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By Paolo von Schirach
June 28, 2012
WASHINGTON – The judicial saga concerning health care reform is over. According to the Supreme Court of the United States, the Affordable Care Act, the law universally known as “Obamacare”, is constitutional. Political victory for president Obama; but not necessarily a defeat for the Republicans and for Mitt Romney, the GOP challenger. The judicial upholding of the law gives him another major issuse to run against. The law is still divisive and very unpopular among millions of conservatives.
A medical insurance reform
That said, with or without Obamacare, America’s health care is still in a deep crisis caused by totally out of control costs, not even remotely comparable to the expenditures of other rich countries. Obama’s reform is essentially a medical insurance reform. Its goal, laudable in many respects, was and is to get millions of uninsured Americans covered. But the law does almost nothing to contain costs that are alreday astronomic, as they grow each year at a much rate than inflation.
US health care: totally out of control costs
Indeed, the US health care system, if looked at in its entirety, is a grotesque abomination. The US spends now 18% of GDP on medical care, and yet it is only number 50 in the world in terms of life expectancy, (78.49). Poor Portugal is one notch ahead of us, while a bit further down but close to America we can find such economic superpowers as Cyprus (N. 55), Cuba (N. 59) and Libya, (N. 60). So, with all our trillions spent on health, we are doing just a little better than some developing countries.
While it is true that in other developed countries medical care is either nationalized or heavily regulated, while in the US most people have plenty of choices, their basic health statistics do not reflect poor services. People live longer. So, we cannot even argue that Americans spend a lot more but in return they get superior service and superior outcomes.
The culprits: fee for service and bad life style
US out of control costs are due to two factors combined in an almost perverse way. The first one is that the medical profession works on a “fee for service” basis. Which means that any doctor has every personal financial incentive to do more rather than less. Since medicine is not yet an exact science with clearly prescribed tests and therapies, it is extremely easy to overdo anything: diagnostic tests, procedures, surgeries, drug prescriptions, you name it. And this extra zeal is not checked by anybody. Most patients are insured and so they have little or no incentive to challenge the doctor who tells them they need this or that procedure.
This is no small matter. Multiply the cost of unnecessary and pricey procedures a few million times and you have a cost explosion.
The second factor is the rapid deterioration of basic health conditions for millions of Americans. Americans have adopted a very bad diet that has led to the massive increase of obesity and all the maladies that follow it, such as cardiovascular diseases and diabetes. A bad diet embraced by the majority of the population combined with an increasing sedentary life has undermined the basic health of tens of millions of Americans.
Sick people are good business
Paradoxically an unhealthy population is great business for the medical profession that can simply make more money curing and often overtreating sick people. Again, given the financial incentives that reward treatment, doctors have no incentive to invest any time teaching patients how to practice a healthier life style. Regarding growing costs, remember that most patients do not pay the bill. It is picked up by their insurance.
Remedy: reward doctors for keeping people healthy
How do we break this crazy spiral? Well, this would require a major but not unthinkable revolution. It is all about redefining the function of the medical care system. In the future doctors should be paid not on the basis of how many treatments they provided to the sick but for successfully keeping people healthy through good prevention and education programs. Such education programs should include solid guidance about nutrition and exercise.
Healthy people do not need so much care. Huge savings
I fully realize that this would require an immense turnaround. But such a reform would follow simple common sense. If people knew how to eat properly and how to stay fit, they would also enjoy better health. If doctors had an incentive to keep people healthy, down the line there would be fewer costly procedures. Look: it is rather simple. If you are healthy, you do not spend money on health care. Whether you pay out of pocket or your insurance pays, there are savings. Multiplied by millions of Americans, these become billions.
And let’s be clear, this is not about saving money by denying care. This is saving money by making care unnecessary. That said, most certainly, even with the best “wellness” prevention programs, there will be illness and people injured in car accidents and what not. But there will be less. The needs will be much lower and therefore they will cost much less.
Prevention is cheaper than care. Healthy people will have a higher quality of life
And it is quite obvious that a healthier population would yield multiple gains across the board. Healthy people enjoy a higher quality of life. Healthy people are not a burden to others. They are more creative and more productive. Hence economic gains for the individual, for employers and for society.
You tell me, what is better: to spend mountains of money as we are doing under the present system (with or without Obamacare) to treat disease after it is full blown, or to spend far less to keep people healthy, so that they can feel well, while keeping disease and all the associated treatment costs away?