Friday, January 08, 2010

Why Is Healthcare So Expensive?

Why is healthcare so expensive? If you are a politician you instictively assume that it because of "greed, fraud, waste" of industry fatcats. If you are an industry fatcat, you assume that it is because of the irresponsibility of spoiled patients, churlish doctors and meddling bureaucrats. And then throw in tort lawyers, pharmaceutical companies, unions, demagogues, and various undefined predators. I submit that this is a pretty typical schematic of the assumptions underlying current healthcare reform legislation. What each of these assumptions has in common is some questionable motive on the part of someone. I submit that the cost of American healthcare is really more a result of more benign factors and expectations. In my opinion healthcare is expensive because of :

1.) Performance. As I have said befire, there is a reason why a Ferrari costs twenty times more than a Dodge Omni, and it is not because the Ferrari goes twenty times faster or farther. Marginal increments in high performance systems cost considerably more than proportional improvements in less ambitious systems. Excellence costs disproportionally more than adequacy, and Americans want and have been willing to pay for excellence.

2.) Access. If you need your knee replaced in a fair sized American city, you can go to the local medical center. Or you can go to a specialty hospital or to a surgical center. These options allow you to schedule your procedure within a reasonable time, and not subject to operative room availability that is subject to ruptured appendices, multi-trauma car accidents, dissecting aortas, or perforated bowels. This ready access requires a certain amount of redundancy and redundancy costs money.

3.) Uncertainty. Lets say you have chest pain. A skilled practitioner can take a low tech history and physical and tell you wiht ~85% certainty that you are not having a heart attack, and that he thinks the cause is esophageal spasm, or anxiety. The 15% uncertainty is unnerving, so you are willing to pay for cardiac enzymes that can tell with 95% certainty that you are not having a heart attack. But it's your heart we are talking about so you get parked in an observation unit, with telemetry monitoring, and because something caused the pain, you get a nuclear medicie study the next day. (The readiy availability of the nuclear medicine study also costs money as mentioned above.) But you still don't know what caused you to go the ER and you want to find out. You don't like uncertainty where your health is concerned. You get a specialized CT scan and if this doesn't answer the question you are scheduled for a swallowing study. If you are having headaches, how much are you willing to spend to be assured that they are due to tension and not a tumor or an aneurysm?

4.) Choice. Heaven forbid you are given a diagnosis of cancer. There are several treatment options, the cheapest of which is disfiguring, or disabling surgery. Or you can opt for one the newer radiation techniques, chemotherapy protocols, high tech reconstruction, or some high tech monoclonal antibody therapy. Maintining these options and the expertise to use them costs money, money that we americans have been willing to spend in the private insurance market, until our politicians told us that we aren't.

5.) Autonomy. There is no one other than the patient who can tell us how important the last month of his life is to him. There is no reliable way of telling that the three months he spends at home with his daughter is less meaningful than the three months that a motorcycle crash victim spends in inpatient and outpatient rehabilitiation. The lifestyle and healthcare choices of individual people are matters of liberty and individual dignity, not actuarial variables to be guessed at by remote bureaucrats. It is much cheaper for treatment decisions to be made by venal accountants, it is much more meaningful for these same decisions to be made by unique and irreplaceable people.

6.) Fantasy. We all engage in illusions that are comforting, or that provide emotional reassurance, even if we know these illusions are contrary to reality. We assume that the natural condition of mankind is to die at home in his bed surrounded by loved ones, of old age. We want to think that our doctors will succeed in whatever therapeutic interventions they try, regardless of reason, and if the outcome is less than expected, a jury will be asked to right the wrong. We want to pretend that the 87 year old who just had a massive stroke will get back on her feet "because she's always been active" as soon as she is able to eat, and as a consequence we are willing to spend significant money for what may be a one-in-a-hundred shot. We do this, not because we are greedy or stupid, but because we look at our loved ones a certain way. It may be, in the case of healthcare, that these are futile expenditures, but the underlying presumption, that human life is never an ordinary thing permeates all that we do and all that we value as a society. The money we spend on fantastic healthcare ambitions is simply a consequence of our values.

7.) Responsiveness. Ambulances and emergency rooms respond to everyone who has a medical emergency based only on the fact that the patient is a human being. It requires infrastructure to ensure 24-hour coverage, aerial transport if necessary, and tertiary care centers when needed. Again, we American have been willing to pay for this until our enlightened politicians tell us that we aren't. The simple fact is that government provided healthcare cannot keep up with the private healthcare system in providing Americans with the attributes described above. So they tell us the government must take over and by fiat and diktat deprive us of many of the qualities of our healthcare system that we have already indicated are important to us. The reason, after all that Obama says we need to reform healthcare is not because it costs too much (it doesn't "Consume" 17% of GDP, it produces it) it is because the government is not very good at providing it.

1 comment:

Seamus Muldoon said...

Z9Z99- I am a fellow Coloradoan with particular interest in healthcare. I think you have an interesting perspective. I took the liberty of linking to this post on my blog and digging a little further into the uncertainty factor. I think that is a little-discussed aspect of the whole health care debate that could be expanded upon.
Seamus Muldoon