The Truth Regarding Health Care

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June 18, 2022

There are truths regarding health care in America that need broadcasting.  Some truths are intimidating and discouraging, with no need for us to be reminded, such as the crazy costs of hospitalization, testing, procedures, and pharmaceuticals.  Another such truth is that along with ridiculously expensive medical care has come incredible success in the battle against the morbidity and mortality of disease.  But the truth about how we got here is worth reviewing.  It is the result of a unique, accidental confluence of circumstance.  Unfortunately, it is unsustainable in its current form.

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Many of the residents of our country act as if cost should not be a factor in the delivery of health care.  They feel as if medical care is a right and not having a socialized, government-sponsored system of delivery is akin to slavery.  On the other hand, corporations successfully weave among the patient, the doctor, the current government-sponsored health care systems, and their fellow capitalist insurance companies, managing to make a good profit while driving up cost. 

How did we get to the point where it was conceivable to produce pharmaceutical agents that cost six figures a dose?  When did we conclude that it is cost-appropriate to pay doctors and facilities to transplant a pair of lungs, a kidney, a liver, or a heart?  Most telling for the future, what would we be willing to sacrifice to make things sensible?

Our way-out-in-left-field costs have their origins in a simple-to-understand source.  After World War II, the federal government froze wages in its concern for runaway wage inflation, knowing that businesses desired to employ the best of the huge returning workforce and pay them accordingly.  With no means to attract new workers through better wages, companies created benefits packages along with employment that included costs shared in health care.  (A harbor company in San Diego with the now familiar name of “Kaiser” was among the first.)

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Health care insurance companies created from this new market accumulated monies with each employee paycheck.  Health care at the time was rudimentary and did not have much to offer sick patients.  As a result, prospective patients did not have the same desire to go to the doctor that we have today.  As money built up in the system, doctors and hospitals began to realize better, more predictable finances, and the costs of treatment options were barely considered, because insurance companies were more than willing to pay.

Practically no one could personally afford what resulted from this cost-is-no-object-in-care approach.  With these new treatments, massive wealth was created.  Research and development in pharmaceuticals radically expanded.  New devices for radiologic evaluation were invented.  New surgical instrumentation allowed doctors to do previously unimaginable procedures.  Transplantation of organs was no longer a fantasy.  The best and the brightest were funneling into medical schools with the prospect of leading the way in both the advancement of patient care and their own personal wealth as a result.

Following the money, the legal system dove headlong into health care, too.

For a while, the insured and employed in America generated enough money for health care providers to extend care to the uninsured.  The local, state, and federal governments created programs for the uninsured to further bridge the gap, as did charitable entities, many of whom already existed.  Contrary to today’s unspoken narrative that scores of the uninsured were dying on the streets, care was extended to most.

The head start that the insurance companies had to accumulate wealth before distributing payment began to fail to keep up with the demand for dollars in the 1980s.  This is the reason that their lobbyists permitted the introduction of managed care contracts in the early 1990s. Companies had the option of managed care when deciding on more affordable (to them) plans for their employees. 

With the launching of managed care came a couple of “stowaways.”  One was a means to make medical bills so opaque as to be unreadable.  Another created the need for doctors and hospitals to dramatically increase their staff to pursue payment for services from the new bureaucracy. 

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Medicine began losing its attractiveness to the next generation of prospective physicians because of this reminder that cost is involved in decision-making.  It is causing current practitioners to seek salaried positions with health care conglomerates rather than opening their own offices.  This drives down personal service and availability.  As the money dries up, community hospitals are closing in droves, leaving our rural communities with spotty care and long-distance driving for anything more than what a primary care physician can provide.

Pharmaceutical companies, a universally vilified element of the equation, have a reasonable excuse for their financial “excesses” that few are willing to recognize.  They take huge financial risks, partially because they can still pretend to work in the world of “cost is no object.”  Bringing a new drug to market currently costs around 2.6 billion dollars.  If the drug is found during trials to have an untoward side-effect, that money is gone.  The overwhelming cost is also partially traceable to the malpractice insurance industry, with lawyers anxiously anticipating when a breakthrough drug — that already has made it through the testing gauntlet — is found to cause unforeseen, associated harm.  Yet the public complains if the cost of the new drug is unaffordable.

