US Healthcare Still Seeks the Right Balance of Private/Public Funding

The Organization for Economic Cooperation and Development tracks the total healthcare expenditure of the developed economies and compares these data indexed by per capita with the percentage of gross domestic product.  In 2012, the United States spent 17.7% of its almost 17 trillion dollar economy on healthcare.  Rounding out the top 20 largest budgets, the remaining nations spent 8.9-11.6% of GDP on medical care.  Do Americans live 33-50% longer and better to validate this increased cost?  Now is when the ideologues, pundits, lobbyists, politicians and professional advocates wage war.  There may be naysayers citing selected issues and numbers, but I challenge that we get better outcomes when you consider the summation of longevity, infant mortality, and number of disabled due to mental or physical frailty and death rates from cardiovascular events, cancer, trauma, substance abuse, liver and pulmonary diseases.  What we do have that is different from the rest of the world is healthcare virtually on demand despite the introduction of the various managed care plans.  Americans want access to their doctors; plans gain market share by competing on that basis.

The financial sustainability of our delivery system is in doubt, with or without Obamacare, which deals more with health insurance than with medical practice.  The baby boomers are here and the national demographics point to increased need for medical resources.  Doing business the same way is not an option.  Unfortunately, the discussion has been polarized on the national level to the let the free marker forces solve the problem versus the healthcare is a right and single-party payer for all sides that lob criticisms at each other across the financially struggling and physical ailing masses.  Making sense of what is true, who has credibility, and what should be done is daunting; particularly as a national initiative.  Many states have instituted reform, but extrapolation of their proposals to the entire country seems politically impossible and of uncertain efficacy.

But the Federal Government is the elephant in the room and is not going away. Between Medicare, Medicaid, the Veterans Administration, and Social Security Disability the Feds foot half of the health care tab.  Even the most strident free marketers can not set the clock back to the pre-entitlement era.  Economics has never been a precise science in less arcane areas than healthcare.  Let me suggest several unique aspects of medical practice in the US that suggest traditional economic principles and healthcare finances are an oxymoron.

The current market is “socialized medicine” to some.  Not only does the Federal Government directly fund 50% of healthcare, but the other half is indirectly subsidized by the Treasury as the cost of employee-provided coverage is tax deductible to employers. And the workplace is where the majority of non-directly funded Americans get their insurance.  The concept of providing patients more economically driven latitude in choosing their medical needs breaks down when the market is really determined between healthcare providers (the payees) and the insurance companies and governments (the payers).  Patients complain about copays, caps, and networks but that amount is trivial compared to their ignorance over the cost/pricing structure of the vast majority of their care.

Along the same line, there is a concomitant asymmetry of knowledge between providers and insurers of specific costs to determine rational pricing at the microeconomic level.  In a hospital or clinic, how do you allocate the indirect costs of depreciation, salaries, utilities, administration, parking, maintenance etc to the operating room, wards, cafeteria or pharmacy?  Given all the support services that are required to run the medical intensive-care units, how do you calculate a daily rate?  How much do you charge for IV fluids in a particular site when a myriad of disposables used throughout a healthcare network are bought by negotiation with a single provider, who may also may have packaged non-disposable hospital equipment in the negotiation?

Similarly, how do you deal with the moral paradox of physician service charges?  Nonspecialists will not be empathetic, but many specialties get paid for doing procedures.  Some of the hardest decisions I made as a cardiac surgeon were not to operate despite intense pressure by family and referring cardiologists that there was no medical alternative or the patient would die.  My rebuttal that I need not be the proximate cause of a fated event often was interpreted as lack of caring, although I viewed it as not wishing to inflict unnecessary pain and suffering.  This was never the best remunerative option.  And finally, in many settings doctors provide care where they should not have a conflict of interest in carrying out that care.  Emergency rooms, intensive care units, and radiology suits are often staffed by physicians under contract to hospitals who, because of potential individual liability, practice defensive medicine and order additional tests and imaging that are justified more by self-protective instinct than the financial benefit of the hospital or insurance provider.

There is no perfect answer to the best mix of public/private contribution to funding healthcare, nor the surrogate issue of market forces vs government largess in solving the evolving economic turmoil.  However, to my mind, a purely market fore based approach to our financial healthcare woes is not compatible with a commitment to providing a basic tranche of health care is a right for all citizens.  As Joseph Shrumpeter, the academic champion of capitalism’s benefits to society, once said “capitalism without failure is like religion without sin”.  The debris of creative destruction on outmoded technologies can be rectified, but the harms of inappropriate and insufficient medical care are not rectifiable.

