Yes, we are expensive, but we do poor work.

A news story carried by Reuters on Thursday led with a summary of findings from a new report stating that Americans spend double what people in other industrialized countries do on health care, but they have more trouble seeing doctors, are the victims of more errors and go without treatment more often.

This appears to be another twist on the expression, “Yes, we are expensive, but we do poor work.” In any other context we would have a little laugh at that idea, but would never acknowledge that we were so careless with our own money that we would actually hire anyone who subscribed to such a motto – at least not for long.

What if your plumber, auto mechanic, or dry cleaner posted a sign that read:

Yes, we are expensive, but we do poor work.”

How long would it take you to find a new one? Not very long, I trust, as we are all careful with our hard-earned money. We would not long tolerate a mechanic with whom it was difficult to get an appointment and who made frequent errors. But now we find out that we Americans each spent $6,697 on healthcare in 2005 — a whopping 16 percent of gross domestic product — at a merchant that had that sign posted in the back room if not in the front window. What were we thinking?

Let me point out right now, that I am not blaming health care providers. Health care is the United States is the most responsive and dynamic in the world. Higher prices enable the system to cater to patient desires for convenience and innovation and as a result our system excels in treatment of some specific diseases, such as breast and prostrate cancer.

I am not blaming insurance carriers either. They have been struggling for decades to come up with plans that employers can afford and that employees will find acceptable. Meaning that they feature low out-of-pocket costs and a fair amount to freedom to seek care when and how we choose.

I am sticking the blame on the government. Yes, the government that started this crazy system that grew out of World War II wage freezes.  Crazy is a system where we have to depend on our employers to provide us with medical coverage. Of course at first, we patients were part of the process. We were sensitive to the overall cost of health care and found the insurance to be a financial lifesaver when something unpredictable and serious happened to us or a family member.

By the late seventies it was necessary for employers to make the first real push to control what was becoming out of control spending. The answer was managed care. The promise was lower costs for employers and convenient co-pays for the employee instead of a percentage of the total bill. The tradeoff was that we had to go though a primary care physician who “managed” our care including our visits to specialists and stays in the hospital. We hated it.

So what happened? The employers and insurance carriers said, “Ok, you can go see anyone you want, any time you want and still pay a co-pay as long you stay in the network.” Fine, we can do that. But the costs started mounting again. Why? Because we all now believe that doctor visits cost $20 and all prescription drugs are $10, Of course the real cost is much more, but how would we know? We as consumers have been insulated from the real cost of health care because the insurers and the providers have negotiated the prices and let us in on the true cost only after the fact. This should be enough to prove that negotiations at a corporate or government level can not solve the problem.

It takes the everyday negotiations of the marketplace to really have an impact. Mechanics and dry cleaners who are expensive and do poor work are soon adjusting their business models, or they are closing their doors. It is time we apply the same logic to our health care system.

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