Tell - A- Vision
Number Please: Statistics in the Context of Health Care
Catching-up on half a century: Health care costs in 1950 were about 4 percent of the GDP. In 1966, the year Medicare and Medicaid went into effect, it was about 5.5 percent. By the early 1970s it had risen sharply to 7.2 % ($69 billion) as a result of the cost plus/fee-for-service billing in the 1965 Medicare legislation. This sudden increase in cost was seen as an economic “healthcare crisis” which generated Herculean efforts to hold the line. Despite this, costs continued to increase and by 1980 were 9.4% of GDP ($230 billion). The medical sociologist and author Paul Starr described this explosive growth in health care cost in his 1982 book The Social Transformation of American Medicine as something that “… cannot be indefinitely sustained, regardless of the administrations in Washington; other sectors of the economy will not support it”.
But apparently the other sectors of the economy were helpless in the face of this run-away freight train. According to the Bureau of Labor Statistics, the fastest growing occupations are concentrated in the health care industry. By 1998 health services became larger in GDP terms than the entire federal government. Per capita healthcare spending increased 28-fold between 1960 and 1998. As of 1998 was 4.3 times the amount spent on national defense. By 2007, the $2.2 trillion HC expenditures in the US were nearly 17 % of GDP. By 2017 spending is expected to reach $4.3 trillion or 20 % of GDP, while health care spending accounts for only 10.9 % of GDP in Switzerland, 10.7 % in Germany, 9.7 % in Canada and 9.5 % in France, [National Coalition for Health Care - nchc.org]
On September 11th, 2001, the loss of 3,000 American lives was seen as a tragedy of such magnitude that we went to war to be sure it didn’t happen again. However, every year we quietly accept a death toll from a broken health care system that is 73 times greater than the 9-11 disaster. In the eight and half years since, almost 2 million Americans --1,870,000 to be exact -- have died from toxic healthcare system syndrome. One of those fatalities was a highly-trained health professional and close friend of mine for 30 years. My colleague was the victim of a treatable condition that made health insurance unavailable to her. Without access to the necessary medical care until it was too late, she died tragically and unnecessarily, one more statistic in the collateral damage of a health care system that is neither healthy nor caring.
A Real-World Study in Contrast: According to the US Bureau of Labor Statistics, General Motors was the country’s largest employer in 1960s and1970s but sometime during the mid-1980s, health care took over as our largest industry. By 1993, the cost of health insurance for GM’s employees added $700 to the price of every car and truck. In 2005, GM’s yearly spending on health care was $5.3 billion for its 1.1 million workers, families and retirees – slightly more than $5,000 for every GM-insured person. This added $1,525 to the price of every vehicle the company builds in the United States. GM’s largest competitor, Toyota, spends only $97 on workers’ healthcare for vehicles built in Japan [A Second Opinion; Arnold Relman, MD].
As could be predicted, the healthcare industry is thriving. With a projected 22% increase in its work force over the next decade, health care is one of the few growth industries in the US, along with banking and financial services. Meanwhile, GM was grateful for a government bailout in the fall of 2008 and was forced into bankruptcy by May of 2009.
AMA financial Standing: As of 2007, the AMA had a national staff of 1,121 full-time employees. Sale of advertisements in the Journal of the American Medical Association (JAMA) and the other ten AMA-owned professional journals topped $289 million. In 2007 the AMA enjoyed a net income of $50.3 million and income growth of 99.6%.
Many physicians heartily disagree with the AMA’s policies, but nonetheless they go forward unimpeded. The AMA is actually a publishing empire that makes its fortune by selling advertising space to drug and medical device manufactures in JAMA (Journal of the American Medical Association) and its ten other professional journals. The Association has recently expanded its publishing business to include on-line data services for MDs and to gather, archive and sell statistical data on health and medical practice to corporations. In addition to advertising revenue and selling very pricey subscriptions to its professional journals to libraries and educational institutions, the AMA also sells malpractice insurance, collects membership fees from its 240,000 MD-members and receives many generous grants money from its many corporate sponsors. It has recently expanded its publishing business to include on-line data services for MDs and to gather, archive and then sell statistical data on health and medical practice to corporations. As a result it does not have to rely on its membership for the $300 million a year that currently fuels it’s aggressive lobbying activities.
