Why is healthcare expensive?

November 30, 2008 , 19:17 Filed in: Healthcare | medicare | spending | costs

Healthcare is expensive everywhere but particularly in the United States. Part of the reason is that we want it that way. Really? People don’t want to spend money on healthcare in general or healthcare for others but we all want it for ourselves seemingly no matter how futile the spending may be. In America we are raised to believe we can have anything and that which we don’t have we can buy. While true in many parts of life it doesn’t always work out that way in spending for healthcare.

For example... One percent of the population accounts for 30 percent of the nation's healthcare spending. Nearly half of those people are over age 65. Medicare spends nearly 30 percent of its budget on people in their final year of life. More than half of Medicare dollars are spent on patients who die within two months. Add to this the fact that most of us pay for healthcare using pooled money from others (either taxpayers or customers of private health insurance companies) and it’s easy to see why individuals do not exercise any restraint in their spending. After all, many reason, if I don’t use those dollars someone else will and of course you do and someone else does and everyone does. Everyone spends whatever is available to extend life even a few minutes with no consideration of the cost. People spend until there’s no more left to spend and hospitals and doctors continue to spend on patients long after their insurance, government, and private money runs out. Cost is almost never an issue when deciding how long to keep someone alive on life support and when the official money sources run out it just goes to the hospital and the doctors to find ways to make up the shortfall elsewhere meaning getting the money from other patients to make up the deficit.

In countries where all healthcare is paid for by the government though things have to be different. No country can afford to hand a blank check to the medical establishment and say do anything and everything whether you can pay for it or not. No matter how big a budget a government sets for healthcare it will never be enough to meet patient demand, particularly in a country like the US where people are used to there being no limits. In these countries expensive treatments and drugs are just not available. On paper this makes sense. For example, one of the rare diseases I treat can cost up to $250,000 a year for medication cost alone. This to extend life in some cases by a year or two. A government paying all these bills would have limited resources and would have to decide how much money to allocate to treating this disease vs providing much cheaper preventive healthcare to children or providing treatment for diseases that if treated can be cured as opposed to just extending life a few months for terminal patients. How many organ transplants should be purchased when so many more immunizations and antibiotics might be paid for.

In practice, this happens already in the US Veteran’s hospital system. While they limit drug choices for veterans and may allow for certain transplants to occur they severely limit the money spent on these items by limiting how many hospitals can perform the surgery. This way only the best possible candidates can get the expensive therapy while the rest die waiting. This seems harsh but if money is finite, as it usually is, hard choices have to be made as we no more than any other country can continue to have the open ended policy of paying for anything anyone wants if the government is in charge.

In my healthcare plan (detailed in articles elsewhere on the site) we ask the government to pay for basic care but we don’t prevent people with private resources from buying more if they want and can afford it. Still, even in my plan (or in any government plan) limited resources will have to be allocated in ways that benefit the general health of the population. We will not be able to afford unlimited very expensive care for the few at government expense at the peril of many.

Don Elton, MD

Tags: healthcare, medicare, spending

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Immigrants and Healthcare

October 16, 2008 , 19:31 Filed in: immigration

Immigrants and Health Care — At the Intersection of Two Broken Systems
Susan Okie, M.D.

(From the New England Journal of Medicine 2007)

At a primary care clinic in Montgomery County, Maryland, where I volunteer, the patients are uninsured immigrants from Latin America or West Africa. Many are day laborers, house cleaners, or construction workers; most do not speak English. Several months ago, I saw a middle-aged Hispanic baker with profound weakness, fatigue, limb swelling, and severe muscle pain, who had to be hospitalized for myxedema. Fortunately, a local charity agreed to pay most of her hospital costs, and she's now receiving thyroid hormone–replacement therapy — but with regular care, her hypothyroidism could have been diagnosed earlier and hospitalization averted. Another day, I tried to persuade a reticent West African man who had been tortured in prison that psychological counseling might help his chronic pain. However, mental health services for uninsured immigrants are sparse, and the man was reluctant to venture to a distant part of Washington, D.C., to a program for torture survivors. A third patient, a man in his 40s, came in with a nearly empty bottle of eyedrops, which he had brought from Ghana to take for glaucoma. The disease had already blinded him in one eye, and the vision in his other eye had been fluctuating. He needed a complete eye exam and visual-field testing, but arranging timely referrals to specialists is often difficult for caregivers treating the uninsured. I wrote him a prescription, and we managed to set up an appointment at a hospital-based ophthalmology clinic that accepts a limited number of uninsured patients.......

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Tags: immigration