Surrendering the Future to Health Costs
Robert J. Samuelson's Washington Post column was reprinted in the Deseret News this morning (find it here). The title is about the failure of the so-called SuperCommittee, but the article is really about the devastating opportunity costs of doing business as usual in American health care. The whole article should be required reading for every American voter. We need to get health system reform done, correctly and now. Here are some excerpts:
Ultimately, the only way to control federal spending and deficits is to suppress the upward spiral of health costs. These are already the budget's largest single expense (27 percent in 2010 compared with 20 percent for defense), and their continued rapid growth, combined with the scheduled introduction of Obamacare, will soon bring them to nearly one-third.
It remains urgent. Americans know that expensive medical care is squeezing non-health government programs and, through higher employer insurance costs, take-home pay. But they console themselves that U.S. health care "is the best in the world." Among experts, this has long been debatable. A new study from the Organization for Economic Cooperation and Development (OECD) in Paris suggests that the debate is over: It's not true.
As societies grow wealthier, people want — and can afford — more health care. Still, American health spending (about $7,960 per person in 2009) is in a league of its own. It's 50 percent higher than Norway's ($5,352), the next costliest. U.S. spending is more than double Britain's ($3,487), France's ($3,978) and the OECD average ($3,233).
Despite this, Americans aren't notably healthier than people in other advanced countries, the study reports.
Indeed, by some indicators, Americans get less medical care than people in other advanced countries. The number of practicing doctors (2.4 per 1,000 population) is less than the OECD average (3.1 per 1,000), as is the number of annual doctor consultations (3.9 per capita in the United States versus 6.5 for the OECD average).
What propels U.S. health spending upward? The OECD's answer comes in two parts: steep prices and abundant provision of some expensive services. In 2007, an appendectomy cost $7,962 in the United States, $5,004 in Canada and $2,943 in Germany. A coronary angioplasty was $14,378 in the United States compared with $9,296 in Sweden and $7,027 in France. A knee replacement was $14,946 in the United States, $12,424 in France and $9,910 in Canada. Knee replacements in the U.S. were almost twice as common per 100,000 population as in the rest of the OECD. So were MRI exams and angioplasties.
This is a devastating portrait. At times, the U.S. health care system delivers the worst of both worlds: pay more, get less. Unfortunately, the message isn't new. America's fragmented and overspecialized health system maximizes returns to providers — doctors, hospitals, drug companies — but not to society.
One way or another, if we don't act, we're surrendering our future to runaway health spending.
The American way of life is threatened by how we do health care business. The pretense of markets in medicine creates perverse incentives for providers to deliver inefficient, mediocre care in order to get top dollar. We spend more because we have a poor quality and inefficient health care system. Health care is not a commodity efficiently distributed via market forces. How do I know that health care is not a market commodity? What market commodity is less expensive when it is better quality? What market commodity is based upon $1.5 trillion in tax revenues? What market commodity is not in greater demand when its price is low (no one buys an appendectomy because it is on sale)? How can market forces work when the buyer must depend upon the seller to determine what to purchase? How can market forces work when the buyer is unable to shop because the buyer does not know what to purchase, what a quality purchase would be, and is often incapacitated even if informed? Business as usual in American health care is a rip-off of historic proportions and is killing American patients and will kill our federal and state governments and ruin our businesses and economy if we do not get reform done correctly and soon. The Utah Healthcare Initiative proposes a state-based model for health system reform, which begins with an option that Mr. Samuelson failed to mention in his article. Have Congress pass the States' Right to Innovate in Health Care Act. The reader is invited to review a draft of this legislation which can be found under the 'Solutions' tab on this web-site. The Act would allow each state to draw down federal funding for comprehensive health reform at the state level, as long as the state met minimal requirements. States which fail to enact their own reform would get business as usual health system function, presumably under 'ObamaCare'. We propose comprehensive health system reform, detailed elsewhere on the 'Solutions' tab of this website, for Utah.
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Dr. Joe Jarvis