The 5 Real Reasons American Health Care Is So Expensive and Ineffective

The debate is heating up over the future of health care in America, but this is a subject I’ve been thinking about for a long time. As a publisher in the health field, a new member of the board of a very large hospital (the Lehigh Valley Health Network), and a health “consumer” who has helped my mother navigate the system, I’m starting to understand where we have gone wrong. And we have gone wrong. Unless we address these five issues, we will never really fix the situation, only complicate it even further. The problem is clear: We spend more money than any other country on health care, and we have some of the worst “outcomes.” Why?

1. We have too many specialists and not enough primary-care physicians. Dr. Robert Martensen, in his new and very excellent book A Life Worth Living, confirms what I have always suspected and heard: People who rely on primary-care physicians as their doctors live longer, healthier lives and have fewer procedures done (in other words, spend less money). But we have a shortage of primary-care physicians in this country, because we reward specialization by paying specialists more money (thus, more people want to become specialists).

2. Doctors in the United States are paid 5 times more than doctors in other countries. In other countries, becoming a doctor is seen as a way to serve others and make a decent living. In America, it’s seen as a way to get rich. How did this happen? The same way that things went so wrong on Wall Street—a combination of generally accepted greed, deregulation, and entitlement confused with capitalism.

3. Hospitals are incentivized to make profits from filling beds, insurance companies are incentivized to deny payment to people who need it most, and pharmaceutical companies are incentivized to sell more drugs. If people were healthy and relied on preventative medicine, it would be much harder for hospitals, insurance companies, and pharmaceutical companies to make ever-increasing profits and grow every year. Growth, rather than healing people and helping them live longer and healthier lives, is equated with success.

4. We the people are so fixated on the knee-jerk debate of socialism vs. capitalism, private sector vs. public sector, big government vs. “small” government, that we have forgotten our responsibility as humans. It’s much harder to really dig in and understand all sides of a problem, and come up with solutions, than to listen to “pundits” spouting off and shouting at each other from cardboard platforms that don’t really mean anything. The real issues are much more complicated and convoluted than any ideological stand. And hospitals, insurance companies, and pharmaceutical companies would much rather people stay on superficial and polarizing topics than look behind the curtain. Here is a direct quote from A Life Worth Living:

“In America, which we think of as the realm of “private” medical care, approximately 50 percent of our total expenditures on health care come from the public purse. Moreover, our public half is as large in percentage of gross economic output, and larger in per capita expenditure, than what citizens of ANY country spend, public and private combined, on their health care. Yet in terms of average life expectancy, “quality-adjusted life years, and so forth—U.S. rates lie at or near the bottom in comparison with economically advanced countries and on a par with some developing nations, such as Costa Rica.”

5. We are in denial about death. Because we are constantly looking for “positive outcomes” as opposed to recognizing that we are all mortal, there is an intricate dance of denial, miscommunication, and false hope that leads to artificially extending life in ways that are painful, degrading, and expensive. The truth is we all die. Some people have better deaths than others. Our goals should be to live life fully and die quickly and peacefully—all, hopefully, surrounded by a loving family.

Until we face all five of these issues, we will continue our grotesque track record of being the biggest spenders and the biggest losers when it comes to how we care for our health, and, ultimately, how we live and die.

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18 Responses to The 5 Real Reasons American Health Care Is So Expensive and Ineffective

  1. LH, a 60-something May 18, 2009 at 9:34 am #

    All great points. The point you glossed over, however, is that preventive care under a primary care physician is much less costly and with universal care would reduce overall medical costs . For example, it is much less costly to treat an early stage of breast cancer discovered during routine mammogram or an annual physical than an advanced stage, which might only be discovered at an advanced stage because the patient had inadequate or no medical coverage and did not have regular preventive care.

