Originally, this message was going to highlight the accomplishments of the Americas Hernia Society. These successes have been achieved through programs such as the newly christened Abdominal Core Health Quality Collaborative (achqc.org), “Stop the Bulge” campaign, Safe Hernia Steps, and the new WiSE (Web information, Social media, and Education) initiative that aim to make americasherniasociety.org the leading educational resource on hernia and abdominal wall disease. We look to shape the future identity of our field, breaking down traditional ways of thinking with the concept of Abdominal Core Health (abdominalcorehealth.org).
But this all changed with COVID-19.
Our practices were upended by the pandemic, and we retooled to accommodate the influx of COVID-19 patients and limit the spread of the disease. While resuming elective operations, the pandemic continues to rage with much uncertainty. As with many upheavals, the “return to normal” may never happen, yet positive meaning can emerge that leads to a better society.
With my practice on hold, I read “Proofiness: The Dark Art of Mathematical Deception,” by Charles Seife. One particular story resonated with the COVID-19 situation and health care: the “Tragedy of the Commons.” Originally described by British economist William Forester Lloyd in 1883, the “Tragedy of the Commons” describes a hypothetical situation that assumes individuals (i.e., people, corporations, health care systems) generally behave according to their own self-interest, contrary to the common good. This occurs when we are numb to the costs or negative consequences of the choice. Lloyd describes the unregulated grazing of cattle on shared land, “the commons.” Initially, the cattle owners have great benefit—large amounts of grazing land at seemingly no cost. This is sustainable for a while, until the commons can no longer support the herd coming to graze every day. The shared resource is depleted through the collective actions by many acting in their own self-interest.
The shared resource in health care is simply whomever is paying for it. So, who is funding our health care commons? Economist Uwe Reinhardt summed it up best in his work “Priced Out: The Economic and Ethical Costs of American Health Care.” The main “checkwriters” of American health care include government-run health insurance programs, private employers and private insurers. Reinhardt states: “None of these final check writers actually pays a single dime for health care. They all recover their outlays from the budgets of private households.” His is a shocking revelation. The situation becomes even more shocking when one realizes that health care costs contributed to the biggest percentage increase (24.9%) in middle-class families’ household spending in the United States between 2007 and 2014, according to the Wall Street Journal (“Burden of Health-Care Costs Moves to the Middle Class,” Aug. 25, 2016). This was at the expense of other household spending; Health Affairs noted that health care costs have wiped out a full decade of wage increases (2011;30[9]:1630-1636).
As many of you have done, I called several patients whose operations were postponed due to COVID-19. As I worked through the list, several patients informed me of their job losses and furloughed status. They would be in no shape to undergo an elective operation given the out-of-pocket expense. Having 40 million working Americans file for unemployment should jolt everyone into rethinking how we can insulate our friends, colleagues, families and patients from future losses. It has become quite apparent that most Americans were living from paycheck to paycheck before the pandemic, paying a lot in health care expenses, and are now in a very difficult financial situation during the pandemic.
Determining whether a treatment we offer to patients has real value is extremely challenging. If we collaborate, we can generally agree on some outcome measure that can help inform our practices. On the other hand, agreeing on cost remains difficult. At best, it is so hard that most of us give up and just move on. At worst, we twist costs favoring our own biases in formal analyses. “Cost containment” efforts are generally limited to local efforts meant to benefit hospitals or practices. If cost containment were so effective, it’s unclear why the United States has the highest-priced health care in the world, surpassing $11,000 per capita—nearly double that of most other nations! When asked what the federal government does when it needs additional funds, the former chair of the Federal Reserve, Ben Bernake, noted, “We simply use the computer to mark up the size of the account.”
The COVID-19 crisis has laid bare one of the pillars of our health care economy that supports this high cost care–elective procedures. The New York Times reported that Mayo Clinic produced $1 billion in net operating revenue in 2019 (“Hospitals Knew How to Make Money. Then Coronavirus Happened,” May 15, 2020); it expects to lose $900 million this year due to suspension of elective procedures.
Many things drive spending in our health system, but surgery remains one of the biggest. According to the Health Care Cost Institute, surgical inpatient admissions consisted of 24% of all admissions in 2018 with an average price of $43,810 compared with a medical admission of $19,672. For outpatient spending share, surgery is the clear winner at 37%. With one in four working Americans filing for unemployment—and many losing health insurance—large numbers of patients will not undergo needed elective procedures anytime soon. Unlike the federal government, our patients, practices and hospitals do not have the option of using a computer to simply mark up the size of bank accounts.
