Out of Control

By Jim McVeagh 18/03/2010


Two US surgeons have offered some commentary on Why US Healthcare Costs Are Out of Control. It is a highly revealing read. They cite six reasons:

  1. The Building of Shrines for Hospital Administrators – buildings constructed out of desire to make a mark rather than out of necessity.
  2. Unnecessary Duplication of Services – Often added under the aegis of point one.
  3. Absence of Medical Malpractice Tort Reform – as they correctly point out, the real cost is not in insurance expenditure but in excessively defensive medicine. They put the cost of unnecessary investigations, procedures and hospitalisations at up to $200 billion. MacDoctor thinks this is a bit on the low side and probably does not include unneeded follow up visits and unnecessary time expended in obsessive note-taking and quality control initiatives.
  4. Need for Hospitals to Be in the Black – Failing hospitals do have a tendency to try to boost their admission rates rather than make their processes more efficient. Most hospitals in the US would improve their bottom lines tremendously if they specialised, rather than tried to offer all services.
  5. Decreased Physician Reimbursement Leading to Unnecessary Procedures – I once knew many doctors in South Africa (where the medical insurance rates were kept artificially low) that saw 100-120 patients a day. The vast majority were return visits for colds and flus and similar self-limited diseases. One doctor I knew routinely saw colds every day until their symptoms resolved – rarely less than five visits. Meanwhile back in New Zealand, most A&Ms charge ACC like a wounded bull…
  6. Pay-for-Performance Systems – artificial incentives to perform the easiest, most lucrative procedures, leaving the complex work to an ever-decreasing pool of doctors.

Read the whole thing (you may have to register, but it is free). Two observations:

  • Mr. Obama’s healthcare package addresses none of these things. In fact, it is obvious that Obamacare will make most of these things (certainly the last four) significantly worse.
  • New Zealand has a similar set of problems. We just call them by other names eg.
    1. Empire building
    2. Turf protection
    3. Criminalisation of medical malpractice
    4. Need for DHBs to stay within budget
    5. ACC procedures and investigations
    6. Medical Productivity

Do any of these sound familiar?

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  1. Over My Dead Body
  2. Sounds Familiar
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