Addressing Myths of Our Health Care System

Jason over at The Sidetrack linked to an interesting article on 5 myths about our health care system. I've already written many times about health care, but I thought I could propose some solutions to the problems that this article points out. Because I knew I'd end up writing so much, I'm going to respond to his post here.

The first point is that despite spending lavishly on health care (more than any other nation on a per capita basis), we have poor uniformity of care and some key health indicators are worse. The article blames this on higher rates of obesity, yet it doesn't delve into how federal spending causes it. Because corn (#1) gets more subsidies than wheat (#2) and cotton (#3) combined, it's used to make all kinds of inexpensive and unhealthful foods. We also spend lavishly on subsidies for rice, soybeans, diary and many other foodstuffs. These subsidies lead to us being overfed and undernourished. Killing them would be a big step towards solving the obesity issue and save billions of dollars per year.

The second point is that we always pay for our own insurance and that this climbing cost is contributing to stagnant wages. If only this were entirely true. In fact, we have little power over health care purchasing decisions from the get-go. Our employer chooses the plan, and then the insurer and care provider haggle endlessly over the price without giving us the ability to make smart purchasing decisions. If we really want to see a change, we need to be put behind the wheel of picking our own plans.

The third point is that administrative costs are but a small fraction of the total cost of care and that exotic new drugs and procedures are the real culprit. On this point I agree entirely and we certainly need a sweeping overhaul of our patent system to aid in this. Figuring out how to drop the frequency of dosage of a medication from twice a day to once does not warrant a patent extension.In essence, our patent system has been turned into a system of government-granted perpetual monopolies, an affront to free-market principles. There's also a significant lack of transparency in price/performance ratios with drugs and medical procedures which hampers our ability to make smarter choices. We again see the hand of insurers pushing us aside as they dictate prices.

The fourth point bring up how unnecessary care is eating up about 20-30% of all medical spending, much of it on preventable medical accidents. It's no secret that medical record-keeping is archaic at best and PCs seem to exist in hospitals as a way to conveniently rack up more and more paper records. There's no easy fix either. The tech industry has spent decades trying to bring better data storage solutions to the medical field without much in the way of results. The key problem is that there is no set of medical data standards, no interchangable data formats, no protocol for electronic record sharing. There's also no incentive for heath care providers to form or join a working group to hammer all of these things out. It isn't helped that large companies such as Oracle, IBM and Microsoft all want to make sure that they poison any standards with their own "embrace, extend, exterminate" business philosophies. This is something that will have to be driven by engineers and gearheads with the full support of the biggest names in the medical industry.

The fifth point is that Americans are ready for sweeping changes to the way medical care is handled. They cite opinion polls in which 70% of Americans believe the system needs major changes. This is an area where I think we need to step back and move cautiously. There are a lot of hare-brained schemes to "fix" medical care out there that would love to claim a mandate to do so, but we need to only focus on one thing: identifying what makes health care expensive and doing everything in our power to drop that cost. This means radical pricing and effectiveness transparency for medicines and procedures so that patients can make better choices. It means removing the pricing incentives to eat Twinkies instead of carrots. It means making strong tech standards for medical records and finding ways to securely share them between all authorized medical providers. It will take a lot of radical changes to fix; socializing medical care, which seems to be the hinted aim of this article, is not one of them.

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3 Responses

  1. Bill says:

    Having lived in another country (England) and having seen the problems of socialized medicine., I disagree with Jason’s assessment of our health care situation. How can one equate longevity of life to health care. How about taking into consideration traffic accidents, gangs, stress, exercise, eating habits and a host of other variables. It will be near to impossible to come up with any type of mandatory health coverage that does not socialize the industry, Do we pay to much? Of course we do and there are a number of causes of which some have already been mentioned. I say lets have tort reform. Make punitive damages a non profit making enterprise by not allowing lawyers or “victims” to participate in the bounty. I say that all punitive damages go to pay off the National Debt. I believe that would make such damages far less frequent and with such health care would come down

    I don’t ever want to see a “dental repairs while you wait” sign again.