Within the world of special interest groups, the AMA reflects the very specialized corporate interests of the organization itself, rather than the medical profession per se or any public-spirited advocacy for national health care policy. In
The Facts ~ Quality of Care: The US spends 50% more than any other country in the world, and yet we rank a lowly 19th in preventable mortality. An estimated 100,000 Americans die prematurely each year due to inadequate or inappropriate care; an additional 100,000 people die from medical errors & hospital-acquired infections, and 20,000 more men, women and children die needlessly because they didn’t have health insurance – that’s nearly a quarter of a million unnecessary deaths.
The US vs. Other Developed Countries: Compared to Australia, Canada, Germany, New Zealand and the UK, the United States ranks last, or next-to-last, on quality of care, access to care, efficiency, equity, and healthy lives. Measuring 37 different parameters, with a possible 100 points, the U.S. scored only 65. Its overall performance did not improve from 2006 to 2008. The Commonwealth Fund’s National Scorecard on health care performance for 2008 found “disturbing” evidence that the health system is performing worse than two years ago in nearly every category measured. Authors of the National Scorecard used words such as “squander” to describe an unconscionable level of wasteful care, inefficient systems, failure to treat preventable conditions and unproductive spending, especially on administrative costs. Poor quality included:
v Avoidable hospitalizations
v Inappropriate, wasteful, or fragmented care
v Disproportionately expensive administrative costs
v Illogical variations in quality and cost of treatments
v Failure to make appropriate use of new information technology
“Without a new national policy, millions more U.S. residents are on a path to becoming uninsured or under-insured. … Rising costs put families, businesses, and public budgets under stress, pulling down living standards for middle as well as low-income families”. [National Scorecard – 2008]
They estimated that lowering administrative costs for insurance could save up to $100 billion a year. According to the National Scorecard, if the U.S. health system achieved the benchmark levels of performance identified in other cost-effective systems, it would produce measurable benefits in terms of health, patient experiences, and money saved. For example:
v 100,000 fewer people would die from causes that could have been prevented by good care.
v Save an estimated $102 billion per year if the US achieved the levels of the best performing countries.
v Save $51 billion a year by lowering administrative costs of health insurances to the level found in Germany which, like the U.S., has a blended public–private health system.
v Save at least $12 billion a year by reducing readmissions or reducing hospitalizations for preventable conditions for the Medicare patients
Maternity Care for Healthy Women:
The economic impact of maternity care for healthy women with normal pregnancies (70-80% of total childbearing population) accounts for 25% of our national health care budget or 4% of the GDP. Maternity care is the #1 occasion for hospitalization and the largest category of expense for both private insurers and the federal Medicaid programs. Hospital charges for mothers and babies far exceed any other single condition. [Milbank Report: Evidence-Based Maternity Care, 2008] This money mainly pays for the routine use of obstetrical intervention on healthy women.
Recent surveys of birth practices in the U.S. identified a 99% medicalization rate, with an average of seven medical and surgical interventions per new mother. For seven out of new mothers, childbirth included a major surgical procedure – episiotomy, instrumental delivery or Cesarean section. [Listening to Mothers Survey, 2002, 2006, www.ChildbirthConnection.org] The US is currently spending 3% of its total GDP to unnecessarily medicalize a healthy population, while those with life-threatening medical needs continue to go untreated.
Cesarean surgery is the number one operating room procedure in American hospitals – 1.3 million a year – equal to the number of students that graduate from American colleges every year. Today, the Cesarean surgery rate in the US is 31.4% -- triple the evidence-based rate -- with no additional reduction in either maternal or newborn mortality. Because of this or in spite of it, maternal death rates in the U.S. were higher than in 33 other countries in 2005 and have risen the last 3 years in a row. In 1977, the maternal mortality rate (MMR) was 10 deaths per 100,000; in 2007, MMR was 14. Despite the increase in maternal deaths, many in the obstetrical profession are promoting scheduled elective C-sections as the new standard of care for healthy women. Elective Cesarean delivery is associated with a 3.5 fold increase in maternal mortality. [“Postpartum Maternal Mortality and Cesarean Delivery” Catherine Deneux-Tharaux, MD, MPH, et al; 2007
$$$ Healthcare Cost and its Consequence:
In 2007 Price-Waterhouse-Coopers estimated that $1.2 trillion dollars of the $2.2 trillion spent on US health care was wasted – that’s 55 cents of every dollar. The Commonwealth Fund’s 2008 Scorecard on Health Care Performance warned that: “…. the U.S. health system is on the wrong track.” Spending more money is not the answer. An important study reported a negative relationship between the amount of money spent on health care and its outcomes – more money was associated with higher use of Rx drugs and procedures and poorer outcomes as measured by morbidity, mortality and cost-benefit ratio.
