The Lessons of Renal Failure

By | October 30, 2011

Many of the insurance directors and HMO executives that I know bare a disturbing resemble to this chap!

In our last blog we looked at how the utilization of the healthcare system after the 1972 decision to extend Medicare benefits to patients with End Stage Renal Disease, ESRD, differed sharply from what policy makers had expected. Today I would like to look at why Congress and the President were so far off in their estimates and what it means for the future of healthcare financing.

Probably the biggest mistake that policy makers made back in 1972 was their failure to see that as a chronic disease, renal failure costs would behave very differently from the acute diseases that they were used to dealing with and in fact were uninsurable.

Let’s take atherosclerosis as a counterexample. Firstly back in 1972 the treatments that were available to control the risk factors for atherosclerosis or to reverse its course were relatively few, cheap and ineffective. Also while atherosclerosis is a chronic disease, it produces little in the way of symptoms until the alterations of blood flow reach a critical level. As such atherosclerosis behaves as a series of acute events even though the underlying pathophysiologic process is chronic and progressive. Since as we said the treatment for this underlying condition was poor, there was little incentive to increase spending on it. Since the acute complications of the disease were unwanted and unpredictable, they met the requirements for insurability and the system worked fairly well. All of this began to change around 1972 with development of better antihypertensive agents and coronary artery bypass grafting (CABG), but most policy makers were not yet aware of these trends.

Renal failure on the other hand was a chronic disease, which produced symptoms on a continuous basis and for which treatment in the form of dialysis and renal transplantation was available. As such once they had contracted the disease, the patients had a constant incentive to utilize medical services. As such healthcare could only be rationed, not insured against. Since as we have said in a previous blog, that chronic and degenerative diseases have now surpassed acute acquired diseases in most developed countries, the very foundations upon which health insurance is based have been perverted. It is almost counterintuitive, but with every advance in the treatment of chronic disease (read here chronic pain) this problem become larger and more pressing.

After a lifetime in Medicine it is clear that we have arrived on the other side of the looking glass. I believe that I hear the Mad Hatter approaching even as we speak.


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