Our medical-industrial system is long overdue for a real shakeup

Recently I was sent this commentary on the issue of health care costs.  It seemed like a pretty good summary of the problem to me, though it didn’t delve into solutions or the current controversy about the Affordable Health Care Act.  In our country, we’ve built up a huge medical-industrial system that can do lots of good but at a huge cost.  It seems that we are on the brink of a “health care-cost bubble” because we are now dragging down economic growth with continued double digit rising insurance rates.  Individuals, small businesses, corporations, and government entities are all crying for relief from this health care cost burden.  An example of the medical-industrial complex is in the area of sleep apnea treatment.

A splashy story about a successful company in San Diego, ResMed, was published in the Union Tribune recently.  Not much was said about their medical devices but their CEO  has “spent $10 million so far for art in the company’s 18 locations around the world”.  Apparently it’s felt that these millions spent for art help to inspire the workers.  This is a small example of the extraordinary spending in the medical-industrial complex.  Multiple profitable health care businesses are benefiting from the “piggy-bank” bulging with growing health care dollars.  Many MD’s in top administrative positions in non-profit hospitals make more than one million dollars.  Now, I understand that most of the drug companies, device makers, glass and steel hospitals, procedure doctors, medical directors, CEO’s, scanners, robotic devices, etc. are wonderful, but just not wonderful in their current excesses.  The challenge is to change incentives in order to bring costs down.

There are a number of possibilities for improvement, and one of the smartest of the innovators is Dr. Donald Berwick.  This Harvard pediatrician recently had to step down after about a year and a half as the head of the Center for Medicare and Medicaid Services.  He was a recess appointee by President Obama and had no chance for a permanent appointment by the US Congress.  Kaiser Health News recently noted the top five accomplishments at CMS by Dr. Berwick.  His leaving is certainly a set-back to accelerating reform, however he remains a nationally respected promoter of quality improvement.

The Hastings Center, a non-profit which deals with ethical issues, has published a Health Care Costs Monitor containing several articles with different takes on the issue.  One by ethicist Daniel Callahan deals with the cost of end-of-life care, a problem in every ICU in every hospital in the USA.

Recently the New Yorker reported that, “Yet, strange as it may sound, the federal government does not have a spending problem per se. What it has is a health-care problem. The cost of most budget items typically rises at a reasonable rate, if at all, but the cost of Medicare, Medicaid, and the tax subsidy for employer-provided insurance has been rising much faster than everything else…”

Dr. Berwick has shown that there’s good evidence that we can still maintain and improve quality while trimming costs.  But do we have the political will?  Every dollar spent is “benefiting” someone.  In the equation are the patient, doctor, administrator, nurse, other providers, clinics, hospitals, device manufacturers, drug companies, lobbyists, research tanks, politicians, pharmacies, nursing homes, unions, AARP, insurance companies, Wall Street, etc.

Some doctors and medical specialty societies are addressing the problem of overuse of technology.  These physicians look at the research evidence and encourage limiting unnecessary testing and treatment.  Although this isn’t rocket science, it is quite hard to implement change in both lucrative medical procedures and the desire by some patients to “do everything.”

It seems like a huge bucket of largely poorly controlled health dollars is being sprinkled around with often ineffective and wasteful administrative attempts at control.  Let’s hope we find ways to get a much less leaky bucket soon.  Our medical-industrial system is long overdue for a real wake-up and shakeup.  Here’s an example from an interview with Stanford economist Victor Fuchs.

Jim deMaine is a pulmonary physician who blogs at End of Life – thoughts from an MD.

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  • NewMexicoRam

    I’m a primary care doc and I have artwork in my exam rooms for the patients to enjoy.

    I went to Hobby Lobby and had some prints framed for about $60 each.

    Guess that shows where I’m at in the pecking order.

    • kjindal

      $60 each??? you got ripped off – a guy came into my office and sold me van gogh & picasso framed (plastic) replica prints for like $25 each!

      so much for the millions and billions a la Bill McGuire (backdating scandal guy from United HC)

  • Chiked

    When I found out the CEO of my hospital made over a million dollars a year, I just about threw up. “Non profit hospital”….yeah right. What we need a grassroots doctor revolt from this corporate hospital chicanery: Cash only, no insurance and lawsuits by arbitration only. In return you my personal dedication to see you live a healthy life. 

    • http://twitter.com/Hootsbudy John Ballard

      Over the top executive compensation packages in so-called “not for profit” organizations don’t pass the smell test. After working for one of those places and following the health care reform arguments for the last eight years I have come to the conclusion that many, if not most of those non-profits are the functional equivalent of money-laundering operations for the many for-profit operations feeding from their trough. 

