Every so often someone who is not on the inside of an industry is able to see in a somewhat different light things about the industry that seem to be taken as fact by insiders. So it is with David Goldhill, a media and technology executive, who has written an article, "How American Health Care Killed My Father", about health care in The Atlantic. Granted it's an incendiary title, but Goldhill goes beyond the personal and raises fundamental questions about our approach to health and health care. And they are two different things.
We tend to think of health care as being the same as medical care, but, as Goldhill points out, there are a lot of other aspects of life that are necessary to a healthful life: "nutrition, exercise, education, emotional security, our natural environment and public safety". Yet, we spend an unbelievable amount of money on medical care, "8 times as much as we spend on education, 12 times what is spent on food aid to children and families, 30 times what we spend on law enforcement, 78 times what is spent on land management and conservation, 87 times what is spent on water supply, 830 times what is spent on energy conservation". It is truly scary.
Goldhill looks at medical care as simply an industry. Clearly, looked at through that prism, medical care has some problems. Goldhill feels that the fundamental problem is that the industry is not customer-focused, the customer being you and me; it is focused on who pays the bills, insurance companies and governments. He argues that much of the progress in the world beyond healthcare has come about because of the consumer's interest in the price he pays for goods and services. This is an area that is a grand mystery to just about all of us who consume medical servives Do you know how much your doctor is charging you for your annual physical? Do you question her scheduling of a CAT scan? Do you ask how much the prescription will cost before he writes it? Yet, you look at all the prices in the supermarket. You know to the penny how much you pay in real estate taxes. You make sure that you're getting the beat deal on that new car. Does it not make sense to consider pricing when making medical decisions? His basic argument is that we would all be better off if we directly paid for some of our medical expenses.
Goldhill stresses a fundamental difference between health and other insurance. We expect health insurance to pay for virtually all medical expenses, not only expenses associated with a major problem. Yet, all other forms of insurance cover not the expected daily expenses, but the major catastrophe.
Along the way, Goldhill mentions some interesting factoids: for every two doctors in the U.S. there is one health-insurance employee, Medicare spends twice as much per patient in Dallas as it does in Salem, Oregon, because there are more doctors per resident in Dallas, whether you are insured or uninsured you spend about the same amount of your own money on health care, per capita spending on health care in most Western countries has increased by c. 40% over the past five years.
He does address many of the 'givens' that supposedly have a major impact on the growth of health care costs. The idea that improved technology means higher medical costs flies in the face of the experience of most of us. The computer on which I am writing this is more powerful than the mainframes I worked on in the 1960s and 1970s; those behemoths cost in the millions, I paid $700 for this PC. Goldhill attributes the high cost of emergency rooms more to accounting legerdemain than reality. Goldhill questions the value of the 500 major hospitals we finance. He wonders why the industry won't finance the investment in electronic records as the the roi is close to 60%.
It is probably the most sensible article you will read about how we pay to stay healthy. It demonstrates quite clearly that the current 'debate' about health care is more sound and fury signifying very little. This is an area where change is clearly needed. Instead, as with the world of finance, we're getting patches.
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