algosdoc
07-29-2007, 12:34 PM
The problems we have with our healthcare system are outlined below. There is greed and self serving decisions on nearly every front of health care. Only through some means of centralized control will we be able to curtail expenditures, provide reasonable basic universal healthcare, and finance it through taxation. And before I am accused of being a bleeding heart liberal, let it be known I am a conservative Republican. These are some of the major barriers to reasonable cost healthcare in our country, the US.
1. Hospitals cost the medical system approximately 40% of all funds available, even though they deliver the minority of healthcare. This is partially due to overregulation, partially due to threats of litigation, partially due to having to absorb the cost of indigent care, and partially because of the movement from a patient care model to a business model in which $$$ trump patient care issues. The latter explains why non-profit hospitals build $200 million campuses with soaring marble facades in their lobbies. Think about how much money is coming out of your pocket everytime you see fine art or cascading waterfalls on their premises or prime time advertisements on TV for their services. They are very big business and harbor not only clout in Washington, but are quite protectionist about their turf. They drive up the cost of health care tremendously by lobbying to have procedures covered only in hospital settings and actively attempt to destroy the formation of potentially competing ambulatory surgery centers.
2. Pharmaceuticals. The typical markup of a pharmaceutical over the raw material cost is on the order of 2500-10000%. Of course they have expenses of research (except the generics, that are virtually all profit and no research), marketing (way way too much spent on direct marketing to patients and on $100,000 sales reps to shake down doctors in order to induce prescribing of their drug), but a large amount goes to profit. The pharmaceutical industry hands down over the past 20 years has had a higher profit margin than any other industry in the country, averaging 18% per year. The pharmacy lobby has been able to influence congress into restricting sales of their products back to Americans through 3rd countries and to enforce ridiculously long patent laws that provide virtually a generation of patent protection for their drugs. Oxycontin in Canada costs 1/3 as much for the exact same identical drug as here in the US, and the Canadian government does not subsidize these drugs. In other countries there is even more of an outrageous difference in cost. There is little accountability regarding each company hyping their new drugs at 3-10 times the cost of the competing drugs and often with only statistical but not significant clinical evidence there is any improvement in outcome or lessening of side effects. Generic manufacturers in the past had prices that were 1/3 or less for their products, but now with laws and insurance rules specifying generics must be used or otherwise the patient will pay a very high premium, the generic manufactured drug prices are not too far removed from the name brands. If the generics price their drugs the same or even just 1$ lower than the name brand, they get the business. They have no research costs or marketing costs at all and are enormously profitable.
3. Physicians have become entrepenures at the expense of their patients. Doctors own labs, surgery centers, parts or all of hospitals, imaging centers, pharmacies, PT and ancillary services, etc and have lost sight of their core function. Of course the 12 years of college, medical school, and residency should create some financial reward, but financial pressures of treating those without insurance or those that voluntarily decide to do without insurance takes its toll on a practice. Family physicians make an average of $140,000 in many areas while nurse anesthetists make $200,000 in the same area. A perfusionist for cardiac cases with 2 years of college may make $150,000 and physical therapists may make upwards of $130,000. Others in the health care profession without nearly as much education are now frequently supassing the physicians in income and doctors feel pressure to own more medical services in order to keep their doors open. One of the most dangerous new arenas for doctors to make money is selling narcotics out of their offices. There are companies that will set up a turn key computerized operation that virtually removes the pharmacist completely from the loop. While this may appear attractive initially, the pharmacist serves as one of the gatekeepers for control of the use of narcotics and when abuse is recognized by the pharmacist, the physician is then notified. Taking pharmacists out of the loop is short sighted, will ultimately cause drug errors and serious reactions, and may augment substance abuse and diversion in our society.
4. Insurers make astronomical profits and are inefficient in the expenditure of patient funds. 30% of dollars paid to insurers to purchase health insurance are spent on Taj Mahal skyscraper offices and on outlandish executive bonuses. The CEO of Anthem, the largest health insurer in the country has made between $26,000,000 and $74,000,000 the past several years. This is money out of your pockets that is lining the pockets of those that are trying to limit what services you can purchase with your money. Comparatively, Medicare has an administration cost of 4%. Therefore, due to inefficiency and avarice, 1/4 of all private and corporate insurance healthcare dollars are wasted.
