Health Care Costs

Comparing health care costs to the quality of the delivered service is important to patients, payers and healthcare providers.  Despite awesome workers, U.S. healthcare struggles with achieving the best medical outcome at a reasonable price.  Some problems can  be summarized as follows:

  • Americans spend more on healthcare than any other developed country.
  • Yet millions remain underserved.
  • Health outcomes in the U.S. are no better than countries spending far less.
  • Conflicts between patients, insurance companies and doctors are spotlighted regularly in books, movies, and internet reports.
  • Fraud hotlines are busy investigating and prosecuting doctors, pharmacists, hospitals and nursing homes.
  • Numerous legal ads promise injured patients justice and financial compensation for shoddy medical care.

With health care costs so high, why is there such dissatisfaction with its quality and delivery?  Is it provider greed?  Or is it due to unreasonable expectations for perfect health?  Although medicine is a profession, it’s also a job with a price list published yearly in a book called the Current Procedure Terminology (CPT for short).

When elected officials, CEO’s, and citizens speak of a crisis in health care costs, what do they mean?  The following graph (Source Kaiser/HRET Survey of Employer-Sponsored Health Benefits 1999 – 2011) illustrates the problem by comparing worker wages to inflation and health care cost.

Health Insurance The lower two lines of the graph show wages and inflation from 2000 to 2010.  As expected, they’re aligned with wages slightly above inflation.  Although we’d all prefer higher wages with less inflation, at least the results are reasonable.

But of grave concern are the upper two lines displaying disproportionate health care costs. Indeed in 2010, health care costs had risen by 114%, which is a 26% increase from 88% just three years earlier.  This is contrasted to a rise in wages of only 12% over the same time.  Most alarming is the top line that displays worker contributions to insurance premiums.  Those payments rose by 147%, an increase of 44% from three years earlier.

What does this mean?  Government reports from 2010 indicate that health care costs accounted for 17.3% of GNP.  In dollars, that’s $2.5 trillion.  Continuing this trend, health care costs should exceed 19.3% of GNP by 2020.  Effectively telling us that nearly one dollar out of every five will be devoted to health care costs.

In future blogs, we’ll look at how knowledge can build better consumers.  We’ll examine a new medical field called healthcare informatics.  As well as discuss new technologies in personal products that monitor health status.  Since cost is primarily controlled by physicians, we’ll discuss medical education.

If one phrase could define the medical profession, perhaps it’s the Hippocratic Oath.  A covenant to convey trust, privacy and devotion by doctors to their patients.  Contrary to popular opinion that oath is not mandatory, but nearly all medical students take it at graduation. The oath, ascribed to Hippocrates, over two thousand years ago, instills in physicians a sacred promise to place their patients’ health above all other concerns.  The original oath read as follows:

I swear by Apollo Physician and Asclepius and Hygieia and Panaceia and all the gods and goddesses, making them my witnesses, that I will fulfill according to my ability and judgment this oath and this covenant: To hold him who has taught me this art as equal to my parents and to live my life in partnership with him, and if he is in need of money to give him a share of mine, and to regard his offspring as equal to my brothers in male lineage and to teach them this art—if they desire to learn it—without fee and covenant;

To give a share of precepts and oral instruction and all the other learning to my sons and to the sons of him who has instructed me and to pupils who have signed the covenant and have taken an oath according to the medical law, but no one else.

I will apply dietetic measures for the benefit of the sick according to my ability and judgment; I will keep them from harm and injustice. I will neither give a deadly drug to anybody who asked for it, nor will I make a suggestion to this effect. Similarly I will not give to a woman an abortive remedy. In purity and holiness I will guard my life and my art.

I will not use the knife, not even on sufferers from stone, but will withdraw in favor of such men as are engaged in this work. Whatever houses I may visit, I will come for the benefit of the sick, remaining free of all intentional injustice, of all mischief and in particular of sexual relations with both female and male persons, be they free or slaves.

What I may see or hear in the course of the treatment or even outside of the treatment in regard to the life of men, which on no account one must spread abroad, I will keep to myself, holding such things shameful to be spoken about.

If I fulfill this oath and do not violate it, may it be granted to me to enjoy life and art, being honored with fame among all men for all time to come; if I transgress it and swear falsely, may the opposite of all this be my lot.

Although archaic in prose and revised over the years to a modern version, it’s principles are foundational.  Which means, doctors should treat the sick to the best of their ability, preserve patient privacy, and teach medical care.  The American Medical Association’s Code of Ethics holds this oath as an expression of conduct for all doctors.

On the other hand, some physicians argue that even the modern oath doesn’t address the realities of current medical practice.  They cite huge scientific, economic, political, and social questions, which doctors must face.  A world of legalized abortions, physician-assisted suicides, and diseases unheard of in Hippocrates’ time.  As government agencies demand greater transparency, and insurance companies insist on complete information before payment, how can a doctor maintain patient privacy?

Other physicians criticize the oath because its principles are derived of pagan origins opposite to beliefs held by Christians, Jews and Muslims.  Plus the oath fails to address: ethics for medical experiments, team care, or legal responsibilities.  Finally the oath is penalty free, with no threat of loss of practice.  Indeed this point is often quoted by malpractice attorneys who say that bad priests are defrocked, bad lawyers disbarred, but bad doctors don’t even have a word for it.

If there’s a criticism to be made, perhaps it’s that more providers should take the Oath — not only physicians, but nurses, pharmacists, dentists, rehabilitation therapists, nursing home directors, insurance executives, quality care auditors, and all other services connected to the delivery of care.  If all stakeholders swore to not bend the moral principles of the “archaic” oath, would it not improve public health and lower health care cost?

That question intrigues me.  Most medical providers including insurance company workers, all began their careers with noble intentions to do good.  But somewhere along the path, one or more  principles of the Oath were slowly bent.  In future blogs, we’ll explore how bending the oath can affect health care costs.  Some topics will include:

  • How preferred medical providers are chosen,
  • How legislation can adversely impact quality care and health care costs,
  • How market-based medicine compares to a single payer system,
  • How personalized informatics can help people navigate the convoluted web of healthcare.

These are just some of the thoughts that provide the rationale for the Bessette Report.