LifeCare Chiropractic

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health care spending

Paying More for Less; US Healthcare in a Nutshell

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health care spending
Kenishirotie/Dollar Photo Club

There has certainly been no shortage of discussion on who should pay for healthcare in this country.  But never once has anyone seemed to question whether or not who pays is the problem.

This is the exact topic that the entire Obamacare administration will be known for, for good or for ill.  To date, however, the discussion has been all about the financial side of health care and not the efficiency and efficacy of health care.

There are unquestionably people who believe that health care is a right and should be provided for everyone, regardless of financial means.  If they can’t pay for it, someone else who does have the money should foot the bill.  And if you’ve happened to fall into a discussion with someone who believes this way, it can be a difficult one.  I should know–I have a close family member who feels this way.

The argument that health care is a right is purely an emotional argument because when you try to look at it from a logical standpoint it just does not make sense.  I have said time and time again that we cannot afford healthcare for a population that is one of the sickest in the developed world and has a sense of entitlement that is second to none on this planet.

We want MRIs, ER visits, that new medication we saw on TV, we want very expensive and toxic cancer treatments that will provide additional life extension measured in weeks and we want it all without a wait.  Even worse, we want all of our medications in lieu of making simple lifestyle changes that would otherwise completely erase the need for that new fancy medication.

Our health care system is broken and it has nothing to do with who’s paying.  If we want to meet halfway, what about making the diabetic exercise routinely and avoid processed foods, refined carbs and hydrogenated oils in order to have his or her medications paid for?  Does this sound unreasonable?  It will to those who do not feel like personal responsibility should be a requirement for getting your healthcare paid for.

I had a patient in the other day who, prior to the Affordable Care Act, paid $3 or 4,000 a year in premiums for him and his wife (I can’t remember which one it was).  After Obamacare, they are still paying the same amount of money for the same coverage, but the REAL price tag on the premiums is something like $11,000.  He gets a massive subsidy to pay for his health insurance premiums.

Those of you who were never good at math would look at say how wonderful everything is under the Affordable Care Act because now this person can get insurance.  On the other hand, those of us who did pay attention in 4th grade are scratching our heads trying to figure out where the extra $7 or 8,000 went?  Who gets this extra money??  We all know who is paying for it–all of us.  But who is making the extra money??

I just don’t understand it.

Just in case you still don’t get my point, I bring you this particular study looking at life expectancies based on GMP of countries across the globe.  Here are some interesting points:

  1. It is clear that higher healthcare spending (as a percentage of GDP) does NOT lead to higher life expectancies.
  2. Among the 25 highest income states in the US there is also no correlation between higher spending and life expectancies.
  3. Among the 25 poorest states, higher spending actually leads to LOWER life expectancies.
  4. Colorado, the state that spends the least on healthcare, STILL spends more (again as a percentage of GDP) than the Netherlands on healthcare.
  5. To put it clearer, if the US controlled health care spending to match that of the next highest country, there would be an extra TRILLION dollars to spend elsewhere.

And remember, all of this spending is not getting us anywhere.  We are the most medicated country on the planet (we consume a massive 52.9% of the WORLD’S prescription drugs) and it’s getting us nowhere except more sick.

 

Just How Broken is Our Health Care System?

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Stating that our health care system is broken should not drop any jaws.  But just exactly how broke is it?  You’ll be shocked.

For me, the most recent updated cardiovascular “prevention” guidelines creating such controversy the past few days outlines just how bad it has gotten.  Basically, a panel of which 8 of 15 members had strong financial ties to an industry that produces the statin class of drugs.  The potential outcomes of the new recommendations is that statins (my personal favorite pharmaceutical drug) should now be given to millions more patients.

For a drug that is just short of worthless that should be used LESS to be pushed for expansion illustrates how far we have come from what medicine was intended.  There is no longer any value to medicine, with the exception of a small number of scenarios.  In other words:

Mainstream medicine has FAILED in its stewardship of our health.  There is no other way to put it.

Just in case you think I’m way off base, I present this particular article.  In it, the author looks at health care financial data from public records sources.  Here’s a summary:

  1. In 2011, US health care encompassed 17.9% of the US gross domestic product (GDP) to 17.9%.
  2. Yearly growth exceeds any other industry.
  3. Government funding increased from 31.1% in 1980 to 42.3% in 2011.

So.  There is no doubt that health care costs are increasing in this country at a rate that exceeds any other industry as well as any other country.  But what kind of bang are we getting for our health care buck?  A very poor one.  Multiple health metrics such as life expectancy at birth and survival with many diseases shows the US trailing its peer nations.

There are many fallacies that are floated around (especially as it relates to political maneuverings), but there are some surprises that run contrary to popular belief:

  • Since 2000, price of hospital charges (+4.2%/y), professional services (3.6%/y), drugs and devices (+4.0%/y) and administrative costs (+5.6%/y) produced 91% of the cost increases in healthcare.  (As a side note, I can tell you that my fee schedule from insurance companies have NEVER gone up in my 15 years of practice, although we did take a 50% HIT in 2011 from BC, Cigna and Aetna)
  • Demand for services or aging of the population did not factor into the equation of increased costs.
  • Personal out-of-pocket spending on insurance premiums and co-payments have declined from 23% to 11%;
  • Chronic illnesses account for 84% of costs overall among the entire population, not only of the elderly

Costs are going up, but who’s to blame?  Listen to the tort reform lobby and they would tell you it’s from doctors being sued, but what’s the reality?  Three factors have produced the most change:

  1. Consolidation, with fewer general hospitals and more single-specialty hospitals and physician groups.
  2. New technology, in which investment has occurred but no real value.
  3. The patient as consumer, whereby influence is sought outside traditional channels, using social media, informal networks, new public sources of information, and self-management software.

Overall, it is a financial mess, with no additional value being added to the patient.  We have massive waste in the system with an almost god-like reliance on medications in lieu of lifestyle changes for chronic diseases (the strongest cost driver).  Basically, our society has been created where drugs are the answer to everything, although in truth, they are rarely an answer to anything.  We just can’t step back and look a patient with high blood pressure in the eye and say, “We have nothing for you.  Either you make these changes or you will die an early death from a heart attack, stroke or dementia.”

Instead, we lure patients with a false sense of security, thinking that Drug A will fix the problem and there is no real need for the lifestyle change.  But, when the numbers are fall out on the end, the drug did very little to change the original trajectory, merely adding massive costs and side effects that frequently leave the patient worse off then the disease it was meant to “fix.”