Doctors, hospitals, and equipment manufacturers all have similar expensive medicolegal components to their cost projections that grow every day.  Just managing the expectations related to human resources departments and their accompanying insight into our implicit biases is potentially budget-busting.

This cannot last.  It is unsustainable.  The coexistence of affordability, availability, and excellence in ability is a pipe dream in any service industry, medicine all the more.  It was only hinted at for a period of time in America where cost seemingly was no object in care, a period caused by the creation of health care insurance companies as a response to an unnecessary government program.

It is undeniable that prior to this product of accidental government interference, health care was woefully inadequate and did not have the wherewithal to cure almost anything.  Now, with each new day, another malady is seemingly on the road to becoming easily, and expensively, vanquished.  But who will pay?  Our government’s liabilities with its Medicare and Medicaid costs are already being “paid” by those who have not been born.

It’s easy to say that managing liability with tort reform would go a long way toward more reasonable cost.  It would help.  (And the lawyers’ lobby, whew!)  It would be fashionable to “introduce capitalism” into the equation, with comparison shopping driving down cost.  That may work for low-overhead, computer-driven, discretionary options like corneal surgery for nearsightedness, but not for most medical treatments.  Having the banishment of Certificate of Need to drive down the cost of an MRI would help a little, too.  But the cat is out of the bag for most medical options, with costs justifiably and untenably high because they were created when cost was no object.

It is interesting and unfortunate that the insured in America are currently, arguably, getting some of the worst care.  That is because, despite being the financial engine driving this whole machine, their deductibles are so high that they are afraid of the financial risk of merely going to the doctor.  It’s rarely the uninsured facing bankruptcy from health care costs.  It’s mostly the insured who don’t qualify for programs because they are employed.

Answers to our problem have not been worked out elsewhere.  We shouldn’t dispense health care as they do in the countries of Canada and Great Britain, relying on the unavailability of timely service to “time out” many people’s curability.  They also limit service by age and potential survivability, a major moral hurdle in the increasingly immoral USA. 

But the answer to our next permutation in health care distribution may be hinted at in how physicians in these countries have adapted to “socialized” medicine.  London is famous for doctors who see their government patients in the morning and their paying customers in the afternoon.  Canada has doctors who do their country’s bidding until having achieved their quota of patients from the system and then “take off” time to do more profitable work.

Just like doctors, those involved in the hospital industry, pharmaceutical companies, and medical manufacturing need cash flow to justify their financial risk.  It can’t be all risk, no reward.

The answer to the unanswerable question of how to keep progress in health care alive and affordability, availability, and talent continuing is a hard one.  It will never be answered when the power gained from politicizing the problem exists.  We all know that the only thing more unaffordable than our current system would be “free health care.”  Tweaking the current system is preferable.

There already exist many programs for the poor and uninsured.  These could be streamlined and sensibly expanded.  What would classify as a necessary addition to the equation would be possible assistance with deductibles and expansion of catastrophic insurance policies for the rest of us.  Improving the portability of Health Savings Accounts, making them easier to understand and obtain, would address the former.  A creative solution merging government assistance with HSAs and catastrophic insurance policies could go a long way toward appeasing both sides, even though they would scream that this “solution” is wrong.  One avenue for saving is the cost of administration of the health care dollar.  Private insurers’ administrative costs are surprisingly much higher than the government’s.  There must be a “happy medium” there, with less bureaucracy in the former and more effective administration in the latter.

Since the currency of the swamp people of Washington, D.C. is the unfulfilled promise, here’s hoping that remembering how we got here and why it can’t keep working leads to a solution.  Then again, in D.C., cost is no object.  Predictably, the most expensive socialist model will win.

Image via Max Pixel.

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