5. Lawyers. Trial lawyers of America exist in a greater population than in any other country. There are more trial lawyers (university trained in law and with law degrees) than in all other 176 countries of the world combined. The US population is 6% of that of the world and yet we harbor more than 50% of all trial lawyers. This breeds competition and severe distortion of fees. For instance most patients believe their lawyer gets 1/3 of any "awards" made by juries, but the final percentage is actually much higher. Lawyers have additional charges for copying documents, preparing other aspects of trial, etc. that in some cases drive the overall percentage to well over 50%. Lawyers can simultaneously charge 5 clients an hourly charge of $250 each for the same pro forma document with a $15/hour secretary typing in different names and addresses. Lawyers drive up the cost of health care when litigation is filed, then dropped for no reason, leaving the malpractice carrier with hundreds of hours of legal fees and the doctor with a permanent record with the national practitioner databank and the state medical boards. Lawyers force a change in health care practice that errs on the side of excessive caution, unnecessary tests, and precautionary measures physicians take to CYA. Lawyers also are permitted to file endless claims whether frivolous or not without any punishment for such. They use the stupidity of jurors to derive malpractice claims instead of the much more rational administrative judicial system used in Canada. There is also no risk for patients filing malpractice claims in our system since we have more than enough lawyers to jump on any claim that looks even remotely litigatable.
6. Manufacturers and middlemen cause astronomical markups in anything labeled "medical" even they sell the exact same product for another purpose. Medical Huber needles from one company sell for $8 each while the same needle sold to veternarians costs $0.56. It is all about greed and seeing just how much we can get for each product regardless of the relative or absolute value of that product to society. Rather than manufacture reusable products that could be re-sterilized as are most surgical instruments, because the manufacturers can now command a steady income stream by simply marking the products "Single Use Only", hospitals and ASCs must dispose of these products after one use, even though there is absolutely no reason they could not be resterilized.
The only way to control the many forces that beset the US medical system making it the most expensive in the world is through control of costs, universal acquisition paid for by taxation, restriction of tort law, elimination of excess patent protection, limit patient access and services to a national medical system, and permit private insurance beyond the base medical system. Would this create a two tier system? You bet it would, and this would be a far better solution than our current system. I prefer a Quebec system (two tier) to the Ontario system (cannot go outside the single system...ie. you cannot obtain an MRI at your own cost even if you wanted to). We need very strong political players to make this happen and we need a chorus of patients demanding change.
1. Hospitals cost the medical system approximately 40% of all funds available, even though they deliver the minority of healthcare. This is partially due to overregulation, partially due to threats of litigation, partially due to having to absorb the cost of indigent care, and partially because of the movement from a patient care model to a business model in which $$$ trump patient care issues. The latter explains why non-profit hospitals build $200 million campuses with soaring marble facades in their lobbies. Think about how much money is coming out of your pocket everytime you see fine art or cascading waterfalls on their premises or prime time advertisements on TV for their services. They are very big business and harbor not only clout in Washington, but are quite protectionist about their turf. They drive up the cost of health care tremendously by lobbying to have procedures covered only in hospital settings and actively attempt to destroy the formation of potentially competing ambulatory surgery centers.
2. Pharmaceuticals. The typical markup of a pharmaceutical over the raw material cost is on the order of 2500-10000%. Of course they have expenses of research (except the generics, that are virtually all profit and no research), marketing (way way too much spent on direct marketing to patients and on $100,000 sales reps to shake down doctors in order to induce prescribing of their drug), but a large amount goes to profit. The pharmaceutical industry hands down over the past 20 years has had a higher profit margin than any other industry in the country, averaging 18% per year. The pharmacy lobby has been able to influence congress into restricting sales of their products back to Americans through 3rd countries and to enforce ridiculously long patent laws that provide virtually a generation of patent protection for their drugs. Oxycontin in Canada costs 1/3 as much for the exact same identical drug as here in the US, and the Canadian government does not subsidize these drugs. In other countries there is even more of an outrageous difference in cost. There is little accountability regarding each company hyping their new drugs at 3-10 times the cost of the competing drugs and often with only statistical but not significant clinical evidence there is any improvement in outcome or lessening of side effects. Generic manufacturers in the past had prices that were 1/3 or less for their products, but now with laws and insurance rules specifying generics must be used or otherwise the patient will pay a very high premium, the generic manufactured drug prices are not too far removed from the name brands. If the generics price their drugs the same or even just 1$ lower than the name brand, they get the business. They have no research costs or marketing costs at all and are enormously profitable.
