Newsflash: The cost of healthcare in America has been out of control for many years and we really need to do something about it!
Ok, so this isn’t news. And we already have the all-new healthcare reform legislation which fixes all our problems, right?
Unfortunately, this new law – officially called the “Patient Protection and Affordable Care Act” (PPACA) but more affectionately referred to as “Obamacare” – has some problems, and now a few people are lobbying to ditch this plan so they can come up with something different.
Part of the problem with baking up a new healthcare plan is that there are so many fingers in the pie, all with vested interests – you have the healthcare insurance companies, malpractice insurance companies, pharmaceutical companies, hospital owners, nurses unions, lobbyists, medical licensing boards, government agencies (FDA, HHS, CDC, VA, CMS, etc), the politicians (who love to shoot down whatever their opponents propose, no matter what it is) ... and let’s not forget the doctors and the patients themselves. It really is fundamentally IMPOSSIBLE to implement any reform that won’t upset someone in the chain. It’s a political nightmare, and everyone knows it – but something has to be done.
The main focus of PPACA is to provide healthcare to every person in America, which is a noble goal, but it does not really address the root of the problem – the total “cost” of our healthcare. The new law just spreads the costs around a little differently, taking money from some people’s pockets and putting it into others. From a standpoint of total dollars spent per capita (and as percentage of GNP), the USA still spends far too much on healthcare – more than any other country on the planet. Yet, we tend to be the least healthy people of any industrialized nation.
Personally, I don’t care if health insurance is provided by a large number of private companies or one big government run “single payer” insurer. In the first scenario, independent insurance companies will have to compete with each other, and the ones that provide the best coverage and service at the lowest cost will survive. In the second scenario, you would theoretically get better efficiency and lower costs with the vast economies of scale.
England, France, and Canada have shown you can have successful healthcare based on “socialized” medicine (although France has other healthcare issues right now, mainly due to rampant immigration – which is actually a much bigger problem in France than it is in the USA!)
My family lived in Switzerland for the past year, and we just recently moved back to America. In Switzerland, everyone pays for their own private health insurance individually. Employers do NOT, under any circumstances, pay for healthcare coverage (some of the larger employers have negotiated group rates for their employees – but everyone pays their premiums directly, out of their own pocket).
Every person who resides in Switzerland is required by law to carry basic health insurance. There is a minimum coverage policy, and then most people also get “supplemental” coverage which goes above and beyond the government mandated minimum. Insurance companies are not allowed to exclude pre-existing conditions. Overall, the system works very well. The government doesn’t spend tax dollars for healthcare, no one goes without insurance (legally, at least), and – from my personal observations – people are generally satisfied with the costs and the level of care they receive.
There is one advantage of the Swiss system that I did notice when we lived there – when everyone pays for their insurance premiums out of their own pocket, they have a better appreciation for what their healthcare really costs. In America, everyone just says “we can’t afford that” if they have to pay for their own insurance, so we’ve found ways to build it into the “overhead” of our economy, by having employers and the government make the actual payments. We still pay for it, but no one seems to know how much!
So we have an example of “socialized” medicine in France, and the furthest extreme opposite “everyone pays for their own” structure in neighboring Switzerland – and both seem to work quite well. How come we can’t come up with a plan for America that will make everyone – or at least a good majority of people – happy?
Again, the overall COST of healthcare – no matter who pays for it – is just too expensive in the US. In addition to ensuring universal coverage (which I am wholeheartedly in favor of), we need to drastically reduce the total amount that we spend.
Unfortunately, everyone is far too eager to blame the doctors, the insurance companies, the pharmaceutical companies, the politicians – but nobody wants to admit that there is one group who is truly responsible for the cost of healthcare: the good people of America.
Americans seem to have the notion that we don’t need to take care of our own health, we can rely on someone else to do it. No one seems to understand that there is no “free” healthcare. If our employers provide healthcare benefits, the result is higher prices of consumer goods and services (just like a sales tax). If we have “socialized” medicine, it looks like an income tax. If someone is destitute and has no insurance, the public still ends up picking up the tab.
