The critical factors driving up American health costs

The Bipartisan Policy Report titled “What is Driving US Health Care Spending? America’s Unsustainable Health Care Cost Growth” issued in September lists seven factors increasing American health care costs. The “fiscal cliff” debates include many of these arguments.

While these factors do indeed play roles in American health care, almost all are at work in other industrialized countries, all of whom provide better care to more people for half what we spend. Good intentions aside, the report overlooks critical (and dysfunctional) characteristics of American health care and instead distracts itself with factors never mastered by any country (including ours).

The report was prepared under the direction of former Senate majority leaders Tom Daschle (D-S.D.) and Bill Frist (R-Tenn.), former Senator Pete Domenici (R-N.M.) and former Congressional Budget Office Director Dr. Alice Rivlin. With such participants, the report certainly qualifies as bipartisan, but unfortunately the final product does not qualify as accurate.

Here are the seven factors. They are largely irrelevant in our quest for better care at less cost.

1. Many industrialized countries pay providers on a fee-for-service basis, seemingly rewarding more care rather than better care. Yet their costs are lower and their citizens are healthier.

2. Other countries face aging populations with higher smoking rates and more chronic illnesses than we have. Yet their costs are lower and their citizens are healthier.

3. Other countries face patient demands for the latest therapies. Yet their costs are lower and their citizens are healthier.

4. Other countries do not financially penalize patients seeking care. Yet their costs are lower and their citizens are healthier.

5. Other countries provide patients with no more information about complex health decisions than we do. Yet their costs are lower and their health results are better.

6. Many hospital systems in other countries dominate their markets. Yet their costs are lower and their citizens are healthier.

7. The one exception making us unique is our malpractice costs. Yet defensive medicine costs $55 billion annually, just 0.2% of our $2.6 trillion health care spending.

Thus we face the same challenges every country faces. But American costs are increasing faster and are already twice as high. What are these other countries doing differently? They apply three characteristics missing from American health care:

  • Everyone is included without discrimination against the sick. Unlike other countries, Americans encourage private insurance companies to insure only healthy patients, leaving sicker patients to government programs, charities, or no care at all.
  • Patients can seek care without financial penalty. We are unique in using high deductibles and co-pays to discourage patients from primary care. Although patients in other countries see their physicians more frequently and spend more days in the hospital than we do, their costs are less and their citizens are healthier.
  • Financing is provided exclusively by publicly accountable, transparent, not-for-profit agencies. Although providers make a profit in many countries, we are the only nation in which financing agencies make a profit.

No country, including ours, has ever resolved the Bipartisan Policy Report factors. Yet our health care costs are the world’s highest. Although the report is bipartisan, it misses the critical factors driving up American health care costs. And unfortunately so does the Affordable Care Act, another valiant but futile effort at addressing our health care crisis. If the US wants a health care system that provides better care to more people for less money, we should take our lessons from countries already doing so, not from think tanks speculating on economic theories never applied successfully anywhere.

Successful systems around the world can teach us proven methods of containing costs while providing better care, but if only we choose to learn from them. These policy makers chose to ignore these lessons. The rest of us should not.

Samuel Metz is an anesthesiologist.

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  • buzzkiller

    This analysis is a muddle. Read Victor Fuchs’s analysis in the latest issue of JAMA for concise clarity.

  • DavidBehar

    Their healths are not better, if you compare our white people to theirs. Stop that Commie propaganda. They are also liars. They call the deaths of premature infants, miscarriages. We properly call that infant mortality.

    They have no expensive care. For example, it is not appreciated but, Commie Care killed Princess Diana. She was talking for half an hour. No EMT. No Jaws of Life ($300, used on eBay), no trauma supervisor, no telemetry, no helicopter, no trauma center, no trauma team. It took the Commies 45 minutes to get her out of the car, instead of our 4 minutes. It took them an hour and half to reach the hospital, 4 miles away, at Midnight, with no traffic, instead of 4 minutes by helicopter to the roof of the hospital, with a board certified thoracic surgeon waiting for her in a pre-readied operating room. The untrained Commie idiots stopped and did street CPR on a trauma victim. Princess Diana would have survived her pulmonary artery tear in the poorest county of the USA.

    A heat wave hit France. It killed 11,000 old people. They did not have $20 window fans or glasses of water. There were so many bodies, they were stacked in refrigerated trailers. Those Commie idiots did not think of putting the old people in refrigerated trailers before they passed away. Meanwhile, Commie vermin, Chirac was in cool Canada on vacation. He sent his solidarity. He did not bother to come home early.

    The biggest effect on mortality comes from passing the threshold of eating 2000 calories a day. A tiny effect is seen from sanitary infrastructure such as sewage and running water. A hardly measurable effect is left by mass vaccinations of children. After that, hardly anything has an effect on mortality.

    The Euro trash go on disability and die. They do not get good health care.

    • Sdb

      Your argument is made so much stronger by your inaccurate and bigoted use of “commie.” Just because Rush told you this is the way it is doesn’t make it so.

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