US Healthcare Most Expensive, Still Not the Best

By Drs. Karl Engelman and James B. Field for islandpacket.com –

Despite spending 17.8 percent of our gross domestic product, 50 percent to 90 percent more than Western European nations, the U.S. has lower quality, efficacy, efficiency, and by far, the least universal coverage, with 16 percent, or 50 million people, uninsured.

The Commonwealth Fund evaluated health care in Australia, Canada, Germany, Netherlands, New Zealand, Great Britain and the U.S. for quality, relative cost and equity (percent insured). The U.S. was least effective overall and excelled in no category.

U.S. life expectancy trails most industrialized countries. It rose from 69.8 years in 1960 to 78.2 years in 2009, but longevity rose even faster elsewhere, dropping the U.S. from 13th to 20th among 26 countries. Australia, Austria, Canada, Great Britain, Ireland, Norway and Switzerland now surpass us (80 to 83 years) after developing their national health care systems.

Why, despite spending the most, do we get such ineffective health care?

The National Academy of Sciences and other experts estimate that 30 percent of U.S. health expenditures are wasted (i.e., produce no medical benefit). Overuse of expensive, unwarranted and potentially dangerous diagnostic and therapeutic procedures (CT, MRI and ultrasound scans and cardiac isotope stress tests) contribute to waste, as do fraud, incompetence and excessive administrative expenses.

Regional per capita health care costs vary greatly and are often inversely correlated with quality of care. A remarkable article on comparative health costs by Dr. Atul Gawande in The New Yorker (June 1, 2009) documented expenditures differing by 100 percent in El Paso and McAllen, mid-sized Texas cities with similar demographics. Outcomes were superior in lower cost El Paso. McAllen patients underwent 60 percent more cardiac stress tests, 200 percent more implanted cardiac pacemakers and defibrillators, carotid endarterectomies, coronary artery stenting and coronary bypass operations. Based on Medicare evaluation, the five largest El Paso hospitals ranked better than those in McAllen in 23 of 25 criteria.

Physicians are legally and ethically obliged to tell patients when their actions are a conflict of interest. Studies show that non-radiologist physicians who own and profit from using their own radiological diagnostic facilities (CT, MRI and ultrasound scanners and isotope cardiac exercise testing) order these tests far more frequently than physicians referring similar patients to better qualified radiologists for testing.

Nine major medical specialty societies, recognizing the prevalence of abuses, published recommendations to limit the overuse of tests and procedures. To help limit such abuses and to prevent injury to themselves, patients should ask about proposed procedures, why they are being done, what potential hazards exist, whether they’ll be performed and interpreted with appropriate expertise and how the results, even if abnormal, will improve their care.

Medical societies, specialty boards and state boards of medicine must enforce professional standards. A recent study of all state regulatory medical boards again showed, as it has for the last decade, that the S.C. Board of Medical Examiners had the lowest incidence of disciplinary actions, suggesting that state regulation was extremely lax. The board chairman disagreed, stating the data proved that South Carolina had better doctors than the rest of the U.S. Unfortunately, experience suggests otherwise.

The Supreme Court’s validation of the Affordable Care Act is only an interim step in solving our problems. The law reduces costs little beyond limiting insurance company overhead to 20 percent of premiums paid, while mandating many needed benefits: extending medical coverage to half the currently uninsured, eliminating discrimination based on pre-existing conditions, permitting coverage under parental insurance to age 26 and establishing state-based risk pools so individuals and small groups can purchase insurance at reasonable rates.

Regretfully, for political reasons, S.C. Gov. Nikki Haley and other governors say they want to opt out of the needed state-related resources and expanding Medicaid coverage, even though the costs will be borne fully by the federal government for three years.

Additionally, the law doesn’t reverse the prohibition against Medicare’s negotiating drug prices, instigated by the committee chairman who left Congress to become CEO of the Pharmaceutical Research and Manufacturers of America.

Savings from the Affordable Care Act will be consumed by the cost of covering half the uninsured, still leaving 25 million Americans without health insurance, and it will do nothing to lower the high billing and collection expenses of doctors, hospitals and other providers.

Significant reduction of health care costs won’t occur until we emulate all other industrialized countries and institute single-payer national health care, reduce administrative costs at all levels and curtail inappropriate overuse of medical resources.

Canada’s total overhead costs (hospital, physician, insurance administration and other providers) are only 16.7 percent of total health care costs versus our 31 percent. Annual per capita health care costs in Canada, the second highest spending country, are only 65 percent of ours, partly due to much lower overhead ($307 versus $1,059).

In 2010, U.S. health care cost $2.6 trillion, with overhead consuming $800 billion. Reducing overhead costs to Canada’s level would save $575 billion, sufficient to cover all uninsured people at a current cost of about $8,900, still leaving savings of about $130 billion. Additional savings would accrue from eliminating hidden unreimbursed care subsidies contained in insurance premiums.

At their 50th reunion, graduates of a pre-eminent national medical school voted 95-5 for advocating the U.S. institute single-payer health care. Coming from 41 states, they represented the entire spectrum of political opinion.

What do they understand that those in opposition need to learn?

Drs. James B. Field and Karl Engelman are graduates of the Harvard Medical School and emeritus professors of medicine from the Baylor College of Medicine (Fields) and the University of Pennsylvania (Engelman).