Why Health Care is So Expensive

Posted on June 07, 2009. Filed under health-care

This is brutal article, which, if accurate, is a damning indictment of the business of medicine.

The Cost Conundrum

The writer (a physician himself) went to McAllen, Texas, which has the highest cost of medical spending in the country, to find out why medical care is so expensive. The bottom line turns out to be that the doctors here (and elsewhere, one presumes) have turned medicine into more of a business than a service.

“Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures.

The surgeon came to McAllen in the mid-nineties, and since then, he said, “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?' “

This meshes with what a doctor friend of mine once told me. He says that a patient can come in with something easily diagnosable and curable, but doctors today will still order a dozen tests and procedures “just to be sure.” These are things they wouldn’t have done in the past. Based on what my friend told me, and the contents of this article, Here’s why they do this:

  1. To avoid any chance of malpractice (“My son wouldn’t have died if you had just ordered this extra test...”)
  2. To rack up fees for themselves.
  3. To rack up fees for their colleagues (my friend revealed “a lot of tests get ordered because some guy they graduated with owns a lab somewhere...”)

I had another friend who managed investments for a health care group. He was meeting with a long-standing client whose income had taken a massive jump – $400,000 to $720,000. He asked her how she made so much more money, year over year. Her response: “We learned how to bill Medicare more effectively.”

The article states it plainly:

Health-care costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen.

[...] there are the physicians who see their practice primarily as a revenue stream. They instruct their secretary to have patients who call with follow-up questions schedule an appointment, because insurers don’t pay for phone calls, only office visits. They consider providing Botox injections for cash. They take a Doppler ultrasound course, buy a machine, and start doing their patients’ scans themselves, so that the insurance payments go to them rather than to the hospital. They figure out ways to increase their high-margin work and decrease their low-margin work. This is a business, after all.

I don’t believe all doctors are greedy, but I think that the trend in this country – the way doctors are trained both formally and informally – these days, is to shotgun medical care. Do everything possible, even things that might be even distantly related to the problem, perhaps out of a genuine desire to provide the best possible care. But, can we afford this as a country anymore?

What’s scary is that if one of my children was a patient for some life-threatening disease, I’d want the doctor to do everythingpossible – order every test, order every procedure, consult every specialist – to heal them, costs be damned. But, looking at things objectively (read: thinking about other people’s problems), I can sit here and say that we’re going broke on needless medical care.

This isn’t lost on the writer of the article.

I remember when my wife brought our infant son Walker to visit his grandparents in Virginia, and he took a terrifying fall down a set of stairs. They drove him to the local community hospital in Alexandria. A CT scan showed that he had a tiny subdural hematoma – a small area of bleeding in the brain. During ten hours of observation, though, he was fine–eating, drinking, completely alert. I was a surgery resident then and had seen many cases like his. We observed each child in intensive care for at least twenty-four hours and got a repeat CT scan. That was how I’d been trained. But the doctor in Alexandria was going to send Walker home. That was how he’d been trained. Suppose things change for the worse? I asked him. it’s extremely unlikely, he said, and if anything changed Walker could always be brought back. I bullied the doctor into admitting him anyway. The next day, the scan and the patient were fine. And, looking in the textbooks, I learned that the doctor was right. Walker could have been managed safely either way.

In the end, I think this problem will self-regulate. We just can’t keep paying for medical care at the rate we’re paying. Something has to give in this country, and perhaps the market will sort itself out. When people can’t pay anymore, and when insurance companies start taking huge losses, when tHere’s no more money, then perhaps sanity will return.

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