The Eighth Factor Driving Up Health Care Costs


By Samuel Metz, MD

The Bipartisan Policy Center, quoted in the Oct. 24 PBS NewsHour program, “Seven Factors Driving Up Your Health Care Costs,” missed the most expensive factor making the US the world’s costliest health care system, yet with the worst record in public health in the industrialized world.

Financing our health care system with American private insurance is an ongoing disaster. It leaves millions of us with limited or no access to health care. It consumes $350 billion in administration that might otherwise provide real health care. This factor dwarfs the effects of everything mentioned in the report.

Five of the factors described in this report (fee-for-service payment, increasingly older populations, demand for better treatment, limited information about best practices, and hospitals dominating a market) are also challenges in other industrialized countries. Yet these countries provide better care to more people for less money than we do.

A sixth factor in this study identifies a “strength”–the cost of patients seeking care is low. That's because no other industrialized country uses high deductibles, high co-pays, excluded conditions, and lack of coverage for medications to discourage patients from seeking care. Apparently these more advanced countries believe that patients should not decide if they (or their family) need health care before seeing a physician, but that a physician should decide if a patient needs care after she sees the patient. Cost-sharing, or “skin in the game,” increases health care costs and worsens patient outcomes.

Yes, because barriers to seeking care are so low, patients in other industrialized countries see their physicians two to four times as frequently as we Americans do, and spend more time in the hospital. Yet these patients ultimately spend half what we spend, and they are healthier for it. Clearly, encouraging patients to seek care immediately brings costs down, not up, and improves public health.

What about the seventh factor, the ever-present spectre of lawsuits? Americans do pay far more to cover malpractice premiums and fund defensive medicine than our more civilized neighbors. But the $55 billion spent on premiums and unneeded treatment because of defensive practices is 2% of our $2.6 billion health care spending. We do need tort reform, but don’t expect tort reform to bring health care to more people or perceptibly reduce patient costs.

In contrast to this study, peer-reviewed comparisons of the US health care system to other industrialized countries identify one critical factor making ours the world’s worst: our insurance system that denies access to the sick, makes the healthy pay premium prices, and diverts premium dollars away from patient care and into administration.

American health care is not the industrialized world’s worst because our population is sicker, older, or abuses tobacco, alcohol, or food. Japan has an older population and their care is less. Americans have the lowest rate of smoking in the industrialized world (except for Sweden), and our high obesity rate is rapidly being approached by every other country. And what about the costs of these poor habits? The $350 billion lost to financing by American private insurance is more than what we spend on tobacco and obesity-related diseases combined.

American health care is not the industrialized world’s worst because our nurses, doctors, and hospitals are the worst in the world. On the contrary, wealthy people come to the US for some of the most advanced care in the world. The problem is that our citizens can’t access that care because they don’t have the money that wealthy foreigners do.

And that’s our more important problem in health care. Unlike the rest of the civilized world, we are alone in rationing care by the amount of money you have. Yes, we have the best care that money can buy, but if you have no money, you get no care. It’s that simple.

That points to the simple solution neglected by the Bipartisan Policy Center. A publicly funded, nationwide, universal health care system with no financial impediments to patients seeking care would provide comprehensive health care to every American for less money than we spend on health care now.

Eventually, each of the factors listed by the Bipartisan Policy Center deserves attention; correcting them as best we can will improve efficiency. But if we want guaranteed lifetime access to care for our families, reduced costs to us, and better results, we must focus on the big enchilada, not the small potatoes: eliminate the American private insurance industry and create publicly funded universal care.

To help make this a reality, please visit Health Care for All-Oregon. We are an alliance of over 60 organizations who want this vision of better health care to start right here in our state. Find out how you can become an advocate for your family’s health care needs, how you can play a vital role in changing our health care system for the better, and help us turn Oregon into a shining example of cost-effective comprehensive health care for everyone. Join us!

Samuel Metz is a private practice anesthesiologist, HCAO representative from the Portland chapter of Physicians for a National Health Program, and founding member of Mad As Hell Doctors.

Cross posted at The Daily Kos