  2. CW May 18, 2009 at 9:47 am #

    Excellent take Maria….I concur. We treat on the basis of who can afford it with unrealistic promises and expectations. We have been given a false premises that we can fix things. It is like a car. To get the best life out if it you must maintain it well, and treat it with care; it also depends on what kind of car you have. Some are born (genes) as a BMW and some are a KIA. That is reality no amount of money or health care will make a Kia a BMW… it is just not going to happen. Each are prone to their own problems. Bodies age and break down- it is the hard and sad truth of it. No one can take a hard abused body and restore it like nothing ever went wrong. We want humans to perform miracles and that is not in our realm of talents. We also expect that there should never be any adverse outcomes to treatment or that as humans mistakes are not acceptable. Both or these are false premises. The note on entitlement is not reserved for those with money either. It brings to mind the many who call and have called 911 to complain about fast food orders, and some of them repeatedly. Even with explanations they still wanted someone to ‘make’ someone else do things they way they wanted it. But what does anyone expect? We are a nation who accepts endorsements from actors for everything from what medicine to take, make-up to wear, hygiene products to use to who is qualified to be in political office. What is wrong with our healthcare system is systemic to what is wrong with us. Entitlement says it all and vents itself in either greed, stupidity, or both.

  3. Esther Confino May 18, 2009 at 9:52 am #

    You have made all the important points and understand that allowing the private insurers to influence our lawmakers will not produce an effective healthcare overhaul. You made a good point about 50% of health care being paid for by the government, making it possible for the private insurers to make huge profitsl Help all the Medicare for All/Single payer advocates to get what we need. Write to them, call them, promote rallies. Our legislators are being paid off by the medical-industrial complex.

  4. CWilson May 18, 2009 at 10:15 am #

    I reply about the 50% of medical care coming from the Gov. As you can see it has not reduced the cost of health care for those with private insurance. What I would like to know is if half of the money is being paid out for medical expenses is government tax monies how much of the population is being served? Is this huge amount covering or giving care to at least half of the nations population? I would think not. Then how does ANYONE think that the government would do a better job at health care then the private sector?

    A lot of that money is going to private doctors in the form of those on Medicaid and medicare… it is government bureaucracy in the private sector and the huge expense in the VA hospitals spending that 50%. They do some good work there is no doubt but they also waste an enormous amount or money and resources. This comes first hand from being with my father for the past 20 years in his dealing with the abhorrent VA hospital in GA. If you want to see socialized medicine just go down to a clinic or VA hospital in your home town. You will not be such an advocate after that. If our ‘healthcare’ system is broken and half of the money is our government tax monies then there is something wrong with the government branches of the handling of it. No small output I am sure due to the healthcare being paid for every government employee. We need to seriously scale back on those on the government payroll- we cannot afford so many employees.
    We must also be accountable to what we do to our own bodies. You are what you eat, and if you eat highly processes foods you are doing much more harm then good.

  5. SP May 18, 2009 at 10:17 am #

    There is purposely a shortage of doctors, period. The fewer there are the more they can charge for their services. Medical care is inelastic. People will pay whatever the charges are so that they can live. If there are more MD’s each would get a smaller piece of the pie (greed). It is the same with the drug companies. I can order drugs from Canada for much less than what I would have to pay in the US. They are exactly the same drugs though the drug companies would like you to believe that they are somehow inferior. Drug companies get research and development grants from the government (you & I). Their excuse for the outrageuosly high prices that we pay for drugs is because research is expensive. We are in effect paying twice for what the drug companies produce. We are being raped by the medical communities and the drug companies and it is made possible thanks to our greedy legislators tho are owned by the medical, insurance and drug companies

  6. Brian Dale May 18, 2009 at 10:22 am #

    Good points, and I agree. But there is a major point left out. The laws of economics apply whether we have public system or a private system, just like the law of gravity applies whether you flap your wings or not. Health care inflation continues to outpace the general rate of inflation because the cost of health care is separated from the decision to purchase it. The people making the decisions are the doctors, who as you point out are incentivized to order too many tests and prodedures; and the patients, who don’t bear the cost of health care directly. Whatever system we adopt will certainly not curb the costs unless it addresses this critical point.

  7. key typer May 18, 2009 at 11:00 am #

    As a type 1 diabetic, I have been a health care “consumer” for years. I’ve endured years w/o coverage and had some pretty bad coverage as well. Even w/ “good” coverage, costs are simply crazy. I tried for years to cut down on the number of “specialists” I saw, only to be told that my primary care doctor “couldn’t” help me w/ certain (minor but necessary) things because of the location on my body or b/c the insurance company required him/her to refer me out!! This not only caused me a great deal of time, money and frustration, in one case a wait to see a “specialist” damaged my health. So, anyone who says they don’t want government saying what docs should/shouldn’t do for patients, should take a closer look at their insurance policies b/c a bean-counting beaurocrat is already filling that position!!