A prime example of the irrationality of our system is the way the US regulates and prescribes drugs. According to a paper published in October 2008 in the Archives of Internal Medicine: “FDA approval does not require that a drug be compared with alternative treatments; it only has to be safe to use and better than a placebo. Nor ... does a pharmaceutical company have to show that a drug’s effectiveness justifies its price.” More Bang for the Buck? Randall Stafford, MD PhD, Stanford Prevention Research Center; funded by the Agency for Health Research and Quality; published in the Archive of Internal Medicine 10-27-2008]
Health Insurance: For-profit insurance companies spend 10% to 30% of total premiums on administrative costs (overhead plus advertising, executive salaries and bonuses), versus just 3% for the Veteran Administration and Medicare. This per capita spending on administrative costs is six times more than economically-similar health care systems in Western Europe. A significant part of the unproductive cost for the 1,300 private insurers is spent cherry-picking healthy adults, while denying coverage to those who have genuine medical needs.
Workplace Disincentives: For employers, the fastest growing business expense is health insurance, which was projected to overtake profits for many businesses by 2008. On average, premiums for employer-sponsored health insurance in the United States have been rising four times faster than workers’ earnings since 1999. Average employee contributions to company-provided health insurance have increased more than 120% since the year 2000. In 2008, the employer-paid premium per year for a family of four was $12,700. If administrative costs for private health insurance are figured at the median rate, approximately $2,600 of that premium was administrative costs. For a government-administered insurance plan or not-for-profit coverage co-op group, the cost would be approximately $377.
Bankrupting the Insured: Two of every five Americans reported problems paying medical bills, up from 34% just two years ago to 41% in 2007. More than 50% of all bankruptcies in the US are the result of overwhelming medical debt. According to a Harvard University study, 68% of those who declared bankruptcy had health insurance. About 1.5 million families lose their homes to foreclosure every year due to unaffordable medical costs. [www.NCHC.org] Since hospitals routinely bill insured patients at inflated rates ($24 for an aspirin) in order to cover the hospital’s losses for uninsured patients who can’t pay, medical bankruptcy is a form of double jeopardy. This Alice-in-Wonderland system is sending insured individuals into bankruptcy as a way to subsidize the uninsured.
Double jeopardy for the Uninsured: Hospitals are still permitted to bill uninsured patients at hugely inflated rates in many states. A $9,000 reimbursement for normal birth when billed to an insurance company becomes a $32,000 debt when billed to an uninsured family. This occurs because uninsured patients are not protected by an insurance company’s ability to negotiate a cap on payments for a specified form of care. If uninsured patients can’t pay, their delinquent account is turned over to a collections agency, putting medically-indigent patients at risk for also having their credit ruined, making it harder to get or keep a job or qualify for rental housing.
Physicians: Physicians are the only health care professionals broadly licensed to perform or order medical, diagnostic and surgical procedures, thus exerting the greatest influence over the allocation of healthcare resources of any entity in the system. Of the 13,621 health care occupations, payments to physicians accounted for 20% of the total healthcare expenditure in 1998. At that time, there were some 427,000 active physicians in the United States; by 2006, the number was 633,000. Based on national population, the availability of practicing physicians increased from 190 doctors per 100,000 people in 1980 to 268 doctors in 2000, which is one doctor per 373 people. [Ref # 25]
Corporate Medicine: Investor-owned, for-profit hospitals and out-patient clinics prescribe twice as many drugs, do twice as much lab work, order twice as many diagnostic tests (including high-ticket items such as MRIs) and use twice as many medical treatments and surgical procedures on each patient as their not-for-profits counterparts. This also doubles the rate of medical errors and hospital-acquired or drug-resistant infections. However, investor-owned nursing homes and kidney dialysis units (2/3s of all dialysis) are paid by diagnostic code and so improve their profit margin through cost-cutting measures, such as a much smaller and less-educated staff and re-use of materials. This propensity for under- and over-treatment reflects decisions to put profits before patients and contributes to a 20% increase in mortality in investor-owned facilities. [A Second Opinion; Relman, MD].
