Currently, most discussion in the United States regarding health care reform is focused on the extent to which health care costs are covered by public or private insurance. However, it will make little difference whether health care is funded privately or publicly if the cost of health care is not held in check. Even with the current predominantly privatized system, the federal budget will be overwhelmed in a few decades by Medicare outlays, which are rising much faster than inflation due to increased health care costs. If the government will not be able to afford paying for health care for seniors, it will hardly be able to provide it for others. Our energies would be better directed, therefore, at reducing the cost of health care.
There are several ways that we can reduce health care costs almost immediately; others will take more time. These approaches are primarily directed at undoing the antiquated system of medical education and hospital regulation, much of which is grounded in the politics of the 1930s. Supposedly non-profit hospitals and universities are able to gouge the public for their services, yet receive federal subsidies. It would be considered abominable if a non-profit charity or church indulged in the extravagances of these institutions, many of which have billion-dollar endowments. Anyone who has seen an $8000 bill for routine testing or a night’s hospital stay should know that the major culprits behind health care cost are the service providers, not the insurance companies.
Indeed, the oft-maligned HMOs are themselves the product of the last great effort at liberal health care reform, the HMO Act of 1973. Prior to the HMO act, most health insurance only covered major illnesses or surgeries, just as auto insurance only covers accidents, not routine maintenance. Ordinary care could be paid out of pocket, or in the cases of the extremely poor, not at all. This was not burdensome, since the cost of a routine doctor’s visit was not much. With the advent of mandatory employer health insurance, much more extensive coverage was required, driving up the cost of insurance premiums. Further, since the patient no longer paid for routine health care out of pocket (except a fixed co-payment), he did not care what exorbitant fee the hospital charged the insurance company. Since patients no longer had any incentive to keep costs down, and indeed were often unaware of the price, the cost of health care could rise, and the insurance companies would pass on this cost in their premiums.
Going further back, our medical education system has relied on a bizarre system of requiring four years of medical school in addition to university, and then three or four years of grossly underpaid internship or “residency”, after which the young doctor emerges with staggering debts often well over $100,000. Given this burden of education and debt, it is no wonder that a large proportion of American doctors choose to become high-priced specialists, leaving a deficiency of general practitioners. Only the extremely intelligent can pass the rigors of U.S. medical schools, where emphasis is placed on the mathematical and analytical aspects of medicine, and less on preventive nutrition and humanitarian aspects. The typical medical school student is intellectually overqualified to be a GP; many highly competent doctors in other countries would not pass muster in U.S. schools, even though experience proves they are quite capable in their profession.
Nurses possess the education necessary to diagnose and treat most common ailments; and pharmacists have the education to prescribe medications, yet both are prohibited from exercising their craft due to our arcane medical system that requires an MD to be involved in every diagnosis and treatment. Given that this same system induces a shortage of GPs, this can only drive up cost. What is worse, these science-oriented, non-humanitarian doctors tend to think everything is to be solved with expensive testing and drugs, especially since ordering tests and drugs takes less of their time than getting to know the patient and his behavior. I once had an “old school” doctor who resigned out of disgust with the increasing pressure to become a pill dispenser.
The residency program, which is supposed to be a time of apprenticeship, is often just an opportunity for the hospitals to exploit cheap labor. Residents often work 100 hours a week, with little sleep, thereby impairing performance, and much of their time is spent on menial administrative tasks unrelated to patient treatment. With yet another three years of lost income, it is no wonder that they all wish to cash in on a high-paying position. To cover their increased debt, they will actually have to be paid more than if they had been paid justly in the first place.
In sum, I propose the following cost-cutting measures:
- Abolish Direct-to-Consumer (DTC) advertising for prescription drugs, as this was illegal before the 1990s, and consumers (not to mention doctors) are often poor judges of what medications they should take. Billions of dollars would be saved from this act, since the cost of TV advertising would no longer need to be built into drug costs.
- Reform the residency program so interns have the right to demand competitive salaries and reasonable hours. Increasing their salaries should actually lower costs in the long run, as doctors will begin their careers less debt-laden.
- Allow RNs and pharmacists to diagnose and treat ailments within their competency. This will reduce costs, as they have lower salaries.
- Reduce the cost of medical school (by student grants) or allow admission to medical school direct from high school. Less stringent mathematical requirements should apply to GPs, as mathematical geniuses don’t necessarily make better family doctors. A certain amount of scientific hubris would have to be swallowed here.
- Set limits on tort claims related to medical malpractice. This will lower malpractice insurance premiums, greatly reducing the salary demands of doctors.
- Stress preventive medicine in medical education, including nutrition and exercise. Less emphasis on surgery, drugs, and high-tech testing as solutions to preventable diseases will greatly reduce costs.
- Require full advance disclosure of costs to the patient. Often the patient does not know or care what the cost is, allowing gouging by the hospitals. Ideally, insurance should not cover routine care, which would force caregivers to drive down their prices in order to be competitive among consumers. Emergency care should be price-regulated, since the patient often has no choice of caregiver in such a situation.
- The government could demand more stringent accounting from hospitals and universities to account for their non-profit status. If the institution is federally funded, salaries derived from ordinary revenue should be held to the federal executive pay limit. Alternatively, abolish their non-profit status, and dispense with the myth that hospitals and universities are not just businesses.