  8. Christy H. May 18, 2009 at 12:30 pm #

    Not all doctors are motivated by greed. In fact, the majority are not. Doctors leaving medical school today will earn only a fraction of what doctors earned a decade or more ago. Doctor salaries are going down, yet medical costs continue to go up. Med students today pay significantly higher tuitions (even adjusting for inflation) than in the past, have to take more tests, go through longer residencies, and pay more fees than in the past, and have to expect lower salaries. Yes, they still get a good salary when compared to national averages of the general population, but for what they go through, doctors earn it. BTW, residents do pretty much the same work as a full attending physician but get paid less than 50K a year. Given how many hours they work, that’s barely above minimum wage per hour.

    I do agree that we need more primary care physicians. GP’s and pediatricians are woefully underpaid compared to other specialties. The highest paid specialties: opthalmology and dermatology. Not what most would expect. Those fields deliberately manipulate that by only accepting a few residents a year.

    One point not mentioned: liability/malpractice insurance. Some specialties such as Ob/gyn have such high liability insurance in some states that it’s hard to recruit doctors to do the job. Reform is needed to control the costs of lawsuits and what cases really are legit. Now, I’m not saying that if your doctor is negligent that you shouldn’t have some recourse. But, you must understand that your doctor is human and not an omnipotent miracle worker. Some things are out of their control, and/or are simply unknown factors.

  9. Ron V May 18, 2009 at 12:34 pm #

    Its easy to condemn the “system” rather than look for the root causes. I have a little different take on the issue.

    1. Maybe we have more specialists because the generalists are being priced out by the high cost of malpractice insurance. You need to earn more to pay the increased expenses. Also (before I get into my anti-lawyer rant), when was the last medical school opened in this country? The law of supply and demand and the high cost of education has a lot to do with doctors wanting to make money.

    2. Doctors are in high demand and incur much debt just to open their doors.

    3. Insurance companies are incentivised to deny claims to those who need it most? Easy to say, but hard to prove, other than anecdotally. Insurance companies are businesses and are entitled to make a profit (just like the evil oil companies that earn an “exhorbitant” 8%). Maybe you should talk to the stockholders and tell them that they shouldn’t take a dividend, that they should risk their life savings with no reasonable rate of return. BTW, most of these stockholders are your neighbors, your mom and dad, anyone who is in a 401k or mutual funds is that evil stockholder who wants your money. What is your retirement money invested in, and do you expect it to go up over the years?

    4. Yes, we have forgotten our responsibilities to take care of ourselves. We have a high rate of morbidity, not because healthcare is unavailable, costly, or ineffective, but because we have a high rate of smokers, obesity, diabetes, laziness, stress, and overall careless living. We have developed the attitude that says: “It can’t be my fault and there must be someone I can sue over this!”

    5. Yes, I suppose we should just roll over and die when we a serious illness.

    Needless to say, I think you are not in danger of being accused of critical thinking, Maria. Just keep dealing in emotion and it’ll all be fine.

  10. Victoria LeForestier May 18, 2009 at 12:48 pm #

    Kudos to Ron V May 18 post. He gets it. You obviously had no Doctors in your family, Maria as i did. The ones who dedicated their lives to their patients, went without sleep, gave up their family life and wrote off a ton of bad debt. They deserve every penny.

  11. Laura Allen May 18, 2009 at 2:35 pm #

    The last independent GP in my county just “retired” last week…or rather, he was forced out of business, as he stated in his letter to the newspaper, by sky-high malpractice insurance, and the high cost of doing business with the insurance companies and Medicare. Every other physician practice in our county has been bought out by the hospital, who has been bought out by a huge conglomerate. It’s hard to get primary care when there aren’t any primary care physicians. The only way to see one here is to go to the emergency room and hope to see an intelligent resident who isn’t overworked and sleep deprived.

