“We don’t have a deficit problem; we have a health care
expenditure problem.”
Aaron Carroll*
What’s wrong with American health care? To paraphrase James
Carville, the problem is “the cost stupid”. ** In 2016 we spent $3.3 Trillion
on health care. This is twice as much per capita as any other developed country
on health care. In those countries
access is not an issue because no one is uninsured. In those countries medical bills are not the
cause of bankruptcy as they are more than half the time in the United States
because no one is under insured. If our
health care system were as efficient as any other developed country we would cover
everyone and currently be saving $1.6 trillion per year.
If we a spending $1.6 trillion more than we
should, where is that money going? Well,
Consumer Reports looked at the growth of health care spending in the United
States from 1970 to the 2008.*** (This report is dated but I think the
statistics hold up for another decade.) They found that the biggest growth went
first to hospitals and then to doctors.
This was followed by pharmaceutical sales. The lowest increase was in insurance
administrative costs. Therefore, most of
the inordinate increase in the cost of health care goes to care. Since we are not twice as sick or live twice
as long as people in other countries why do we spend so much more on care?
The answer is multifactorial but it starts with the perverse
fee for service payment system. The
problem with fee for service is not that doctors are rewarded for providing
service; it is that they are rewarded for creating service. From the extra office visit, to the extra
test, to the extra procedure or surgery, doctors have an almost limitless
capacity to create service and in doing so drive up costs. The fee for service system rewards providers
for the quantity of the service without regard to its utility. If America is to cure its ailing health care
system it must abandon the fee for service system once and for all.
A second problem coming from providers, that is doctors and
hospitals, is that there are no financial consequences for inefficiency. The following is a trivial example. It had
been pro forma to order 2 liver tests when following a patient who had been
placed on a statin for high cholesterol.
These tests are usually done semi-annually. About ten years ago the
American College of Cardiology determined that these tests were unnecessary
after the tests done at the initiation of therapy. I stopped ordering the test as soon as I read
this but virtually every cardiologist with whom I share patients still orders
these tests at an average of $64 for the two tests. If this is the norm throughout the country
then tens of thousands of these tests are being performed by professionals
whose organization says they are of no value.
I am not sure if this is just force of habit or an “It can’t hurt”
mentality but it is unnecessarily wasteful.
While the lion’s share of wasteful spending comes from
providers, others share in the problem including . . .
Insurers get a lot of heat for the mess that healthcare is
but their contribution to high healthcare costs is indirect. Competition in our
“free market” health care system is among insurers. Since they don’t directly
control the delivery of care the only things they can do to hold down costs are
to limit care and to select for the healthiest panel of patients. This is
inefficient and adds to higher administrative costs to providers – the estimate
being an additional 10% (remember of a very big number) to the cost of health
care.
Pharmaceuticals cost about twice what they do in other
developed countries.[i]
They spend more on marketing than they do on research which is a complete waste
of money (but we all pay for it). More importantly Medicare is blocked by law from negotiating prices as
part of the Medicare prescription Drug Law of 2005[ii]
(sometimes referred to as the Big Pharma Relief Act of 2005).
There is controversy about how much malpractice laws drive
up the cost of medicine. I think malpractice laws significantly impede best
medical practices and I will discuss this in a later entry. However, if it is
driving up the use of unnecessary medical services as part of defensive medical
practice that is still money being spent on providers and is going into their
pocket.
As I move in to my later years of practice as a physician,
my biggest embarrassment is that I have been a participant in and benefactor of
this wildly inefficient system that is a chronically debilitating disease
impeding the health and well being of the rest of society and the
responsibility for that falls largely on the people (like me), organizations,
and institutions providing the care.
That said, there are no bad actors here in the sense that
the players in this game are not cheating.
Providers, insurers, pharmaceutical companies, and personal injury
lawyers are all doing what the system pays them to do. If you want better
outcomes from your system you have to change the system and that is not going
to be easy to do. Every one of these players has a huge stake in this very big
pie so they have fought and will continue to fight changes that affect their
share of this market.
Since the 50’s when President Eisenhower coined the phrase
we have talked about the military industrial complex but no one talks about the
medical industrial complex even though it is 5 ½ times bigger than the military
budget. When I talk to people about this they seem to have a hard time getting
their head around this probably because spending on medicine is seen as helping
people and that must be a good thing. All I can say in response is, “Trust me. I'm s doctor.”
Next blog I will propose the cure.
* More dogma – not sure if this is his original quote or he
is quoting someone else
** https://www.nytimes.com/2018/01/02/upshot/us-health-care-expensive-country-comparison.html?_r=0
This article antedates my comments and corroborates them. However, the article
cited in the 4th paragraph predates my thoughts on this. However, I
did not plagiarize the title of the article cited. I am not that well read to have been aware of
it.
No comments:
Post a Comment