We should be doing everything we can to limit the financial impact of our high-priced health care system on our own patients’ household budgets. Yet there are few analyses to evaluate the trade-offs involved if an expensive product, approach or technique has some marginal benefit. If you are the decision maker and there aren’t any perceived negative consequences to a high-cost decision (unchecked grazing on the commons), you may very well be willing to spend the cash regardless of the outcome or price. A hypothetical modern-day example can help illustrate.
Suppose we wish to evaluate the “best” vehicle to get to the grocery store from your house. The two vehicles we want to test include the 2020 Ferrari F8 Spider and the 2020 Honda Accord Sport. We set up a randomized controlled trial assigning 200 households the Ferrari or the Honda, with its primary outcome measure being the average travel time from household to the grocery store parking lot. The trial is performed without a hitch, and the results are overwhelmingly in favor of the Ferrari—the travel time was reduced by 35%! There was even added benefit for the Ferrari group: They reported other drivers and pedestrians gawking at their F8 Spider at intersections. Some even took pictures of the beautifully crafted car. All participants received their groceries regardless of vehicle type. A commentary article was copublished after the well-written description of the trial results, pointing out that the 2020 F8 Spider costs $274,280 while the 2020 Accord Sport costs $26,830. If we were insensate to the cost of the F8, many would go for it. In reality, however, most households will purchase the Accord Sport instead, even if it takes more time to get to the grocery store and you don’t create a ruckus at stoplights. Why would people act this way with such a clear-cut, noncontroversial, evidence-based advantage for the F8? The answer is that the Accord Sport does a fine job of getting you to and from the grocery store at a far cheaper price.
Currently, our health care system allows us to drive the F8 Spider without really worrying about the cost! This is our health care tragedy of the commons, which is ultimately paid for by our patients. The consequence of inaction is clear—we will deplete the commons by increasing health care spending for each household. The pandemic exposed this economic fragility even further. Forty percent of Americans were unable to cover a $400 emergency expense and pay it off quickly according to the Federal Reserve. The Institute of Policy Studies found that nearly one in five U.S. households had either a zero or negative net worth (www.cnn.com/ 2020/ 07/ 03/ investing/ american-dream/ index.html). If that weren’t enough, as health care prices continue to balloon, the checkwriters will soon discover that quality elective surgery can be performed at less cost outside of your local community, or even outside the United States. This will create unprecedented new levels of competition.
Amazon and Walmart are already bypassing local providers and sending patients across the country to those who can provide the best value. Ashley Furniture Industries is pushing this further by sending both U.S. surgeons and their American employees out of the country for elective orthopedic surgery! Many large corporations long ago made the decision to cut expenses by moving manufacturing and services outside the United States where prices are cheaper, devastating many small businesses and livelihoods across America in the process. In this time of economic stress, you can bet that businesses will figure out ways to do more with less. The elective management of hernia is an area of health care that is primed for this disruption—whether we are ready for it or not. Patients tend to be ambulatory; operations are relatively low risk; and there is high volume.
We must also find a way to assess the value of innovation in surgery fairly. An innovative product, approach or technique may improve beneficial outcomes or save time in a very useful way, but may be more expensive than what is currently available. We might be very willing to pay a premium despite new problems and costs inherent to the innovation. Laparoscopy is an excellent example. Our current concept of value defined as outcomes/cost does not capture innovation well. Since time savings can be critical to the appraisal of innovation, and translating time into cost is a murky business, we should modify the value concept as outcomes/(cost + time).
All of us care deeply about doing what is best for patients clinically. We should extend that sentiment to their health care costs over time. Improving outcomes and reducing costs is complex and difficult; it must also allow for true innovation. The simplest thing we can do right now is subject our decisions to the question: “Is there a less costly way to get the same result?” We must start now, otherwise our patients suffer and the checkwriters will look elsewhere. Professional societies such as the Americas Hernia Society and Abdominal Core Health Quality Collaborative are uniquely poised to lead these efforts; we must set aside our differences to succeed.
It has truly been an honor to serve as the president of the Americas Hernia Society in a tumultuous period in history. I look forward to a bright future where we can overcome these challenges and foster meaningful innovation for the benefit of our patients.
Dr. Poulose is the Robert M. Zollinger Lecrone-Baxter Chair and chief, Division of General and Gastrointestinal Surgery. He is the current president of the Americas Hernia Society and director of Quality and Outcomes for the Abdominal Core Health Quality Collaborative.
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