The fiscal disaster of healthcare costs has a human toll

Today, I come back to the tragedy of medical economics in this country. And I would apply that word “tragedy” in at least two ways.

The first tragedy is that we are headed for fiscal disaster in this country because of healthcare costs.

We now spend twice as much per person on healthcare as the average per person cost of all developed countries. During the past several decades, the inflation rate for healthcare costs has usually been two to three times the general inflation rate.

Obviously, this level of healthcare cost increase cannot continue. It is, to use the favorite word of the day, “unsustainable.”

But lost in this economic tragedy is the even more important human tragedy.

Because healthcare costs are soaring (I believe last year’s somewhat lower costs were primarily due to the recession) 40 to 50 million Americans have no health insurance largely because they or their employer can’t afford it. Even though we are the richest country in the world, we are the only developed country in the world that does not have universal health insurance. Unbelievable but true!

And given the power of the medical-industrial complex to produce and politically protect (with a huge lobbying arm) high cost tests and treatments, there appears to be little hope of stemming the tide of rising costs.

Which is why I predict that the healthcare cost crisis will drive us to a real fiscal cliff within 10 years at which point I would guess the desperate politicians would hold an emergency meeting in Washington (much like the banking crisis) and probably decide to expand Medicare to cover everyone simply to get the “supply line” of cost in one place in a frantic attempt to get control of it.

The only hope of avoiding this scenario is the “medical home” concept I had described. That’s because the only hope of avoiding unnecessary healthcare costs – before it is too late – is a primary care “system” where trust abounds and “patients” become “partners” in a decision-making process that allows rational decisions to be made about healthcare – rather than the emotional decisions too often made today out of fear and/or greed.

For the “medical home” concept to truly work we will also need to remove the “fee for service” incentive that basically says “the more you do, the more you make.” And we need to develop comparative data – and make it readily available – that tells us what works and what does not, in other words what is “cost effective.”

With payments based on “outcomes” and “results” and information available to guide decisions toward “outcomes” and “results” I think we could have a fighting chance to stem the tsunami of healthcare costs before it is too late.

So I personally will be evaluating any and all proposals about healthcare reform on the basis of how well they promote this kind of primary care. I have come to believe it is our only hope in stemming cost and – more important – providing care that is more helpful than harmful.

Timothy Johnson trained as an emergency room physician but switched careers in 1984 when he joined ABC News as its first full time Medical Editor. Although he retired from that role in 2010, he continues as Senior Medical Contributor.  He blogs at Timothy Johnson, MD: On Health.

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

    We are not “headed for fiscal disaster in this country because of healthcare costs”.

    We are headed for fiscal disaster because of an egregiously inequitable distribution of wealth which causes the economy to stagnate and is increasingly putting everything, including health care, out of the financial reach of most people in this country.

    • margo

      That is so beautifully put!! coming up with different plans to fix the crisis is never going to work. Only addressing the egregiously inequitable distribution of wealth as you eloquently phrase it –and that is pretty hard to address or fix from where I sit.

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

        Exactly. And BECAUSE it’s unlikely to be fixed anytime soon, we ARE facing the kind of crisis Dr. Johnson describes. No amount of idealistic wishful thinking about reversing the wealth gap negates this fact.

        “Medical homes” are a practical approach to embracing the kind of multi-disciplinary, team-based and patient-engaged medical care we sorely need. Whether we can possibly scale them to the magnitude needed to forestall the financial tsunami that awaits us is an open question. I find it highly unlikely.

    • Suzi Q 38

      If I have more wealth because I am more frugal with my money than the next person and therefore can afford insurance, does that make me bad?
      If I have a little more education and a job and work 40+ hours a week and the next person chooses to sit around and not look for work or go to school, does that make his or her situation inequitable to mine?
      i just do not agree.

