Political Squabbling May Cause U.S. to Fail to
Improve Failing Health Care System
U.S. spends 50 percent more of GDP on health care, yet life expectancy
growing slower here than in other countries; much higher medical costs
and worse outcomes; aging population not cause costs
Nov. 12, 2013 The aging of the population
has not been the primary cause of high health care costs over the last
decade in the U.S. Nor has it been the large number of tests and
treatments being prescribed. Instead, new Johns Hopkins-led analysis
suggests it has been the increasing prices of drugs, medical devices and
hospital costs - prices that doctors, patients and insurers rarely know
until the money has been spent. The administrative costs alone - the
costs associated with physicians and hospitals procuring payment from
health insurers and individuals - are rising by 6 percent a year.
Though many policymakers point to the elderly
as the biggest consumers of health care, it is actually those younger
than 65 with chronic illnesses who account for two-thirds of
Study leader Hamilton Moses III, M.D., an
adjunct professor of neurology at the Johns Hopkins University School of
Medicine and former chief physician of The Johns Hopkins Hospital, says
the paper outlines the "sobering reality" of the U.S. health care system
in 2013 - one that is on an unsustainable path that needs righting, a
task that seems ever bleaker in the current climate.
"Health care has become so politicized that
rational discussions based on valid information have become impossible,"
says Moses, who also runs Alerion, Inc., a Virginia-based consulting
"But we are living in a time where we spend
more money on health care than other developed countries and our
outcomes are worse. Yet, we fail to understand the differences or to
learn the others' lessons."
Moses discussed the research at a press
conference at the National Press Club in Washington, D.C. The study is
published in the Nov. 13 issue of the Journal of the American Medical
The JAMA analysis, conducted with
colleagues at the Boston Consulting Group and the University of
Rochester School of Medicine, attempts to dispel several common
misconceptions informing the current health care debate. The researchers
used publicly available information about who pays for and who supplies
Included: economics of health care; people who
receive care and organizations that provide care; value created in terms
of objective health outcomes and perceptions of quality of care;
potential factors driving change, including consolidation of insurers
and health systems; the patient as consumer - see
While the average rate of growth has
decreased steadily since the 1970s, Moses says the 18 percent of its
gross domestic product (GDP) that the United States spends on health
care is 50 to 60 percent higher than any other developed country.
Life expectancy, which has been on the rise
for a century, is now not growing as quickly in the United States as it
is in the rest of the developed world, a shift that began in the 1980s,
with the United States lagging by three years in both men and women.
Moreover, Moses says, patients are further
removed than ever from the true cost of health care. Individuals'
out-of-pocket costs declined from 23 percent of the cost of their
medical care in 1980 to 11 percent of the cost in 2011.
Those costs have been shifted to employers
and the federal government, whose share grew from 31 percent of costs to
42 percent over those same three decades. All of this despite the fact
that the rate of growth in health care costs is not increasing as
quickly as it has been.
Moses and his colleagues describe three major
forces that will change health and medicine in the decade to come.
First is consolidation and industrialization,
with a smaller number of much larger insurance companies and hospital
systems. "This will result in less choice of where people get care. And
they will likely be asked to shift their allegiance to an institution,
rather than have a single physician," Moses says.
Second is information technology,
which holds great promise to coordinate care and improve quality but,
despite large investments, has not yet delivered on the promise.
Third is the patient acting as an informed
consumer, gaining greater
influence than today.
"Costs are completely invisible to you and to
your doctor," he says. "Unless the prices of services, of drugs, of
devices are known, you cannot have any kind of effective market.
Moreover, many prices are fixed by the federal government or negotiated
with hospitals confidentially, further removing levers that can lower
Moses points out that the United States is
also lagging behind the developed world in the proportion of primary
care doctors, something that takes its toll not just in preventive
medicine but in coordination of care once someone becomes sick. He says
this comes through when, say, a person with diabetes or depression
requires a joint replacement. These patients are much more likely to
suffer complications, but few specialists are on the lookout for them.
"Specialists can attend to one problem, but
few can see the totality," he says.
What is needed is an investment in people -
in primary care doctors, in innovations that can streamline the process
of care to improve outcomes. He says 4 percent of health care spending
has gone to biomedical research into new technology (drugs and devices),
while only 0.1 percent has gone to improving the process of care.
"Nearly every other industry has found a way
to invest, reduce costs and improve outcomes," he says. The airlines,
for example, after deregulation in the '70s, built information systems
that allowed them to save on fuel, streamline routes and cut the
cost-per-mile in half. Thirty years later, more people fly, consumers
pay "rock bottom" prices, safety is far greater but flying can now be
an unpleasant experience, he says.
Would people tolerate less choice, less
freedom in their health care? Moses doubts the airline model is the
answer, he says, but a discussion, based on valid and unbiased
information, must begin to truly innovate to deliver greater value and
lower cost. Thus far, he says, "the political process has failed us
"There is a risk that political squabbling
will cause the country to miss a chance to achieve a more effective and
efficient way to deliver care - one that truly reflects patients' needs
and their preferences. The current state of health care is
unsustainable, and tensions are only growing."
Johns Hopkins Medicine (JHM), headquartered
in Baltimore, Maryland, is a $6.7 billion integrated global health
enterprise and one of the leading academic health care systems in the
United States. For more information about Johns Hopkins Medicine, its
research, education and clinical programs, and for the latest health,
science and research news, visit
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