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Tradeoffs and Compromises: How Most Countries Struggle to Balance Cost, Quality, and Access
Episode

Peter Cram, Chair of the Department of Internal Medicine at the University of Texas Medical Branch

Tradeoffs and Compromises: How Most Countries Struggle to Balance Cost, Quality, and Access

For this episode, we have the privilege to host the excellent Dr. Peter Cram, Chair of the Department of Internal Medicine at the University of Texas Medical Branch in Galveston, Texas. He is also the co-founder of the International Health System Research Collaborative (IHSRC). 

Dr. Cram discusses some of his experiences in the Canadian healthcare system. He also shares the result of some of his research on global healthcare costs, price transparency, and reference pricing. He also shares the hope of ensuring that everyone has healthcare. This is a stimulating conversation about prices of care so be sure to tune in!

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Tradeoffs and Compromises: How Most Countries Struggle to Balance Cost, Quality, and Access

About Dr. Peter Cram

Dr. Peter Cram is the Chair of the Department of Internal Medicine at the University of Texas Medical Branch in Galveston, Texas. He was on the faculty at the University of Iowa and director of the Division of General Internal Medicine and Geriatrics at Sinai Health System and University Health Network at the University of Toronto. His current research foci include 1:) using administrative data to compare health care utilization and outcomes across developed countries; 2.) enhancing communication of risk and prognosis to patients and after low impact hip fractures,  and 3:) studying prices of care and impact of price transparency efforts. He has published more than 200 research papers on these really fascinating topics. Peter is the co-founder of the International Health System Research Collaborative (IHSRC) with Bruce Landon from Harvard.

Tradeoffs and Compromises: How Most Countries Struggle to Balance Cost, Quality, and Access with Peter Cram, Chair of the Department of Internal Medicine at the University of Texas Medical Branch: Audio automatically transcribed by Sonix

Tradeoffs and Compromises: How Most Countries Struggle to Balance Cost, Quality, and Access with Peter Cram, Chair of the Department of Internal Medicine at the University of Texas Medical Branch: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Saul Marquez:
Hey everybody, Saul Marquez here. Welcome back to the Outcomes Rocket. Today, I have the privilege of hosting the amazing Dr. Peter Cram. He is the Chair of Department of Internal Medicine at the University of Texas Medical Branch in Galveston, Texas. He was on the faculty at the University of Iowa and director of the Division of General Internal Medicine and Geriatrics at Sinai Health System and University Health Network at the University of Toronto. His current research folk include using administrative data to compare health care utilization and outcomes across developed countries to enhancing communication of risk and prognosis to patients and after low impact hip fractures and three studying prices of care and impact of price transparency efforts. He has published more than 200 research papers on these really fascinating topics. Peter is the co-founder of the International Health System Research Collaborative (IHSRC) with Bruce Landon from Harvard. And we're going to have a fantastic discussion around some of these and some of his experiences having spent a lot of time in the Canadian health system as well as the U.S. health system. So, Dr. Cram, thank you so much for joining us today.

Peter Cram:
Oh, thanks so much for having me. It's great to be here.

Saul Marquez:
Absolutely. And so before we kick off the discussion around some of these differences, some of your areas of focus in your research, talk to us about what inspires your work in health care.

Peter Cram:
So as a kid growing up in Connecticut, the topics at our sort of dining room table, my parents, my dad, would come home and plop the New York Times in the Wall Street Journal on the table. And then we would just sort of have at it. And because he was a corporate attorney, often the conversation wasn't so much about health care, but about sort of business and economics and finance and budgets. And so at the same time, I had some really great role models who are physicians, and I always had this idea that maybe I could merge this interest in the business side with this interest in sort of being a physician. And lo and behold, it was possible to do. And here I am, 20 or 30 years later, as an academic, general, internist and health services researcher who studies cost and quality and sort of sustainability in the U.S. health care system.

Saul Marquez:
Yeah, it's a great combination there. Peter, and you know, some of the areas of interest that you're focused on are really timely. So really, talk to us about what you're most passionate about there. And we mentioned three different things that you're tackling in your research. But where do we start?

