Health care reform
It is clear that health care costs significantly more in the United States than in other countries. What should be done about this is, to state it mildly, a matter of some debate. Our health care system is one which I suspect few people fully understand. I do not pretend to be one of those few. Like most, I must base my opinions on facts provided by others. Among the best reports I've seen on the issue of US health care costs is this one, by McKinsey & Company.
This report compares the cost of health care in the United States to that of other developed and industrialized countries. The writers give an excellent breakdown of where the largest cost differences come from. From that, we can better determine how to correct any issues with our present system and lower health care costs for everyone. Given that the McKinsey report estimates that we as a nation spend $477 billion more on health care than other comparable countries, or $1645 for each person in the country, this seems to be a worthy goal.
Unfortunately, there is no magic bullet. The cost difference does not come from any one source, and no one change is going to solve all the problems we face. The health care system is not broken beyond hope of repair, but system-wide changes are required to bring down costs. However, this report makes it clear that there is no need to move towards a fully socialized system, as some advocate. There may not even be a need to move towards President Obama's approach of government competition in the private sector. I believe that with a few relatively simple changes, we can make a significant reduction in health care costs in the United States, without any significant taxpayer expenditure. I will focus on four specific areas.
1) Physicians are in many cases paid per procedure performed, per referral, or per patient seen. The phrase "quantity care, not quality care" has been thrown about lately in reference to this practice. This pay structure inevitably creates a conflict of interest for the doctor. Doctors are forced to choose between providing the best possible care for the patient and making the most possible money.
I am in principle a libertarian, meaning I believe in minimal government regulation. But I am also an engineer, and I understand the importance of an inviolable ethical code. Professions that put lives at stake every day must always focus on the end goal of keeping people safe, regardless of financial or social pressures. For doctors, conflicts of interest like this are absolutely not acceptable, under any circumstances. Otherwise the entire medical profession risks losing the trust which it has built.
The AMA should require that doctors' be paid on a salaried or hourly basis, and refuse to work under any other pay system. Should the AMA fail to pass such a resolution, individual states should step in and demand that their doctors be paid in accordance with their ethical obligations. The interference of the federal government should be a last resort in this matter, but it should be considered as a possibility should other means fail.
2) A related problem is co-ownership of outpatient facilities by physicians. Studies have shown that physicians who own their own imaging equipment are between two and eight times more likely to recommend tests than those that do not own such equipment. This is another conflict of interest situation, where doctors are placed in a position where they may benefit from things which harm their patient. Doctors are ethically required to avoid such situations. Again, the AMA, states, or the federal government should forbid any such arrangements.
3) Prescription drugs in the United States cost significantly more than their equivalents in other countries. Market forces have no effect on price, because while drugs are protected under patent, the pharmaceutical company who developed the drug has a legal monopoly on its distribution and can charge whatever they want. This needs to change. More limited patent protections would allow the market to lower drug prices, while still protecting some measure of exclusive profit for the developers of new drugs.
Patent protections for prescription drugs need to have shorter terms, incentives for licensing the drug to competitors, and more difficulty re-patenting what is effectively the same drug. It should also be made easier for consumers to obtain prescription drugs from outside the United States, so that the market force of lower drug prices elsewhere can be brought to bear lowering drug prices here at home.
4) Malpractice concerns drive up health care costs in a number of ways. Most obvious is malpractice insurance, which due to high premiums costs over $20 billion a year, or nearly $30,000 per doctor. These costs could be greatly reduced by tort reform, which would alter the situations under which a patient may sue their doctor. Costs would be reduced even more, because of the subsequent reduction in defensive medicine.
There should be a statute of limitations on bringing malpractice suits, forbidding suits more than a few years after an alleged mistake was discovered. There should be limits on non-economic damages, preventing destructively large awards for non-quantifiable losses like pain and suffering. The idea of setting up a system of specialized health courts to hear malpractice cases should be explored. Doctors should not be immune to the consequences of their mistakes, but the cost of doctors' protecting themselves is passed on to all of us, and needs to be reduced.
I am by no means an expert, and I am not claiming that this plan fixes all our health care problems. But my estimate is that these changes could lead to over $200 billion in savings, about $700 per person. And with the exception of health courts, none of these ideas cost a dime in tax money, or require expansion of government power. There would be significant upset in the health care sector until adjustments could be made, but this would be temporary, and the long term benefits would vastly outweigh the temporary costs.
Administration costs are much higher in the US than in comparable countries, and make up a significant fraction of our remaining health care cost overage. I plan to address possible ways of lowering these costs in a later post. Some argue that a single-payer socialized system would lower overhead costs in the US, but this is very questionable. The United States government is not known for small and efficient bureaucracies, and a medical bureaucracy would be no different. Other possibilities must be considered. And there is still the question of health care for the uninsured, which I will also leave for a future post.