So how do we reduce the cost of healthcare? Here are a few ideas that we can start with:
Tort Reform
Americans expect doctors to be miracle workers, but doctors are human and they do occasionally make mistakes. Unfortunately, we live in a society where people are actually encouraged to sue healthcare providers, for outrageous amounts, when the slightest thing goes wrong. The legal environment that doctors work in is completely untenable. Our court system is based on a precedence philosophy, which makes every single court ordered award into the minimum amount requested for the next judgment – and over the years it has spiraled out of control.
Malpractice insurance for an OBGYN has gone up steadily for the past twenty years, and currently runs between $100,000 and $150,000 per year. Throughout human history, pregnancy and childbirth has been a frequent cause of death and is, by it’s very nature, a very dangerous process for both the mother and the child to go through. Modern medicine has made it much safer, but our modern legal system lets the patients sue if anything does go wrong. It’s easy – just say to a jury “I would have been fine if that INCOMPETANT doctor hadn’t given me the epidural that I was SCREAMING for at the time” … and suddenly you’re a millionaire!
That million dollars doesn’t come out of the doctor’s pockets, or even the malpractice insurance company’s profits – what happens is that all malpractice premiums go up, so doctors need to charge more for their services, and then health insurance premiums go up to cover it. It all just goes right to the bottom line and adds to the total cost of healthcare in the USA. We all pay for it. We ARE all paying for it, right now, today – a doctors visit would be just a little cheaper if malpractice insurance wasn’t so expensive!
Recommendations:
* Limit damage awards for injury and death to the average “accidental death and dismemberment” coverage of the general population in the patients income bracket.
* Eliminate any and all awards for “pain and suffering” or “emotional distress” throughout our ENTIRE legal system, not just in healthcare related lawsuits. Seriously – this is a huge area of abuse. Everyone, at some point in their lives, has times of emotional distress. It’s part of being human. Let’s not sue someone else for our own frailties.
* Discourage “frivolous” lawsuits by making the losing party pay for court costs and legal fees of both parties. This is standard law for all British Commonwealth countries, where these types of lawsuits are exceptionally rare.
* Direct the courts make more realistic appraisals of the patients portion of responsibility, especially for “lifestyle” induced health issues (for example, if a doctor is sued for a botched gastric bypass surgery, the patient should be responsible for his part if he didn’t follow the diet which the doctor previously recommended, which would have made the surgery unnecessary).
* Promote a society that accepts personal responsibility – when you go to a doctor, YOU are the one that is sick or injured and YOU are the one responsible for your health and welfare.
Pharmaceutical Companies
Everyone loves to hate the drug companies. They are big, powerful, rich, and the cost of medications range from expensive to outrageous. Unfortunately, it’s not really the pharmaceutical companies profit margins that makes our drugs so expensive – its the cost of developing safe and effective drugs which is out of control.
Americans want a treatment for every possible ailment. We solicit donations and lobby for grants to support research and find cures for everything from AIDS to Zersiniosis. The problem is that private funding and government grants typically only cover the “basic research” to find potential candidate treatments. From out of maybe a hundred potential treatments, funded by grants of $5 million to $50 million each, we might find one that shows promise. And then it starts to get really expensive. So the pharmaceutical companies take over development, buy the rights to the candidate drug, and run it through double-blind clinical trials. From that point, only one out of maybe ten to twenty come out of clinical trials intact and make it all the way to FDA approval.
The three stage, double blind clinical trial process does provide a high level of confidence that the product is effective for it’s intended treatment, and will show a safety profile from which we can at least evaluate the risks and side effects – again, this will depend on the treatment (the accepted level of side effects for a cancer treatment is much higher than it is for an arthritis drug, for example). However, a full set of clinical trials (along with the FDA’s fees to review all the data and eventually give approval) is very expensive – typically costing between $500 million and a billion dollars. But for every drug that gets approved, the pharmaceutical companies need to cover their expenses for the other ten to twenty that DIDN’T make it to market. That’s where the biggest cost is.
We are at a stage where many of the “easy” treatments have been uncovered, and each new generation of drug gets more and more complex, and expensive to develop.
I see many articles and opinion columns which state that the drug companies stifle innovation by refusing to promote “alternative” medications. Here’s my own opinion on that: any alternative medication becomes mainstream as soon as it’s shown to be safe and effective! Until someone makes the investment to run an alternative medication through proper clinical trials, no one really knows if it works or if it’s safe. But the process is so expensive that the drug companies need to have 1) some confidence level that the candidate drug might actually work, and 2) patent protection to be able to make back their investment. This has happened, where a pharma company has acquired a non-traditional treatment and brought it to market, but at that point the medication is no longer considered to be “alternative” – just more expensive.
