How fucked up is the US Medical Care system?
How about GM, whose economy is larger than Denmark's, will probably go bankrupt because of it. Why are New Yorkers walking to work rather than take the subway? Health care costs. Why are legacy airlines going bankrupt right and left? Same thing. Remember when Bush stuck his neck out trying to "reform" Social Security? The big truth is that social security wasn't even in all that much trouble in the long run. Medicare and Medicaid however, have frightening explosions of costs coming down the pipeline.
The problem with presenting this problem to the american public is that there's no one cause to point to. Some people blame insurance companies, some blame doctors and the AMA, some blame ambulance chasing lawyers, some blame drug companies. Get representatives from these four sectors at a table and they'll all point fingers at the other guy.
But here's the truth. All four of them are responsible. There are four fat, fat hogs feeding at this trough. And seeing as how the economy is straining under the current load of retirees' health costs, and considering the time bomb that is the baby boomers is yet to actually strike, there is real cause for pessimism.
Let's go through the four pigs at the trough:
Insurance Companies - As far as I can tell, insurance companies really are the least corpulent of the four, especially when one judges on the basis of their overall profitability. There is relatively healthy competition in this arena, even though lots of mergers have reduced the number of players. Insurance companies mostly make money by delaying the payments of owed monies as much as possible. So while the money sits in their investment and money market accounts accruing interest, they delay payment as long as possible. However, they do it mostly by introducing a ton of red tape, which introduces fundamental inefficiencies in the system.
Malpractice Lawyers - These guys constantly introduce broken statistics as to how they aren't part of the problem, but all people need to do is look at some very simple indicators to see how much cost they introduce: just look at malpractice insurance costs to doctors. They are huge. The doctors certainly don't eat those costs, they try to pass them onto the insurance companies, who pass them off to you in sky-high premiums. Lawyers try to point that without their judgements, incompetent doctors wouldn't be removed from practice, but as far as I can tell, lawyers don't actually push out these doctors. It wouldn't surprise me if they actually influence the review boards and try to keep these guys in the system to make money off of them. Lawyers often self-congratulate themselves that they force greater safeguards and process improvement due to the imposing threat of malpractice lawsuits. But considering how conservative medical practices seem to be, I doubt there is any real effect. But what really annoys me is people assuming that they are owed millions of dollars if the medical system, which is human and more an art than a science, fails them. The medical system is a benefit of a modern society. It isn't a guaranteed right. People choose to have doctors help them, or they can suffer/die without their assistance. Caps on pain and suffering and relying on a basic support network for the disabled are sufficient safety nets for people who use this modern service.
Doctors/AMA - Doctors obviously make a lot of money. The golf-playing porsche-driving doc is a common archetype. Doctors go through extensive training and education, which is expensive and time-consuming, with a payoff that only really occurs in their mid thirties, on an education track that begins in college when they are 18. To a certain degree, these people should be paid an elevated standard to reward such a grueling educational path, ensure quality people, and keep demand for profession high.
http://www.fff.org/freedom/0194d.asp
However, I notice several ways that doctors and the AMA increase our medical costs. First, medical schools have an extremely small enrollment. These schools clearly restrict the overall supply of education to prospective doctors, and since almost every state has laws that codify that only educated doctors can practice medicine, there are no alternative supply of educated doctors. But that is only the first tier of supply restriction. Yet another restriction of supply occurs in the specialization process, where a general doctor applies to become an anaesthesiologist, radiologist, or cardiologist. These programs have extremely restricted sizes, often only one or two doctors per hospital that runs a program. Finally, the AMA has resisted the creation of cheaper, lower tiers of medical care, a sort of super-nurse or doctor lite that can perform many medical procedures that doctors are simply overkill for. Different tiers of nurses and specializations could treat many mundane ailments and problems for far less costs, without a doctor's elevated costs. For example, many EMT and nurses provide medical care overseas on a volunteer basis, where they can handle sutures, common antibiotics, patient stabilization, bone settings/castings.
Drug Companies - Anyone who knows me knows my beef with the drug companies. First off, some facts about drug companies: they are far and away the most profitable corporate sector. Second, most (40-70%) of their costs aren't in research, it's in marketing of drugs, as anyone who is bombarded by Erectile Dysfunction marketing, allergy marketing, heart ailments, pain relief can testify, which is basically everyone (also, I'd guess using the magic of accounting, that most FDA approval costs are allocated to research to artificially pump up the research numbers). Third, public funded universities provide many of the core science that underlies drugs, thus keeping their private research costs down while reaping all the financial benefits once a technique becomes druggable. Drug companies actively push name-brand higher cost drugs and try to shut out generic, low-cost drugs. Drug companies employ armies of drug salespeople to entice doctors with conventions, trips, and dinners to push their wares on their patients (where do you think all that marketing money goes - not all in ads). As can be seen in several recent drugs, such as Vioxx, drug companies will actively suppress contrarian research and oppose the recall of drugs as much as possible, and will only do the bare minimum of education and "fine print warnings" once problems appear with drugs. Drug companies, even if they know how to synthesize drugs for obscure ailments, will not pursue drugs if they aren't economical to a large audience. Even things such as flu shots, which have a large market, won't be actively pursued or refined. While economic realities have to be recognized, the fact that such grossly profitable companies haven't made greater efforts toward humanitarian drug production is disappointing.
Taken together: insurance red tape, frivolous lawsuits, restricted supply/inflated salary of doctors, and the drug companies, it should be obvious what a many-headed beast our medical system is, and the fact that meaningful reform of the system will involve overcoming the: doctor/AMA lobby, insurance lobby, lawyers lobby, and last but not least, the drug lobby, and prospects for meaningful reform before the boomers bankrupt us are dim.
I suppose the most frustrating thing with medical services is their complete lack of progress in efficiency and service. Since the seventies, we have seen vast technological advance in computers, electronics, software, sensors and the like. The most significant advances have been the ability to make electronics and computers with powerful capabilities very inexpensively. Medical history, patient tracking, treatment monitoring, expert systems, online searchable ailment/medical databases, better drugs, cheap, wide arrays of generic drugs, outpatient surgeries, better, cheaper tests, all of these should have provided a medical care system that is more efficient, powerful, and especially cheaper. Yet things have clearly not progressed, but regressed, DESPITE all these advances.
Sigh.