  • http://twitter.com/FerkhamPasha Ferkham pasha

    Healthcare costs are out of control

    • http://www.facebook.com/people/Steven-Reznick/100000549195050 Steven Reznick

      Easy to say and a fact but a generalization. A longtime friend owns and operates a medical supply company specializing in cardiac related products. A new line of business is genetic testing . Some of the tests look at our ability to metabolize medications. An example would be can you metabolize and get the antiplatelet anticlotting effects of a drug like plavix after a artery has a stent placed to relieve an arterial obstruction. Without the antiplatelet efficacy these stents can close down and lead to a heart attack and or death. The easy to perform in office test is sent to a lab which bills insurers thousands of dollars for it. Interventional cardiologists are beginning to use the test to decide who gets plavix post procedure and who will do better with something else. The science and technology are relatively new so there is not a great deal of evidence and or research on its effectiveness. The cost to the system is huge. Is this science and good medicine or is it premature and use of snake oil. The physician makes no money on the transaction so it is not an example of volume driven profit by greedy private practitioners but just provides some additional knowledge with which to base a clinical decision which can save a life. There are new products like this flooding the market every day advancing the technological capabilities of all health care providers. I do not believe it is the technology driving up costs. It is the unregulated pharmaceutical industry plus the poorly regulated insurance industry plus the reasonably out of control trial bar and tort system creating a need and reason for many of the regulatory agencies overseeing hospitals and outpatient care facilities.

  • http://www.facebook.com/people/Steven-Reznick/100000549195050 Steven Reznick

    My 96 year old diabetic, hypertensive severely depressed patient with chronic kidney disease resides at an upscale skilled nursing facility. He receives palliative care. His children and I have discussed his care, his quality of life and the choices with end of life decisions. He has a yellow DNR sticker in his room. Friday morning at 1:35AM i received a phone call from a LPN on duty at his facility. Mr J has fallen . He has a bad cut on his elbow. He did not lose consciousness. Its a deep cut so I have called 911 and he will soon be on his way to the emergency room. Because he is anxious I gave him an extra ativan. ” Why don’t you just provide compression to the wound, clean it with peroxide and put an antiseptic on it and a clean bandage and I or his wound care doctor will look at it in the morning? I asked. She responded quite annoyed,”I have called 911 because of the protocal and liability. The only reason I am calling you doctor is because of the protocal.” I asked if he was actively bleeding and she said no longer. At that point I called the ER and spoke to the charge nurse. I told her a patient of mine was on the way and I wish to be called when he arrived. I told her he probably would be lethargic from an extra benzodiazepene given by the LPN. I told her he was a do not resuscitate patient with poorly controlled diabetes and chronic kidney disease stage III. I turned off the phone in the bedroom so my wife would not be awakened when the ER called and sat down dressed in a chair in my family room next to the phone. The phone ring startled me but woke me. It was the ER Doc. It was also 4 hours later. ” Dr Reznick I saw your patient Mr. J. Do you know his sugar is elevated and he is in renal failure? I did a CT scan of the brain because he was lethargic and it was fine just showing atrophy of his brain appropriate for his age. I bandaged his wound and will be sending him back by AMR to his facility. ” The private ambulance cost will be about $365 and insurance will not pay for it. The 911 call and transport creates another trip record for the EMS and firefighter service and another reason to request a larger budget next year. Not calling me when he arrived at the ER and proceeding with a CT scan of the brain plus elbow films plus labs will probably cost the taxpayers $2500 – $3500 and frankly the ER staff and hospital are thrilled to collect this from Medicare. The patient needed a Boy Scout or Girl Scout seeking a first aide merit badge to treat his injury not the health care system put in place by insurers, employers, government and the trial bar. Apparently at least 1/3 of Medicare spending occurs in the last few months of a patients life. An ACO or patient centered medical home without tort reform and without compassionate and sane treatment of our elderly on site will not save the system any money or provide better care. Common sense has been replaced by protocals to limit liability and limit the need and cost to teach how to care for many simple problems we once all cared for at our homes. Until common sense and compassion replace ” Call 911 and copy the chart for transfer” we will continue to go broke using this conveyor belt approach to senior health care.

    • margo

      OMG that is ridiculous and aggravating. When did the nurse become the doctor giving orders?

    • Suzi Q 38

      So crazy.
      Reminds me of my BIL, who was dying of pancreatic cancer with mets. The local hospital pushed for all sorts of treatment, chemo/radiation, PT (he had total drop foot on both feet already)
      pysch (for what, I don’t know, he was in and out of consciousness), blood tests, etc. As much medicine as his PPO insurance would approve and pay for.
      In the end, he died within 60 days, just like he would have if he didn’t order 75% of it.

