Matt Yoder
The Rising Costs of Healthcare
Bio410: Biology Senior Seminar
Dr. Stan Grove
Goshen College
November 5, 2007
Thesis: [The] rising costs [of healthcare] have birthed an alarming discontinuity between the mission of the broader healthcare system in the United States and the implementation of programs and policies to bring these statements to realization, demanding the attention of the medical and Christian communities.
America’s Healthcare Crisis: An Introduction
The state of the American healthcare system is one of disarray. While it may appear healthy and thriving on the outside, internally the serious danger of possible systemic collapse demands our immediate attention. Over 40 million Americans are struggling to make ends meet today without any medical insurance, and some 67.9 million others are subsisting on the nominal coverage provided by the government programs Medicare and Medicaid (US Department of Health, 2007). Even these subpar programs threaten to give way under the stress of need within the system. As a result of this minimal health care coverage, many Americans are delaying healthcare to the point of medical emergencies. This is causing a notable influx of extremely unhealthy individuals into emergency venues not designed or prepared for this type or magnitude of care. In 2003, there were an estimated 114 million emergency room visits, an increase of about 27% in a single decade. In light of recent trends, it is not surprising that only about half of these visits were deemed true medical emergencies. The poor and underserved have learned to take advantage of this loophole in the system, seeking care from the one element of the system that cannot legally refuse to treat them (Neergard, 2006).
The question begs answering: how can this be? Our nation undoubtedly remains the richest in the world with an estimated gross domestic product of just over $13 trillion or around $43,000 per capita (Central Intelligence Agency, 2007). The American Medical Association claims “the betterment of public health” as a part of its integral mission statement (American Medical Association, 2007). Yet, despite spending more than any other country on healthcare per capita, the 2000 World Health Organization health report ranked the United States as 37th in terms of overall healthcare (World Health Organization, 2000). In general, one can refer to our system as one of “healthcare” only in the loosest understandings of the word. Once founded on the Hippocratic Oath, our system has thrown ideals like the “benefit of [one’s] patients” and avoidance of “mischief and corruption” to the wind (Stevenson, 2000). These foundational understandings have been replaced by a market driven, capitalistic machine bent on increasing profit margins. Obviously, the greatest issue facing healthcare today can be traced to the ever increasing costs of diagnosis, treatment, and care. These rising costs have birthed an alarming discontinuity between the mission of the broader healthcare system in the United States and the implementation of programs and policies to bring these statements to realization, demanding the attention of the medical and Christian communities.
Examining the Costs: An Economic Overview
To fully understand the root of this problem, one must first examine the causative events that have led to the current state of affairs. The driving force behind the change has been the espousement of the market driven industry concept, more closely resembling the philosophy of an advertising agency than a hospital. Overdeveloped administrative efforts, inflated treatment pricing, and unnecessary and high cost complicated procedures, are just a few of the reasons for the rising costs and reflect the dependence on viewing healthcare as a business (LeBow, 2003). A move towards the privatization of the industry has generated the need for advertising and marketing strategies to attract the “business” of more “consumers.” Clever advertising slogans, billboard campaigns, TV commercials, and radio messages are common practice among modern healthcare organizations. Inevitably the consumers are the ones who incur the costs of these unnecessary programs. It is a safe assertion that the sick will know when and where they can seek medical attention if such an occasion rises. The quality of care provided between healthcare entities should be comparable, in a healthy system, eliminating the costly “need” to persuade patients of their need to seek out a specific place of treatment.
Rising administrative costs have been a continuing disease to the modern medical system. Many of the problems arise from the multiple payer system in which our country is so grounded, which limits government involvement and stresses the importance of the private industry. As it is, clinical decisions often must be approved by phone calls or meetings with hospital administration, lengthening the time between diagnosis and treatment, increasing costs, and creating headaches for the treating physicians (McCally, 2002). In the late 1990’s health administration costs came in at around $294.3 billion in the United States, or $1,059 per capita (Woolhandler, Campbell, Himmelstein, 2003). While some of these costs can be categorized as necessary or unavoidable, additional studies put the excessive costs of administration at $46.5 billion (Mueller, 2001). Only five years later, collaboration between several research groups, including those generating the immediately preceding statistics, estimated the bureaucracy of health care to claim $399.4 billion annually. Furthermore, these groups approximated $286 billion in savings associated with a move to national health insurance (Woolhandler & Himmelstein, 2003). This knowledge must be made available to the general public in light of the lack of response to such unsettling figures. Clearly, room for improvement exists.
