Private laboratories are working hard to come up with the next new drug, the next new medical procedure. Arguably, this represents an advance in medical science that will benefit us all some day. The problem is that the pharmaceutical companies and the medical equipment companies all expect to make a hefty profit if, indeed, they do come up with something worthy of an advance in curing disease and/or prolonging life. The result of all this feverish activity is that there are more devices, more procedures, more drugs all of which purport to save and prolong lives and all of which cost big money. Who is going to pay for it all?
This is the main reason why the cost of Medicare and private health insurance is going up. Everyone wants access to the latest medical technology, but that technology is increasingly expensive. Is the government going to pay or are private health insurance companies going to pay or both? Most of the payouts occur in the last three months of life. One might argue we would be better off with the medical technology of 30 years ago and just be resigned to dying three months sooner albeit with a substantial cost savings, money which could be passed on to the next generation.
This is from Time magazine:
Americans tend to assume that more is better, especially when it comes to the heroic brand of try-everything medicine we've watched on ER and House M.D. But overtreatment is a national scandal. It's bad for our health: with medical errors now estimated to be our eighth leading cause of death, drugs, procedures and hospital stays can be risky (as well as painful, time-consuming and wallet-straining) even when they're necessary. It's also bad for the economy: health costs are bankrupting small businesses and even conglomerates like General Motors as well as millions of families. And it's awful for the country: Medicare is on track to go broke by 2017, and our long-term budget problems are primarily health-cost problems. At current growth rates, health spending by the Federal Government alone would increase from 5% to 20% of the economy by 2050; Social Security, by contrast, would increase only from 5% to 6%.
But one man's unnecessary costs are another man's profits; lobbyists for drug- and devicemakers, hospitals, doctors and insurers are already fighting to make sure their slices of the more than $2 trillion health-care pie aren't nibbled by reform. Senate Republicans just introduced "antirationing" legislation to bar the government from using comparative-effectiveness research — "a common tool used by socialized health-care systems" — for cost control. They paused in their usual attacks on Obama's profligacy just long enough to attack his stinginess, warning that he will use evidence as an excuse to micromanage the art of medicine, stifle innovation and deny Americans their right to choose whatever treatments they want — or at least their right to taxpayer reimbursements.
A way out of this dilemma of rapid cost escalation is to follow the model of the Mayo clinic. Instead of a "fee for service" model, which rewards doctors for doing more procedures and demanding more visits, the Mayo clinic puts doctors on salary thus undercutting the perverse incentives of the fee-for-service model. Drug companies, in order to get FDA approval, just have to prove that their drug is slightly better than a placebo. They don't have to prove that it is any better than an existing drug. So you have many copy cat drugs on the market just sufficiently different from an existing drug in order to get a patent. Drugs are developed based on their profit-making potential rather than on their ability to cure illness. Patients are ordered to have unnecessary MRIs just to pay for the MRI machines. There is little data available on comparing new procedures with existing procedures in terms of their ability to obtain better health outcomes.
Located in Rochester, Minnesota, the Mayo clinic has implemented procedures that result in high quality care but at a low cost:
Mayo has computerized medical records that provide instant access to patient histories, improving information-sharing, reducing pharmacy errors and eliminating the hassle of tracking down charts. The staff cafeteria even gives away fruit, illustrating Mayo's apple-a-day commitment to prevention and wellness. Like other low-cost, high-quality institutions — the Cleveland Clinic, Geisinger in Pennsylvania, Intermountain in Utah — Mayo is dedicated to offering integrated and coordinated care, with a broad network of providers working together to reduce redundant tests and office visits, improve disease management and generally avoid treating patients like pinballs. "It's a team sport here," says David Lewallen, a Mayo orthopedic surgeon. "A bunch of tennis players doing their own thing just doesn't work — it's too expensive, and it's bad medicine. We only do things to help the patient, and we're all looking over each other's shoulders."
Evidence-based medicine, the kind the Mayo clinic espouses, is not the most profitable kind of medicine, and therein lies the rub. Last year the Mayo clinic lost money on its Medicare patients. And the profit making medical industry, the drug companies, devicemakers and medical specialists, who stand to lose money if the profit is taken out of medicine, are all allied against any government program including Obamacare which tends to diminish their profits. Currently, Medicare covers just about any kind of treatment that purports to be effective without any consideration of cost whatsoever. Lobbyists for the profit making medical world and their shills in Congress want to keep it that way.
In the final analysis the only way to reduce the skyrocketing cost of medical care is to take the profit motive out of it altogether. The Mayo Clinic model is a start, but the profit motive has to be taken out of medical and pharmaceutical research and device development as well. The only way to do that is to have the research done at government labs by researchers who are on salary and don't stand to reap a profit from each new drug and each new medical device. And more emphasis needs to be put on keeping patients healthy rather than curing them once they get sick. That means more physical and nutritional education in the schools and more preventive care in the doctor's office. Changing lifestyles will do more to reduce medical costs than anything else. But in a profit making system the doctor has no incentive to make his patients healthier. After all he or she only gets paid when they are sick. This perverse incentive needs to be taken out of medicine. Obama tried to do it with Obamacare but failed to get it passed into law. So the cost containment aspect of Obamacare was a complete failure thanks to Republican obstructionism and lobbyist fueled resistance.
Right now we don't have a health care system; we have a sick care system, and the sicker the American public becomes, the more profits the drug companies and device makers reap. Obesity in the American public is only getting worse thanks to cheap fast and processed foods that are based on sugar, salt and fat. Snack has become a completely accepted way of life. It used to be that snacking between meals was discouraged. Thanks to a successful PR campaign against smoking and the proof that it results in cancer, the American public has been weaned off smoking. Now we need an equally extensive campaign for lifestyle fitness focusing on diet and exercise without the hucksterism of diet and exercize crazes brought to you via TV advertisements. Fast food needs to be discouraged in favor of slow food. Time has to be made available for physical exercise and stress reduction. Weight reduction should be paramount for obese people. The campaign for better health needs to start in the public school system at a young age and be continued throughout one's entire educational career. Nutritional literacy as well as financial literacy needs to be made a major goal.