WASHINGTON – I have observed before that there is an incredible gap between the extraordinarily high level of US health care spending and the actual health outcomes. When one compares American health statistics with those of other rich, developed countries, America does barely OK. For example, in terms of life expectancy, the US, (number 51 out of 223) does worse than Portugal and is just a little bit ahead of Panama. Not a horrible score but hardly a shining example. Still, this ranking is really dismal if you consider that the US now spends about 17.5% of GDP on health care, an astonishing amount, while the average spending among developed countries that offer far better service with far better health outcomes is around 9 to 10%.
Gigantic over spending
So, we spend about 1/3 more than other countries comparable to us and we get mediocre results, at best. And do consider that in the US 5% of a $ 16 trillion GDP is a lot of money. The entire US defense spending, by far the highest in the world, (20% of overall Federal outlays), comes up to about 4% of GDP. So, every year we outspend the rest of the world on health by an amount that is larger than the entire Pentagon budget, with mediocre or poor results.
Value for money?
If you thought that here in America almost by definition people want and get “value for money”, think again. At least in health care, we do not. There are many reasons. In a crazy and most perverse way, we have created a system that tries to reconcile private medical practice, with doctors charging whatever the want, with a payment system in which most people are covered by insurance, that is to say they do not pay out of pocket. Here is the set up. The care giver charges whatever, while the care recipient does not pay, but passes the bill to a third party. This almost guarantees higher and higher prices, because there is no real market mechanism that will keep prices in check.
Medieval inefficiency
Beyond that there is still, (albeit not everywhere), an almost medieval level of inefficiency. Let me illustrate with an example. I had to take a good friend of mine to the emergency room of a major (and well known) medical facility in the Washington, DC region. He was in great pain and the matter appeared really urgent.
Anyway, upon checking in at the ER, he was looked at by a nurse. Then he was sent to an office where another nurse asked questions. Then he was placed in one area of the emergency room on a gurney. After quite some time another nurse arrived, asked some questions about his condition and did routine stuff like checking his blood pressure.
Then a physician arrived and asked once again all the same questions, taking notes in long hand on a book, while the nurse had entered some data on a computer. This data was not even looked at by the physician. After that visit, a long while later another physician arrived asking once more exactly the same questions, and also taking notes in long hand. Later on a new nurse arrived because the previous one had finished her shift. The new nurse needed to be told what her colleague had done.
7 1/2 hours in the ER
As a result of all these ER staff coming and going and repeating the same stuff, three procedures were prescribed in order to come to a diagnosis: one X-ray, an EKG and one CAT scan. Time for each procedure: about 15 to 20 minutes. My friend’s time in the emergency room: 7 1/2 hours. Yes, that is 7 1/2 hours.
No electronic records
And this is only the half of it. This facility does not have seamless computerized records. Therefore the ER medical personnel has no access to existing medical history of patients coming in. As a result, consider this absurdity: my friend is actually being treated by specialists in the very same medical facility. But the ER medical staff could not access any of his records, something that would have really saved time and resources because, by reviewing his medical history, they would have received precious help in determining the nature of the ailment (tied to an existing condition) that took him to the ER.
No, I am not making this up. He had to explain and provide details about his medical history, in his own words, to doctors who could not see any of it, notwithstanding the fact that all his records are located in the very same facility, literally in the same building.
Talking to one of the nurses we were told that this great hospital is in the process of introducing electronic records. Now this is great news. In fact, she said that she has been recruited to help with the transition from another medical facility where they embraced electronic medical records 15 years ago.
Lack of information, waste of resources
I have no idea why it has taken so long for this (famous) hospital to finally get to the point of adopting what should be the standard. But I can only imagine the incredible cumulative cost of this epic level of inefficiency, in terms of waste of time and wrong diagnoses. Indeed, with access to my friend’s records, the physicians probably would have ordered the CAT scan immediately, and this would have allowed for a quick diagnosis, therapy and discharge. In an efficient ER facility, with access to medical records, my friend would have been there for may be two hours. Instead it was a long, drawn out process that lasted for 7 1/2 hours.
Needless to say, all that staff time and all these people doing this and that, much of it irrelevant, is going to be billed to his medical insurance. And then you wonder why US health care costs are so high, while quality of care is so poor?
And the irony here is that America is the leading country in the world when it comes to state of the art solutions in IT and innovation. Something does not add up.
No market incentive to become efficient
Here is my explanation. Decision makers are not pushed by real market incentives to strive for cost-effective systems. In other words, even if your procedures are old and spectacularly inefficient, you still charge and you still make money. If this does not change, 10 years from now we shall still have hospitals in which physicians take notes on a scrap-book that will be totally inaccessible to any other health care provider.
Just like in the Third World.