Auction 2012 is a week long series in partnership with The Huffington Post and United Republic.
The point of seeing a doctor -- or being one -- should be to improve health. After all, besides your mother or spouse, who do you count on to care about your well-being more than your doctor does? That is literally his or her job. But what I've found, and I've written about in my new book Greedy Bastards, is that the same incentives distorting banking, energy, education, and government are distorting our very bodies.
The American health care system has incentives so out of alignment for everyone involved that it's a Greedy Bastard paradise. For American health care providers, the goal isn't to get you healthy, but to get you paying. And similar to banking where the costs of a low interest loan might be a hidden balloon payment, the costs of our health care system are hidden from the end consumer.
One basic problem with the system is how doctors are paid, the fee for service model. In fee for service models, doctors are paid based on the treatments they deliver rather than the health outcomes they generate. So for instance, if you need an expensive surgery, your doctor gets paid to operate. If you don't need surgery, your doctor doesn't get paid. This creates an obvious incentive to recommend surgery, even when you don't need it. And it also discourages looking at the evidence of what works and what doesn't, because expensive but ineffective procedures create more profit for the doctors and hospitals that host and perform them.
This prioritizing of money over health outcomes shows up in the political influence the American Medical Association uses to stifle competition. Shikha Dalmia, a senior policy analyst for the nonprofit think tank Reason Foundation, described in Forbes how the AMA used its political influence to insist that only doctors could deliver babies, even though midwives have performed this service for years. "In 1995 thirty-six states restricted or outright banned midwifery, even though studies have found that it delivers equally safe care at far lower prices than standard hospital births."
Then there's the prescription drug problem, where pharmaceutical companies leverage their political influence to protect and expand drug monopolies. In one case, a company called KV Pharmaceuticals got the FDA to give it an exclusive franchise over a hormonal agent used for years by obstetricians. The price jumped from $300 a treatment to $25,000. Pharmaceutical companies advertise to convince you that you are sick, and spend $61,000 per doctor on promotional costs to get doctors to prescribe you their drugs.
This wouldn't be affordable for most of us if we had to pay the sticker price. But we don't, because most of us are covered by increasingly expensive third party health insurance (through our employers, which is yet another problem). This insurance is protected by a law granting health insurance companies the right to monopolize state coverage, a monopoly retained by the enormous sums spent by the health insurance industry in Washington ($263 million from 2009-2010 alone).
None of this improves health outcomes, or is necessary for good health. Sometimes it is counterproductive, because it discourages collaboration and the adoption of best practices. In my book, I spent time learning about the Mayo Clinic, where doctors are paid on a flat salary, and where they operate in teams. This promotes the sharing of information, and leads to far better health outcomes. I also spoke with Jeff Brenner, a specialist in Camden, New Jersey, one of the poorest areas in the country. He assembled a team to specifically target the most expensive cases, and using this technique of hotspotting, was able to save millions of dollars. For instance, he found out that one diabetic was continually relapsing because he wasn't wearing his glasses when he injected himself with insulin, and so was taking the wrong dose. This alone saved thousands of dollars in hospital bills, but in our fragmented health system, it wouldn't be anyone's job to tell you that you aren't taking your medicine correctly. In fact, the hospital would make money on every return visit.
As with banking, energy, and education, we have the skills and tools we need to improve outcomes and cut costs. We know how to stop Greedy Bastards from ruining the system and bankrupting us. They are after all operating according to certain incentives, and those incentives are malleable.
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The AMA advocates for proposals to address rising health care costs that aim to improve clinical outcomes, quality of care and patient satisfaction per dollar spent. Instead of simply focusing our efforts on reducing costs alone, our ultimate goal should be to achieve better value for our health care spending. To learn more about how the AMA is working to reduce costs while improving health quality and outcomes, visit www.ama-assn.org/go/healthcarecosts.
After physicians began delivering babies, the maternal complication rate for childbirth dropped from over 10% to well under 1%, due not just to doctors, but to their ability to apply the latest science to the problems. Now that lawyers view childbirth as a profit center, and midwives are enjoying a resurgence, so is the maternal complication rate.