Deregulation and Privatization: The most corrosive influence on healthcare in the late 20th century was the deregulation and privatization of hospitals in the 1980s and redefining medical care as a for-profit business. Small or non-profit hospitals were snapped up by conglomerates, thus replacing local control with national hospital chains.
By law, the prime directive of the corporate practice of medicine (or anything other business) is its fiduciary responsibility to shareholders and quarterly profits. In pursuit of these goals, investor-owned facilities and service-providers market themselves as a superior provider of safe and effective health care, while making treatment decisions based on profit-value to the system rather than therapeutic value to the patient. Corporate medicine enjoys the benefit of government regulation when it prevents others from stealing it its assets or engaging in anything it deems to be ‘unfair’ competition, while it simultaneously rejects any form of regulation that would protect the vulnerable population it serves (the ill, injured and elderly).
Professionalism vs. commercialism: A recent example of how medical decision-making is influenced by a business agenda – in this case, hospitals and big pharma – revolves around the prescribing of Rx heartburn-indigestion drugs (Prilosec, Nexium, etc). Between 50-70% of all hospital patients, regardless of admission diagnosis and without any history of ulcers (including nearly half the babies in the NICU), are being given these expensive drugs. [NPR June 2009] Unfortunately, patients receiving these drugs suffer an increased rate of pneumonia. Both drug companies and hospitals profit from the drug’s administration (hospital patients are billed the each time a drug is dispensed) and profit again from the prolonged and more expensive treatment required by patients who contracted pneumonia.
Trends in the physician workforce: Between 1970 and 2000, the average number of potential patients available to the medical profession was reduced from 641 people per physician to 373 per physician. This was due to a large increase in new doctors in the decades following the Health Professions Education Assistance Act of 1963, which dramatically increased the number of medical schools in the United States. Between 1960 and 1988, the number of first-year students in US medical schools more than doubled. While it was obvious that the number of new graduates would lead to an oversupply of physicians, no medical schools were willing to give up federal dollars by closing or significantly reducing their class sizes. During that period, new physicians entered the workforce at three times the rate that older physicians left practice. [Ref #26 -"Physician characteristics and distribution in the US”; 2000 edition Chicago American Medical Association 2000, page 352
The Numbers ~ Everyday Non-urgent Health Care: Approximately 90% of all medical appointments are for non-acute healthcare. This category includes “self-limiting conditions” i.e., temporary situations that resolve spontaneously. By definition, self-limiting conditions do not need or benefit from sophisticated medical technology, prescription drugs or surgery. The illustration often used is that a cold, if untreated, will go away in seven days; if treated, it will go away in one week. Ordinary, garden-variety complaints include mild illness or minor injury, psychological states such as anxiety or mild depression, normal biological conditions such as pregnancy, breastfeeding, newborn follow-up, well-woman care (contraception, pap smear), normal aspects of aging, life-style issues (diet, exercise and questions about sexual topics), school and work physicals, vaccinations, testing for STDs, managing a stable chronic disease, etc.
Not enough of both to go around: By 2025 the growing US population, which includes children and increased proportion of elderly people, is expected to raise the number of ambulatory care visits by 42 %. The number of patients with chronic diseases – a category who benefit most from the coordination of care and continuity of care -- is also increasing. [Am Coll Physicians - White Pager 2008]. By reducing rate of obesity, diabetes, osteoporosis and many other chronic and expensive diseases thru high-quality primary care, it eliminates the great volume of expensive and invasive procedures currently driving up the cost of health-related services.
Institutionalized Mismatch: According to Dr. Atul Grover, chief lobbyist for the Association of American Medical Colleges (an arm of the AMA), the answer is a 30% increase in medical school enrollments, to produce 5,000 additional new doctors each year.