Recommendations:
* Don’t spend as much on research for cures to diseases which have a lot of public attention, but only affect a small number of people – which results in “orphan drug” status.
* Make it harder to get approval for drugs that are for “vanity” treatments. I mean, people really don’t need Botox to stay healthy – and how many people really suffer from erectile dysfunction?
* Modernize and streamline the approval process. Clinical trials can be done much less expensively and still get valid safety and efficacy data. This is the biggest area of opportunity.
* Eliminate “Class Action” lawsuits. The actual amounts awarded to plaintiffs are typically pitifully low, after being spread among so many people, and the legal costs and overhead are outrageous. These are a huge hit to the cost of healthcare and the only winners are the lawyers.
* Stop the practice of marketing prescription drugs directly to consumers. Doctors should prescribe drugs only when necessary, and not have to deal with patients who come in and say “I saw a commercial that said I need to ask my doctor about this new anti-depressant, and I guess I have been feeling a little blue lately. Can I have a prescription please?”
Let Doctors be Doctors
It’s very tough to be a “general practice” physician right now; Doctors are under pressure from all sides. The Doctor/Patient relationship is fundamentally broken for most Americans, and the current healthcare environment has made it very unappealing to be a GP. It’s no wonder that many of the better doctors take the extra few years of training and become specialists.
Family Practice docs who work for HMO’s are typically only allowed to spend ten to fifteen minutes with each patient. A recent study suggests that the majority of people who seek out “alternative” healthcare providers do it solely for the fact that they can sit down and just talk to someone who has the freedom to take the time to listen to their issues.
Everyone hears about the fact that doctors are forced to practice “defensive medicine”, ordering batteries of tests that aren’t really needed – just to show that they are being thorough. Yet again, this is a waste of resources and another huge hit to our overall healthcare costs. General Practitioners should be allowed to use their own judgment on what tests are appropriate, using evidence based analysis – without the fear of getting sued.
And then there’s the whole prescription drug issue. Many people are of the opinion that pharmaceutical companies and doctors are “pushing” drugs on the American population. The reality is that most doctors are normally very hesitant to write prescriptions, but patients are demanding a pill for every problem they have, or think they have. Unfortunately, doctors are often far too willing to give in to their demands (for fear of being sued, or maybe the doctor knows that the patient will just go make an appointment with someone else to get what they want).
There needs to be some common ground. Doctors should ensure that patients understand, and are comfortable with, the medications being prescribed. Patients need to trust their doctors, and not pressure them to prescribe medications above and beyond what the doctor thinks is absolutely necessary.
Recommendations:
* Encourage more doctors to be general practitioners.
* Encourage patients to actually follow their doctors directions, especially when it comes to diet, exercise, and proper dosage of prescriptions.
* Train more doctors to use Evidence Based Medicine techniques.
* As noted above, stop marketing of prescription drugs directly to the consumer.
Extremes of Life – Premature Deliveries and Geriatric Care
This is probably one of the stickiest ethical conundrums in healthcare, and admittedly there is a lot of grey area between what’s right and wrong.
According to a recent report, the average cost of first year medical care for a pre-mature baby (less than 37 weeks gestation) is over $49,000 vs. just $4,550 for a full term baby. This is the cost of healthcare for the first year of life, not including pre-natal care or the delivery itself. For the price of one year of healthcare for an average pre-term baby, we could provide healthcare for 40 uninsured school age kids for a full year.
But the costs increase substantially for earlier deliveries: the average cost for a delivery at 27 weeks gestation is over $200,000, and there is a 50% mortality rate – and higher risk to the mother as well. And then you need to consider the fact that a very high percentage of these kids that do survive are saddled with physical and emotional issues throughout their lives. The result is not just higher medical costs, but higher education costs and very high stress for the parents.
