Saturday, June 13, 2009

Why US Healthcare Is Expensive

It's not because we're inefficient.

Despite what others may say, it's not because we provide poor care and have high infant mortality.

It's not because we don't emphasize preventative care.

And believe it or not, it's not because most doctors are greedy and overtest for profit.

Oh sure, there are stories like this, where pre-terminal care lends itself to over-consulting and over-testing, in part because patients and their families have little financial stake in the game and, in part, because of the looming malpractice concerns for physicians. While important, the reality is that these concerns represent a mere 29 cents of the health care dollar.

And yes, there are the intermediaries: the insurers, the coding and compliance officers, the medical device companies and the pharmaceutical companies getting their piece.

But these patient care issues are minor weather disturbances compared to the health care cost jet stream that rises above all others: politics and the need for jobs.

Health care, after all, has become our economy.

If there is any question about this, look to down-state Illinois in the city of Springfield that serves as the capital of our president's home state. Look to city that has two main acute care hospitals, some of whom have entire wards that stand empty, feverishly competing with each other. Look for the new SimmonsCooper cancer care center, built on the backs of a wink and a nod to contractors and state regulators, yet remains shuttered.

Yet this does not thwart the director of this center. No, in his Spring newsletter he criticises the lack of coordination he observed in cancer care on a junket to King Hussein Royal Military Hospital in Amman, Jordan, while not even acknowledging that his own care center remains closed. He concludes:
"Let's hope that our efforts to educate our state government representatives on how we are helping to lessen the terrible burden of cancer in downstate Illinois will convince them to provide the necessary funding to occupy our new center this coming summer."
Earmarks. Waste. Inside deals. Hidden spending.

How do we make this part of health care reform?



Andrew_M_Garland said...

They will pretend to pay - We will pretend to treat

The people of the Soviet Union had a slogan about their government jobs. "They pretend to pay us, and we pretend to work". That is what is coming in health care. There is no free lunch. When the lunch is truly free, then there is no lunch.

-- quote --
In speech after speech Gov. Blagojevich hammered home the “fact” that he had granted insurance coverage to so many in Illinois, through various means. How has this actually been implemented? State payments to medical providers have been dramatically slowed.
-- /quote --

Lack of Competition in Health Care Insurance

-- quote --
Medicare is a good deal partly because the government drives a hard bargain with health care providers by offering artificially low payments. In a competitive market of many insurers, no one insurer could do this.

Artificially low payments don't cover the full cost of procedures, so health care providers shift costs to everyone else.

In other words, the lack of competition in today's market leads to higher insurance costs for people who aren't old enough to qualify for Medicare. Extending Medicare-like insurance to everyone won't work, because no one will remain to pay the shifted costs.
-- /quote --

Anonymous said...

Our society treats primarily and doesnt prevent. The financial crisis was preventable. Nobody came forward. In Talebs book, Black Swan, he talks about the fact that prevention is not glamorous or quantifiable. Treatment is.Prevention is looking forward. Treatment is a reaction to lack of treatment.

Anonymous said...

I agree with you on one thing here there is too much and excessiveness in the system. In Chicago there are way too much hospitals. Are there E.g. 4 hospitals with heart transplant in Chicagoland Loyola, Rush, UCMC and northwestern why ? Isn't that too much and thus leads to less specialization. But here in the US we want everything and we want it now and we are not willing to wait for it nor are we willing to drive more then 10 minutes.

Also I would rather hospitals invest in care for patient and subsidizing the care for uninsured rather then invest in newer rooms, HDTV in every room, Jaccuzi, better menu. If someone wants these services then they can pay for it separately. My wife delivered in Evanston hospital and she was in bed rest, so she could not have enjoyed the Jaccuzi in her room, nor who wanted to watch TV. Yes it's nice but not a necessity.