3. Physicians have become entrepenures at the expense of their patients. Doctors own labs, surgery centers, parts or all of hospitals, imaging centers, pharmacies, PT and ancillary services, etc and have lost sight of their core function. Of course the 12 years of college, medical school, and residency should create some financial reward, but financial pressures of treating those without insurance or those that voluntarily decide to do without insurance takes its toll on a practice. Family physicians make an average of $140,000 in many areas while nurse anesthetists make $200,000 in the same area. A perfusionist for cardiac cases with 2 years of college may make $150,000 and physical therapists may make upwards of $130,000. Others in the health care profession without nearly as much education are now frequently supassing the physicians in income and doctors feel pressure to own more medical services in order to keep their doors open. One of the most dangerous new arenas for doctors to make money is selling narcotics out of their offices. There are companies that will set up a turn key computerized operation that virtually removes the pharmacist completely from the loop. While this may appear attractive initially, the pharmacist serves as one of the gatekeepers for control of the use of narcotics and when abuse is recognized by the pharmacist, the physician is then notified. Taking pharmacists out of the loop is short sighted, will ultimately cause drug errors and serious reactions, and may augment substance abuse and diversion in our society.
4. Insurers make astronomical profits and are inefficient in the expenditure of patient funds. 30% of dollars paid to insurers to purchase health insurance are spent on Taj Mahal skyscraper offices and on outlandish executive bonuses. The CEO of Anthem, the largest health insurer in the country has made between $26,000,000 and $74,000,000 the past several years. This is money out of your pockets that is lining the pockets of those that are trying to limit what services you can purchase with your money. Comparatively, Medicare has an administration cost of 4%. Therefore, due to inefficiency and avarice, 1/4 of all private and corporate insurance healthcare dollars are wasted.
5. Lawyers. Trial lawyers of America exist in a greater population than in any other country. There are more trial lawyers (university trained in law and with law degrees) than in all other 176 countries of the world combined. The US population is 6% of that of the world and yet we harbor more than 50% of all trial lawyers. This breeds competition and severe distortion of fees. For instance most patients believe their lawyer gets 1/3 of any "awards" made by juries, but the final percentage is actually much higher. Lawyers have additional charges for copying documents, preparing other aspects of trial, etc. that in some cases drive the overall percentage to well over 50%. Lawyers can simultaneously charge 5 clients an hourly charge of $250 each for the same pro forma document with a $15/hour secretary typing in different names and addresses. Lawyers drive up the cost of health care when litigation is filed, then dropped for no reason, leaving the malpractice carrier with hundreds of hours of legal fees and the doctor with a permanent record with the national practitioner databank and the state medical boards. Lawyers force a change in health care practice that errs on the side of excessive caution, unnecessary tests, and precautionary measures physicians take to CYA. Lawyers also are permitted to file endless claims whether frivolous or not without any punishment for such. They use the stupidity of jurors to derive malpractice claims instead of the much more rational administrative judicial system used in Canada. There is also no risk for patients filing malpractice claims in our system since we have more than enough lawyers to jump on any claim that looks even remotely litigatable.
6. Manufacturers and middlemen cause astronomical markups in anything labeled "medical" even they sell the exact same product for another purpose. Medical Huber needles from one company sell for $8 each while the same needle sold to veternarians costs $0.56. It is all about greed and seeing just how much we can get for each product regardless of the relative or absolute value of that product to society. Rather than manufacture reusable products that could be re-sterilized as are most surgical instruments, because the manufacturers can now command a steady income stream by simply marking the products "Single Use Only", hospitals and ASCs must dispose of these products after one use, even though there is absolutely no reason they could not be resterilized.
The only way to control the many forces that beset the US medical system making it the most expensive in the world is through control of costs, universal acquisition paid for by taxation, restriction of tort law, elimination of excess patent protection, limit patient access and services to a national medical system, and permit private insurance beyond the base medical system. Would this create a two tier system? You bet it would, and this would be a far better solution than our current system. I prefer a Quebec system (two tier) to the Ontario system (cannot go outside the single system...ie. you cannot obtain an MRI at your own cost even if you wanted to). We need very strong political players to make this happen and we need a chorus of patients demanding change.