We pay more than any other nation for health care, yet we have suffered the single biggest decline in life expectancy since WWII. Something went wrong. At a time of record inflation and rising taxes, isn’t it time we stopped to ask where the money is going, what exactly we are paying for, and why?
Astonishingly, nearly half the federal budget goes to health care in one way or another. Either directly through Medicare and the ACA or indirectly by paying federal employees’ health benefits. Health care is the single biggest line item for any organization after payroll, and the government is no different. When you look more closely at health care spending, only 27 percent goes to individual patient care. The rest is spent on managing that care.
That means one-third of our tax dollars goes to insurers, agencies, and benefit managers who are responsible for setting the price of everything from pharmaceuticals to surgical procedures. This requires volumes of data collection that ultimately calculates risk and allocates resources. If it sounds like rationing, it is, and we are paying for it.
But in the age of technology, when a patient can receive a pill for cancer rather than be admitted for IV infusions or go home immediately after a joint replacement, medical care has become a lot more efficient and less costly. Bernie Sanders has a heart attack, is treated, sent home the next day, and is back on the campaign trail a week later. The price of his cardiac stent is one thing, but the cost of his recovery is zero because the system in place to help him recover is no longer required. The burden falls onto his family to take time out of work or find resources to support his care. Those costs are not factored in and go uncompensated.
We talk about the social determinants of health, but what we really mean is that as we move care outside the controlled environment of a hospital, we ought to be prepared for uneven outcomes. If a patient lives alone in a sixth-floor walk-up or in an assisted living with 24-hour services, those outcomes will be different. But we spend little to no amount of the health care dollar addressing this. Instead, we fund an elaborate system of claims and denials intended to manage the cost and quality of care within a structured data-driven system that so far has failed badly on both accounts.
The truth is, practicing great medicine got a lot simpler; it’s health care that’s getting in the way.
So what to do? If we only need 27 percent of the pie for medical care, why not take the other two-thirds and repurpose it? What if we gave it back to the patients? Offer federally funded health savings credits to patients who remain healthy or who pay out of pocket to see their doctor. Medicare patients could be entitled to receive 100 percent coverage for the big stuff if they chose to pay for the small encounters out of pocket. And those below the poverty line could have health vouchers, much like a food stamp, that guarantees access along with choice. Cash back rewards and participation require only a transparent price.
A hybrid model means fewer claims, fewer denials, and better service. It also means fewer opportunities to share or breach data. More and more often, it’s cheaper and faster to pay out of pocket than to wait for insurance approval every time you need care. Stories occur daily about people expecting their insurance to cover their medical expenses only to find out that if they had paid out of pocket, it would have cost much less than the surprise bill in their inbox.
Patients have had the right to informed consent for nearly 40 years. During that time, medical information has become universally available. We no longer practice a paternalistic model of care, where the doctor knows what’s best for you, so why are we asking an insurer? We work together with our patients in a more collaborative approach. Patients not only pay for their care but also take on more of the burden of recovery. Our system isn’t built to accommodate this. So why do we continue to ask permission to receive the care we have already paid for? In the age of informed consent and price transparency, managed care has no place. It’s time to redirect that money to better serve those responsible for improving outcomes, namely the patients. Let’s start asking lawmakers for a new plan, if we don’t soon, the health care budget will swallow us whole, and there won’t be anything left to pay for our medical care.
Paula Muto is a vascular surgeon.
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