Shared sacrifice is key to cutting medical costs

Now that the health care reform law has been passed, it’s time to get serious about tackling the problem of the cost of health care to our nation, which, if not controlled, will threaten to bankrupt our economy.
Since World War II, we have witnessed an unprecedented development of technology that has increased our life spans and helped conquer many life-threatening diseases. This improvement of health care has come at a tremendous financial cost and continues to grow.
Last year, spending for health care in the United States was $2.4 trillion. That total is about 17 percent of the gross domestic product and more than four times the amount spent on national defense. Health care costs are rising at more than two times the rate of inflation. Since 1999, employer-based health insurance premiums have increased 120 percent, while inflation has risen 43 percent and wages have risen 30 percent.
The way I see it, our health care system comprises the following groups: doctors, patients, hospitals, medical insurance companies, drug companies and the government. Every one of these groups will have to make some major sacrifices and adjustments to its status quo to help bring down costs. Their willingness to do so will be the key to success.
Here is my opinion of what each group needs to do.
Doctors: Health care providers need to change the way they are reimbursed. Fee-for-service compensation — that is, receiving payment for each patient seen or each procedure done — has worked well for many years, especially when costs were a fraction of what they are now. The medical profession is now developing evidence-based practices that provide guidelines for the best, as well as the most economical, treatment for patients. There also needs to be an emphasis on and compensation for a new focus on preventative care.
Patients: The people of the United States have, for the most part, been privileged to receive some of the best medical care in the world, without regard to price or value. There will need to be some form of sensible rationing of health care, and I’m not talking about the infamous “death panels.” As it is now, we function under a “blank check” mentality, where the doctor can provide any and all care possible, no matter what the cost. Patients have naturally come to accept and expect this system, which is all too expensive.
Also, billions of dollars could be saved if patients took more responsibility for their own health. Our existing insurance model does not encourage patients to take care of themselves. Doctors can only do so much, but often, patients choose to continue to smoke, drink too much alcohol, gain too much weight, exercise too little or just keep up an unhealthy lifestyle.
Hospitals: We’ve all heard horror stories of exorbitant hospital charges. Hospitals must contain costs. The new health law should help them cut costs, because most people will now have some form of insurance to pay for their care. Hospitals will no longer have to compensate for the money they lose on uninsured patients by charging more for those who are insured. Hospitals also need to consolidate services and resources to eliminate the wasteful duplication that often exists. Our medical centers must be run more efficiently.
Medical insurance companies: These companies spend a lot of money on administration, and they earn excessive profits from high premiums. If they cut back on their costs of operation, they could lower premiums.
Drug companies: This group has, over the years, been a key player in the tremendous improvement in our health over the past 70 years. The drugs they have developed have improved, prolonged and often saved our lives. However, non-generic drug prices have risen all too rapidly and need to be fairer and more competitive. Some patients in the United States have been forced to go to Mexico and other countries to buy drugs, because they are cheaper in those countries. Drug prices in the world should be equal, not higher in the U.S. Our government and insurance companies need to insist on lower drug prices.
Drug companies also must immediately stop direct advertising to patients. They are only promoting expensive new drugs, when equally effective alternatives are available at a fraction of the cost. Doctors are uniquely trained to determine which drugs are best for their patients.
Government: This entity must help and encourage doctors to find the most beneficial and yet cost-effective treatments for patients, without overstepping the doctor-patient relationship. Government must work with and not against the medical establishment.
Government must also help regulate the medical malpractice question. The existing system of multimillion-dollar awards, with windfall profits to attorneys and patients, must change. Too often, huge awards are given with no correlation to actual malpractice, while there are other instances of actual malpractice that result in no compensation for the patient. To keep from being sued, it is estimated that doctors spend up to $200 billion practicing defensive medicine. In place of the existing malpractice court system, I would recommend a mediation system, wherein trained judges and panels of experts in medical and legal issues would award just and adequate compensation to deserving patients who have suffered true malpractice.
With the suggestions listed above, and with doctors implementing effective cost-containing measures, I believe we can save our health care system without lowering the quality of care.
Terry Hollenbeck, M.D., is an urgent-care physician at the Palo Alto Medical Foundation Santa Cruz in Scotts Valley. A doctor with 36 years’ experience, he invites readers to view all of his previous columns at his Web site, valleydoctor.wordpress.com. Information in this column is not intended to replace advice from your own health care professional. For any medical concern, consult your own doctor.