Peter Cram:
You know, it's funny. So I was a medical student at Wake Forest University. It was then called Bowman Gray in Winston-Salem, North Carolina. And I remember at the time when you're a medical student, so everybody is looking for this mentor. And some of my classmates would find what develop a relationship with a vascular surgeon. Another colleague, they seem to really connect with psychiatrists. And I was looking and looking and I couldn't really find the right mentor. And this was back in the late nineteen nineties and suddenly the vice chair of our Department of Medicine, a geriatrician named Walter Ettinger. I learned that he was teaching a class on health care policy, and he brought in these articles about Medicare and the Rand Health Insurance Experiment, about how much the U.S. was spending. And I said, That's it. And Walt and I have now been friends for nearly well, it's more than 20 years. And really, he got me passionate about this idea that the U.S. we all know this, the U.S. health care system, we spend more than any other developed or high income country by a long shot. We have all these resources going into the health care sector. Yet when you look at the health of Americans, we know that we do not do well as a country by most measures. And that really is what motivates me and gets me up every morning is how are we spending so much and not doing so well?

Saul Marquez:
Yeah. You know, and it's an issue. A few years ago, Peter, I got a gift from my brother for a birthday. I forget what number it was, but it was a puzzle. And it's cool because New York Times does these puzzles that they print off the front page of your your birthday. I was born in eighty four. So it was February 27, 1984. Health care costs continue to skyrocket and I just kind of I was like, Wow. Nothing has changed, you know,

Peter Cram:
Right. Yeah, no, you're spot on and you can look at the New England Journal from the nineteen sixties, the nineteen eighties, the early two thousands and every year there are articles about the unsustainability of U.S. health care spending and how this can't continue. And then you look 10 years later, and it has continued.

Saul Marquez:
Yeah. So the Rand Health Insurance Experiment, that was multiyear experiment, right? And basically showed how if you give, I guess, health care for free, people are going to use it more. And then so what did we what actions were taken as a result of the findings?

Peter Cram:
So the Rand health insurance experiment, along with some work, some more recent work from the state of Oregon, where they essentially expanded insurance Medicaid. So those two sets of studies are really the best evidence we have for this experiment that we'd like to do. And the question is if you give people health insurance, what happens? Yeah, it turns out that it's not that easy to do that as a randomized experiment. And so we really have these two examples that are our best examples. Thought experiments for what it looks like. And what you see is that when you give people health insurance, number one, people like it.

Saul Marquez:
Mm hmm.

Peter Cram:
Well, that's not surprising because you're giving them something very valuable and very expensive. So you could say that people would probably be similarly happy if you gave them, I did a randomized trial of giving people a new car or Sony PlayStation. People like getting health insurance. Like getting anything else. Yes. What you also see is that when you give people health insurance, they use more health insurance or they use more health care. Yes. If people insurance versus people who have no health insurance, the people who have insurance will see the doctor more. Mm hmm. But then what gets more confusing is that if you give people insurance, do they live longer? Do they have less heart attacks? Is their blood pressure better controlled? Do they have more cancer screening? All things that we would say are good and the data there is a bit more confusing. And what it seems to suggest is that when you give people health insurance, they do somewhat better in certain aspects of health. So they don't just see the doctor. Their health might get a bit better, but the big change is, of course, on the utilization side, which isn't surprising because now they have this health insurance, which is covering the costs, if you will, of their visits.

Saul Marquez:
So then does the utilization outweigh the benefits?

Peter Cram:
Well, that's the fifty thousand dollar question. And what I would say is that there's two ways to look at that. One is looking at the Rand Health Insurance Experiment or some of the Oregon data, and I would say I would say no. I would say that the benefits of giving people health insurance far outweigh the costs and the downstream sort of. And I say that the other place that we can look is simply in the values of other high income countries. And what I mean is that virtually every high income country outside of the U.S., England, Germany, France, Israel name the country. Almost all of them have decided that some level of health insurance should be a condition of being a citizen of that country. And so if we want to aspire to be like other countries and not be the sort of the weird kid who has some strange magical beliefs, I would say that given people health care something that we should be doing.

Saul Marquez:
And the weird kid, I love it. Yeah, you know, Peter, it's super interesting. You spent a good amount of time, 10 plus years in Canada, and you've gotten to see firsthand, as you called it, an embedded researcher, practicing medicine, doing the research, you know. Talk to us about some of the good that you've seen, some of the bad, you know, some areas of opportunity. And you know what we could be thinking to be better than than what we're doing today.