Fee for service is not necessarily a problem, but fee for service with insurance companies paying the physicians directly according to a contracted rate is a huge problem. Doctors have to make a living somehow, i.e. there has to be some sort of fee, but if patients have no say in the payments, then they also have no interest in the ultimate costs. The incentive to watch costs is the strength of the high deductible/health savings account model of insurance, which insurers and the government hate, but doctors and (informed) patients prefer. The Mayo model works now, because it is relatively unusual. If it were to become the norm, then the catfights over money would simply elevate from the level of the physician vs. the insurer to the hospital system vs. the insurer. Either way, the patient is cut out of the picture completely.
Fee-for-service, employer-provided, third-party payer, diagnosis-based, corporate-supplied medical care is a disaster. Fee for service, by itself, is a much less difficult problem.
A single payer Medicare-For-All system will eliminate 500,000 insurance company jobs and replace them with 3.2 million new jobs in health care for a net gain of 2.6 million new jobs according to a study by the National Nurses Organization. That's as many jobs as the US economy lost in all of 2007.
Single payer will create hundreds of billions in annual wages and local and state tax revenues for cash strapped cities and towns. It will lift the shadow of bankruptcy for medical reasons from two thirds of a million American families yearly.
Dr. David Himmelstein of Harvard and PNHP states that having everyone on single payer would save at least $350 B per year, and latest reports say $400 B per year.
--Comprehensive, no deductibles, no co-pays, no rescissions. Oh, prescriptions included.
What's not to like? Oh, yeah, the Big Insurance Parasites lose their ability to suck wealth out of the populace. Some pols lose big contributors.
“Fascism is not defined by the number of its victims, but by the way it kills them.” – Jean-Paul Sartre
1. Mayo Clinic's goal is no different from other providers.
2. Until our Country gets for-profit insurance companies out of our primary care system, we will never address the # 1 problem with our system.
A case in point, not reported in the US press though it made the front page of Le Monde: when Haiti was struck, doctors from all over the world flocked to help. It was however reported that American doctors - particularly for some reason those from Texas - were working with an incentive scheme that rewarded major interventions, and especially amputations. European doctors reported with horror how people with no more than a treatable infection or a broken thighbone would find themselves with a missing limb after an emergency stay in the clinic.
Trying to fix our healthcare delivery system through "reforms" is a lot like putting a bandaid on a wound that gone gangrenous. It may look good for a while, but in the long term it's counter productive.
Insurance is a fairly easy concept to understand. A large pool of people gets together and agrees to put a relatively small amount of money aside each month to cover the costs of treatment for those unfortunate enough to surfer serious illness or injury.
Then the for profit insurance industry came along, and screwed it up for everyone.
Let's get just the young and healthy in "our" risk pool. That way we can cut costs, offer insurance at a much lower rate, and still make a fortune, and that is exactly what they did.
There is something seriously wrong with a society and a system where someone goes to college for 8-12 years in a very difficult field to make roughly $150,000 a year to provide health care, when the average Health Insurance CEO makes over 16 Million a year to deny it.
Medicare for all would have solved all of these issues, and guaranteed the solvency of Medicare for as long as people continue to procreate.
In a just society it would have been.
But not here, here the "greeds of the few, outweigh the needs of the many"
Profit over people, a society in decline.
No wonder so many die every year from a lack of health care, they are paying for everyone else and can't afford to pay for themselves.
Private insurance companies are often stingy at paying out from the pool of premiums. Think of the scene from Erin Brocovitvh ("yes, we always initially deny claims and make the patient work to get us to pay....most people give up"). So the private insurers maximize profits versus being focused on overall patient health which is the most cost-effective approach. Preventative health care saves on total cost in a larger, whole life analysis. It is a systematic or holistic approach.
What the GOP does not hear is that for 100 million or so Americans who can barely pay insurance premiums, they'll try nationalized health care. It can't be more expensive than what we have and if nothing else, everyone has access. Now the insurance lobby will not agree with this.....and thus the GOP obstinacy. Their cry of socialism or socialized health care. The GOP ignores the access and cost or affordability discussion.
and breaches their Hippocratic Oath. But when Presidents devote such scant regard to the terms in their Oath of Allegiance, that hardly creates cause for surprise.
"the political influence the American Medical Association uses to stifle competition."
Shouldn’t that be: stifle capitalism? Since one equates to survival of the most adept. The other, survival of the lobbyists.
"the right to monopolize state coverage"
At what star-chamber investiture was capitalism ever conferred, with the crown that endows a monopoly?
"bankrupting us"
It is reported that a Synagogue, trapped by inescapable debt, has petitioned Mel Gibson for assistance. So much for banksters doing the work of god.