Ice Bergs and Ice Cubes

Ice berg

Image by derekkeats via Flickr

The financial crisis in healthcare dwarfs all other federal budget problems.  It is an iceberg, and the ship of state is headed right for it.  The ACA does not do enough to rein in medical costs that continue to outpace inflation, and the GOP’s Ryan plan simply shifts the burden to those who can least afford to pay while the wealthiest Americans either have medical insurance or they are so wealthy that they can pay their own bills, including buying into concierge arrangements with doctors.

The problem of course is with the poor and the middle classes who defer concerns about healthcare, usually until they are candidates for an ER.  Did you know that even families that make $88,000 a year pay only 37% of their hospital bills?  Such families can afford health insurance but they simply choose not to.

Did you ever wonder how the ACA passed muster with the healthcare lobbys?  Here is a revealing paragraph from the above link:

Hospital officials are “nervous” about proposed medical cuts in the House budget, he said.

“Most of the major hospital associations were supportive of the Affordable Care Act for this reason,” he said. “They were willing to take some cost reductions in Medicare payments, and in return, the government would insure 32 million people.”

No wonder then that the costs outpace inflation year after year!  Unsustainable.  The normal mechanisms of supply and demand are not in play here.  In a pure capitalist arrangement it would be fee for service and if you can’t pay, you die.  Fortunately we are more civilized than that.  The other end of the spectrum mirrors the socialized single-payer systems found in Europe, but those lack the quality and responsiveness of the U.S. system.


Image by via Flickr

USA Today recently (5/6/2011) published an article that provides a revealing look inside the medical industry, an industry that, so far, is thriving and vigorously competing for dominance in the niches of a very lucrative market.  It is a market rife with practices that leverage patents, kickbacks and consulting fees to achieve remarkable profits.

How are they getting away with it?  In addition to courting doctors to prescribe their products through advertising and personal lobbying by skillful sales reps, they are enlisting medical societies that represent specialists:

Yet, one area of medicine still welcomes the largesse: societies that represent specialists. It’s a relationship largely hidden from public view, said David Rothman, who studies conflicts of interest in medicine as director of the Center on Medicine as a Profession at Columbia University.

Professional groups such as the Heart Rhythm Society are a logical target for the makers of drugs and medical devices. They set national guidelines for patient treatments, lobby Congress about Medicare reimbursement issues, research funding and disease awareness, and are important sources of treatment information for the public.  (emphasis supplied)

Dozens of such groups nationwide encompass every medical specialty from orthopedics to hypertension.

“What you’re exploring here is the subtle ways in which the companies and professional societies become partners and — wittingly or unwittingly — physicians become agents on behalf of the interests of the sponsoring company,” said Steven Nissen, chair of cardiovascular medicine at the Cleveland Clinic.

“It has a not very subtle effect on medicine,” said Nissen, an expert on the impact of industry money.

There is a strong odor of corruption about all of this.  I can’t help but suspect that many medical society recommendations for standard practice have more to do with profit than patient welfare.  The evidence is circumstantial, but it is strong.

The rest of the article is just as disturbing.  So long as one political party insists on the very best healthcare for everyone and so long as the other party refuses to even discuss paying for those who can not afford such treatment, the financial system will careen toward the cliff and financial disaster.  They fuss over ice cubes as the berg looms.  And the medical-society parties will continue full-swing.  Party favors for everyone!

I am close to concluding that the government will eventually have to take over the system.  I just hope the process isn’t too damaging.  The 2012 elections could be decisive on the issue if either party prevails overall.  Otherwise?  Stalemate and collision with the berg.

About Jim Wheeler

U. S. Naval Academy, BS, Engineering, 1959; Naval line officer and submariner, 1959 -1981, Commander, USN; The George Washington U., MSA, Management Eng.; Aerospace Engineer, 1981-1999; Resident Gadfly, 1999 - present. Political affiliation: Democratic.
This entry was posted in Fiscal Policy, Medicare, Medicine and tagged , , , , , , , , , , , , . Bookmark the permalink.

9 Responses to Ice Bergs and Ice Cubes

  1. jwhester says:

    As you know, I share your frustrations. I appreciate the ACA because it does something rather than wringing hands for 20 years. I am as close as you in concluding that the government will have to take a stronger position in this system. I am not convinced that the “quality and responsiveness” of those other systems are as bad as those who are invested in our system would have us believe.


    • Jim Wheeler says:

      I agree, JH., it is something of an unknown. But I do have a lot of experience with a massive bureaucracy, i.e., the U. S. Navy. While rules and regulations are no guarantee of excellence, there is something reassuring to be found in the existence of rules and regulations that are transparent to provider and patient alike. In the present system it can be a crap shoot – under a government system there should be less a chance of quackery and price exploitation.



