ABC on Healthcare in the United States

Peter Jennings anchored his final report on the state of healthcare in the U.S. It examined a few points about what is wrong in the system and where the costs are coming from. You can watch a behind the scenes Charlie Gibson interview with Jennings’ widow and some snippets of the report here (click the right hand sidebar video image which will launch a popup on ABC’s Primetime site).

In brief, the report mentioned the under insured and uninsured (40+ million in the U.S.) and how they use emergency rooms as a doctor’s office. It mentions how the perception is that the insurance companies are making huge profits (an assertion I made as well) at the expense of the sick. The report said that insurance companies profit margins are flat. For every dollar earned, insurance companies pocket 13 cents. That hasn’t moved dramatically in thirty years, according to the report. It spoke to the General Motors CEO who said that they spend more on healthcare for their employees than they do on steel for their cars. Another GM spokesperson said that approximately $1,500 per GM vehicle goes to healthcare costs. If you buy a GM car, you are helping subsidize GM’s health care.

The report did a good job of talking to several different people on many sides of the issue. Doctors, professors, Kaiser and consumers. The rising costs of healthcare, according to the report is based on several factors; consumers perceptions about using the latest greatest, the notion that consumers aren’t spending their money when a doctor orders the most expensive meds or tests or techniques, the expensive technology whose merit is untested. While malpractice insurance is a cost, it was not mentioned in the report. So conservatives, here’s a number for you. If healthcare expenditures are $1.7 trillion U.S. per year, say 1.1 billion of that is lawsuit related, that is a drop in the bucket. It takes 1,000 billion to make a trillion. I’m of the opinion that while there are certainly frivolous lawsuits, they do not represent a large portion of healthcare costs. Malpractice insurance for physicians might be crazy, but is that cost passed along to consumers? Insurance companies? I tend to think that it may, but not at a high enough rate to influence premiums. Any doctors out there who can shed more light on this aspect?

The report profiled Whole Foods, and how they had moved to a high deductible plan and educated employees about how to take control of their health and ask tough questions about costs to their doctors. The idea that consumers are spending someone else’s money so they get more care and more costly care was brought up again in this context and Whole Foods said that they could insure more people because they went to a higher deductible plan that lowered their costs as an employer.

Also mentioned was a geographic study where more healthcare was provided (doctor’s visits, hospitalization, tests, etc.) and the study showed that where more medical attention was given, it actually seemed to have an adverse effect on mortality rates.

In the end the report seemed to be saying that healthcare costs in the U.S. are based on consumers wanting the latest greatest (typically most expensive) in care and physicians (and their groups) spending large sums on technology whose benefit is marginal. I felt the report fell short on it’s point by only including two examples. One was Nexium vs. Prilosec. Nexium costs $120/month (but if you’re insured, you only pay around $20, so somebody has to pay for that extra $100). Prilosec over the counter is about $20 for a month, and you don’t need insurance to buy it. The report argued that Prilosec was just as effective in most cases as Nexium at a fraction of the cost. The other example was a machine that could detect heart disease 15 years before outward physical symptoms were manifest. Cost of the machine was $2.2 million, with a scan costing $500. If I’m insured, I pay a copay for that scan, but somebody somewhere has to pick up the remaining costs. Some insurance companies pay for the test, some don’t.

I’m sure I’ve missed something in my recap, but given the discussion here lately, I wanted to share this to gauge response. Do you think we as consumers are part of the problem? Some of the stories left in the comments point to serious health problems, not frivolous use and abuse of the system. What about our expectations for the kind of healthcare we get? How about the notion that when a doctor orders a test, we just say OK without asking it’s cost or effectiveness? In our case, Leta has had two MRIs. While I’d have an extremely difficult time denying that care to her, given that we now know she’s ok, I wonder if those MRIs weren’t excessive. I don’t know. It’s such a tough call. I’d pay out of pocket for those tests, no question, because at the time, we were very concerned (above the normal parental concern level) about Leta’s development. Part of me feels that children’s health should be off the table in this discussion and covered de rigeur. But what about adults? Would my doctor be so quick to order that MRI if she was just trying to ease my fears? Cover her ass? If any doctors out there would care to comment, I’d love to hear your side of this. I think we all share some responsibility in examining this and changing our behavior where necessary. So is it necessary?

I think that a huge part of this is education on the part of consumers about medicine and medical care. And some of the sacrifice is going to be saying no sometimes. That’s a tough one and I don’t think people are willing to accept this notion of personal responsibility so readily.

One of the doctors interviewed in the report said that he wondered if we had the will to change the system. I wonder the same thing.