It's well known that Americans pay more for less when it comes to healthcare than just about any other country in the world. In 2009, we spent nearly $8,000 per person to provide medical care to just over 80% of our population -- that compares, for example, to just under $3,500 spent per person in the UK to provide care for the entire population. To add injury to insult: our counterparts across the pond get an extra year of life for their $3,500 than we do for our $8,000.
Why do we pay more for less when it comes to our health? Every policy wonk has his theory. Common ones include the high cost of American medical education (which is too expensive), or that permissive tort laws in the U.S. enable lawyers to profiteer the health system (which is true). But while each of these theories, and others, explain small quirks in our health system that certainly contribute to it's gargantuan price tag, they don't address the fundamental issue with our health system. And that's that our market-driven system introduces perverse financial incentives for medical providers that don't align with the health or wellbeing of Americans. This leads to wasted money and lost lives.
In our healthcare system, the fundamental billing unit is the "procedure" -- doctors charge per action, diagnostic or curative, taken on the part of a patient. While, on the surface, rewarding doctors for each step they take to make a patient better may seem fair, it has disastrous consequences for the structure of our health system. Chief among them is our top-heavy physician specialty structure.
Let's consider, for example, the incentives around America's #1 killer: heart disease. This malady is responsible for about one in four lives lost in the US. What causes heart disease? At the most basic level: poor eating, low physical activity, and smoking. It follows then, that if the goal was to minimize death and suffering resulting from heart disease, the health system would invest in improving diets, increasing physical activity, and eliminating smoking. The system would devote its resources and most talented minds to advising patients about their health habits at regular office visits with general practitioners -- well before they ever developed a symptom. But here's the problem: in our system, primary care office visits aren't exactly procedures. Not surprisingly, they don't bill very much, and the system doesn't invest very much into them.
By stark contrast, consider what happens to people after years of smoking, eating poorly, and being physically inert: They get heart attacks. In our procedure-oriented system, that's when you hear the "cha-ching" of the money rolling in. They're rushed to the emergency room, where all sorts of tests are run to characterize the heart attack, and then rushed to cardiac catheterization labs or operating rooms where life-saving procedures are attempted.
Now, imagine you're a newly minted physician (probably saddled with over $100 K in debt). What specialty do you choose? Do you go into primary care and get paid relative peanuts to help prevent people from getting heart disease, or do you follow your financial incentives and go for the career in cardiovascular surgery, waiting for your patients to get heart attacks so you can treat them? The findings of a recent study in Health Affairs are telling: the study considered whether or not the incentives to choose more lucrative specialties in the U.S. were higher than in five comparable OECD countries, and found that in the U.S., the difference in earnings between specialists and primary care physicians was highest -- surgeons made almost 2.5 times as much as their colleagues in primary care.
In this way, our for-profit, procedure-oriented medical system skews the incentives away from primary care, where disease prevention can happen, toward specialty care that is ultimately more expensive and less efficient. In our system, a heart attack prevented is a dollar (or many thousands) lost -- and the high number of specialists relative to primary care doctors reflects that. This perverse incentive set is a foundational reason why American healthcare costs more, is less equitable, and produces worse outcomes than almost any other health system in a comparable country.
Unfortunately, while the Affordable Care Act tips its hat to prevention, it does nothing to restructure the incentives that ultimately stack up against it. And as our population continues to age, the high costs of specialty care for diseases we could have prevented will continue to inflate our national debt. It is no doubt, then, that addressing our burgeoning healthcare costs, which have been projected to approach 20% of GDP in the next several years, will mean empowering preventive institutions--primary care among them. Only by realigning doctors' incentives with disease prevention efforts can we lasso in rising costs and, most importantly, improve the health and wellbeing of our country.
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I could write a book on how MDs fail miserably in practicing cost effective medicine. Most do not have a clue.
They run the hospitals.
They define the care standards.
They profit mightily from the system they've created.
It is unlikely that they'll be changing the system anytime soon.
And, the doctors lobbyists will be paying Congress to make sure of it.
The other reason is that health care does not have elastic demand. There is not an option either to do without it or opt for less expensive alternatives.
As it is now, at every step along the way, every part of the medical system, is trying to get the most money possible
THE BEST SOLUTION IS SINGLE-PAYER, there is a reason, every other advanced country on earth follows this approach. Politicians keeps touting the lie that we have the best health care on earth.
As you mention at the beginning of this article:
WE SPEND THE MOST, and GET THE LEAST - middlemen are the cost drivers
By almost every measure, we are far from the top on any healthcare metric
An increasingly smaller portion of the country have cadillac-healthcare, usually subsidized by others
SHORT OF SINGLE-PAYER,
We should have more operations like Kaiser-Permanente, who combine both Insurance coverage & HMO healthcare delivery.
