Healing The High Cost Of Health Care (Long Version)

(This is the long version. Click here to read the short version.)

What cost $2,000 at one hospital might cost $235 at another one, according to an NPR story. And that’s just a tiny glimpse; there are many more example in Steve Brill’s exposé in Time Magazine (online content is only available to paid subscribers; I read most of it in a paper version while waiting to get my car’s oil changed). And for many of us, none of this matters because we have health insurance. We only pay the deductible or co-pay amount. The insurance company negotiates their own price and pays without involving you.

But it’s a huge example of what’s wrong with the health care industry in our country today, and one reason prices are so high.

➤ Spending More For Less

Apparently, no one spends more per capita on health care than we United Statians, with only Luxembourgers coming close. And: “What may be less well known is that the United States still has one of the highest growth rates in health care spending”, according to this article. That would be fine if it meant we were the world’s healthiest or happiest people, but — on average — we’re not. We’re not even in the top 20 in one ranking (Bloomberg), and come in at #11 in another (Forbes). Another study ranked the U.S. last among 17 nations studied (Atlantic).

➤ Plans From The Left

On the left (liberals, Democrats), the focus for solving this health issue and others has been on the millions who aren’t insured — and who therefore can’t even afford basic health care. I was one of those people through most of my 20s and early 30s — generally the age group of men least likely to need health care. The thinking goes something like this: If everyone has insurance, then everyone can have health care. In my opinion, this view ignores the very real situation that we still will have to pay for it.

The Clintons attempted something like this in the early 1990s, hoping to require all employers to provide insurance to every employee, but failed to get traction both publicly and in Congress, even among Democrats. Some said it wouldn’t work, others said it wasn’t needed, and still others said it should have been a single-payer system.

In 2010 Barack Obama finally got his plan — a mix of mandates, subsidies, and other really complex requirements — passed through Congress, though much of it won’t take effect until later in this decade. The House has voted dozens of times to repeal it and one case went to the Supreme Court in a failed attempt to declare it unconstitutional. There are so many provisions and so many exceptions to most of the provisions that I doubt anyone fully understands the entire thing, and certainly very few people seem to agree on the efficacy of any one part of it. It remains to be seen how effective it will be in actually providing better health care to more people.

Obama’s last major opponent for President was Mitt Romney, who favored (and passed) almost identical health legislation as governor of Massachusetts, but was against Obama’s plan during the U.S. election. — on the grounds that it should be up to each state.

➤ Plans From The Right

On the right (conservatives, Republicans), there is currently a wide mix of suggestions. Newt Gingrich said earlier this month that the Republicans don’t actually have a plan to replace “Obamacare”, but some of them actually do. In fact, there’s one (.pdf file) hosted on Speaker.gov right now — and some of the planks are oddly similar to what Obama passed in 2010, such as allowing children to stay on their parents’ plans longer and ensuring that those with pre-existing conditions can get insurance.

But some of it is oddly different. For one, they want to “end costly junk lawsuits”, something that on the face of it sounds like a good idea — if doctors aren’t frivolously sued every day for doing their jobs, they’d have enough time to do their jobs and wouldn’t have to charge so much. While I’m in favor of the general idea of tort reform, most of the specific plans I’ve seen advanced actually just protect doctors (and other businesses) from lawsuits in general, regardless of whether they’re frivolous.

Republicans also want to allow people to purchase insurance across state lines, thus avoiding sometimes stupid per-state regulations. I’m not sure why anyone would be against this idea.

Additionally: “The GOP plan promotes prevention & wellness by giving employers greater flexibility to financially reward employees who adopt healthier lifestyles.” Um… Don’t employers currently have complete “flexibility” to reward their employees? Or do they mean the government will offer financial incentives? They didn’t say. Either way, I don’t think anyone would be against this either, within certain reasonable limits. Healthier people generally need less health care, and less costly healthcare.