      In the same way that anchor stores attract customers to shopping malls, the big non-profit campuses are surrounded by endless ancillary for-profit operations, from small practices to group clinics and specialty centers (ortho, heart, cancer, surgical, etc.) all feasting at the same table. And that’s before adding in medical device and supply vendors, food service, landscaping and parking services…the list is endless. And the bigger the campus, the fatter the revenue potential. 

      Those highly compensated CEOs need the business acumen of a corporate executive to juggle the system in a way that maximizes tax dollars and competitive insurance contracts while doing as little damage as possible to their image in the community. Oh, and delivering health care is also somewhere on the list.

  • buzzkillersmith

    The  doctor states that rising health care costs drag down economic growth.  This is not really accurate.  Perhaps he means to say that rising health care costs decrease the resources available to purchase other things or that rising health care costs decrease workers’ take-home pay.  Or that much of what is spent on health care is wasted. Those would all be true statements. Another true statement would be that current health-care inflation rates are seen by many  to be unsustainable. But rising health care costs are actually an important increasing component of aggregate demand and, especially during the current depression, help to increase total output.
    You can probably get away with such howlers at this blog, but you need to sharpen your spear a bit if you plan to post for non-physicians.

    • James deMaine

       Really?  I didn’t realize that we were in a growing economy!  Health and insurance costs are surely slowing growth outside the health care industry.  Please share your data with us.  Yes, health costs are booming and are pushing up revenues for many portions of the medical-industrial system.  So I suppose one could look at the wasteful excess health expenditures as stimulus dollars to favor the health system over roads, bridges, schools, and non-health care jobs.  Kind of pork spending at the trough of health care dollars.

  • http://twitter.com/livewellthy Stewart Segal

    Until we address the record profits posted quarterly by the insurance companies, we will never control the rising cost of healthcare.  Insurance companies’ greed takes a huge bite out of every healthcare dollar!  Talk about waste, paying an insurance company CEO in excess of $10,000,000 a year to create a paperwork and administrative jungle every patient and doc must journey through in order to recieve or deliver care is the most wasteful thing I have ever seen!!

  • James deMaine

    I’d suggest watching a 9 minute video clip of Dr. Donald Berwick discussing his April 11, 2012 article in JAMA http://jama.jamanetwork.com/multimediaPlayer.aspx?url=http://bcove.me/3t9t31mo
    His article and video summary discusses the  ways to address and eliminate waste in US health care – with a admonition to doctors, nurses, pharmacists and others to become strong leaders. 

  • http://onhealthtech.blogspot.com Margalit Gur-Arie

    If you add all the excesses from every quarter, from payers who skim their 20% right off the top, to hospitals who sink unknown amounts into real estate beautification and creative revenue enhancing activities, to medical goods sellers who gouge prices, I would estimate that about half of our health care dollars are not used for health care.

    And I know this is unpopular, but unless we come up with a single fair fee schedule and end the arm wrestling matches between corporate entities over who gets more gravy, while small independent practitioners and most patients are left out in the cold, there will be no positive changes.
    Physicians are probably best positioned to spearhead such change, but for one reason or another, they are not, and this is something I cannot understand.

    • southerndoc1

      Agree with everything you say.

      But how can practicing physicians spearhead any change?

      The medical societies are all run by docs who have the leisure time to do so. They benefit from outrageous fee schedules, facility fees, and so on. They’re chowing down at the trough and have no interest in changing the system. At least in the AAFP, venality and stupidity are running the show, and I’ve hit a brick wall there time and time again.

      Any suggestions?


      • http://onhealthtech.blogspot.com Margalit Gur-Arie

        Yes, I do, but it won’t be easy. I believe I wrote the same things here several times before. You need to organize. If your societies are no longer representing you, create a bold new one. Stand together and put aside the differences between specialties for now, because you have larger foes who couldn’t care less about your specialty.
        If you think that the future of medicine is being redefined as we speak, and not for the better, surely even practicing physicians can find a couple of hours here and there for a good cause. You just have to find enough of them to pitch in ( I am certainly willing to help). And if your message is true and selfless, your patients will do the rest.

        My latest and largely futile rant on the subject is here http://onhealthtech.blogspot.com/2012/05/rationing-our-finite-resources-with-our.html

        • LeoHolmMD

          Organizing only yields results when there is a bargaining chip. Which one does the physician have? In a monetized system, you either have to have power or cash. Physicians and patients are outgunned on both fronts. Organizing could help, but it certainly hasn’t yet. If we organize to deal with the monetary issues, it can be considered illegal (even though EVERY other player in the Health Care game does it).

