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Is There A Campaign To Prove Healthcare Cost is Cheap in America?

Stanley Feld M.D.,FACP,MACE

Two articles have implied that healthcare is inexpensive in America. The NY Times article of August 22 “Health Care the Engine that Drives the Economy 1 and a August 30 AP article “Americans may get medical money’s worth”. 2

For some reason someone feels compelled to find justification for the escalating out of control healthcare costs. For some reason they are ignoring the tremendous inefficiency, waste and overcharging in the system.

In the NY Times article Dr. Fuchs is quoted as saying “It takes so little of household income to satisfy expenditures on food, clothing and shelter,” he explains. “At the end of the 19th century, food, clothing and shelter accounted for 80 percent of the family budget. Today it’s about a third.”

Dr. Fuchs must be kidding. Where does the waste in the system go? It certainly does not go toward improved medical care.

“We have to spend our money on something,” says Robert E. Hall, a Stanford University economist., Dr. Hall and Charles I. Jones of the University of California, Berkeley, write: “As we get older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”1
Dr. Hall; what about the people who can not get insurance or can not afford insurance. Who is going to pay for them?

David Cutler, an economist at Harvard, calculated the value of extra spending on medicine. He added, “Are you willing to spend more? Yes, it costs a lot, but we’re rich enough where the alternative use of the money isn’t as valuable.” 1
In a recent paper in the NEJM Dr Cutler et al stated:” Americans of all ages spent an average of $19,900 on medical care for each extra year of life expectancy gained over the last four decades of the 20th century. And that cost is worth it.”2
“On average, the return is very high,” concludes study leader David Cutler, a Harvard University health economist. “But it’s getting worse for … in particular, the elderly.”

This is an incredible analysis from well known economists. They seem to be saying let us keep the waste and lack of value generated by waste. Everything is fine. The medical care is worth the cost.
Dr. Sidney Wolfe who heads research at Public Citizen has a cynical view of all this:
“The fact that someone is writing this paper shows how desperate the health care system is to justify these out-of-control increases in health spending,” .2

These economists seem to have concluded that since we can not eliminate the waste, we should convince the public of the value they are getting from our present healthcare system. It sounds pretty ridiculous to me. These economists are ignoring the fact that access to the medical care system in the present healthcare system is out of the reach of 46 million of the most important stakeholder the patient. They are also ignoring the fact that the benefactors of the waste and inefficiencies are the facilitator stakeholders and not the primary stakeholders the patients and the physicians.
Both the physicians and the patients make their own contribution to the waste and inefficiencies in the system. This waste must be eliminated for the survival of the medical care system. It can not be eliminated by legislation. It can only be eliminated by creating motivation and incentives for all stakeholders.

I am optimistic. I believe when confronted with a broken healthcare system, America create a democratic and efficient system. There is an opportunity to eliminate waste. There is an opportunity to improve the delivery of medical care. There is an opportunity to reduce cost by reducing waste and increasing quality of care. All these opportunities can be realized without destroying the resource and will of our most important asset in the healthcare system, namely the physicians trained to take care of us (the medical care system) when we are ill and before we become ill. Rather than holding on to the obsolete, ossified bureaucratic system of ineffective and abused rules, we can create a system for the good of all.

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