They also want to “Encourag[e] innovative state programs” with federal incentives. I know conservatives are generally States’ Rights people and want the country to be governed in 51+ different ways with 51+ different sets of rules. I used to think this too, perhaps because I was raised in a conservative household or in mostly southern states, but it just doesn’t seem efficient or practical — what if we’d tried to fight World War II with 40-something separate state militias?

I still think there isn’t a one-size-fits-all plan for health care (or other hot-button issues — like gun control for example), but perhaps it shouldn’t be the relatively arbitrary (and somewhat archaic) geo-political state boundaries that separate us.

The very first plank in the Republican plan is probably the most desirable by every citizen, but also the most ambiguous: Lower Premiums. Well, duh. That’s what the entire thing is about. High premiums are the single most-cited reason why the uninsured don’t have health insurance; at least that’s why I didn’t have it for more than a decade — it was a choice between that or paying rent and other bills. The plans offered by my employers during those years had premiums that were more than my rent, electric bill, and phone bill combined, and I was struggling to make ends meet without paying for insurance.

But the Republican plan doesn’t say how it will lower them, just that it will. They surely aren’t suggesting government control of the prices; conservatives are against that.

Individual Republicans have their own ideas too, separately from the main party. Rand Paul, an eye surgeon and Kentucky Senator, suggests “capitalism”, which is what I thought we’d been doing this whole time. He says costs are so high because “capitalism has not been tried yet in health care”, and that most medical prices are “government-fixed”.

I’m not convinced that last part is true, since no price I’ve ever paid for health care is fixed by anyone. In fact, the price often vacillates wildly, depending on how you offer to pay. There’s Price 1, which is what the hospital or doctor’s office requests. It’ll always be different from Price 1 at any other nearby medical facility, strongly suggesting that the price isn’t “fixed”. Then there’s Price 2, which is what they’ll accept from the insurance company, almost without exception lower than Price 1. And Price 3 is an even lower number — what they’ll accept from you if they find out you’re paying cash. That’s just at one facility. Remember, all three prices will be different if you receive the exact same treatment (even from the same doctor) at another facility (see the linked stories in my first paragraph if my anecdotal evidence isn’t enough).

➤ Move To The Middle, Reasonable Ground

So where’s the answer? Is it somewhere in the middle? Yes, as usual. Clinton’s suggested mandates on employers doesn’t solve the issue; prices remain crazily high. Obama’s mandates on citizens leave the prices high as well. A single-payer system alone doesn’t address the high prices, unless it would be paired with some form of price fixing. Most of the right’s suggestions don’t address this either.

As always, both parties offer ideas and solutions that sound good, but seem to be molded out of rhetoric and sound-bites instead of getting to the root of the problem. When there’s a common problem, there should be a common solution. Both sides (in fact, everyone except certain members of the medical community and insurance companies) agree that there’s a problem. And both sides could probably be convinced what the actual problem is:

We’re paying too much for care that isn’t as good as it should be for that price.

We’re billed $10 for a single Band-Aid and $20 for one Tylenol pill (these are from actual bills my family members have received), which makes you wonder about the other prices too. When my daughter was in NICU, aside from all the other charges, the doctor billed $700 each day for a 5-minute visit.

➤ List The Prices

From way over here in the middle, it almost looks like the pricing scheme currently in place was designed to be confusing and tiring, with the intent that everyone just buy insurance and forget about the prices of medical care. But that sounds like a conspiracy theory, so I’ll go with: it seems more like vast incompetence and lack of communication. It stays this way because it just makes us tired to think about it. Almost no one (especially those with insurance) asks about prices when they need something medical in nature. If you do ask, the person you ask probably doesn’t know the price. “…Even doctors can have difficulty finding out what hospital care costs” — source.

Prices remain high because the average person doesn’t know the price until she gets the bill. This, in my opinion, is the single biggest reason prices are so high.

If you knew your next surgery would cost $2,000 at your usual hospital, but only $1,100 at another nearby facility (with the same doctor), would that make a difference in where you went — everything else being equal? Of course it would. And often the price difference is much more pronounced.