  12. EMoore ( May 18, 2009 at 3:11 pm #

    Yes, I agree that health care is far too costly and must be changed. I am a retired RN and I’ve been on both sides of the fence. There is good and bad on both sides. There are those engaged in health care that are in it for the money; there are those using the system that uses it because they don’t have to pay for it. Both of these groups are irresponsible.

    The only ‘cure’ for both of these is education at an early age about the sanctity of the body and that medicine is a last choice treatment and then to be used with the careful guidance of good and honest doctors. Common sense needs to be a key word in health care and everyone needs to know that for every minor ailment a drug isn’t needed.

  13. Bill G. May 18, 2009 at 8:14 pm #

    When hospitals became profit making institutions and the drug companies recovered their research costs through the costs of drugs, the whole system fell apart
    I purchase drugs in Mexico in original packaging for $14. They would cost me $74 in the U.S.

  14. Carolynn McLaughlin May 19, 2009 at 1:25 am #

    I love your view, and the straightforward way that you make your points. As a person who has tackled health issues for 4 decades and who must take 4 medications per day to maintain equilibrium, I thank you. Let people disagree! Maybe they haven’t been behind the health 8-ball.

  15. Carol May 19, 2009 at 12:13 pm #

    Add’l things to also consider, coming from someone who works in the health care system:
    1. There is a great deal of waste that never used to exist, e.g. everything is disposable now; very little sterilizing and reusing. It also is unfortunately part of the change in our culture – too much paper wasted & too much throw-away.
    2. Preventive medicine should be a priority for everyone – lifestyle.
    3. Gov’t regulations create a huge amt of paper work which takes time. Time=money.
    4. Many hospitals feel they have to look like luxury hotels in order to compete or because they think people want this – priorities.

  16. SH May 19, 2009 at 7:28 pm #

    As Winston Churchill said about democracy, so we can say about socialized medicine, “it’s the worst sort, except all the others that have been tried”. As a native of the UK, now living in the US for 25 years and working in health care as an RN, I can attest to that. Insurance companies and for-profit business has so place in my industry. My son was recently hospitalized for 4 days for an appendectomy. I requested an itemized bill of charges. The “standard” charge JUST FOR THE SURGERY AND HOSPITALIZATION NOT INCLUDING THE SURGEON AND ANETHESIOLOGIST, WAS $56,OOO however, the facilty involved had agreed with my insurance company that $12,000 would cover it … what is wrong with this picture? What is wrong is that people with no, or lousy insurance will be stuck with the inflated $56,000 and face financial ruin, when actually $12,000 would cover it.
    And yes, the doctors and residents I work with bust their ass’ and make great sacrifices for their profession. My 16 year old son is considering Med School and my take-home to him is, “you’ve gotta really want it, ‘cos man, it’s tough”
    And yes, our system’s lack of focus on Primary Care is madness. I work in the community visiting the chronically sick in their homes and witness every day how a lowly paid RN can prevent thousands of dollars in hospitalization by identifying problems early. In my field, our government/Medicare has their act together, they are generous with home visits ‘cos they know the saving.

  17. cw May 20, 2009 at 11:50 am #

    that is the crux of so much of it. Without insurance you have no barganing price. That is just SO WRONG. That is what needs to be changed. That is true price fixing and isn’t that against the law somewhere. How can you logicly say that someone owes $$$$$ much but paitent b only has to pay $$. for the same service.? That is the ONLY reason we have insurance. We can’t even aofford to use it becuase our deductable is so high. it is for some thing that we may get down the road… how pathetic is that? I personally think insurance companies are just scam artists and no better than thugs taking protection money. If one was to break down and try to exsplain it to a novice we would see how ludicrous it really is. Not to mention it is subsidized by our tax monies where the risk is so high no insurer would take it on. ( i.e home owners insurance in hurrican, and other prone areas).

  18. Fela December 28, 2012 at 7:44 am #

    I don’t know what type of insurance opnoits you have in your area but out here in Canada we have BCAA (British Columbia Automobile Association) and they also offer medical insurance for trips. You might want to look into something like that from your area. Some travel agencies might offer a decent plan as well. Just make sure you ask them specifically if you will be covered in BC. BCAA is who I go to when I travel to the US because the US doesn’t accept our policies.I hope you have a great trip. I just got back from Whistler today and we had some great boarding, it snowed the whole time but visibility was great.

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