Overpricing: Padding Physicians’ Pockets
This incredible need for improvement and reevaluation of the current system can also be found within the corrupt system of overpricing that has developed in the last half a century. Though the origins are many, upon closer inspection of the pricing issue, one can identify physician salaries, medical equipment, and the explosion of the research and development, in close association with the pharmaceutical industry, as foundational to the problem. In 2003, the average physician netted $203,000 with surgical specialists topping the charts at an average $272,000. Though the rate of increase of physician salaries has declined in the last decade, especially when taking inflation into consideration, the sheer numbers still rank them among the monetary elite (Adams, 2006). While it is a well known fact that physicians put in a significant amount of time, energy, and money into the educations that allow for their privileged societal position, such salaries seem like a gross overcompensation. Too many physicians today enter the field for the express purpose of arriving at such a lucrative status. There is simply not enough concern for patient wellbeing and commitment to the service aspect of the profession for this industry to even warrant the “health care” title. Among the minority who still stand firm in their ideals, such organizations as the “Physicians for a National Health Program” and numerous grass roots efforts have been initiated in response to the growing problem. These noble reformers remain well grounded in the standards of care that attracted them to their vocation, and set a precedent for other physicians to match.
The popular usage of both routine and advanced medical equipment has forced physicians to match their competitors in terms of the diversity and innovation of care offered via this equipment. Approximately, 5% of all physician bills are allocated towards the purchase and maintenance of major medical equipment (Mueller, 2001). This should be of no surprise with the commonality of procedures like echocardiograms, colonoscopies, and liver biopsies at $1200, $2000, and $3000 respectively (LeBow, 2003). X-rays are taken to rule out broken bones, CAT scans check for tissue damage after sports injuries, while PET/CT images reveal the absence of cancer. Angiograms, magnetic resonance imaging, mammograms, nuclear scans, and ultrasounds are just a few of the other common procedures that make up this seemingly never ending list. The probability of utilizing diagnostic imaging as a supplement to a physician’s expertise has become increasingly high. American medicine has lost touch with a sense of managed care that balances thoroughness with practicality. Specialists are among the worst abusers of such technology, utilizing the most advanced diagnostic measures for some of the simplest of ailments. They simultaneously have proven to be the least likely to defer or wave the costs of consultations and select procedures (LeBow, 2003). While these tendencies may not always be intentional, and may actually be viewed as in “the patient’s best interest,” the broader financial consequences are still devastating on the private and public levels.
Yet, perhaps the greatest single factor contributing to the eruption of health care costs in the last century has been the explosion of technology within the medical field itself. Most of the common treatments, surgeries, and procedures considered normative today, simply did not exist even a few decades ago. In conjunction with the pharmaceutical and medical equipment industry discussed earlier, the broadly defined arena of medical research and technological advancement has witnessed enormous and growing success. In 2003, the investment in biochemical research and development was estimated at $94.3, nearly tripling in the period of a decade (Moses, Dorsey, Matheson, Their, 2005). The private sector provided the majority of funding, though the ratio of public to private sources has not changed substantially over the years. Both fiercely defended and strongly criticized, technology has proven to be perhaps the most indispensable of the cost factors. With the financing and resources to do so, the US has become a hot spot for medical research that has paved the way for new treatments and improved quality of life for individuals around the world. The private nature of the funding means that most of the cost of this research is incurred by the general public regardless of the extent to which person’s may benefit from these developments. Unfortunately, the poor, still subject to the indirect costs of this research, rarely reap the benefits of costly, innovative medicine. Still, technological advances have streamlined some processes, such as lab and blood work, to the point where even the poorest of Americans can afford testing (Mueller, 2001). Perhaps this is one area at which healthcare reformers might best serve by keeping their critiques at bay.