By Norman Silverman, MD, with Ryan McKennon, DO and Ren Carlton

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According to the federal Agency for Healthcare Research and Quality (AHRQ), inpatient hospital costs account for nearly 30% of healthcare spending in the United States and are increasing by about 2% per year over inflation. This cost issue is a focus of the Affordable Care Act, which is accelerating the move away from fee-for-service to a single, diagnosis-related comprehensive payment, similar to Medicare reimbursement. Such payment systems punish unnecessary testing, prolonged hospitalization, and readmissions.

Is Medical Science Dead? - Art, Science, and Quackery

On April 8, 1966, Time Magazine caused a national commotion when the issue’s cover was emblazoned with the question, “Is God Dead?” The Time article was a measured consideration of how society was adapting to the diminishing role of religion in an age of stunning scientific advances. The writer posited that people would no longer believe things out of received doctrine, but faith would steadily succumb to the scientific method as mankind unraveled the truths of the physical world at the expense of the myths of the metaphysical.

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I strongly suggest that a pledge to read a synopsis of the philosophy of the 13th century Franciscan William of Ockham on a weekly basis be inserted in the oath of office taken by every government employee. Clearly highlighted should be his nominalist doctrine, Ockham’s razor, which avows that the best solution to a problem is usually the simplest. Pare to a minimum the number of confounding variables.

How do we treat pain? - Unrealistic Goals Leading to Opioid Addiction

In the weekend review from ACEP, two articles caught my attention. The first one was on new guidelines from the American Society of Addictive Medicine on the use of prescription medication to treat opioid addiction. These guidelines were created soon after the Centers for Disease Control and Prevention (CDCP) declared opioid use and resultant death as an epidemic. The second article refers to a study showing that pain is underdiagnosed and undertreated in the ED. This is the challenging dichotomy we live and work in.

Drowning in the Fountain of Youth - Genetic Predisposition

Recently I read in a New York Times magazine article that the 130th richest man in the United States wants to match his age with his Forbes magazine wealth ranking. His riches have not bought him a unique, scientifically-formulated elixir for immortality; nor is he a wacky proponent of perpetual hyperbaric oxygen chambers or cryogenics.

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Find and Replace: Genetic Engineering in Science and Medicine

Shakespeare’s Hamlet proclaimed, “What a piece of work is a man,” but now, almost half a millennium later, this could be amended to what a set of sequences is man. The nobility, reason, infinite faculty and admirable form can be attributed to the 20,000 or so genes that contain the chemical code for specific protein formation

HIPAA Protects Millions with Unintended Consequences

The Health Insurance Portability and Accountability Act (HIPAA) was endorsed by Congress in 1996 and was the last significant legislative legacy of Senator Ted Kennedy. It is enforced by the Office for Civil Rights and mandates nationally recognized regulations for use and/or disclosure of an individual's health information by a “covered entity”. Such an entity is a health plan, healthcare clearinghouse or healthcare provider.

Studies Prove Communication and Teambuilding Training a MUST for Surgical And Hospital Staff

Although individual judgment and technical dexterity are obviously important, best surgical outcomes, particularly for complex procedures, reflect the performance of many medical providers before, during and after an operation. Professionalism and a competitive business environment both stimulate medical centers to continuously focus on quality assurance programs, and to improve patient safety.

Death Rates Plunge Due to Following Protocols, Not New Technology

We are regaled in the lay press about new medical breakthroughs a novel cholesterol-lowering drug mimics the effects of a genetic mutation and improves lipid profiles when conventional treatment is ineffective; new cancer therapies are tailored medications designed to specifically attack tumor cells without the nonspecific toxicity of conventional chemotherapy; hepatitis C can be cured by short-term oral agents, not prolonged courses of parenteral infusions; mitral valves can be repaired percutaneously without the potential risks of extracorporeal circulation.

How to Grow Your Medical Practice Online

Here at Michigan Physicians Society, we’re dedicated to the financial betterment of physicians by providing continuing education and technology, along with an extensive network of other like-minded professionals in our space....
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