I found this picture and couldn’t help but think of our health care system: Our current health system is kinda like using a shopping cart for a BBQ, it works but is it really the best we can do?
In the September issue of the Atlantic Magazine David Goldhill has written an article titled How American Health Care Killed My Dad that tells a detailed story from any industry outsider.
In the article David tells the story of his 83 year father who died in a prominent not-for-profit hospital in New York City from a hospital-borne infection. Within 36 hours of of walking into the hospital, his father had developed sepsis and spent five weeks in the ICU eventually became:
“…a statistic—merely one of the roughly 100,000 Americans whose deaths are caused or influenced by infections picked up in hospitals. One hundred thousand deaths: more than double the number of people killed in car crashes, five times the number killed in homicides, 20 times the total number of our armed forces killed in Iraq and Afghanistan. Another victim in a building American tragedy.”
David quickly points out that he is not a healthcare expert, but as a form of survivors grief he became obsessed with finding out how the American healthcare system worked. Like many of my non-healthcare focused friends he found out that he had a lot of information to sift through in what must seem like a foreign language to an outsider. This article was brought to my attention by my neighbor Kevin, who is not in the healthcare industry, but has been doing lots of research on the topic of late and he told me that the “How American Healthcare Killed My Dad” was:
“The best single article he had read on this topic”
With interest I dug into this article that had captivated my neighbors attention and wanted to see what David had to say. The following are my favorite excerpts:
“Keeping Dad company in the hospital for five weeks had left me befuddled. How can a facility featuring state-of-the-art diagnostic equipment use less-sophisticated information technology than my local sushi bar? … Why, in other words, has this technologically advanced hospital missed out on the revolution in quality control and customer service that has swept all other consumer-facing industries in the past two generations?”
Indeed David has an interesting point here, in my experience in working with various hospitals the reason for this issue is quite simple. Hospital administrators are paid to keep patient alive and donors happy, they are not paid to innovate. Most hospitals operate on the thinnest of margins with several service lines (usually transplant, orthopedics and elective procedures) subsidizing the other service lines (ER, Internal Medicine and Radiology among others). A great read on how hospitals are run can be found in the following book:
David then moves onto a more touchy subject, in fact reading some readers comments on his article on the Atlantic website shows that this is the emotional side of the argument for most people:
“I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm…We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results;…Everyone I know has at least one personal story about how screwed up our health-care system is; before spending (another) $1trillion or so on reform, we need a much clearer understanding of the causes of the problems we all experience.“
Reduce the role of Insurance? Ponzi-scheme financing? Manipulated Pricing? Undisclosed Results? Yes. Yes. Yes. Yes. In my earlier post Is Dr. Ezekial Emmanual the devil or just pragmatic? I discussed this elephant in the room:
“There is no way to provide healthcare to everyone without bankrupting the system as it works today. We either have to ration care or be okay with 40M+ people not getting healthcare.”
If we add 40M+ people to the insurance roles with no other change to our health care system we will be bankrupt the system. While insurance has a place in healthcare, we need to find ways to reduce the role of insurance in our healthcare decisions. Can you imagine paying for gas with your auto insurance? A new lawn mower with you home owners insurance policy? Why then do we turn to insurance for our most mundane health care issues? Why do we associate “health care” with “health insurance”?
David puts it this way:
“Imagine sending your weekly grocery bill to an insurance clerk for review, and having the grocer reimbursed by the insurer to whom you’ve paid your share. An expensive and wasteful absurdity, no? Is this really a big problem for our health-care system? Well, for every two doctors in the U.S., there is now one health-insurance employee—more than 470,000 in total. In 2006, it cost almost $500 per person just to administer health insurance. Much of this enormous cost would simply disappear if we paid routine and predictable health-care expenditures the way we pay for everything else—by ourselves.”
“Every time you walk into a doctor’s office, it’s implicit that someone else will be paying most or all of your bill; for most of us, that means we give less attention to prices for medical services than we do to prices for anything else. Most physicians, meanwhile, benefit financially from ordering diagnostic tests, doing procedures, and scheduling follow-up appointments. Combine these two features of the system with a third—the informational advantage that extensive training has given physicians over their patients, and the authority that advantage confers—and you have a system where physicians can, to some extent, generate demand at will.
Do they? Well, Medicare spends almost twice as much per patient in Dallas, where there are more doctors and care facilities per resident, as it does in Salem, Oregon, where supply is tighter. Why? Because doctors (particularly specialists) in surplus areas order more tests and treatments per capita, and keep their practices busy….the data is clear: in our current system, physician supply often begets patient demand.”
Is this because the citizens of those states are so much more sick? Do they need more care? Or is there something else causing the disparity in Medicare Reimbursement?
According to this unflattering New Yorker article The Cost Conundrum – What a Texas town can teach us about healthcare:
“Rich towns get the new school buildings, fire trucks, and roads, not to mention the better teachers and police officers and civil engineers. Poor towns don’t. But that rule doesn’t hold for health care.”
While I believe that this article focuses on the outliers in medicine and paints doctors with a broad brush as greedy business types not concerned with the outcome of the patients, the author hits on my point perfectly. If all we do is provide insurance for more Americans then we are going to have a much larger problem than we have right now. The incentives are messed up in the health care system we have today and insurance, public or private, for everyone is not the answer.
Goldhill continues his review of the American Health System:
“For almost all our health-care needs, the current system allows us as consumers to ask providers, “What’s my share?” instead of “How much does this cost?”—a question we ask before buying any other good or service. And the subtle difference between those two questions is costing us all a fortune.
“Perhaps the greatest problem posed by our health-insurance-driven regime is the sense it creates that someone else is actually paying for most of our health care—and that the costs of new benefits can also be borne by someone else. Unfortunately, there is no one else.”
“For fun, let’s imagine confiscating all the profits of all the famously greedy health-insurance companies. That would pay for four days of health care for all Americans. Let’s add in the profits of the 10 biggest rapacious U.S. drug companies. Another 7 days. Indeed, confiscating all the profits of all American companies, in every industry, wouldn’t cover even five months of our health-care expenses.
Somebody else always seems to be paying for at least part of our health care. But that’s just an illusion. At $2.4 trillion and growing, our nation’s health-care bill is too big to be paid by anyone other than all of us.”
The article is a good read and a good attempt to describe the American Health System. I highly recommend that you take a look at the article.
Wow … screen credits! Thanks!