Findings on the support provided by the pharmaceutical industry vary. Researchers from the American Medical Association investigation cite pharmaceutical monetary involvement at around $10.5 billion, a number on the conservative side of most estimates (Moses et al., 2005). Regardless of the supposed involvement, pharmaceutical companies have a vested interest in the promotion and consumption of new, cutting edge drugs. Just over one fifth of the total revenue of pharmaceutical companies in the capitalistic US finds its way back into marketing strategies, a value twice that in other developed countries like Britain (Mueller, 2001). The sad truth is that pharmaceutical research depends on the lobbying of private physicians and larger health systems to buy patented prescription drugs as a major source of revenue. Many non-patented, equally effective drugs exist, but at times consumers are not made aware of their availability because of a diverse array of persuasive tactics that have been used on physicians to insure the sale of the “higher quality” name brand medications. Gifts, lottery tickets, a free computer and cash incentives were just a few of these creative marketing ploys offered to Dr. Rudolph Mueller, author and critic of today’s healthcare system (Mueller, 2001, p. 59). In the past year, protesters have had to deal with the unethical sale of physician information from the AMA masterfile, containing some 900,000 physicians, to interested pharmaceutical companies (Barclay, 2007). Michael Mendoza, MD, MPH, and assistant professor of family medicine at the University of Chicago in Illinois, objected strongly claiming “the AMA has abused [his] rights to privacy by selling data about [him] without [his] consent for commercial and marketing purposes” (Barclay, 2007). The extent of the pharmaceutical industry’s hold on America’s healthcare system is no small matter.
However, the general public cannot presume to blame physicians and the industry for all of the perceived problems. One important consideration, patients’ freedom in the frequency and type of treatment sought, provides a new perspective on the crisis. If one reverses the lens of critique to focus on the choices of the public, rather than the inherent flaws of the system, an entirely new set of factors can be identified that only serve to maintain the status quo. Granted, the industry can be rightly accused of marketing propaganda used to attract and convince patients of their dependency. Once patients are in the door they retain the right to refuse treatment. Unfortunately, recent trends show quite the opposite happening within the healthcare system. Fueled by the American ways of consumerism and individualism, most patients treat healthcare like any other luxury: they want the best. Perhaps individuals are also not entirely to blame. After all, the health of oneself and one’s family are of the utmost importance. Yet, a trip to the emergency room for a child having fallen off the couch, accompanied by a slew of imaging and lab tests, could rightfully be considered excessive. Americans are so intent on the infallibility of the care they receive that malpractice suits are now an increasingly common experience. In 2002, the Medical Liability Monitor determined that the average intern, general surgeon, and obstetrician/gynecologist forked over $10,098, $35,915, and $55,804 respectively to cover the cost of their yearly premiums (Harleston, 2003). With the threat of legal action looming over their heads, physicians are doing everything in their power to cover their medical bases, ordering every relevant test and medication possible. The extent to which fear factors into these diagnostic services will likely never be known, but defensive medicine is a long accepted reality. The responsibility falls on physicians and patients alike to break this costly cycle.
Bipartisan Politics: The Conservative Take
Breaking the cycle may prove to be a difficult task within the context of the political turmoil surrounding the state of the nation’s health care system. As things are, medical practices must operate within the constraints of the ruling power’s political agenda. While medicine continues to advance rapidly, the guiding political infrastructure lags severely behind. Bipartisan politics are fundamentally causal in the inability of our nation to implement any semblance of a cohesive or cooperative plan. In the absence of such a plan, the ideologies of a free market economy have pervaded every corner of the industry. Many social and economic conservatives feel that this may actually be the best case scenario. In their eyes, the undesirable aspects of our system are in fact the result of government attempts in the last few decades to intervene. The government is believed to be detrimental by “artificially stimulating demand and artificially constricting supply” (Richman, 1992). Reduced competition in medical school admittance and the enormous costs of government paperwork are just two of the more popular faults found in a government controlled system. As always, the conservatives are concerned with the tax jump that universal health care with the US would entail. Tax revenues almost always reflect disparities in income, meaning the bulk of the burden would fall on those who can afford private health care. Additionally, they believe that a decrease in taxation would free up more money for individuals to purchase their own private health insurance or medical care. Many are convinced movement towards a universal health care regime would virtually guarantee shortages, shoddy care, and the long waiting periods often criticized in the Canadian system (Antunez, 2005). To the conservatives, while a free market industry may not be perfect, it is most conducive to the progress and high quality of care that millions of Americans have been able to choose and enjoy throughout the nation’s recent history.