Peter Cram:
Yeah. So in 2013, I was lucky enough to get recruited up to the University of Toronto, and this is something that not a lot of American physicians get to do. You have to get licensed in Canada, you have to have a job in Canada. It's actually a country sovereign country with its own borders and rules. So it's not that easy to move up there as a physician. So I got this opportunity and it was just too good to pass up.

Saul Marquez:
Yeah.

Peter Cram:
And in seven years at the University of Toronto, it was fascinating. So the first thing that I learned and this was really just as a person living in Canada, legally, you get health insurance, and it is it is the easiest thing to do. So most of us who are lucky enough to have employer sponsored health insurance, we have this thing called open enrollment and you have to choose and then you might have a health savings account and all these different things. In Canada, after I think it's a 90 day waiting period, you go to a place that looks like the Department of Motor Vehicles. You present some ID, they give you a health insurance card. That's it.

Saul Marquez:
Nice. And so what's the cost to you as an individual?

Peter Cram:
So that's what's interesting. Most of us, or most of the people listening to this podcast. If they look at their paycheck, they will see some sort of deduction or employer contribution to your health insurance. In Canada, it all happens in the background using the taxes that you are paying so you don't see any deduction from your income, but you're paying a higher income tax. And that's really where health insurance gets paid from, if that makes sense.

Saul Marquez:
It does. Yeah, yeah. And then there's administrative kind of this goes here, this goes there. That part is for health care, tax is higher. You look at the overall costs and really when you do the net impact overall, I would even argue that our taxes are higher when you look at the cost of our health care.

Peter Cram:
So I had a lot of conversations about this with friends and family who would try and get their hands around this. So your income tax rates in Canada are higher, so you are going to be paying more taxes out of your paycheck. But you're right. So you do not then have this money coming out of your day to day paycheck going into health insurance. And so it's difficult to do the math. But health insurance in Canada is incredibly simple. The other thing that's sort of worth talking about is cost sharing. So when you go to an emergency department, your kids scrapes their knee or you slice your finger and you go to an emergency department in Toronto or in Kingston, Ontario or in Winnipeg, so you don't get a bill, generally speaking. So nothing comes in the mail a week or a month later from your insurance company. Nothing comes a week or a month later from the hospital or the doctor. Co-pays are virtually non-existent for physician and hospital care, which makes life very simple and comforting because you don't get the $7000 surprise bill a week or a month later.

Saul Marquez:
Yeah, none of that.

Peter Cram:
None of that.

Saul Marquez:
Yeah, it's interesting. And you know, we think about the countries that, you know, Peter mentioned some of the the most affluent countries and providing health care as a as a base benefit. Why can't we do it? You look at the number of people in this country and the amount of money that this country produces, our gross domestic product. I mean, you would think that it's something we could do better on. Ok, so talk to us, Peter, about some of your research around outcomes improvement as it relates to cost, or maybe you want to take a different angle on it.

Peter Cram:
Yeah. So one of the things that was incredibly sort of interesting to me getting to Canada was so the U.S. spends 18 percent of its gross domestic product on health care. That's about eleven thousand dollars per person per year. Canada spend an eleven and a half percent, which is about seven thousand per person per year. So the question was, well, something's got to give, right? If Canada spend in so much less, our Canadians somehow missing out and we started looking at this. So one of the things we started to look at was sort of utilization or access to very high end procedures. These are what we call quaternary care procedures. These are like high cost procedures performed in big hospitals.

Saul Marquez:
Ok.

Peter Cram:
And we said, well, maybe Canada's. There's long been a rumor that the U.S. the saying is the U.S. does more to more. So we do more stuff to more people. That's what we always assumed, but we didn't actually know that. So we started looking at this. And what we found were some really sort of interesting findings. So spine surgery, so your back is really hurting and you go and you get an MRI. Do you get spine surgery or do you not? It turns out that in New York state, they get three hundred percent. That is three x more spine surgeries per capita than in Ontario.

Saul Marquez:
Wow.