We have an attitude that we must save every person, no matter what the cost is – but the cost is killing us. Some estimates put the total bill for delivering premature babies in the USA at well over $50 billion a year. There are no easy answers here. It’s hard to say to a mother who is going into labor at 30 weeks that delivering the baby is not feasible, but we should really consider some gestation period that we agree is minimum for viable delivery – especially in the case of drug abusers or women that have had insufficient pre-natal care. Again, you need to be responsible for your own health!
On the opposite end of the spectrum of life is the geriatric care issue.
My own mother died of cancer in 1996. She had colon cancer a few years earlier, and with intensive chemotherapy she went into remission and was cancer free for a few years. But then it came back. This time, she had to have her entire large intestine removed, but not before the cancer spread to her liver. At that point, she refused any further treatment. When I asked why, she told me something very profound. She said, “the purpose of medicine is to prolong life, not to prolong the dying process.”
I was struck by the wisdom of this statement, and I firmly believe that many elderly patients with a terminal illness would prefer to have a dignified way to let go – at home, in their beds, with family nearby. Not in a hospital, dragging out every last possible minute of a declining life. Unfortunately, it is usually the family who intervenes and demands that the doctors do everything possible to keep their parents/grandparents/aunts/uncles alive as long as possible – racking up substantial medical bills along the way.
We also need to take another look at legalizing assisted suicide for people with terminal illnesses; not for the economic reasons, but because in many situations it is the most humane thing to do.
General Fitness of America
This is the biggest challenge/opportunity we have. Let’s face it: Americans are out of shape and overweight, and that is the single biggest factor in the rising cost of healthcare.
We’ve gotten to the point where we don’t walk our kids three blocks to school, we get in our super-sized minvans and drive them. We go out to eat and tell the kids “Hey, they have free refills on soda! Make sure you drink as much as you can!” instead of saying “Only one cup of that nasty sugar water – no more.” We don’t think twice about spreading a large pat of butter on a bread roll or a putting a ton of mayonnaise on a sandwich.
Every week, I see articles about the cost of the obesity epidemic – primarily healthcare costs and lost productivity, but there are other negative economic effects as well.
We have not attempted a focused educational campaign or provided enough support and encouragement for people to get in shape. Yes, this would be very costly, but it has the potential to have the biggest impact on what we spend for healthcare.
Recommendations:
* Eliminate farming subsidies for sugars and corn sweetener products. We need to do everything we can to make these as expensive as possible.
* Likewise, we need to do everything we can to make fresh fruits and vegetables as affordable as possible.
* Incentivize people to follow doctor recommended diets and exercise regimens.
* Tax foods that are substantially outside of any reasonable nutritional standard (I’m talking about things like the Blooming Onion appetizers which can have 2,200 calories and 130 grams of fat. There is NO REASON for any restaurant to sell something with these stats). In general, I am NOT in favor of flippantly proposing any additional taxes without very good reason. But making some foods a little less attractive from a financial standpoint can be a very effective deterrent.
* Education, education, education. The anti-smoking campaigns have been very successful over the last 30 years. Use this as a model for other educational campaigns to promote healthier lifestyles. There are warning messages on packs of cigarettes, and signs in bars which say “you will not be served alcohol if you appear to be intoxicated” ... how about a sign in every McDonald’s which says “we will not serve you a Big Mac if you appear to be obese”!
Realistically, what can we do?
Some of the ideas I’ve suggested are politically incorrect and some might seem just a little Half Baked and written by a Lunatic. But putting political correctness aside for a moment, we need to accept the fact that this is a serious issue and, as I said, it is impossible to change anything related to healthcare without upsetting a few people. I don’t care who get’s pissed off, let’s just get something done!
As we head into the mid-term elections, there is a growing movement to repeal the healthcare reform legislation. For the life of me, I can’t see why we should do that, because it is a step in the right direction. I applaud the Obama administration for at least trying to address the problem. President Bush just stuck his head in the sand and fastidiously ignored the fact that the healthcare system in the US had been going downhill for many years – and, surprisingly enough, it didn’t get any better while he was in office.
I readily admit that there are outstanding issues with PPACA; there are far too many compromises and far too many issues that haven’t been addressed yet. But maybe, just maybe, President Obama will be able to convince enough people that this is a good first step. The harder challenge will be getting enough support to take the next step – because no matter what people think of the current reforms, we still need to reduce healthcare costs.
And it ain’t gonna be easy.