There is no need for a socialized medical system in our country if we want to lower costs. For that goal, there is no need for any taxpayer money to be spent at all. We can have reforms that will lead to massive cost reductions. All that's needed is for us to elect representatives willing to take the necessary steps.
This report compares the cost of health care in the United States to that of other developed and industrialized countries. The writers give an excellent breakdown of where the largest cost differences come from. From that, we can better determine how to correct any issues with our present system and lower health care costs for everyone. Given that the McKinsey report estimates that we as a nation spend $477 billion more on health care than other comparable countries, or $1645 for each person in the country, this seems to be a worthy goal.
Unfortunately, there is no magic bullet. The cost difference does not come from any one source, and no one change is going to solve all the problems we face. The health care system is not broken beyond hope of repair, but system-wide changes are required to bring down costs. However, this report makes it clear that there is no need to move towards a fully socialized system, as some advocate. There may not even be a need to move towards President Obama's approach of government competition in the private sector. I believe that with a few relatively simple changes, we can make a significant reduction in health care costs in the United States, without any significant taxpayer expenditure. I will focus on four specific areas.
1) Physicians are in many cases paid per procedure performed, per referral, or per patient seen. The phrase "quantity care, not quality care" has been thrown about lately in reference to this practice. This pay structure inevitably creates a conflict of interest for the doctor. Doctors are forced to choose between providing the best possible care for the patient and making the most possible money.
I am in principle a libertarian, meaning I believe in minimal government regulation. But I am also an engineer, and I understand the importance of an inviolable ethical code. Professions that put lives at stake every day must always focus on the end goal of keeping people safe, regardless of financial or social pressures. For doctors, conflicts of interest like this are absolutely not acceptable, under any circumstances. Otherwise the entire medical profession risks losing the trust which it has built.
The AMA should require that doctors' be paid on a salaried or hourly basis, and refuse to work under any other pay system. Should the AMA fail to pass such a resolution, individual states should step in and demand that their doctors be paid in accordance with their ethical obligations. The interference of the federal government should be a last resort in this matter, but it should be considered as a possibility should other means fail.
2) A related problem is co-ownership of outpatient facilities by physicians. Studies have shown that physicians who own their own imaging equipment are between two and eight times more likely to recommend tests than those that do not own such equipment. This is another conflict of interest situation, where doctors are placed in a position where they may benefit from things which harm their patient. Doctors are ethically required to avoid such situations. Again, the AMA, states, or the federal government should forbid any such arrangements.
3) Prescription drugs in the United States cost significantly more than their equivalents in other countries. Market forces have no effect on price, because while drugs are protected under patent, the pharmaceutical company who developed the drug has a legal monopoly on its distribution and can charge whatever they want. This needs to change. More limited patent protections would allow the market to lower drug prices, while still protecting some measure of exclusive profit for the developers of new drugs.
Patent protections for prescription drugs need to have shorter terms, incentives for licensing the drug to competitors, and more difficulty re-patenting what is effectively the same drug. It should also be made easier for consumers to obtain prescription drugs from outside the United States, so that the market force of lower drug prices elsewhere can be brought to bear lowering drug prices here at home.
4) Malpractice concerns drive up health care costs in a number of ways. Most obvious is malpractice insurance, which due to high premiums costs over $20 billion a year, or nearly $30,000 per doctor. These costs could be greatly reduced by tort reform, which would alter the situations under which a patient may sue their doctor. Costs would be reduced even more, because of the subsequent reduction in defensive medicine.
There should be a statute of limitations on bringing malpractice suits, forbidding suits more than a few years after an alleged mistake was discovered. There should be limits on non-economic damages, preventing destructively large awards for non-quantifiable losses like pain and suffering. The idea of setting up a system of specialized health courts to hear malpractice cases should be explored. Doctors should not be immune to the consequences of their mistakes, but the cost of doctors' protecting themselves is passed on to all of us, and needs to be reduced.
I am by no means an expert, and I am not claiming that this plan fixes all our health care problems. But my estimate is that these changes could lead to over $200 billion in savings, about $700 per person. And with the exception of health courts, none of these ideas cost a dime in tax money, or require expansion of government power. There would be significant upset in the health care sector until adjustments could be made, but this would be temporary, and the long term benefits would vastly outweigh the temporary costs.
Administration costs are much higher in the US than in comparable countries, and make up a significant fraction of our remaining health care cost overage. I plan to address possible ways of lowering these costs in a later post. Some argue that a single-payer socialized system would lower overhead costs in the US, but this is very questionable. The United States government is not known for small and efficient bureaucracies, and a medical bureaucracy would be no different. Other possibilities must be considered. And there is still the question of health care for the uninsured, which I will also leave for a future post.
There is no need for a socialized medical system in our country if we want to lower costs. For that goal, there is no need for any taxpayer money to be spent at all. We can have reforms that will lead to massive cost reductions. All that's needed is for us to elect representatives willing to take the necessary steps.
posted by Stephen Collings at
8:30 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home