  2. Reach Upward says:

    Bill is right about the lawyers. On point #4, the fault for a fair portion of our unnecessary care can be pinned directly on ambulance chasing trial lawyers. I suspect, however, that since the trial lawyers are essentially a branch of the Democratic Party, we will see tort reform go in precisely the opposite direction of where it needs to go to effectively reduce medical costs.

    The insurance companies (both government and private) are also guilty in promoting unnecessary care. Facilities and practitioners perform the services and provide the products that generate the greatest net income. Poorly designed contracts, bad market guesses by centralized bureaucracies (public and private), and political pressures have resulted in payment structures that lend to targeted unnecessary medical care.

  3. numberless says:

    “If you think the problems are bad, just wait until you see our solutions!” That should be the motto of the Federal Government in the USA. Seriously. The solution to every problem isn’t just to get the government to throw money at it. In fact, that often intensifies problems.

    Jesse points out corn subsidies here. Yay for one of the worst ideas in American history! More “free” money does nothing but breed corruption and waste at every level and builds a system of cronyism and patronage.

    The third point is that administrative costs are but a small fraction of the total cost of care and that exotic new drugs and procedures are the real culprit. On this point I agree entirely and we certainly need a sweeping overhaul of our patent system to aid in this… In essence, our patent system has been turned into a system of government-granted perpetual monopolies, an affront to free-market principles.

    Yeah, that’s the problem. For instance, I paid around $200 for the frames of my last pair of glasses frames. Mind you, the designer label (I’m a whore for Italian design, what can I say?) was a partial culprit, but even the generic frames were unreasonable. My current frames aren’t any greater in quality than a pair of sunglasses I picked up at Spencer’s a couple years ago. However, stick the “medical grade” pseudo-label on something and watch the price increase substantially.

    My dentist has very reasonable rates on his services. I pay in cash with no insurance. The problem comes the moment some item that he doesn’t control comes into play. A bridge or a crown or any sort of appliance is ridiculously expensive. Why? These companies have a quasi-monopoly and, more or less, because of a combination of prohibitive government licensing that makes it hard for competition to come to market and the greed that comes when governments and insurance companies, not consumers, are paying the prices inflate beyond the reach of the average person.

    And, hospitals are full of crooks. Get a split or some good old aspirin sometime and look at your bill.

    Your final conclusion is right on. I can’t say enough that we’ve come to rely too much on the fact that we are “modern” and we can “take a pill” to just solve everything. Healthy lifestyles are more important than all the hospitals, drugs and treatments the world has ever seen. My old doctor used to say, “We have fantastic emergency and trauma care in this country, but when it comes to keeping people healthy, we’re terrible.”

    In this day and age, if I saw off my finger I can often get it reattached. This is no reason to ignore safety rules and best practices when using a saw. The same can be said for healthy eating and exercise. People would rather pay the fees for pills than the fees for higher quality food. Go figure.

    As an anecdote, my mother spent years seeing a “pain management specialist” or her mounting problems with multiple sclerosis. Without insurance, this was very expensive and for years I watched her whither away into a TV watching zombie with some serious short term memory and drug addiction problems. After years of this, she herself realized what she’d become, dropped the pills and the doctors, started eating healthy, began exercising vigorously and adopted an “I can get well” attitude. Two years later she’s 110 lbs. slimmer, is in better shape than I am and her last CT scan showed that the lesions on her brain have decreased in size.

    The worst disease facing this country affects us at all levels: apathy. Everyone’s waiting for someone else to do the job and take care of them. It’s disgusting.

    Reach Upward is also right on.

    Ambulance chasers (well, lawyers in general, but what problem can’t we pin on them to some degree?) and insurance companies are two of the primary root problems–and not just of health care, but of society in general. There isn’t an industry out there that insurance touches that doesn’t acquire the rot of corruption and like flies to feces, lawyers will always follow where insurance ventures.

    How many times have you heard something like this: “Well, the insurance company is paying for it so go crazy.”

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