Peter Cram:
And those surgeries are twenty to twenty to thirty thousand per pop. Mm-hmm. Ok. Well, that was just spine surgery. So we did it again. We looked at bone marrow transplants again, New York, you know, two to three hundred percent more stem cell transplants than Ontario.

Peter Cram:
These are one hundred thousand per pop. We've now done this for cardiovascular procedures. So aortic valve procedures and something called left ventricular assist devices. And what we found time and time again was that the U.S. really is doing incredibly high rates of these discretionary procedures. And when you ask where's the money going? Well, it's the stuff like this. Now you could push back at me and someone will and say, Well, you know, Americans are getting more of these procedures and they're living longer. So Canadians aren't getting these procedures and they're dying in droves. Someone's going to say that. Well, it turns out that when you look at life expectancy, Canadian life expectancy is actually about a year higher than U.S. life expectancy. So you typically live a bit longer if you're in Canada. Maybe Americans don't live longer, but maybe we're happier. So we only live seventy eight years and Canadians live seventy nine years, but we're really happy for those seventy eight years. Turns out that when you look at international measures of well-being or happiness, Americans aren't winning on that either. So now you're starting to sort of get cornered. So we say that the U.S. is spending more. We're not living longer and we're not living a happier. And at this point, this is where even as a U.S. citizen who loves the United States, I start to say something starts to smell a little bad here.

Saul Marquez:
Yeah, I agree. And it's a big challenge. You know, I for me, the two areas, we could be better. And just like you, Peter, I love this country. I love and I'm grateful for all of the amazing things that we have here. But health care is bankrupting Americans, and so, so is education. Yeah, that's a different topic.

Peter Cram:
It's a different topic, but it's another huge one. Student debt is an enormous issue,

Saul Marquez:
Is just terrible. But, you know, so let's talk about how we can do something about this. You know, there's been a huge movement around just price transparency, and you've done quite a bit of research around this. More and more employers are demanding price up front. There's, you know, a large segment of the, I wouldn't say, large a growing segment of the population here in the states that are demanding to know there the cost of care with rising deductibles. We just have to know more so. So talk to us about some of your research around price transparency.

Peter Cram:
Yeah. So you know, this has been an issue for a long time. And just from a conceptual standpoint, Saul, if you had to go buy toilet paper or toothpaste, you have a good idea what those should cost. And if you go to the WalMart or Amazon or Kroger website, you're pretty much going to see the price for each of those items. And if you go into the store, the price you see online is the price you will pay. And you know, when you turn to health care, it doesn't work that way at all. So if you anticipate, I'll talk about something that's planned well in advance. If somebody thinks that they're going to need a hip or a knee replacement, which is typically an elective surgery planned weeks or months in advance, this isn't a surprise. It turns out it's very, very hard to find the price for that. So back in two thousand and maybe 13, Jamie Rosenthal, who was an undergraduate at Washington University at the time, she's now a resident actually out in Boston at Boston University. We did a study where she called a bunch of hospitals and she said, I just want to know the lowest price for hip replacement and the hospitals would. First thing that she learned is that when you call a hospital and ask for that, they actually don't know how to give you. They don't know where to transfer you to. So literally, she would get transferred to the cafeteria. She would get transferred to the nursing station. She would get transferred to a voicemail box. All she was asking was what is the price? Compare that to calling Walmart and asking for the price of toilet paper. There is no.

Saul Marquez:
Totally different.

Peter Cram:
And there have been a lot of initiatives at the state level. There are several private entities that are trying to sort of push price transparency through employers. I think there is like a health care blue book. There's fair health. These are private entities that are trying to push the price transparency, but it's been a slow, a long, slow haul. And now there's federal legislation that came into effect in January of 2021 to try and push this ahead even further.

Saul Marquez:
Yeah, and so we're making improvements and ultimately do all signs point to transparency is better overall because it helps us understand and you know and know what we're getting.

