Why health care costs so much

27 Sep
2006

Over the years I have opined that health care costs are increasing because we do more things to improve quantity and quality of life. While I believe (and I am not unique here) that I could personally design a health care system that would save some dollars, I could not prevent health cost inflation.

As a society we have to decide if improved health is worth an increasing proportion of our income.

This NY Times article poses the question clearly – The Choice: A Longer Life or More Stuff

There is no question that the American medical system does suffer from a lot of waste, be it insurance industry bureaucracy or expensive procedures that haven’t been proven effective. But the No. 1 cause of the cost increases is still the one you can see at the hospital and in your medicine cabinet — defibrillators, chemotherapy, cholesterol drugs, neonatal care and other treatments that are both expensive and effective.

Not even most forms of preventive care, like keeping diabetes under control, usually save money, despite what many people think. The care itself has some costs, and, more important, patients then live longer than they otherwise would have and rack up medical bills. “When I make this point, people accuse me of wanting people to die earlier. But it’s exactly the opposite,” Dr. Jay Bhattacharya, a researcher at Stanford Medical School, told me. “If these expenditures are keeping people alive, it’s money well spent.”

As Dr. Mark R. Chassin of the Mount Sinai School of Medicine in New York says, “You almost always spend money to gain health.” Of course, the opposite is also true: the best way to reduce health care spending is to reduce health care itself.

Health care delivery is not static. As we improve our armamentarium, we must understand that new drugs and diagnostic tests are expensive. I believe the money is generally well spent.

The important issue here is that we understand the trade-off. We cannot cut health care spending and then complain about decreasing health care quality. We can save some moneys by actually increasing payments for family physicians and general internists. They do a better job of curtailing unnecessary costs. The problem is in defining necessary and unnecessary. And that task is much more complex than we would easily admit.

It’s easy to be against high costs, and it will no doubt be hard to come up with a broad health care solution. But the way to start is by acknowledging that an affluent society should devote an ever-growing share of its resources to the health of its citizens. “We have enough of the basics in life,” Mr. Cutler, the economist and author, points out. “What we really want are the time and the quality of life to enjoy them.”

Please read the entire article, as it raises very important philosophical issues.

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4 Responses to Why health care costs so much

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Rob

September 27th, 2006 at 8:58 am

Not even most forms of preventive care, like keeping diabetes under control, usually save money, despite what many people think.

Where did he get this information? Certainly some disease processes occur where the data is not clear, but diabetes?

This is clearly a case where the press takes liberties they should not take and mislead the public. There is little question that flu vaccine, childhood immunization, and aspirin therapy saves money. Things such as diabetes at worst are “unproven,” but to make a statement that prevention does not save money is way beyond what can be accurately said.

Regarding the overall cost of healthcare, the debate hinges on whether prevention saves money. We could decrease use of defibrillators, CABG, Stents, Colon Cancer treatment, bone marrow transplants, pneumonia, and other significant morbid conditions by engaging in proper prevention. We choose to be ignore the addage “an ounce of prevention is worth a pound of cure” and instead throw money into expensive therapies rather than preventing the underlying diseases in the first place.

Of course, your dear lawyer friend may want to sue me regarding my opinion in this….

Avatar

BC

September 27th, 2006 at 1:10 pm

I would argue that expensive and often futile care at the end of life is NOT money well spent. Sometimes, the patient does not even want the care but is unable to communicate that fact, and there is no living will or advance directive. Sometimes palliation or hospice care would be much more appropriate and less costly, but doctors may feel they have no choice but to do everything because they are afraid they will be sued if they don’t.

Doctors also often have no clue as to where to send patients for the most cost-effective care. If there is a choice of five imaging centers for an MRI or three nearby hospitals for an outpatient procedure and all provide equal quality but at wildly different prices, the docs neither know nor care what any of them charge. Since doctors drive virtually all healthcare costs through hospital admissions, referrals, prescriptions, ordering tests and doing procedures themselves, I suggest they, in conjunction with insurers, make it part of their job to not just give the patient a prescription for an MRI, for example, but to be able to direct the patient to the most cost-effective imaging center or have a staff member who can do so.

Avatar

amy

October 1st, 2006 at 11:13 pm

“Doctors also often have no clue as to where to send patients for the most cost-effective care.”
This will change as more patient have high deductible insurance. More competition among smaller competitors is the answer (lower overhead and higher flexibility). In my small office, I discount when I want. When I was working for a large group, I could never do that.

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DB’s Medical Rants » Blog Archive » DrRich on health care inflation

October 19th, 2007 at 7:05 am

[...] that their plan will not control health care costs. I hearken back to my post from last year – Why health care costs so much. Please reread that [...]

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