There were, and will continue to be problems with HMO, but those can be solved by always having multiple ones to choose from, and the options to change at anytime
Also people need to be able to purchase different levels of coverage
Plus, incentivise people to get rebates if they keep their costs lower than average
WHAT WON'T WORK = Buying across state lines, actually we do already, BlueCross & UnitedHealth are available in all 50 states. A company that doesn't comply with your own state laws is one that you shouldn't be doing business with.
You are quite correct that simply moving to single-payer will not over-treatment.
Moving to Single-payer elimates the middlemen
However, all Single-Payer systems build in mechanism to control over-treatment/
Www.heartattackproof.com
You want to make them stop smoking? Increase the tax on cigarettes by a dollar a year until they can't afford them, and devise a way to track who actually buys cigarettes and increase their insurance premiums in porportion to how much they smoke. You want them to lose weight? Attach a weight-based penalty on their health insurance premiums. I can't modify their behavior much at all by talking to them. But you can modify their behavior easily with negative reinforcement via their purses and wallets.
All wrong. If that was what "health maintenance organizations" really wanted, their cushy salaries would plummet and they know that. The point of our health care system is to keep people just sick enough to keep having to go the doctors and get pills and expensive treatment. A healthy patient doesn't buy health insurance, doesn't get sick, and doesn't take pharmaceuticals and that's catastrophic for the health insurance co's, the AMA and Big Pharma. And all of what I just said is the absolute truth.
IF the system worked to prevent death and promote health, it would do things a lot differently.
1. Patients showing up for the appointment(s) they have scheduled. A former student found that he had to TRIPLE BOOK his schedule to ensure that there would be ONE patient using the designated time. The other two never showed up!
2. The cost of setting up a practice - the facility, the equipment, the electronic records, the additional staff to make the appointments and maintain the records.
3. The additional technology now being used for both diagnosis and treatment.
4. If the doctor is female and a parent, the cost of child care, and private education can add up quickly. Nannys in Chicago make at least $40,000 per annum plus benefits.
5. Mayo and Cleveland Clinics pay their doctors under contract rather than per visit or procedure. Personal experience selects the University faculty members as being most up-to-date and skilled. .
6. The cost of travel and/or parking at the clinic or University can be high and frustrating during rush hour traffic.
7. Noone has mentioned the cost of the diagnostic and treatment technology. A CT scanner costs $1 M for just the machine, a resonance one costs $2 M for just the machine. When the cost of the shielded facility, the additional electrical current, and cooling PLUS the personnel to operate and maintain/service/callibrate the machines must also be calculated. .
There is a song out there----goes like.....The richer they are , the slower I cure them.---- Again no consciously , but how can you pay for that new MRI machine if people don't get sick. And you can be assured that after the hospital has bought their new MRI machine that costs 2M$ /yr to run, they will find patients to use it on, whether they really need it or not.
Since my husband is a very recent retiree (who was factory trained on these machines) they are used in many different venues from the free-standing stations to the medical school which does foundational research as well as innovative treatment. Yes, I know we are associated within large medical districts where health care is abundant and easily accessed. Remember me? I'm the goofy lady who the paramedics ask "Which Hospital?" when I need to be transported.
If Chicago area is a model for the rest of the country, our medical schools are expanding in great territorial coverage with management and resources shared by many city and suburban hospitals who do NOT have all of the equipment we have been mentioning.
And I think you misinterpreted the 2M$ as operating expenses - that is the COST OF THE MACHINE ITSELF. And, the installations we can name did not acquire the machines until a need was verified.
The oft quoted "we pay more and get less" mantra conveniently ignores the many non medical reasons for US spending and longevity, i.e. more auto accidents, due to more cars and miles driven, more murders and serious criminally caused injuries, more diabetes and heart disease because of the ethnic makeup of the country, etc. that are included in US spending data but much less significant in other countries.
The one message I wholeheartedly agree with is that if the US as a free country is to ever get better control over our health care spending, we must address ways to improve the health of the average American. We should be putting policies and incentives in place to encourage Americans to eat better and get more exercise. We will never gain the upper hand over obesity and chronic diseases caused by our way of life by spending more on our health care system.
A little over 8k is definitely our per-capita spending (including the uninsured), but the uninsured are getting much worse outcomes even though the insured are still paying for their emergency care. Sucks for everyone all around.
If anyone wanted to do an apples and apples comparison, I would suggest comparing the health of people in the Dakotas and Minnesota and Colorado with those in Europe. We'd still spend more but I'll bet our health measures would compare very favorably.
By the way, there is a valid school of medical thought, based on research, that preventive medicine does not pay for itself. This is part of the reason why there is a persistent undercurrent of questioning whether routine mammograms and PSA testing costs more and creates more angst than it is worth.
the rich in this country gets everything including longevity.
Most often when I read about medicine in this country it's fear-mongering about how nurses spread plague by wearing their scrubs outside of the hospital and how doctors/nurses make entirely too much money.