The economics of health care is a very complex issue and one that I believe is poorly understood by most, including policymakers, providers, and, more importantly, the consumers.
There are many reasons for the skyrocketing costs of health care and while much of the cost is justifiable and driven by the cost of research and technology and the pursuit of improving quality, there are many less justifiable factors driving up the costs such as greed, waste, and inefficiency.
While all players in the health care arena, including providers, payors, and consumers, will point to each other and lay blame to the greed, waste, and inefficiency, in reality, every one of us is responsible for the present state of affairs.Payors, including HMOs and insurance companies and their executives are making billions of dollars and profit every year while providers waste hundreds of millions of dollars if not billions of dollars in the excessive use of costly technology, over specialization, the overprescribing of medication and other treatments, and the practice of defensive medicine. The consumers, meanwhile, also contribute to the cost crisis by their demand for and overuse of high-tech and high cost medical care as well as their excessive lifestyles (e.g., smoking, drinking, obesity), and their underutilization of prevention and routine health maintenance.
While I do not profess to have all the answers to this complex and vexing problem, I do believe that the solution can only be found in the principles and practices of a free market system. I can envision competition between small and efficient independent medical practices and the ‘corporate giants’ or HMOs and insurance companies that are the only game in town.As we all know, the delivery of care in large corporate systems is very costly, if for no other reason overhead. Someone has to pay for the steel and concrete, the luxurious surroundings, the exorbitant salaries of the executives, legions of worker’s, and so on and so on—much of which has nothing to do with actual care as big shiny buildings with fancy trappings offer little to the care of diabetes or a broken leg. These systems are by their very nature designed to acquire and provide the latest and greatest in technological advances to be one step ahead of their competitors and at par with the Mayo clinic, again—at a price.
The establishment of consumer driven low-cost ambulatory care clinics is a relatively new phenomenon that is popping up throughout the country (these were called family doctor and GP clinics before). In these clinics physicians are returning to their Hippocratic roots and focusing less on providing the ‘latest and the greatest’ (and costliest) in health care, instead refocusing on the ‘art of medicine’ or that aspect of medicine that deals with care and compassion and that costs essentially nothing to provide. They are also eschewing the insurance companies and the ‘corporate giants’ and are returning to fee-for-service practices that are emphasizing the time-honored tradition of the patient-physician relationship—without the insurance company (or government) in the middle. They are rightfully returning the responsibility of health care to where it belongs—the patient and the consumer—and they are doing it with much less cost to the patient and society.
Every doctor in this country and the world knows that most patients do not require high-tech and high-cost medical care. In fact, study after study, both clinical and epidemiological, have shown that over 90% of medical care can be provided in an office based, low-tech setting at very low cost. Yet, we continue to use—and our patients continue to demand—the latest and costliest scanners, tests, and procedures, to diagnose and treat disease when the careful and thoughtful use of our eyes, ears, and hands would provide us with the correct diagnosis over 90% of the time. We continue to overprescribe costly medication and treatments when watchful waiting, an empathetic touch, or sage advice would suffice.
Quite frankly, we have sacrificed the ‘art of medicine’ for the ‘science of medicine’ and it is the glamorization of this insidious transition of medicine in the media and in society that perpetuates such an unfortunate and costly trend.As long as we have a system in which a third party is responsible for paying for the individual’s needs regardless of the commodity and regardless if it is government or privately sponsored, there will always be excesses in terms of waste, greed, and inefficiency at all levels of the system, including the payor, the provider of the service or product, and the consumer. Another way of looking at it is that as long as there is the perception that “someone else is paying for it”, we are all, by human nature, going to want the best there is to offer and the companies that are paying for it and delivering it are going to do everything they can to get us to take something less.