Home > Medical/Health Commentary > Whose costs? Our costs.

Whose costs? Our costs.

One of the problems that comes up frequently in health economics/policy, and discussions of other economic issues, is the definition and especially the measurement of cost.  Is a given cost a real economic cost, or just an accounting cost to one particular entity?  Whose cost is it?  What kind of cost?  Depending on the question that’s being asked, these sorts of questions need to be answered in order for an analysis to be valid and accurate.

The issue of cost in health care is obviously a huge one, but a recent post by The Happy Hospitalist provides a timely reminder about the fact that certain costs are liable to be systematically under-counted by policy analyses. I’m talking about “convenience” costs.

“Convenience,” broadly defined, implies a lack of necessity… you can get rid of it, because it doesn’t really affect the important stuff.  That’s as true in health care as it is everywhere else.  However, just because something is “only a convenience” doesn’t mean that it doesn’t improve people’s lives in a real way; conversely, reduced convenience does make its erstwhile beneficiaries worse off.

When Canada Post decides to stop house-by-house mail delivery in favour of neighbourhood postbox stations, it might reduce its cost of delivery, but does so by increasing the cost to the neighbourhood of receiving its mail.  It doesn’t cost more money to pick up one’s mail from a neighbourhood mail station; the additional cost is in terms of time (and potentially a psychological “hassle factor”).  Whether this switch is desirable overall depends on the relative magnitude of the two costs in question.  The same goes for health care.

Time is sometimes the forgotten factor in health reform discussions.  Perhaps not coincidentally, it’s patients (and physicians) who probably bear the brunt of the time costs the system imposes.  Patients spend time waiting… waiting in the waiting room at the doctor’s office, waiting for the next available appointment, or as in Happy’s case, waiting for a VA hospital bed to open up, waiting for a VA doctor to be available, and waiting for an opportunity to travel 75 miles to the nearest VA pharmacy.

Sometimes the “inconvenience” costs more than just time.  The wages forgone while waiting to see the doctor, the childcare to pay for on the day of the appointment, the cost of fuel or fare to the distant healthcare facility… these are real costs of “inconvenience,” too.

In most analyses, it seems, these costs aren’t factored in.  On one level, that’s understandable because this sort of thing is probably insanely difficult to measure and value accurately.  That doesn’t mean that it can be safely forgotten.

When a study shows that making certain changes cut cost to the “system” without affecting whatever quality metric was being examined, that doesn’t mean that the change is truly costless.  As Happy’s example shows, a healthcare system (an HMO, an insurer, the VA) can cut its own costs without affecting quality by increasing the “inconvenience cost” to its patients.  Even though there’s no “real” effect on the clinical quality of care, I challenge anyone to read the linked story and say that the cost to the patient is non-trivial.

These decisions about convenience can only increase in relevance as we move forward.  To pick one example, with the decline of the solo general practitioner and the rise of the ACO/PCMH/hospital-owned group practice, it’s worth asking what minimum community size is required to sustain the presence of a medical professional, and which of our rural communities won’t make the cut.  Another might be the desired number of home care physicians, given the existing limitations of the primary care physician workforce.

Sometimes, the cost to the patient of added inconvenience will be outweighed by the decreased cost to the system of providing more inconvenient care of the same or similar clinical quality.  There will be many occasions, I suspect, where the magnitudes of these two costs will be much closer than is presently acknowledged.

So what to make of Happy’s assertion about the VA?  Maybe they keep their costs artificially low by forcing the patient and his community physicians to spend more of their time and money doing what the VA won’t do.  Maybe the savings the VA gets from reducing their physician and pharmacy availability outweigh whatever additional cost is imposed on the patient and on Happy’s hospital.  Regardless of what the right answers are to these questions, it would be nice to see an attempt to answer them that doesn’t pretend that the patient’s time isn’t worth anything.  Health care already is, and will continue to be, rationed by one system or another.  For people to have faith in that system, they need to see that when the numbers are being run, their preferences aren’t being ignored.

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