Progressive politicians have highlighted the lack of political leadership in health care as the root of the perceived failure of the system. Foundational in their argument is the reasoning that quality health care within the United States is a right, not a privilege. The system should be reconstructed to reflect such thinking. Our government has an obligation to disassemble the structures which maintain discrimination and inequality in health care. Equal opportunity employment and affirmative action within the education system, both supported by the government, address issues far less essential to life (Hofrichter, 2003). The resulting thrust among liberals has often been towards a program of universal health care. While this has taken on many different forms, in essence, it agrees that all people should have access to health care through universal insurance policies or a national healthcare program. Such programs would receive funding through simple, yet effective taxation methods aiming to distribute the financial responsibility across all socioeconomic groups. Government regulations on physician incomes based on specialty, pharmaceutical pricing, and malpractice suit limitations would greatly facilitate the implementation of such a system (Mueller, 2001). This system, ideally, would maintain the freedom of choice in selecting one’s physician, hospital, and treatment options, and would not seek a communistic end result. The emphasis of such a system would be placed individual responsibility and the need for preventative rather than curative care. The current US system treats individuals only after their situation has digressed to a desperate state. Throughout the 1990’s only 5% of all health care expenses went towards the prevention of illness and diseases within the US (Mueller, 2001). The availability of care at the very onset of an illness would encourage people to seek instructive medical advice. This would eliminate the need for expensive remedial treatment options.
Further focus on the disparities between people in the system has led to strong arguments for a universal health program stemming from social activists, and for good reason. For a system founded upon ethics, few efforts have been made to recognize the disadvantages faced by the impoverished socioeconomic groups. Upon closer inspection of the intersection between race, gender, and ethnicity one can clearly see that factors external to health care itself soon take on prominent positions in determining the availability and quality of care received. As a result of the undeniable, inbuilt systems of social oppression and discrimination, minority groups are already at an economic disadvantage. Assuming that upon entering the health care system such issues disappear, which quite arguably is not the case, the playing field is already unlevel (Hofrichter, 2003). Oftentimes, these individuals can only secure blue collar or nonprofessional occupations due to their lack of education again resulting from the vicious cycle of financial limitations. These jobs rarely come with long term benefits. Insurance coverage, while sometimes subpar, is more likely nonexistent. Furthermore, this type of work regularly takes place in physical, chemical, or industrial environments in which a heightened health hazard exists (Hofrichter, 2003). These individuals and families simply do not have access to the financial resources to cover the cost of regular medical checkups, much less major surgeries or medical emergencies. Universal health care could effectively eliminate the possibility of poor health resulting from infrastructural discrimination within the system.
Conclusions from a Christian Perspective
Obviously, no agreed upon single answer can bring about the changes so many Americans desire to see with the health care system. The division on Capitol Hill has left many despairing that change will never come about in light of the filibuster and political runaround that paralyzes large scale reform. Many Christians find themselves in this same boat, wallowing in a divided church and disillusioned with the use of the government as an effective vehicle for the transmission of a realized gospel. It seems multiple ways exist for expressing faithfulness to the same call. Yet, the church must continue to answer this calling to be the body of Christ unto the United States and the world. If Christians truly intend to live out the words of Jesus in Luke 4:18 and “bring the good news to the poor,” we must abandon the individualistic tendencies of our nation and recapture the notion of community present within the early church (Soards, 2001, 103). Care of the marginalized within the community must become a priority. Passivity must be replaced with involvement and action. Activism must be embraced to inform and instruct people of their rights. We must discard the notion of personal responsibility and remember the systems of oppression that leave our neighbors destitute. The perceived stigmas of socialism and entitlement should be ignored as we pool our own undeserved monetary blessings to help those in need (LeBow, 2003). The life and teachings of Jesus are our greatest tools in analyzing the state of our system and our response to the needs of those around us. As we continue to seek out God’s will, Christians should be in constant prayer for the creativity, energy, and means by which programs will be created to lower costs and make health care available for all God’s people.
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Created November 20, 2007 by Matthew Yoder