Peter Cram:
Well, so therein is one of the problems. So you don't just want price transparency, but you also want insurance benefit design that supports price transparency. So what I mean by this is suppose that I need one hundred thousand surgery and my health insurance tells me that I am on the hook for the first ten thousand dollars, but they'll pay everything above ten thousand, so it's one hundred thousand dollars surgery. I'm going to have to pay ten thousand. Does it matter to me if I go to a hospital that charges one hundred thousand or two hundred thousand? I'm paying ten, so it doesn't really matter to me. And that's a big issue with a lot of health insurance benefits designs is that the design of the health insurance and the cost of the treatments make it so that the patient still doesn't really care. And there's been some really creative work in California with something called reference pricing, which is an insurance design where the insurance plan would say, well, instead of us paying everything above 10, what if we make our insurance that we will pay? Let's just say we will pay one hundred thousand dollars for that surgery. If you go to someplace that costs two hundred, you're on the hook for the whole hundred.

Saul Marquez:
Yeah, the difference.

Peter Cram:
The difference. Yeah. If you go to a place where the cost is one hundred thousand dollars,

Saul Marquez:
That's a better design.

Peter Cram:
And it's a better design.

Saul Marquez:
I like that design a lot better.

Peter Cram:
Yes. And some of that is happening, but it's slow and you have lots of different health insurance programs. You have Medicare, Medicaid, private insurance, even within private insurance, you have lots of different designs. So it's a long, slow journey that we're on, but hopefully getting better. I'm optimistic.

Saul Marquez:
Yeah, for sure, Peter. Really appreciate that. I mean, the opportunity to get better is there, but ultimately it's an insurance design thing. I feel like having the the focus around total cost of care and have the patient person insurance company focused on that. That's where the benefits come in for everyone. And so what are you most excited about today?

Peter Cram:
So Eric Schneider at the Commonwealth Fund a couple of years back, had an editorial in the New England Journal, and I'm going to misremember this, but it essentially was titled something like from Worst to First. Can the U.S. health care system realize its potential? And I'm incredibly optimistic, I guess, that the U.S. can get to where it's going. There's a tremendous amount of innovation going on in U.S. health care, whether it's the Center for Medicare and Medicaid innovation, whether it's the Agency for health care research and quality, whether it is each and every health care system trying to figure out how to adapt to a post-COVID world or whether it's these changes in insurance design. There's a lot of exciting sort of factors converging right now. The question that I sort of have is can we take the step to get the 10 percent of the U.S. population who still lack health insurance, can we find a way to ensure that everybody has, I'm not talking about Mercedes or Tesla types of health insurance, but can we make sure that everybody has a fundamental basic level of health insurance and access? And that's really what I'm excited about.

Saul Marquez:
Yeah, you know, it's definitely a lot to be excited about. So, Peter, talk to us about what you believe we should be thinking about. How should we be approaching things? And then what's the best place listeners can learn more about you and your work?

Peter Cram:
So what I'd really like people to focus on and this really comes on, you know, probably whatever side of the political spectrum people are is can we agree on a sort of foundational or basic set of health care services that everybody should have access to recognizing that we can't afford to give everybody access to everything? What are the fundamental types of care that everybody should have access to? And how do we deliver that care to everybody? That's what I'd like people to think about and in terms of how to reach me. My email is pecram@utmb.edu. I'm also on LinkedIn and Twitter at @PMCram and happy to engage with people and thank you so much for having me.

Saul Marquez:
Peter, yeah, you know, really appreciate your perspective today. Having somebody that spent a lot of time outside of the system that spends a lot of time researching some of these critical issues is key. So we appreciate your perspective.

Peter Cram:
It's a blast and thank you for having me. Have a wonderful day.

Saul Marquez:
You, too.

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Things You’ll Learn

  • The benefits of giving people health insurance far outweigh the costs and the downstream.
  • A person living in Canada legally gets health insurance. 
  • The U.S. spends 18 percent of its gross domestic product on health care.
  • The U.S. really is doing incredibly high rates of discretionary procedures.
  • Canadian life expectancy is actually about a year higher than U.S. life expectancy.
  • When you look at international measures of well-being or happiness, Americans aren’t winning on that either.
  • There are several private entities that are trying to sort of push price transparency through employers.
  • You don’t just want price transparency, but you also want insurance benefit design that supports price transparency.
  • There’s a tremendous amount of innovation going on in U.S. health care

 

Resources

Websites: IHSRC

Email:  pecram@utmb.edu

LinkedIn: https://www.linkedin.com/in/petermcram/

Twitter: @PMCram