It is clear that healthcare in the US is more costly than in any other place in the world. We spend 18% of the gross domestic product on healthcare and our outcomes are no different than those of other industrialized nations who spend less than half that amount. How did we get here and what are we to do about it?
Recently, an article appeared in the New York Times that explored the increased costs of particular procedures in the US today. In the Times piece, Elisabeth Rosenthal provides insight into possible reasons for the elevated cost and the ballooning trillion dollar healthcare deficit. Certainly, insurers, hospital systems, industry and physicians all play a role in the high cost of care in the US. In general, US healthcare systems tend to test more (and the tests are much more expensive here) and provide heroic care in the late stages of life (and this care may not have a real impact on longevity or quality of life). Ms Rosenthal uses the colon cancer screening procedure known as colonoscopy as an example of a test that has widely variable cost. Depending on where you get your test the price tag can vary by thousands of dollars–but in other countries it can cost as little as a few hundred dollars.
How does this happen?
Ms Rosenthal certainly makes many good points in her article and gives us all pause–industry, hospitals, insurers and physicians all share some responsibility. However, one important group that she does not mention as a contributor to the escalating healthcare costs are the trial lawyers and the American Association for Justice (previously known as the Association of Trial Lawyers of America)–you may can guess why the name change.
First and foremost, I believe the lack of tort reform and the highly litigenous environment that has been allowed to thrive in medicine in the US is a major contributor to escalating cost. Physicians must often order more tests than necessary in order to avoid frivolous lawsuits and utlimately find themselves practicing “defensive medicine”. Unfortunately for US citizens, most politicians are attorneys by profession and they tend to “look after their own.” There has been little activity on tort reform–the trial lawyers are an incredibly powerful lobby. Medical lawsuits have been allowed to continue unchecked and settlement amounts continue to rise to astronomical levels. Many lawyers have made fortunes by “chasing ambulances”
Secondly, as physicians begin to see revenue fall and medicare/insurance reimbursement are cut, many turn to free standing surgical centers to increase revenue. By owning the “facility” and treating the patient there instead of the hospital, the physician group is able to recoup a “facility fee “ that is normally collected by the hospital. In addition, medicare billing (which often makes no sense whatsoever) will pay higher fees if the procedure is considered “outpatient” or is performed in an ambulatory surgical center. In addition, academic institutions often are reimbursed at higher rates in order to offset the cost associated with training young doctors. A more standardized approach to determining payments and reimbursements for procedures and tests must be put in place. Medicare and CMS reform is essential to this process. Currently the application of common sense appears to be quite absent from the government regulation and medicare payment determinations. The system is full of waste and redundancy. Although an entirely new “coding” system for medicare is due to be launched soon–I am certain that this new process will solve none of our current problems.
Our healthcare system is sick. Until Washington stops playing politics and calls all parties to the table for talks of compromise, reform and action nothing will change. The system cannot be fixed by only dealing with one component. We must strive for tort reform so that physicians can do what is in the best interest of the patient rather than what must be done “in case” they are sued one day. Politicians must stand up for the American people and stop being swayed by the trial lawyer lobby. Standardized, equitable and sensible payment systems must be put in place so that the system is not abused by moving procedures from one location to another in order to receive higher payments. This is a big job. There is no easy fix. But we must commit to finding a solution so that the US can continue to claim to have the best healthcare in the world.