The NYT On Healthcare

The New York Times has finally come around to the point that I’ve been making here for some time: that the main problem with the healthcare system in the U. S. is that healthcare costs too much. All of the problems with healthcare are exacerbated by high costs; none of the alleged solutions that have been proposed to solve the problems with our healthcare system do much to solve the problem of rising costs, at least not in a manner consistent with good public health. Here’s the paragraph I liked the most:

This is mostly because we pay hospitals and doctors more than most other countries do. We rely more on costly specialists, who overuse advanced technologies, like CT scans and M.R.I. machines, and who resort to costly surgical or medical procedures a lot more than doctors in other countries do. Perverse insurance incentives entice doctors and patients to use expensive medical services more than is warranted. And our fragmented array of insurers and providers eats up a lot of money in administrative costs, marketing expenses and profits that do not afflict government-run systems abroad.

That’s not the only good paragraph; there are lots of them and I urge you to read this editorial in its entirety.

There are a few points that the NYT leaves out. First, they seem unaware of how costs became so high. The period of greatest inflation in healthcare costs was between 1965 (the enactment of Medicare) and about 1978. During this period physicians’ incomes increased substantially faster than the non-healthcare rate of inflation, the federal government was willing to pay for practically any piece of medical equipment a hospital wanted, and healthcare costs went up commensurately. Why? I believe that the answer is that Congress paid little attention to rising costs, generally just signing the checks, until the sector had risen to a point at which the increases really began to hurt. This created systemic costs in the form of an expectation of rising incomes and rising expenditures.

Second, they devote no time whatever to the relation between costs and distribution of healthcare and the severely constrained supply of healthcare in the U. S. The number of physicians graduated per year from U. S. medical school hasn’t risen much in a generation despite the natural increase in the population of the country. We have significantly fewer physicians per 100,000 than any Western European country (and, particularly, fewer primary care providers). One can only imagine what would have happened to healthcare costs if we hadn’t imported significant numbers of doctors. This, in turn, raises healthcare costs practically everywhere else.

Third, although they mention a future in which every additional dollar of GDP growth is absorbed by healthcare costs they don’t mention the spectre that’s before us right now in which too much available investment is diverted into medical research while other sectors of the economy go wanting, concentrating more and more wealth into fewer and fewer hands.

7 comments… add one
  • PD Shaw Link

    Dave, did you happen to read the article in this month’s Atlantic, “The health-care crisis no candidate is addressing? Too many doctors” ?

    Not available on-line, but it might have better been titled “. . . Too many specialists”

  • Dave, did you happen to read the article in this month’s Atlantic, “The health-care crisis no candidate is addressing? Too many doctors” ?

    No, I didn’t. I’ll have to track it down.

    My questions on that would probably be “Under whose control is the number of specialists? Is it by accident or by design?”

  • Grewgills Link

    We have significantly fewer physicians per 100,000 than any Western European country

    change that to “any continental Western European country” and it will be true.
    Ireland and the UK have significantly fewer than do the US.
    Also lower, but outside Western Europe, are Canada, Mexico, Japan, New Zealand, and South Korea.

  • Larry Corbett Link

    If there ever was a need for government intervention this is without a doubt one of those times. The biggest road block in correcting our health care crisies is the political one..we saw this very clearly in the 90’s when Hillary Clinton traveled throughout the country to talk about “a plan” to begin to fix the health care problem. We all know how that went.

    It’s all about the money, and no party will freely give up those profits for the good of the country and it’s citizens.

    I heard an interview on the radio a few months back, some doctor was talking about an idea he had..basically it was about an experiment involving a few large medical centers across the country in a few selceted cities…using these few medical centers as test sites, the idea would be to allow these selected sites to pick themselves apart and examine their entire process in providing health care to find out what works and what does not, from medical procedures, to the billing processes…to basically rebuild the whole system from the ground up and fix the problems. These selected medical centers would work together, share insights, ideas. Once the issues and problems get corrected, then this same system could be incorporated throughout the country…

    The only way to really fix our health care system is to take a bold step like the one above and roll up our sleeves and get to work in solving this problem. We will not solve this problem policially in our current state of political madness..unless all sides really decide to fix the problems..and this would include all parties involved, insurance, research, drug companies, doctors, patients, any one associated with the medical system.

    Why not experiment on a small scale and see what happens..or are we too affraid to deal with some of the dirt under the carpit?

    When I was in the military that medical system seemed to work just fine..perhaps our health care system is something the free market isn’t incapable of dealing with, perhaps we cannot trust those free market thinkers to actually think in the the best interest of our nation and it people, that a government mandate is needed to force a real solution?

  • PD Shaw Link

    I found a copy of the Atlantic article at the New America Foundation:

  • Thanks, PD. Good article and one with whose conclusions I’m largely in agreement.

    When I say we need to increase the supply of healthcare, I don’t mean we need to train a fraction more doctors. I mean that we need to double or treble or more the supply through some combination of increasing the number of doctors trained and changes in work rules including harnessing information technology, changing the rules on prescribing medications, telemedicine, eliminating anti-competitive regulations on hospitals, and a host of other reforms.

  • Dave, you might find this article to be an interesting data point when discussing the supply of healthcare.,0,931434.story?coll=orl_tab01_layout

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