However, this still misses the point, which is the extreme mismatch between what patients need and want from primary care providers, what society needs from them and what graduate doctors themselves need and want from the practice of medicine. From a patient’s perspective, it must be nearly impossible to get cost-effective services for routine low-tech care from a physician who is trying to pay off an average of $140,000 in med school loans and simultaneously meet staff payroll, office overhead and malpractice insurance premiums. There is already one MD for every 373 people in the US. The number of doctors who report giving up primary practice because they couldn’t make enough money to stay in business is telling – it tells us that depending on MDs to be the primary source of primary care is illogical and simply cannot work in the long term.
A consensus of the scientific literature identifies primary health care by independently practicing non-physician practitioners to be comparatively safe, more cost-effective than MD care and to have a high patient-satisfaction rating. Currently there are about 140,000 non-physician practitioners practicing in the US. In event of a serious or urgent medical situation or request by the patient, non-physician primary care practitioners arranged for referral, consultation or a transfer of care to an MD or emergency facility.
When crisis-intervention medicine is compared to the top 5 causes of mortality, it is easy to see the unproductive expense and other problems caused by not having a health-based model of care. The 5 most frequent causes of death in the US are all preventable diseases or avoidable accidents associated with smoking (lung cancer & heart disease), alcoholism (liver disease and fatal car accidents), complications of obesity (diabetes, gangrene), drug abuse (overdose, murder) and exposure to toxic substances and poisons, including air and water pollution (fatal asthma attack and death from acute toxicity).
One measure of the medical costs of untreated mental illness comes from a study of 120 homeless alcoholics living on the streets of Boston who collectively chalked up a staggering 18,000 EMS calls-ER visits and 900 hospital admissions over five years – 150 per alcoholic. Costs to the county for emergency medical services were estimated at $26,000 each year for each alcoholic, but until such a time as these alcoholics get liver disease or hit by a car, that $26K worth of repeat ER visits did nothing to successful treatment of their basic mental health problems, but it did add over $3 million to the ‘health’ care bill sent to the taxpayers of Massachusetts or $15 million over the course of the study. [NPR story 08-04-09]
The Scope of Practice Partnership characterizes all non-physician practitioners as ‘physician extenders’. The phrase “physician extender” perfectly conveys its MD-centric perspective, one that sees the proper role of other health care professionals as supporting and carrying out the orders of the medical profession. Physicians profits from the labors of non-physician practitioners in their employ by billing a third party at MD rates. Licensing laws in 28 states already reflect this MD-centric philosophy by legally restricting non-physician practitioners to the subordinate status of a physician-extender, thus prohibiting any form of independent practice or reimbursement.
According to statements published by its Steering Committee, the SOPP intends to use its political, financial and legal resources to turn back the clock and sweep back the ocean – or as they put it, to end the illegal practice of medicine by non-physician practitioners. In the 22 states and District of Columbia that already license non-physician practitioners as independent professionals, SOPP members plan to introduce legislation to repeal these laws. In the 28 states that have restrictive laws on the books already, the SOPP will vigorously fight any effort by nurse practitioners and other non-physician practitioners (NPP) to lift these restrictions.
In 1909 California had a multi-discipline Board of Medical Examiners with 11-members -- 5 MDs and 6 non-allopathic physicians. In 1911, the Medical Practice Act was amended to eliminate all 6 non-allopaths and replace them with a 12-member all-MD medical board, which is still in place today.
The Other Pillar of a Cost-effective System – Primary Care: Clinically effective health care starts with a robust primary care system. This improves health outcomes and lowers cost by preventing the incidence of disease, reducing the health impact of chronic diseases and by extending the healthy lifespan. It’s ever so much cheaper and more humane to prevent hip fractures that it is to treat them.
At the turn of the 20th century, primary health care was provided by medical doctors, non-physician practitioners (including midwives) and non-allopathic physicians. In 1910 the traditional multidisciplinary pool of practitioners was replaced by an MD-centric system. This means that primary care is essentially provided by MDs. However, the interest and enthusiasm of MDs for primary practice has fallen steadily over the last hundred years. Now days 75% of MDs choose specialty medicine, with fewer than a quarter of new graduates becoming general practitioners. Of the 25% who start out as GPs, poor reimbursement rates and inability to meet office expenses (or paying down $140,000 in student loans) forces a large proportion to close their doors within a few years and retrain into a better paying specialty.
