who treat their specific conditions (or potential conditions).
The first two aren’t too tough, at least on a population basis. Health risk appraisals have done a pretty good job of forecasting future health conditions…for the general population. And epidemiology has evolved into a reasonably accurate science for prediction of population-based morbidity and associated trends.
The last two are also not too tough, again on a population basis (seeing a trend here?). Case-mix adjusting physician outcomes can produce a fairly accurate picture of individual physician and/or facility outcomes. If you have a large enough sample size and if the diagnoses and other data are accurate, consistent, and complete. Rather big ifs…
(I apologize in advance for denigrating the rather significant issues inherent in case-mix assessment and analysis and ignoring the wide variation in practice patterns across specialties, geography, and physician. I’m making a huge generalization to make another point.)
The big breakdown is our individual uniqueness – we are each a population of one. And that’s where “consumerism” blows apart.
We each get treated as individuals, not as populations. We have unique combinations of co-morbidities, allergies, pre-existing conditions, quirks, differences, nuance, needs and fears. Some of us know a lot about medical stuff, and most of us don’t know much at all. And some patients think that “quality care” is getting in to see the doc within a couple of days, while others view it as a clean waiting room with lots of interesting magazines, and still others want a doc who is warm and smiles, while another group wants to see case-mix adjusted statistics on outcomes.
This “a plus b plus c plus d…” is what makes each patient unique, a population of one.
And docs have to treat individuals, not populations. So, each patient gets treated a little differently.
Patients need to take responsibility for their health, and play an active role in their care. No debate there. But in an increasingly specialized world, with physicians unable to keep up with the growing library of medical knowledge, individual expertise getting deeper and narrower and an educational system which is hard-pressed to adequately educate many Americans on some rather basic subjects, it is not only irresponsible but incredibly naïve to expect or demand individuals have all the knowledge and experience required to effectively “manage” their own health care.
The bright-eyed, textbook-quoting academics and theoreticians citing both obscure economic theory and Adam Smith see consumerism as the cure for health care’s ills. Boy are they clueless.
Oscar Wilde’s oft-quoted ” …a cynic is one who knows the price of everything and the value of nothing” also applies to these “health care economists.”

And you thought Part D was all serious stuff…
Thanks to Helen of kingknight.com for the tip!