So my first suggestion is to fix the pricing problem. There’s no need for government price fixing (which Rand Paul says already exists), but perhaps someone can work out a requirement for hospitals and other care facilities to actually list their prices, or at least make them available up front for comparison.

Sure, there’s probably some ridiculous reason why this can’t or shouldn’t be done, but we can work that out. Remember, the goal here is to solve the problem, not to explain why it can’t be solved.

(Obviously, “$1,100 for X surgery” would be less than accurate because of incidental costs that will be different for each patient. But that’s what asterisks and disclaimers are for: “* Price will vary depending on these factors…”)

But transparency and truth in this regard will go a long way toward driving prices down.

➤ Insure the Uninsured

Another reason medical prices are high for some of us is that uninsured patients get treatment in emergency rooms, knowing the facility is required to treat them. Those costs have to be paid by the rest of us, so our bills are higher. This is one reason the left is focusing on insuring the uninsured. If those people end up with insurance, then my costs would (presumably) go down. But the overall costs would still remain high.

➤ Reasonable Tort Reform

This might be the most difficult to pass, since so many federal-level politicians are attorneys. But one reason medical bills are so high is the high cost of malpractice insurance. There are multiple views on this, including the two most popular: (1) doctors/nurses/hospitals make too many mistakes and should be held accountable through lawsuits, and (2) too many patients sue for simple mistakes, seeing only dollar signs, and it costs a lot for an innocent medical professional to defend herself.

Instead of making it harder for anyone to sue (which is what most tort reform bills seem to do), perhaps we can reasonably reduce the number of frivolous suits. I think there are several ways to approach this that would benefit everyone except attorneys, but don’t have the space to go into it here.

➤ More Sensible Shifts For Medical Professionals

There is probably some reason why nurses work 12-hour shifts and why doctors in internships often are on the job for 36 hours in a row, but I doubt those reasons are good enough — except in the case of all-out war or other large-scale emergencies. It’s widely known that tired people make more mistakes, are more easily distracted, and are more forgetful.

I suggest ending this crazy practice and limiting medical professional shifts to 10 hours, in the belief that it would reduce the number of mistakes and therefore the number of malpractice suits.

➤ Better Billing

At least one site suggests that billing errors are to blame for many of the high costs. This is easy to believe, because the bills are often cryptic to the layperson — it would be difficult to spot any errors because you don’t know what the items on the list actually mean. Also, for those of us with insurance, we usually don’t see any kind of bill until the insurance has already paid for it — at least that’s been my experience. In the midst of stressful and exhausting medical emergencies, we tend to not look too closely at it if the insurance company is paying the bulk of the cost.

This might partly be solved by my “list the prices” point above, but also by more clear billing. For example, we have one bill with three items in a row called “Medical Care”, each with different prices. Nothing more is said to indicate what those amounts are for, and they combine to be more than half the cost of our house. And another item: $3,095 for “medical equipment / supply” with no indication of what equipment or supplies could have cost that much.

(Note: the site I linked to here is selling its own services to help negotiate lower medical bills.)

➤ Build A Healthier Citizenry

This isn’t as easy as simply offering incentives to employers to encourage “healthy lifestyles”. But it’s also not as far-fetched as some might think, and it can be encouraged from the federal level, though most of the implementation would likely have to be at the state and local level of government.

In current rankings like the American College of Sports Medicine’s “Health and Community Fitness Status of the 50 Largest Metropolitan Areas”, there’s not that much difference between the lowest ranked cities (Oklahoma City and Indianapolis) and the highest-ranked (Minneapolis), and it comes down to common sense factors like public recreation facilities, availability of farmer’s markets, obesity levels in the populace, public smoking regulations, numbers of cyclists and joggers/walkers, and so on.

In some of the small towns where I’ve lived, there are more tanning salons than there are public parks, and sometimes no walking trails of any kind. In many grocery stores, the cash registers and front doors are surrounded by cigarettes and candy while the fruits and vegetables are hidden in the back or off to one side. Counting by volume, there’s at least twice as much soda in our stores as there is juice, and much of the “juice” is crammed full of added sugar. There are less-privileged neighborhoods in large cities where the grocery stores don’t even have fresh produce.

