The more our government has been involved with regulating and directing health care in the US the more expensive that care has become. New, expensive technology: hardware, pharmaceuticals, modes of treatment, are all aspects of modern medical care and wonderful because they keep people alive longer. Those are the results of expensive research and development. Just that matter of keeping people alive longer is expensive. Note I keep using the word “expensive”.
Time magazine’s Stephen Brill looks at current health care costs and pricing, the money-go-round, in “Bitter Pill: Why Medical Bills are Killing Us”. He asks,
Where’s all that money coming from? And where is it going? I have spent the past seven months trying to find out by analyzing a variety of bills from hospitals like MD Anderson, doctors, drug companies and every other player in the American health care ecosystem.
Brill says we spend 20% of our GDP on healthcare. Of course, he also notes that “The Bureau of Labor Statistics projects that 10 of the 20 occupations that will grow the fastest in the U.S. by 2020 are related to health care.” Hence, we might conclude, health care is a growth industry in America. That’s not how Mr. Brill sees it. He says,
Employing all those people in the cause of curing the sick is, of course, not anything to be ashamed of. But the drag on our overall economy that comes with taxpayers, employers and consumers spending so much more than is spent in any other country for the same product is unsustainable. Health care is eating away at our economy and our treasury.
Growth industry, eating away… these things might be contradictory, except for how the system works. That is really big and Brill looks at that system from the point of view of people’s hospital bills, which they never look at with any care, and he does not look at offering any real insight. He is also looking at rates of payment for services and procedures; it is all very complicated which makes for a complicated set of complaints. Apparently, this is the biggest article in Time’s history, according to Holman Jenkins in his short piece in the Wall Street Journal. His main complaint against Brill’s point of view is this: “what he describes—big institutions dictating care and assigning prices in ways that make no sense to an outsider—is exactly what you get in a system that insulates consumers from the cost of their health care.”
As Brill notes, if we do look at our bills we find them incomprehensible and outrageous. Most people do not pay their own hospital bills or most of their hospital bills. According to Brill, poor people do and they don’t, which is another piece of complicated contradiction (read the article). For the most part, patients have no incentive to look through bills item by item and figure out what is real, what is unreal, what is reasonable or not reasonable in charges and fees. Yet,
The real issue isn’t whether we have a single payer or multiple payers. It’s whether whoever pays has a fair chance in a fair market. Congress has given Medicare that power when it comes to dealing with hospitals and doctors, and we have seen how that works to drive down the prices Medicare pays, just as we’ve seen what happens when Congress handcuffs Medicare when it comes to evaluating and buying drugs, medical devices and equipment. Stripping away what is now the sellers’ overwhelming leverage in dealing with Medicare in those areas and with private payers in all aspects of the market would inject fairness into the market. We don’t have to scrap our system and aren’t likely to. But we can reduce the $750 billion that we overspend on health care in the U.S. in part by acknowledging what other countries have: because the health care market deals in a life-or-death product, it cannot be left to its own devices.
Fair market? We are not talking about a free market, not at all, as that ended a long time ago. Medicare began in 1965 with a premium of $3 for anyone 65 years old or older. Old people had medical bills three times that of the young, and Medicare was intended to correct that problem, lift that burden. Life expectancy was 67 years for men and 73 years for women. Today, if I am reading this CDC chart correctly, if a person lives to age 65, he can expect to live another 19-20 years after that on average. Life expectancy at birth has not improved all that much in the US, mostly because of crime and accidents. However, if you can make it to 65, you have the great chance of living a very long time. That’s modern medicine for you. I can find no direct correlative statistic, since seniors do not have medical expenses in the same way, but reading statistics from the CDC and the USDHH, generally medical expenses for those over the age of 65 are half of what is spent on medical care in the US. If we really wanted to cap medical expenses in the US, then the kind of cap that would make the best sense in a “Modest Proposal” way would be to execute everyone who comes into the hospital with a major health problem who is over the age of 65 years. Nip it in the bud, that problem of extending life through medical means.* Who can afford it?
If the Brill piece is too long, too anecdote-laden for you, Chris Conover at Forbes has Five Take-Aways from the Brill article. His first is my favorite, that “Healthcare is a Cesspool of Crony Capitalism” and he notes from Brill:
According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington. That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington.
Part of that might just be lobbying for favorable treatment of drugs being vetted by the FDA, but I also suggest that what is happening in Washington with Medicare and Obamacare is not without the influence and guidance of the “health-care-industrial complex”. Why does Brill and why do others think that more government in the health-care “industry” will bring down costs? In his conclusions, when he says “When you follow the money, you see the choices we’ve made, knowingly or unknowingly,” who could disagree? He deplores that, but what he proposes will actually bring us more of the same.
*Note: I spent part of yesterday at the bedside of a dear friend who is dying of cancer at the age of 100 years old. She says that no one should live that long; it is too hard. No, neither does she see an alternative. “It wasn’t my choice.” She does not blame her doctors. Who would make you die when they can help you live? Looking at modern medicine from her perspective, in a hospice bed, with a sharp mind in an impossibly withered body, it is a wonderful horror what modern medicine can do. That’s another story.