Health care reform

My friend Russ sent me an interesting essay from the Wall Street Journal (not a publication I take as completely objective), which makes some thought-provoking points. It's title is "The Myth of Prevention" but it's more about cost cutting in general. Below is an excerpt:

. . . despite being an admirer, I just don’t see how the president can pull off the reform he has in mind without cost cutting. I recently came on a phrase in an article in the journal “Annals of Internal Medicine” about an axiom of medical economics: a dollar spent on medical care is a dollar of income for someone. I have been reciting this as a mantra ever since. It may be the single most important fact about health care in America that you or I need to know. It means that all of us—doctors, hospitals, pharmacists, drug companies, nurses, home health agencies, and so many others—are drinking at the same trough which happens to hold $2.1 trillion, or 16% of our GDP. Every group who feeds at this trough has its lobbyists and has made contributions to Congressional campaigns to try to keep their spot and their share of the grub. Why not?—it’s hog heaven. But reform cannot happen without cutting costs, without turning people away from the trough and having them eat less. If you do that, you have to be prepared for the buzz saw of protest that dissuaded Roosevelt, defeated Truman’s plan and scuttled Hillary Clinton’s proposal. The good news is that the AMA, representing perhaps 15% of active practicing physicians, is not as powerful as it was in Truman’s time, and in the eyes of the public and many in medicine, it’s identity in the reform debate, is that of a protectionist, self-serving, organization; as a result, even their most progressive statements are viewed with suspicion. I’ve found the views of the American Medical Student Association particularly exciting—the next generation of physicians I sense has a deeper commitment to affordable health care for all than ours; they are, simply put, better people.

We may not like it, but the only way a government can control costs is by wielding great purchasing power to get concessions on the price of drugs, physician fees, and hospital services; the only way they can control administrative costs is by providing a simplified service, yes, the Medicare model (with a 3% overhead), and not allowing private insurance to cherry-pick patients (some of them operating with 30% overheads, the cost passed on to you).

Contrary to what we might think, comparative studies show us that the US when compared to other advanced countries, does not have a sicker population: we actually use fewer prescription drugs and we have shorter hospital stays (though we manage to do a lot more imaging in those short stays—got to feed the MRI machines). The bottom line is that our health care is costly because it is costly, not because we deliver more care, better care or special care. Alas, a solution that does not address the cost of care, and negotiate new prices for the services offered will not work; a solution that does not put caps on spending and that instead projects cost-savings here and there also won’t cut it. Leaders have to make tough and unpopular decisions, and if he is to be the first president to successfully accomplish reform there does not seem to be much choice: cut costs.