What Matters: June 2008
Why Does Health Care Cost So Much?
By Paul Hochfeld '72, SM '73
Image: ©istockphoto.com/Naci Yavuz.
In my 27 years of being an emergency room doctor in Corvallis, Oregon, I have become increasingly frustrated and dismayed by the multiple absurdities and perverse incentives of our health care system. I see the failures of our system every day in patients without access to affordable health care who use ERs as their clinic—sometimes painfully late in the disease process and in need of additional care that costs all of us more in the end. We need fundamental changes.
As a country, we spend twice as much per capita on health care as most other developed countries and our government directly or indirectly funds 60 percent of it. At 17 percent of our GNP, much greater than our international competitors, this expense is a cancer on our economy. Not only that, our results, by any measure our health, are poor. Furthermore, we have 47 million uninsured and many more underinsured. Medical costs are a significant factor in half of all bankruptcies—and half of those unfortunate families had health insurance at the onset of the illness.
In producing a video, Health, Money and Fear, about why health care is so expensive, I found that the drivers of cost include advances in technology, fear of liability, the dwindling supply of primary care providers, the mass marketing of prescription drugs, inflated expectations (especially near the end of life), the pressure for profits, and, most significantly, insurance companies that add 25 percent to total cost without contributing anything to health.
Those who write about our health care system generally fall into two camps. There are those who believe we should get the government completely out of the business of health care and allow unfettered free markets to work their magic. Others, like myself, advocate for something that resembles a single payer system. Why? The provision of health care is different than the production and distribution of widgets. That discussion is beyond what this space allows, but most of us would agree that a healthier nation would be a moral good and an economic benefit for all. The barrier to this healthier nation, I believe, is cost.
When we advocate for a single payer system that centralizes control, we do so not just because it is a moral imperative but for sound financial reasons. Not only can we save 25 percent right off the top, we can begin to address the other drivers of cost. We could make these advances:
- develop a national electronic medical record
- legislate national liability reform
- disallow the mass marketing of drugs
- empower physicians (and ethics committees) to help families make difficult decisions near the end of life
- revitalize primary-care providers and ensure that everybody has a medical home
- revisit the days of certificates of need in implementing extremely expensive/redundant medical facilities, and
- offer free medical and nurse practitioner education in exchange for years of service AND lowered financial expectations.
Free markets will not accomplish this.
As I interviewed experts in government, academia, and business, I began examining the bigger picture. How has the culture of medicine changed over the last 50 years? Does our health care system reflect who we are? Maybe, maybe not, but it surely is a reflection of the political process that blocks our ability to fix it. Our politicians seem to understand that they can find votes in talking about universal access. Unfortunately they are more focused on the symptom than the disease. It costs too much! If all we accomplish, politically, is to use the existing wasteful, profit-driven delivery system to cover everybody, we will accelerate to the financial cliff.
The majority of Americans want some form of a national health plan. Lobbyists continue to foster the political wisdom (myth?) that embracing anything that resembles a single payer system is political suicide. Reality check: our health care system will remain broken until the focus shifts from profits to health. That won't happen until somebody, other than insurance companies, takes control. This is now a political problem. Our citizens need to make enough noise and put enough pressure on our politicians to get them to listen to us, instead of the lobbyists.
Then we need to make some difficult decisions, based on what we can afford.
About the Author
Paul Hochfeld '72, SM '73 earned degrees in electrical engineering and computer science at MIT then an MD at the University of California San Diego School of Medicine. An emergency room physician in Corvalis, OR, he and his wife, Janet, a yoga teacher, divide their time between Corvalis and a small coastal farm with 500 walnut trees that he grew from seeds. He has two sons, 13 and 23. This year, he produced a 45-minute video titled Health, Money and Fear, which was shown at the Boston International Film Festival in June. Learn more about the video and watch a trailer.
What Matters is a guest opinion column written by a different MIT alumnus or alumna. The views expressed are entirely those of the author and do not necessarily represent the views of the Alumni Association or MIT. Interested in writing a column? Email whatmatters@mit.edu.