      Now, if a health professional enters my hospital room, I politely ask why. I do not need certain people. I need my doctor, and nurses, maybe the lab people.
      The surgeon asked for a second set of MRI’s, and before I agreed, I asked why?
      The pre op orders asked for various blood tests and I asked the co ordinator to look in the health records to see what I had already done in the last month. I CBC was already done 12/27 for Dr. W., did that need to be repeated? Ditto for the metabolic panel.

      I guard my insurance costs a bit. My PCP is somewhat frugal with some of the tests and prescriptions. He even tells me to fill my prescriptions at Wal-Mart, even though I have a favorite pharmacist in town.

      Some, not all doctors and health professionals are treating insurance like an out of control credit card that never needs to be paid.

      I will be annoyingly redundant: This is not sustainable for the long term.

  • http://twitter.com/FerkhamPasha Ferkham pasha

    We need a better insurance system

  • Elegia More

    You are a prevaricator as you have NO concern about human tragedy; you just want those that can get well to be treated and those of us with life limiting illness to receive poor care so we can just die and get out of the way of the treatable patient. If you pay physicians only for “success,” you will easily kill off those of us with rare, poorly treatable illnesses.

    That IS the plan, isn’t it? Keep the chronically ill from their national specialists, having them be treated by local physicians whom have never seen a patient with their condition. Make sure we DIE QUICKLY and get out of the way of curable patients.

    Dr. Johnson, you are nothing but a celebrity. No REAL physician would want to reward doctors for treating those that are easy to heal and killing those that aren’t.

  • petromccrum

    Great article. I think we will approach a real fiscal cliff well before 10 years.
    And Margalit this has NOTHING to do with distribution of wealth.

  • Dorothygreen

    The scenarios given here are so sad. And, they are repeated over and over again. These are clearly examples of a culture gone amuck. This is our history. Medicare itself was a compromise but that was not enough. To placate the opposition, the “all you dare to charge for all you can do”, and “build a hospital bed and they will come” was allowed to rule Medicare was a bonanza. Paul Starr “The Social Transformation of American Medicine – The rise of a soverign profession and the making of a vast industry” and Rosemary Stevens “In Sickness and in Wealth”
    Cutting back is difficult because it has become sooo part of our culture. Medical homes – a good idea but just one of many, many changes needed. How about more resources to abuse, fraud and waste. How about getting rid of for -profit insurance for “essential services”. These are defined. Start up companies want to come into the exchanges. Many aspects of the Swiss “all insurance” model could be adopted.
    And did you all hear about the 2 IOM reports? The one on waste $750 Billion dollars a year. Then most recently that of most or all OECD countries we have the worse health, and shortest average life span with double the costs of next highest cost country. It pretty much shows how we are failing as a Nation in all our domestic programs – with inequity a huge part of this.
    We can correct these problems.. We are a rich country. And it isn’t just the very wealthy who have to kick in to change this travesty. Most of us contribute something to the problem. We love our subsidies. But what are we subsidizing? I know you can all name a bunch but have you though much about how WE subsidize unhealth food and hence the care for the chronic non communicable preventable diseases caused by this SAD – standard American Diet? It is clear we crave, we are in essence addicted to sugar, sugar with fat, fat, fat with salt, salt, salt with refined grains, sugar with refined grains, fat with refined grains and refined grains. Even the USDA has put out reports that this is what the American diet primarily is. It has in fact replaced tobacco as the leading RISK factor for chronic preventable diseases.
    The middle does not need to pay more income tax to pay the health care bills or premiums for health insurance. Medicare benefits (essential beneftis) do not need to be cut. Rather we need to have the wealthy contribute more through tax reform. And for all.lets add to the list of “sensible things to do change our unhealthy cuture.
    The “tobacco model” was extraordinary in reducing cigarette smoking which peaked at about 60-% and is now about 17%. We did it. There is NO reason not to try this model – a strong message on packages, no more ads for unhealthy foods, subsidize vegetables not cow meat and grains. ThisRISK tax could be on all legal substances that are clearly have a potential risk to developing chronic non-communicable diseases. The money MUST goe into health care as primary prevention at the community level and be kept away from the profiteers. Reearch can be done sensibily because we would have the before and after implemention of RISK just as we have data on health improvements with the decrease in smoking. Estimates for a modest RISK tax would yield in excess of 100 Billion a year. Details are available.

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