Where the Medical Cow Still has Milk

These are the pre-Affordable Care Act impact numbers reported by the Huffington Post (October 3, 2013): We spend 17.7% of our Gross Domestic Product on healthcare. The next tier of big spenders are: Netherlands (11.9%), France (11.6%), Germany (11.3%), Canada (11.2%) and Switzerland (11%, which has the second hard dollar expenditure per capita behind the U.S.). On a hard dollar scale, the government subsidy in the United States (around $4 thousand/capita average) is second only to Norway (close to $4.8 thousand), so the government is a big medical spender even without counting the Obamacare subsidies. We have some pretty-heavily government-subsidized medical care costs, but the staggering bill is so high that it doesn’t remotely make a dent to the healthcare costs for the majority of its pre-Medicare-aged citizens.

Continuing in these complex statistics, the Huffington Post continues with its dissection of the underlying numbers since the 1960s. Corrected for inflation, according to a cited report from McKinnsey, as U.S. wages rose 16% and GDP increased by 118%, our healthcare bill skyrocketed by 818%! And it’s not because Americans go to the doctor more than others. Annually, Americans consult a physician about 4.1 times a year, while Japanese go 13.1 times, Germans 9.7 times, Canadians 7.4 visits, Brits just 5. However, only Germans, Swiss, New Zealanders and Canadians spend more hospital time per capita than us. We do, however, typically pay well more than double the global average (often four or five times higher than the charges in many countries) for common prescription drugs. Our surgical costs are almost double the costs in the next most expensive venue.

What’s even worse, our personal habits, staggering obesity and late-onset diabetes rates leading the way, bring us into the medical system with the most congestive heart failure, diabetes and asthma demands of any medical system in the world. Expensive costs are clearly associated with these ailments, and our preventative care system seems to be a total bust. Our life expectancies aren’t longer than the majority of those in developed nations that spend less that we do. And the end of this road is an expectation that our expenditures on healthcare will double in the next decade.

For those in the medical profession, there is a huge pressure to reduce costs, a shortage of qualified doctors as I have recent blogged, new demands from both government and private insurers to knock dollars off the cost of each procedure. These pressures are felt most intensely at the primary care level, where earnings are pretty much just keeping up with inflation. On the other hand, for specialists who know how to segment their bills into differentiated and additional charges for “different” procedures often linked to a single cause or where they can perform lots of “procedures” in a single day, the money is good and getting better. “It does not matter if the procedure is big or small, learned in a decade of training or a weeklong course. In fact, minor procedures typically offer the best return on investment: A cardiac surgeon can perform only a couple of bypass operations a day, but other specialists can perform a dozen procedures in that time span.

“That math explains why the incomes of dermatologists, gastroenterologists and oncologists rose 50 percent or more between 1995 and 2012, even when adjusted for inflation, while those for primary care physicians rose only 10 percent and lag far behind, since insurers pay far less for traditional doctoring tasks like listening for a heart murmur or prescribing the right antibiotic…

“By 2012, dermatologists — whose incomes were more or less on par with internists in 1985 — had become the fourth-highest earners in American medicine in some surveys, bringing in an average of $471,555, according to the Medical Group Management Association, which tracks doctors’ income, though their workload is one of the lightest.” New York Times, January 18^th. That’s more than triple the average earning power of a primary care physician.

We are going to these “surgical” procedures with increasing frequency and sending the cost equation into spiraling imbalance. “Use of the surgery has skyrocketed in the United States — over 400 percent in a little over a decade — to the point that last summer Medicare put it at the top of its ‘potentially misvalued’ list of overused or overpriced procedures. Even the American Academy of Dermatology agrees that the surgery is sometimes used inappropriately.” NY Times.

Sure getting specialized medical training costs more, and the malpractice premiums of these higher-end doctors is significantly higher, but these costs are bad and going in the wrong direction. Perhaps if we paid for medical school to encourage filling the void and kill those absurd student loans, we might just make a deal for more affordable healthcare down the line. Our entire healthcare system requires a ground-up review, a process that well-funded lobbyists and anti-regulatory legislators are dedicated to prevent. They have been very, very successful, and we have one of the least efficient healthcare systems in the world.

I’m Peter Dekom, and I guess this is what you get in a plutocracy that is built to serve special interests over the best interests of the majority of its citizens.