Diagnosis: Insufficient Outrage; A Consideration

This morning’s New York Times Op-Ed by Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice, and the author of “Overdiagnosed: Making People Sick in the Pursuit of Health”, caught my attention. 

I agree with many of Dr. Welch’s points, specifically that rising health care costs are not so much about better value or care as they are about profiteering; however I contend that most common perpetrator is the hospital and associated network, not the broad brush of providers with which he paints essentially everyone involved in delivering care, to include doctors and pharmaceutical companies.

There is no explanation for a $108 tube of bacitracin other than price gouging.

Follow the money: Hospitals and their networks first want to control market share by purchasing practices or establishing competing entities, then they seek to drive up insurance reimbursement, then finally, enter the insurance market themselves.

One problem is that health insurance is simply too profitable for hospital networks to ignore; they want a piece of the action. In aggregate, the top eight US health insurers had $302 Billion in Revenue and $12 Billion in profit in 2012. On a relative basis, the US government spent $802 billion on Medicare and Medicaid. Its important to remember that the $12 Billion in profit is money that completely left the health care system, and rather than being spent on care was paid as profit and dividends.

He rapidly goes on to segue from this point to highlight the fact that only the uninsured are subjected to the full brunt of these unfair medical price points, and then asks, when does this become criminal?

Probably not criminal, strictly speaking, because none of these entities are breaking the law; however profiteering at the expense of a strained healthcare system is certainly immoral and unethical.

The irony is that the hand on the switch of pricing and market position is the board of directors and hospital network CEOs, the very same who recruit doctors like Dr. Welch and I to work for their hospitals and networks.

The laws controlling the system are written by legislators who do not have the political will or courage to change our broken system. President Obama, even with his mandate, was only barely able to enact the ACA, which although a step in the right direction, lacks the boldness and vision of a president of his stature.

Price fixing isn’t the solution. I believe it is immoral to take the incentive out of the system for a doctor, or hospital, or pharmaceutical company, or device manufacturer to develop a better product or provide better care, or to be able to set a price for what their services are worth. However, those prices need to be transparent, and fair, and based in actual cost. The incentives can be made better (even close to perfect) while offering access to care for our most vulnerable citizens.

Federal and State legislatures should be held accountable for their abdication of fiscal restraint, and profligate policy when dealing with healthcare budgets. Health insurers should be held accountable for passing more and more costs to patients in the form of policies with greater co-insurance portions. Hospitals and networks should be held accountable for price gouging.

I applaud him for his request for a return to professional ethics: just because you can order a test, or do a procedure does not mean that you should.


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