Certainly much of this can’t be (and shouldn’t be) fixed by simply laying down the law. But we can go a lot farther toward encouraging healthy behavior than we are now. And that will save a lot of money in the long run.

One place where federal regulation can help with health is on the corporate end, where the average citizen has little power. Things like stricter controls on commercial pollution, both in the air and water, are already making a health difference in our country, but haven’t gone far enough.

File Photo: Car Wreck
Wreck, Seminole, Okla.
(Copyright © 2003 by Wil C. Fry.)

➤ Focus On Safety

Someone may point out that health care costs aren’t only incurred by unhealthy people. Many of the costs come from trauma incidents — motor vehicle accidents and accidents of various kinds around the home. These happen to the healthy and unhealthy alike.

There are so many ways to help in this regard that it almost seems too easy — and really should be listed in another entry, but much of it comes at the expense of what we’d term “freedom”. For example, there are a surprising number of people who believe they have an intrinsic right to read and send text messages while driving.

Some suggestions off the top of my head:
* prohibit texting while driving
* allow phone calls while driving only on hands-free devices
* stricter DWI and DUI laws (alongside better treatment for chronic drunk drivers)
* improved signage near intersections (where most accidents occur)

➤ Further Reading

There are other suggestions for lowering prices as well, and explanations for why prices are so high, on the following web pages:

* The $2.7 Trillion Medical Bill: Colonoscopies Explain Why U.S. Leads the World in Health Expenditures (N.Y. Times)
* TIME’s Best Cover Story Ever: Why Are The Medical Bills So High? (Physicians News Digest)
* Hospital Charges Bring A Backlash: Patients objecting; state adds scrutiny (Boston Globe)
* Special Report: Why a Hospital Bill Costs What It Costs (Readers Digest)
* Baffled Consumers Seek Help With Rising Medical Bills (USA Today)

And more, with some easy internet searches…

➤ Account For (And Accept) The Disparity

And just one final food-for-thought…

In a sense, insurance of any kind is something like voluntary socialism: we each pay in, while some rarely need medical care of any kind and others need massively expensive care on a regular basis. We expect this in commercial care, but many of us fight the idea when it comes to government-run care: “Why should I pay more taxes because someone else is sick?” Yet that’s exactly what you do with insurance.

Studies show that “half of the population spends little or nothing on health care, while 5 percent of the population spends almost half of the total amount”. And a lot of those top-spenders are elderly. Do we just leave high and dry the elderly and those with high-cost medical needs? Or do we recognize that we’re all in this together and that the healthy have to pay more than their share to account for the unhealthy?

“The 15 most costly medical conditions in the United States accounted for 44 percent of total U.S. health care spending in 1996… Twenty-five percent of the U.S. community population were reported to have one or more of five major chronic conditions… Moreover, people with chronic conditions tend to have other conditions and illnesses. When the other illnesses are added in, total expenses for people with these five major chronic conditions rise to $270 billion, or 49 percent of total health care costs.”

And a lot of that is shared with the rest of us in our insurance premiums. (The reason you pay so much for car insurance even though you’ve never filed a claim is that other people are filing claims and you’re helping them pay for it.)

The left would say we all have to pitch in to help everyone else; the right would say to let charities or churches help out these weak and sick but that we shouldn’t pay for them with our taxes or insurance premiums. The answer to this is probably somewhere in the middle too, but it’s something worth looking into.

➤ Conclusion

It looks to me like the left has mostly ignored the biggest issue in health care: that prices are too high (and unreasonably high) for the quality of care that we’re receiving. And except for tort reform and a vague entreaty for people to be healthier, the right’s suggestions don’t address it either.

By all means, we should address some of the symptoms — as both sides want to do — but our efforts will ultimately fail if we don’t address the root causes of our health care’s high prices.

(You’ve just read the long version. Click here to read the short version.)

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