You Don’t Always Get What You Pay For

It’s happened again ladies and gentlemen. According to a story recently reported by NPR, the U.S. spends the most on health care, but gets the least bang for its buck. The story is based on a survey released by The Commonwealth Fund and paints a pretty bleak picture of the current state of our healthcare system.

In its ranking, the US fell dead last after Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom. Criteria evaluated included quality, access, efficiency, equity, whether people in each country lived long and productive lives, and how much each country spent per person on care.

This study is especially relevant in light of the recent debate (and passage) of the healthcare reform law. While I may disagree with many of the provisions in the law, I do agree that something needed to be done. Insurance mandates? I’m on board but believe that they need to be paid for in a different manner.

(Interestingly, as the article points out, the Netherlands came in first in the survey and doesn’t have a government-run system. Rather, they have insurance mandates like those referenced above).

So what type of changes do I think need to be made? I’ve compiled a list below of my top six, in no particular order, but I have purposefully left off the exact manner in which I think they need to be implemented. Those debates need to be held in an open forum with everyone getting a chance to voice their opinions before decisions are made.

  1. We need to take more personal accountability for our choices. A study by PriceWaterhouseCoopers found that 25 percent of insurance premium cost increases are a result of increased utilization. A large portion of this increase in utilization can be attributed to one thing: Poor personal choices. Many cases of high cholesterol, diabetes, heart disease, and obesity–just to name a few–could be prevented if we make healthier decisions. Many people,  however, don’t want to take responsibility for these poor choices. Instead, they want the healthcare they need without having to pay for it. Dealing with a systemic problem such as this without making changes to this fact simply isn’t sustainable. One way for us to make better choices is to have better information on things like costs and, fortunately, tools from companies such as change:healthcare are coming to market to help us with this. (Disclaimer: The PWC study was commissioned and paid for by America’s Health Insurance Plans, which is the lobbying arm of the health insurance industry).
  2. We need to increase the use (and compensation) of primary care doctors. Study after study points to the fact that our healthcare system fails to recognize the long-term effects of primary care and that we don’t compensate enough for the care that is delivered. Most other industrialized countries are the inverse of our current system where we tend to rely on specialists and relegate primary care doctors to the back burner. Those same countries are getting better outcomes for their dollars spent. My current company, CareHere, is focused on breaking down barriers to primary care with on-site medical clinics and is delivering some pretty incredible results for our clients.
  3. We need to find a way to end defensive medicine. Have you ever felt that your doctor ordered tests that may not have been needed? I certainly have. Sometimes the extra tests are needed to rule-out something that the doctor is unsure of (and that you’re unaware of) but often they’re ordered because you doctor is afraid that they may miss something that’s a one-in-a-million chance and they don’t want to be sued. This fear leads to the practice of defensive medicine. It also leads to higher healthcare costs without a corresponding improvement in outcomes. How do we accomplish this? By enactive comprehensive and sensible tort reform.
  4. We need to find a way to get new medical technology and treatments to scale faster. Andy Kessler wrote a book entitled “The End of Medicine” that really brought this concept into focus for me. Drug companies routinely spend hundreds of millions of dollars doing drug research without a guarantee of a return. Medical technology companies bring new treatments to market but they’re so expensive that they’re relegated to “experimental” status because they simply cost too much. Scale can be achieved in our current healthcare system but it simply takes too long. Somehow we’ve got to find a way to get medicine to scale faster, which will extend life-saving treatments to the masses at an ever-lower cost.
  5. We need to understand that we can have two out of three (but not all three): Medical treatments that are quick, cheap, or of high quality. In a perfect world everyone would have access to the highest quality care when ever and where ever they needed (or wanted) it at little-or-no cost to themselves. This, unfortunately, simply isn’t reality and will most-likely never be achievable. When it comes to project management an old saying goes something like this: “You can have it (your project) cheap, fast, or good but not all three”. People (or politicians) that want immediate access to high quality care without paying for it are delusional. This position simply isn’t debatable even if how you pay for it is.
  6. We need to have open, honest discussions about end-of-life care. Fortunately, I have not had to make end-of-life care decisions for anyone close to me. I will most likely, however, face these decisions at some point in my life. Several years ago I signed documents giving me power of attorney over the healthcare decisions that relate to my parents if they are unable to make decisions for themselves. The Dartmouth Atlas of Health Care finds that 32 percent of total Medicare spending for patients with chronic illnesses occurs in the last two years of their lives. Furthermore, a majority of people that indicate that they’d prefer to die at home end up dying in the hospital. What should we do about this? I’m not advocating “death panels” but we should all have honest discussions with our loved ones so that we clearly understand their wishes. For most, it will be about quality—and not quantity—and the end of our lives. (UPDATE: For a heart-wrenching account of how end-of-life discussions take place–or don’t take place–take a look at this article from The New Yorker.)

UPDATE 2: I recently came across an article by the Council on Foreign Relations that further makes another very important point about how healthcare costs are hurting the competitiveness of US companies and our overall economy.

Do you think that I’ve left out something big? Do you completely agree or disagree with my priorities? Let me know. Debate without consequence is one of the many things that make America great.

UPDATE 3: Read about demand-side issues with healthcare costs.

UPDATE 4: Read about how healthcare costs have more than doubled in the past decade.

(Image source: theFerf)


  1. Andrew Brush says

    Unfortunately, what was left out in the passage of the new healthcare bill was healthcare. The healthcare system was made a political agenda item for both conservatives, liberals, republicans, and democrats. It was passed as quickly as possible with as little true debate as possible. Fixing our healthcare system is imperative, and honest debate should have taken place on how the private sector can improve the quality of care and lowers costs while establishing government’s most appropriate role. I agree with your post, hoping that the new provisions and incentives in the HITECH Act help improve the technology in our healthcare system. In the end, improvements to technology are not for the physicians and hospitals. They are to assist in provided higher quality and more efficient care to patients.

Leave a Comment