Last year there were 902 million doctor’s office visits in the US, the vast majority for routine healthcare needs. Approximately 90% of all office visits (811 million of those medical appointments) are for self-limiting conditions and other types of non-urgent or preventive care. Self-limiting conditions includes mild illnesses, minor injuries and other conditions that heal spontaneously or resolve by themselves. This kind of care consists of routine checkups, health education and information, monitoring normal biological states such as pregnancy, healthy newborns and well-woman gyn visits, refilling prescriptions, concerns associated with normal aging and support for people with stable or chronic diseases.
Ordinary health-related complaints include mild illness and psychological issues such as anxiety or mild depression; normal biological states, life-style issues (diet, exercise, contraception; questions about sexual topics); health histories and students physicals; vaccinations or testing for STDs; managing a stable chronic disease, and more. What each of these conditions and health concerns share is that they are not medically complicated. However they are frequently time-consuming and certainly take more than the 6 to 10 minutes allotted for the typical non-urgent medical appointment.
Since the number of primary care visits in the US is expected to increase 42 % by 2025, this kind of relationship-based care is ever more important. The growth in US population includes an increased proportion of children, retired baby-boomers and patients with chronic diseases – the very categories of patients that benefit most from the coordination of care and continuity of care provided by primary care practitioners. [Am College of Physicians - White Pager 2008]. Reducing rate of obesity, diabetes, osteoporosis and many other chronic and expensive diseases eliminates the great volume of expensive and invasive procedures currently driving up the cost of health-related services.
Laws in 22 states recognize that it is in the public interest for non-physician practitioners to practice independently and be directly compensated by third party payors (private insurance or the government). But this little bit of movement in a positive direction has triggered a powerful backlash by the American Medical Association. The AMA’s 2006 “Scope of Practice Partnership” is a large and well-funded campaign to keep all non-physician health care practitioners under the control of MDs as employees. The Scope of Practice Partnership (SOPP) is a coordinated plan to eliminate the independent practice of non-allopathic primary care providers in all 50 states by blocking attempts to change the law in the 28 states where it is illegal to practice independently and repealing the authorizing legislation in the 22 states where non-physician practitioners are currently able to practice unencumbered.
Best Practices and Comparative Effectiveness: Our medicalized health care system is also illogical in regard to clinical effectiveness of customary treatments. The current standard of care does not require that medical treatments or surgical procedures be the most clinically effective or “best practice” or that patients be informed of their ineffectiveness. Recommended treatments also do not have to be cost-effective. For many decades, studies have identified a high ratio – upward of 80% -- of customary medical practices to lack any compelling evidence of effectiveness and many treatments are known to have serious side-effects that significant cause harm. Care for the same medical problem is also different in different parts of the country. For instance, surgery rates for the same diagnosis are dramatically different depending on of the region of the country and the size of the city one lives in, ranging from as little as 5% in the northeast to more than 40% in the southeast. Obviously human biology does not differ by a factor of eight based on latitude or population, which means that illogical criteria are being employed in an irrational system.
The Veterans Administration’s clinical policy is to only use ‘best practices’ -- models of care proven effective based on their own internal review of treatment outcomes. Using 294 measures of effectiveness and patient satisfaction, the VA is rated far above that of every other healthcare system, including private facilities with a world-class reputation. Even more amazing, the VA’s healthcare system has the lowest per patient cost of care – one-third less than Medicare, which is already a third less expensive than care in private institutions. The VA is successfully treating people for 2/3s less than any other segment of the health care system and getting rave reviews from its patent based. If this is what ‘government-run healthcare’ can do, maybe the rest of us should reconsider our prejudices against bureaucracy.
An example of what happens when evidence-based ‘best practices’ are not used is the current treatment of a frequently preventable disease -- diabetes and its complications, which is the single biggest item in the healthcare budget. At present, one-third of every healthcare dollar is spent on diabetes, which is the number one cause of all blindness, limb amputations and kidney failure. That’s bad news. The worse news is that only 8% of care provided by our current system is treating diabetes effectively as judged by patient longevity and prevention of these complications. Data on kidney dialysis from Medicare shows that annual patient cost ranges from $65,496 to $488,360 -- an average of $129,090 per year. If the scientific principles of comparative effectiveness already being used by the VA were widely applied to the treatment of diabetes, it would reduce the complications of diabetes by 80%. That’s a ten-fold reduction in the horrific, disabling and expensive complications of blindness, amputations and end-stage kidney disease.
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