  2. Jim,

    Your post here made me go back and review the data on comparisons between our system and others around the world because like jwhester above, I am suspicious that “those who are invested in our system” are fudging the comparisons. The result? Beats me. The data is all over the place, depending on the source. You can pretty much find whatever you are looking for to support whatever position you take.

    One thing I do know: For all the money we spend on health care in this country, whatever we get for it is not commensurate with that spending. In other words, if we spend twice as much per capita we are not getting twice the results. Thus, the dilemma you present.

    And the fact that drug reps and medical device salesman play a huge if subtle role in our system is, as you point out, quite disturbing. It’s sort of like money in politics. When donor A gives to politician B, how do you know that B’s vote on a legislation important to A isn’t simply based on the donation? When my doctor prescribes medicine from drug rep A’s company, how do I know it is the best medicine for my condition? Perhaps the doctor himself doesn’t even know. Perhaps the salesman had superior skills or was more diligent. Something is wrong with that picture.

    The more I’ve read about France’s system, the more I like it. It seems to have figured out the best mixture of public and private health care. But how can I know for sure? All I know is what I’ve read about it, most of the information coming from folks with a point of view. I do notice, though, that conservative critics of European systems tend to leave out U.S. comparisons with France, which, I think, tells me a lot.



    • Jim Wheeler says:

      Quite right, Duane, and your comments lead, IMO, to an inescapable conclusion: Any solution to the healthcare conundrum, to be effective, MUST result in lower earnings for the healthcare industry. That is why it is a conundrum.

      Mitt Romney is supposed to speechify about the subject today, but USA Today had a summary of his thinking yesterday. As best I can make out, his new plan is to kick the problem down to the individual states:

      “Here, Missouri. This is your per-capita part of what the feds can afford to spend on what used to be Medicare and Medicaid. Now you deal with it. And don’t ask for any more money – there isn’t any.” And then he says, “Boy, I’m glad I solved THAT problem.”

      Another part of his plan is to change the tax code to subsidize individuals who purchase their own health insurance, which will do little to help the poor, and to cap medical malpractice awards, which may discourage reforms of medical errors. And, he would strengthen HSA’s by eliminating the minimums on their deductibles.

      I’m not impressed with Romney on the problem because none of it does what we both know is required: reduce the industry’s earnings and thus the costs. The monster is simply too big.

      As far as the government single-payer system goes, I think in can either be outstanding or putrid, or anywhere in between. I have personally been in Bethesda Naval Hospital and I can tell you that it is world-class excellent. And then, we have all heard the continuing horror stories about VA hospitals, some of which are obviously at the lower end of the scale. But clearly the potential for a good solution is in there somewhere.

      Thanks for your thoughtful comments on my post. It shows real work on your part – this is not simple stuff.



  3. ansonburlingame says:

    To all,

    I don’t know how to fix the medical system. But here is a glaring example of what is wrong with it.

    A patient goes to a hospital at 700AM for a procedure. The patient leaves the hospital at 700PM. The patient is attended by one physician and about two nurses during the course of the recovery from the treatment. The same physician performed the procedure and was assisted by perhaps two others in the operating room.

    No medication other than the sedative for the procedure was administered during the 12 hour hospital stay.

    Total cost for that 12 hours, $30,000. Medication could NOT have cost more than a $1000. So 4 nurses and one doctor “make” over $25,000 for that 12 hours? I doubt it.

    And there were at least 8-10 other patients undergoing the same procedure on that one day. $300,000 went where exactly, I wonder?

    I also wonder where the $300,000 came from, exactly. Most of the patients looked old enough for Medicare payments?



    • Jim Wheeler says:


      Man, that’s mind-blowing. That’s too much even allowing for the people who don’t pay. Hmm. Wonder how many medical sales reps were in the OR – maybe they were the other two.

      Wondered where you’d been. Hope everything’s OK. I wish you and Janet the best.



  4. ansonburlingame says:

    To all,

    And to cap off the above tale, a very true tale sadly, COST was NEVER discussed by the prescribing physician, attending physician or the two hospitals involved BEFORE the procedure was performed.

    I have no idea what the answer might have been had the patient asked about the cost beforehand. But of course why should the patient care about cost. It was “free” in terms of patient out of pocket expenses.

    Until the patient/family has to worry about such out of pocket expenses, Alfred E. Newman will prevail with a “What, ME worry?”



  5. It certainly seems like we could learn something from the variety of health care systems around the world to improve our own. We can’t just delude ourselves that what we have here is always best, and we have nothing to learn. The latter is where the American exceptionalism goes way off track. It implies we have nothing to learn from anyone.


  6. Pingback: A Medical Hobson’s Choice | Still Skeptical After All These Years

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.