Driving down health care costs is critical to the future financial security of most Americans, authors write
Prices are too high, and unnecessary care dominates the system, they say
Editor’s Note: H. Gilbert Welch, MD, is professor of medicine at the Geisel School of Medicine and author of “Less Medicine, More Health.” Elliott Fisher, MD, is the director of the Dartmouth Institute for Health Policy and Clinical Practice. The opinions expressed in this commentary are theirs.
The financial insecurity experienced by many Americans certainly figures into any root-cause analysis for why President Trump was elected. But for most Americans, the “biggest tax cut ever” will do little to reduce that insecurity. Driving down health care costs – and making them more predictable – is far more important.
Rising health insurance premiums have eaten into take-home pay. What money does come home increasingly goes back out as health care deductibles, copayments and coinsurance. People cannot plan for when these expenditures will occur, nor for how big they will be. And as medical care expands to involve more people, more people experience these unpredictable expenditures – creating more financial stress. Medical care is a common cause of personal bankruptcy.
That can’t be good for people’s health.
Driving down health care costs is critical to the future financial security of most Americans. One way or another – whether through out-of-pocket spending, taxes or forgone salary – health care ultimately consumes 18% of our incomes. It’s also critical to the financial security of federal and state governments – which have sharply reduced spending for schools, parks and social services to pay medical bills.
Neither Obamacare nor the bill recently passed by the House to repeal and replace the Affordable Care Act effectively address both components of the cost equation: price and volume.
High and rising prices are the most obvious problem. Americans pay much higher prices for specific services than those in other countries. Obscene price increases for selected drugs are familiar: think $600EpiPens and the Turing Pharmaceutical decision to raise Daraprim from $13.50 to $750 a tablet.
But the problem is more general: Among 54 prescription drugs commonly used by older Americans, Medicare pays nearly twice as much per dose as do the government systems in Canada, England and Norway. That’s why the President wants to bring our drug prices “way down.”
And the price problem extends well beyond drugs: Open heart surgery is 70% more than the next highest country; an appendectomy over two times more. And the price for a day in the hospital is about five times more in the US than other developed countries.
Why are prices so high? An important part is administrative costs: our complicated insurance system requires an army of billing clerks – employed by hospitals and physicians on one side and private insurance companies on the other. Another is that we use more technology (tests, devices) and labor (nurses) to deliver a “visit” or provide a hospital stay. Plus, some providers simply charge more for a service because they can get away with it.
Too many services?
If lower prices were all that was needed, increased competition might be a plausible solution. But market forces cause medical care to expand: both to provide more services to patients and to produce more patients to serve. While some of this increased volume may be beneficial, much of it produces more mixed effects – and some is outright harmful.
Excess volume is most relevant at the extremes of medical care: care for the dying and care for those who are well.
There is excessive medical care at the end of life. Most Americans want to die peacefully at home. But most die with a costly hospitalization at the end of life – one that often involves painful procedures and interventions.
Most Americans want to preserve resources to pass on to their children. But many will die after an extended stay in a long-term care facility – one that can involve shuttling back and forth from the hospital. Pneumonia used to be considered a friend of the elderly, now it’s just another problem to fix. Maybe such efforts lengthen life, but whether they improve quality of life is much more debatable. They certainly work to impoverish our children.
There is also excess at the other extreme: medical care for the well. In the past, people sought medical care because they were sick. Now we encourage people to be evaluated to make sure nothing is wrong.
While this may make sense in selected settings (such as monitoring blood pressure), it has rapidly expanded to become a high-tech search for abnormality – a search that often turns up something. We go on to seek risk factors for what may go wrong in the future. But while risk-based decision-making is central to good medical care for those who are ill, the concept has been perverted to include vast swaths of the population.
Face it: We are all “at risk.” Testing and risk factor identification are a great business: it has turned more Americans into patients. And with follow-up testing and subsequent treatment, it’s a gift that keeps on giving.
Get our free weekly newsletter
All this excess can’t be blamed just on us doctors. It’s the whole medical industrial complex that’s has grown up around us. Pharmaceutical companies, biotechnology firms, manufacturers of medical devices and diagnostic technologies, free-standing diagnostic centers, surgical centers, hospitals and academic medical centers. There’s a lot of money on this table – some $3 trillion – money to market directly to patients, money to influence guidelines and money to buy off doctors (everything from medical education junkets, speakers bureaus, “research” funding, to outright kickbacks).
Note to the President: this is one swamp that really needs draining.
A good place to start would be for doctors to step up to the plate and take more responsibility for making value judgments. Interestingly, when doctors are paid to focus on delivering better care rather than just more care, they make wiser choices. Physicians might routinely consider the following thought experiments: “Given what we know about the price, expected benefits, and harms – would we buy this ourselves?” And “Could there be more value in encouraging better food, more public spaces for physical activity and stronger communities?”
Some might call that rationing; others might call it rational. But remember, the words share a common root. If doctors are not encouraged to make value judgments, guess what you get: care of no value.
And patients who get poorer – even with their tax cut.