          • http://onhealthtech.blogspot.com Margalit Gur-Arie

            You have power. You have lots of power. You can see that power every day in your office when folks defer to your life-altering recommendations without a second thought and you can see it in every survey ever conducted which ranks doctors as the locus of trust for most people. You should use this power to do good before it gets stripped away by the “industry”.

            If a “doctor” grassroots organization stood up to fight for the benefits of patients everywhere, you will be multiplying that power like a laser beam hitting so many mirrors, because millions of patients will support you. And they vote.

    • James deMaine

       Thanks, great blog.  To readers, please click on Margalit’s blog:  http://onhealthtech.blogspot.com/.

      • http://onhealthtech.blogspot.com Margalit Gur-Arie

         Thank you, appreciate your kind words.

  • davemills555

    Say what you will about the Patient Protection and Affordable Care Act, it has started a long overdue process to scrutinize a highly corrupt industry. For decades, this outrageously dishonest industry has proven that it refuses to police itself. It’s time to get out the microscope and take a long hard look at how to begin the process of breaking up this unscrupulous criminal enterprise. Health care in America is nothing more than 1930s style organized crime. This crime spree has lasted long enough. It’s time to bring in the shock troops and break this party up once and for all.

  • http://profile.yahoo.com/BRDB4JQJCWCARQUXHEBJBSGNSE arnold

    The proposed IPAB was not a death panel. It was meant to be a panel to control health care costs, for unnecessary procedures, e.g. surveillance PET/CT scans for cancer. Surveillance PET/CT scans have no impact on health care outcomes. However, they are routinely performed and paid for at a cost of 4,000-7000 dollars per capita. Those who clamored to avoid oversight of this waste, were interested in only thing, their pocketbook. Thus the creation of fear. Until this mindset disappears in our medical society, physicians are doomed wallow in their financial gain, and vilified as they are, for unscrupulous resasons, as they may appear.

  • http://twitter.com/OurH_careSucks John Lynch

    There’s a consistent tone in these comments of doctors as victims of corporate profiteering, which I guess is to be expected on a physician blog. There’s plenty of physician collusion in all this, however. Indeed, none of it is possible without physicians signing the treatment orders that generate the revenues that pay for these excesses.

    America’s medical community could do much to truly “reform” our medical-industrial complex, starting with more vigilant policing of rogue and incompetent doctors responsible for much of your malpractice premiums. State licensing boards are generally a joke and the move to larger group practices means more docs will refer patients to specialists they know are incompetent or impaired because they’re part of the same group.

    Then there’s patient demands to “do everything”. Just because patients see something advertised on TV and ask for it doesn’t mean their doctors have to comply. The fiduciary obligation is to protect patients, even from themselves. Patients need to learn to “Just say no” to overly-aggressive doctors looking to pad their incomes – it’s no coincidence the highest paid specialties are those with the most unneeded tests and procedures – and doctors need to learn to “Just say no” to overly-aggressive patients. If it means they go elsewhere, so be it.

    Perhaps the greatest point of leverage is the fear that drives so much patient anxiety to “do everything”. Physicians are in a unique position to educate patients to fear the risks of overly-aggressive treatments as much as they fear disease and death. Intensive end-of-life care is a classic example that could be used as a teaching moment. The MGH study of lung cancer patients showing those who rejected intensive end-of-life treatments actually lived 33% longer than those who didn’t could be a jumping off point for a much broader array of dubious treatment interventions at all stages of life.

    All of this, of course, takes time. And that’s in ever-decreasing supply for doctors and patients alike. We somehow have to find a way to make the time, however, if we’re ever to get control of our medical mayhem.

  • John Key

    The only thing I agree with here is your basic premise:  the system is badly broken.  But this post and the resultant thread of comments illustrates how broken it is and how hopeless the prospect of helpful reform seems to be.

    Dr. Berwick as the medical messiah to lead us out of this?  Not by a long shot in my opinion.

    IPAB not a death panel?  Yeah, right.  We had death panels 40 years ago before universal availability of hemodialysis….we can and probably will have them again.

    Physicians are undoubtedly a smart group of folks but the “herding cats” analogy definitely applies to us, as the diversity of opinions and suggestions shows.

    My solution is to get the government and health insurance industry out of healthcare, but that is not a very practical idea either; it won’t happen in my lifetime.

    Maybe it is hopeless after all.

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