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Why the crisis in health care?


“More spending equals poorer health outcomes.”

Crazy? I probably would have agreed before reading this article in the New Yorker. RUN, do not walk, and read this article. It needs as much exposure as it can get.

It’s easy to see where our health care dollars are going — they are going into the hands of monopolists. “Monopolists?”, I hear you exclaim, “How can you call doctors a monopoly? There are zillions of them.”

But here’s the problem. Until you choose to switch doctors, your own doctor has a monopoly on your health care. And since most of us are not sufficiently expert to make our own evidence-based health care decisions, we will generally follow the doctor’s orders. Those orders may include unnecessary tests, unneeded home health care services, unneeded medical equipment, excess prescription medications, etc.

And the reality today is that many doctors are getting kickbacks on all those downstream services. No, let me rephrase that. Many doctors are demanding and receiving kickbacks on those downstream services, either in the form of an up-front bribe to refer patients to a particular service, or a kickback on a per-service basis, or they are running the testing facility or selling products within their own practice (sometimes with the moniker of a separate company, for tax purposes of course).

Health insurance companies should ostensibly be advocating for lower cost by refusing to pay for unneeded services and medicine, but they are in a catch-22. Denying services will get in them in trouble. And since there seems to be no limit to what US citizens and the companies they work for are willing to pay for health care, it’s easier to just let most of the charges pass through the system. After all, higher costs this year means higher prices next year, so no harm done in the long run, right?

I’ve seen this problem first-hand, with my own family. Doctors would order tests, then fail to follow up or draw any conclusions from the data. The information was just filed away. Hospitalization is ordered, but the doctors perform no services while the patient is in hospital, warehousing the patient at extreme cost and increasing the risk of other problems in the process.

I’ve also dealt with health care professionals that simply lodged outright false claims with my insurance company for services that were never requested or rendered. In that case, I confronted them and got the charges withdrawn with a sheepish apology on their part.  But I’ve probably had fraudulent claims charged to my account without my knowledge (I don’t review everything in my insurance records line-by-line), and similarly I’m sure these hucksters have extracted money from other people’s insurance too.

Is this something I should report to my insurance company? I’d like to, but I worry they might accuse me of being party to this mess. It seems more defensible to keep my head down and simply dispute charges that I know to be false.

How to fix the health system? Once we realize what the problem is, it’s clear that the classic “single payer” system is only one way to solve the problem, and it solves that problem by making it difficult for doctors to profit off downstream services required by their medical diagnoses. Rigidly enforced ethical standards would be another option — requiring doctors to reveal conflicts of interest to patients in a clear terms would allow patients to decide for themselves whether the recommended treatments are really in the patient’s interest. Lawyers have such a system in place now, and while it’s not perfect, it’s better than nothing.

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