CRI Focus Areas

Who is at Fault for High Healthcare Costs?


I want to point out an article by Elisabeth Rosenthal  in the New York Times "The $2.7 trillion Medical Bill" ( which many people have been asking me questions about. While almost everything said is true, it is neither the whole truth nor the overarching truth.      When you disconnect cost from service, two things happen: First, fees escalate, and second, consumption escalates.  The increased fees and increased volume distort the laws of supply and demand. However, if you allow for innovation in medicine with the incentives of profit and rewards for ambition, you get amazing medical advances, and colossal failures in the same effort. Yes, failing is as much a part of the free-enterprise system as success.        The author cites "institutional" greed and "provider" greed, but ignores the greed of the consumer who wants all the medical services possible for free. I prefer to look at "incentives". She simplistically lumps a lot of the costs on doctors fees which you and I know to be untrue, largely, with a few egregious exceptions facilitated by Workmans Compensation manipulation.      The point about general population health has been repeatedly debunked, yet she repeats it. For example, if you get acute renal failure from peritonitis sepsis (inflammation of tissue which protects your organs) in England, you can be scheduled for dialysis about 8 weeks after you are dead;  but now you are no longer an unhealthy statistical member of society. England can claim a healthier population because of fewer people on dialysis, because they died before treatment was initiated. This is commonly done to distort World Health Organization stats. Dead people are never sick. Weak premature babies are registered as stillborn and do not get resuscitated, therefore do not suffer infant death. In England you often dont get cancer treatment in time so you do not become a sick old person.                 Ms. Rosenthals statement about Medicare and Medicaid having little control over payment rates is partially true, at least in regards to Medicare Part A, which is about payments to hospitals. Her statement is completely untrue in regards to Medicare Part B, which is about payments to doctors.  If you did not already know, virtually all insurance companies base their payments on Medicare rates.      There are two areas not addressed which I consider critical. The first is that the author (who is clearly biased) believes that health care should be free to all, arguably the root cause of the many problems with our system.      The second is the slow erosion of the ethics of the doctor decision-makers ( other than the patient themselves). We can readily be faulted for failing to consider the whole patient and the financial implications of our recommendations and services. This part saddens me. We have been told that we need to be more businesslike and we have behaved accordingly, seeking profit. Rhetorically I would ask why every sophisticated, mature national health care delivery system in the civilized world has evolved a separate, parallel private system as well, except Canada where it is illegal. Oddly in Canada you can buy separate private health insurance but have to go the U.S. to get the services. All in all an interesting article, but no answers for me. Chris Casscells, M.D. Director, Center for Healthcare Policy Caesar Rodney Institute


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