Heavy costs threaten our health system

Guest Opinion: Rick Diamond

“You are talking about socialized medicine,” said one of my close friends when I mentioned that today’s column was about the absolute necessity in the United States for universal health care.

The fact is that the biggest threat to this country over the next 15 years is not terrorism or global warming, but a medical health system that is now out of control. Health costs are now $2 trillion, or 15 percent of our gross domestic product, and are projected to double to $4 trillion by 2015. While Medicaid provides coverage to low-income women and children, more and more middle class citizens cannot afford insurance and run the risk of medical bankruptcy.

How do other industrialized democracies spend only 10 percent of GDP, yet provide health care to all of its citizens? Canada does it with a managed care program that gives its citizens the right to choose both their primary care physician and usually their specialists, all of whom are self-employed.

While there may be waiting periods for non-emergency treatments and some procedures, especially for the very elderly, are not covered, still Canadian snowbirds flock back home within six months to avoid losing their health insurance.

Why is our system so costly? There are many reasons — excessive administrative costs, inflated prices, fraud, malpractice insurance, lack of preventive medicine, substance abuse, unnecessary surgeries, and too many costly, but still unproven procedures.

Jim Nathan, Lee Memorial Health System’s president and CEO, has estimated that LMHS could conservatively save 20 percent of its entire operational expense if, instead of dealing with more than 50 insurance companies and a multilayered claim and payment system, there was one agency that handled all claims and payments. Nathan put his finger on a major problem — competition works in a free market economy like ours but it fails miserably in creating a sustainable, affordable health care system.

To quote medical care writer Maggie Maher, “Competition works well because comparison shoppers reward quality at a lower price. However, in health care, when a patient has a life-threatening illness like cancer or kidney failure he is not hunting for a bargain, in fact he will spend whatever it takes for a drug or a procedure that may only extend his life for a few months.”

The first obligation that the health industry has is to make money for its stockholders. That may mean hospitals not sharing proprietary information with other providers. For insurance companies it means spending money to eliminate those customers who present poor health risks. For pharmaceutical giants it means coming to the marketplace with new expensive drugs and then spending billions to promote them even though their added effectiveness is not yet proven.

In most communities hospitals compete with each other for the latest technological equipment, creating duplication that often results in both unnecessary capital costs and testing. Here in Lee County groups of doctors, recognizing that the reimbursement for office visits is low, have invested millions in medical equipment for tests and procedures, and an expanding LMHS may duplicate those efforts.

If competition does not work in health care, what is the answer? How can the nation afford expanding our present coverage from 42 million on Medicare and 55 million on Medicaid to 200 million more citizens?

First there will be a one claim and payer system in place to sharply cut administrative costs, there would be an emphasis on preventive care, more walk-in clinics, with extended hours, to avoid many unnecessary and costly emergency room visits, an added medical payroll tax for all employers, who could still voluntarily pay for additional benefits, a repeal of the section of the new Medicare D drug benefit legislation that prohibits the government from negotiating for lower prices and, most importantly, this would be a no-frills health coverage plan.

Without singling out any specialties, reimbursement levels for some procedures, and facility utilizations, have to be adjusted downward. Then the cost of various treatments, other procedures and drugs have to be evaluated and often eliminated if the cost is considerably higher and the added effectiveness minimal or unproven.

Under universal health physicians will be self-employed. They will, however, be afforded the opportunity to opt out of the system and treat affluent patients who may also wish to opt out just like wealthy Canadians who seek medical treatment in the United States.

Will the insurance, pharmaceutical and physicians’ lobbies, with billions at their disposal, continue to convince Congress that universal care is “socialized” medicine? And will those presently covered by Medicare, and other comprehensive insurance plans, resist change because almost all treatments, whatever the cost and effectiveness, are now available to them?

If that does happen, medical costs will continue to soar. In 15 years when Medicare has added 50 percent more beneficiaries, the whole system will be unsustainable and will come tumbling down under its own weight.

— Rick Diamond, a retired Fort Myers resident, served on the board of directors of the 600-bed Bridgeport (Conn.) Hospital from 1974-78.
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