By Arnold S. Relman, MD *
From THE NEW YORK REVIEW:
The US is facing a major crisis in the cost of health care. Corrected for inflation, health expenditures in the public sector are nearly doubling each decade, and those in the private sector are increasing even more rapidly. According to virtually all economists, this financial burden, which is now consuming about 17 percent of our entire economic output (far more than in any other country), cannot be sustained much longer. The federal share, including payments for Medicare and Medicaid, was 23 percent of the national budget in 2009 and is a prime cause of the deficit.1..
However, today’s competitive health care market, with its private health insurance companies and fee-for-service payment system, severely limits the potential cost savings of a delivery system based on not-for-profit group practice. Private insurers contribute to high costs not only because of their profits and overhead, as already noted, but because doctors and hospitals have to pay the considerable costs of billing the insurance companies and collecting money from them. I favor a much less expensive single public payer system supported by a universal, progressive, designated health care tax. Fee-for-service payment gives doctors incentives to provide more services than needed and allows for fraudulent billing. It should be replaced by an advance payment to physicians for comprehensive care on a per capita basis…
Hospitals, as we have seen, are now hiring more physicians to work in groups. As hospital employees, these physicians inevitably feel pressure to protect their employers’ income by filling beds and using hospital facilities for tests and procedures. They are less likely to control costs than physicians in independent not-for-profit groups. It is not yet clear which type of group will dominate, but those owned by physicians would probably be more supportive of reform…
Click here to read the full article.
EDITOR: This is a thoughtful article and well worth reading. Moreover, it has very specific implications for our local situation.
Lancaster General Hospital has spread it tentacles to virtually every aspect of health care in the county, not only virtually monopolizing hospital service but acquiring a large proportion of medical practices. Medical practices and LGH have no financial incentives to further public health measures. This is contrary to other countries with Single Payer of nn-profit insurance systems that are far superior to the USA in both care and cost.
The public pays for this in two ways:
1) Its health is jeopardized. For example, LGH refused to help fund the establishment of a full scale syringe exchange and to devote proper capacity for the treatment of addicts since there is no money to be made off of government funded Medicaid. (LGH provides a part time ‘fig leaf’ of a clinic.) LGH does not take the lead in educating students, the public and businesses on healthful practices.
2) LGH can set its own prices with insurance companies. The result is the public pays higher premiums. Hence comes LGH extraordinary profits averaging around $100 million a year.
‘Public Charity’ LGH President Tom Beeman was paid his full salary of around $1,300,000 when he took a year off to serve in the Navy. $1,300,000 would have funded a top notch syringe exchange for 13 years and led to a significant reduction of heroin addiction, overdose deaths, and the spread of social diseases including HIV / AIDs to the general public!!! In any case, how lawful is such an expenditure? Just like refusing to have public comment at their annual meeting, the self perpetuating board and leadership of LGH show their arrogance and isolation from public opinion and control.
Relman’s contention is that most young doctors prefer to be part of large practices and salaried. This growing trend lends itseslf to real reform of our health care system.
*Arnold Seymour Relman M.D. (b. 1923, New York City, New York) is a professor of medicine, social medicine and emeritus at Harvard Medical School, Boston, Massachusetts.[1] He is a former editor of the New England Journal of Medicine (1977–91) and writes extensively on medical publishing and reform of the U.S. health care system. In November 1988 Relman was awarded Honorary Fellowship by the New York University School of Medicine.[2]
Thanks to LancNews for bringing to my attention this very well-written piece by Dr. Arnold Relman, the former editor-in-chief of the New England, one of the most prestigious medical periodicals in the United States. The piece appeared in the New York Review of Books last October but makes compelling reading today for anyone interested in the growing health reform controversy. I have had the pleasure of hearing Dr. relman speak in person and know he is worth hearing.
The piece may be rather detailed for the casual reader, but everything he says makes good sense. He notes that the Affordable Care Act of 2009 did not squarely address rising costs and that it seems unlikely the current administration will do anything more, given the bitter opposition from Republicans, pledged to roll it back either legislatively or judicially. At the same time, he notes that the GOP plan advanced by Rep. Paul Ryan does nothing to control costs either, merely transferring future increases onto the back of consumers, particularly the elderly.
Dr. Relman goes on to describe the trend towards more specialty and multi-specialty group practices in the US. He says why this trend is growing and sees an opportunity there to revise the way government and insurance companies pay for medical services and bring down costs. The change would spring from a move away from fee-for-service, which rewards redundancy, unnecessary treatment and testing towards pay-for-performance methodologies. He speaks about how multi-specialty groups like the Mayo and Cleveland Clinics are addressing compensation. He details what a few states like Vermont are doing to try to wrestle down medical costs without simply passing the growing cost on to the patient or insurance subscriber.
I am less convinced than Dr. Relman that the trend to group practice has progressed to the point where this could be a nationwide solution. But like him, I do agree that there seems little prospect of genuine work on the costs crisis coming from either party. So proposals need to come from public sources. Thoughtful concerned parties must become vocal to keep the forces of reform alive. Those who would thwart change have been well-financed, and relentless in protecting their turf.
Certainly private insurance companies who have spend millions lobbying against reform would oppose what Relman proposes. I suspect sub-specialists will not like it either. But love it or hate it, this is a thoughtful piece by a respected expert writing about the cost problem at the heart of current crisis in American Health Care.