Health Care Discussions: Where's My Money Going?

05/14/2010 04:12 pm ET | Updated May 25, 2011
  • Howard Steven Friedman Statistician and health economist for the United Nations; Teacher, Columbia University

Al did his research before his next call. "I read that Americans spend two to six times more on health care per person than other wealthy countries but isn't that due to the higher cost of living here?"

"Even when you control for the higher cost of living, we still spend about $2,000 more per person than would be expected. Most of that is going to outpatient visits to doctors, same-day hospital treatments and ER care. Think about it, what's the first thing you ask when your doctor suggests running a test?"

"Is it covered or do I have to pay?"

"Right, you and every other American with insurance asks the same question. Of course, you are paying either way, either directly or indirectly. Better questions might be what is the test for or do I need it at all or am I helping you pay for a brand-new yacht?"

"So it's my doctor's limo and beach house that's causing all the waste!"

"Most of the waste is the tied to excessive tests and fee-for service provision. Only about 10% of the overspend is on physician and nurses salaries."

"I heard that doctors get paid twice as much in the US than in some other wealthy countries. Nurses also get paid a lot more here."

"True, but we also have much more expensive medical and nursing schools than other countries plus malpractice insurance in the US is incredibly costly. Can you imagine that insurance for the same specialty is often only 10% the amount in Canada?"

"You're sounding like an AMA lobbyist. Next you'll tell me there's no shortage of doctors or nurses."

"We could always look for more doctors and nurses, but compared to other wealthy countries we have a fairly typical amount, neither extremely high nor low."

"What about the drug companies? You were telling me last time that our drug companies make tons of money by charging Americans much more for the same drugs than in other countries and that we are the only wealthy country with direct to consumer marketing of drugs."

"About 15% of the health care overspend is on drugs. About the same is wasted on the administration and insurance because of America's having a patchwork of different systems instead of a single, simple system."

"We're not going to get a single, simple system. Obama's new bill failed to do that so give me a useful idea."

"How about controlling malpractice payouts? We're the only country that thinks that a medical incident is a lottery ticket. Controlling the payouts will reduce the malpractice expenses and, more importantly, help us curb unnecessary, 'defensive medicine' procedures."

"Isn't limiting juror awards an infringement on my constitutional rights? Don't I need legal protection?"

"We're Americans. We love to sue people and the truth is a large number of issues are due to medical error. Limiting malpractice awards is one small measure, but it's one that should be seriously considered. Of course, we are just dancing around the real issue in US health care. Call back next week and we'll chat more"