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Every so often, I get it in my head to read a book about the American health care sector. (Also to beat my head against a concrete wall for a few hours, but that's not important right now.)
By the way: calling it a health care "system" is something I will try to avoid. The very language seems to presume something that's the result of design, instead of (more accurately) a sector that's been kludged over decades by powerful forces operating under the wrong incentives.
Also a "system" implies something that actually works well.
And the author, Doctor Vivian Lee, contends otherwise. She has some facts on her side. For example, US Covid-19 deaths just passed 200K. In comparison, Johns Hopkins researchers estimate the body count for medical errors at around 250K. That's per year, every year. Eek.
I wish I liked the book better. It's written in what I've come to think of as USAToday-ese: short paragraphs, heavy on anecdotes, short on statistics, punchy-cute section headings (E.g., "Rebate and Switch" on pharmaceutical manufacturers offering rebates to pharmaceutical benefit managers.) This comes off as condescending.
Worse, Dr. Lee seems to rely on slogans instead of concrete policy proposals. She advocates moving away from a "fee-for-service" pricing model, toward a "pay-for-results" model. I'm still not sure what that means. No charge if the patient ends up dead? There might be a good idea there, but I think it's buried in all the salesmanship. The numerous anecdotes point to successful programs spearheaded by talented and devoted reformers, but Dr. Lee seems to not be skeptical of whether these reforms can scale when the keys are tossed to the less talented and devoted.
Each chapter tackles a different topic (drug costs, mistakes, health records,…) and closes with a set of action-recommendations for patients, doctors, and payers. And ends with "And most importantly, all of us need to elect leaders who will…". And what follows is some vague prescription that assumes government can top-down regulate/mandate/subsidize our way to medical nirvana.
A specific gripe: It's a clichéd observation that the US devotes a huge amount of its economy to the health-care sector, with mediocre results. Geez, why can't we be like those other countries, at least as far as spending goes?
I've noted in the past that one way other countries save money is pretty simple: paying lower salaries to the folks in the medical field. Doctor Lee seems to reinforce that:
Many health care professionals are highly paid (especially doctors, dentists, and administrators). Analysis of 2016 data showed the average generalist physician in the United States made $218,173 a year, double the average of generalists in ten other high-income countries (including the Netherlands, UK, Canada, Australia, and Germany). Specialists averaged $316,000, also higher than in any of those nations. US nurses also make more than their international peers, averaging more than $74,000 per year comparied to $42,000-$65.000.
(Reference to a JAMA article described here.)
But then Dr Lee sticks a pin in this balloon:
While high salaries undoubtedly worsen the US health care crisis, the impact on the economics is not that big. Health care economist Uwe Reinhardt showed in 2007 that higher salaries added about 2% to total national health care spending.
I've even heard of Uwe, so case closed, right? Well… the reference here is not to a peer-reviewed medical economics journal, but to a 250-word LTE Reinhardt wrote to the NYT back then, in response to an earlier column by Alex Berenson.
In “Sending Back the Doctor’s Bill” (Week in Review, July 29), you compare the incomes of American physicians with those earned by doctors in other countries and suggest that American doctors seem overpaid. A more relevant benchmark, however, would seem to be the earnings of the American talent pool from which American doctors must be recruited.
Any college graduate bright enough to get into medical school surely would be able to get a high-paying job on Wall Street. The obverse is not necessarily true. Against that benchmark, every American doctor can be said to be sorely underpaid.
Besides, cutting doctors’ take-home pay would not really solve the American cost crisis. The total amount Americans pay their physicians collectively represents only about 20 percent of total national health spending. Of this total, close to half is absorbed by the physicians’ practice expenses, including malpractice premiums, but excluding the amortization of college and medical-school debt.
This makes the physicians’ collective take-home pay only about 10 percent of total national health spending. If we somehow managed to cut that take-home pay by, say, 20 percent, we would reduce total national health spending by only 2 percent, in return for a wholly demoralized medical profession to which we so often look to save our lives. It strikes me as a poor strategy.
Physicians are the central decision makers in health care. A superior strategy might be to pay them very well for helping us reduce unwarranted health spending elsewhere.
Notice one thing right off the bat: Uwe is only talking about physician salaries; if you've (God help you) been in a medical building recently, you'll have noticed there are a lot more people running around than the doctors. So Dr. Lee's wrong in claiming that Uwe "showed" that "higher salaries" were a 2% effect on the total health care bill; Uwe's not counting all those other folks, not to mention the paper-pushers behind the closed doors, in insurance company offices, in regulatory agencies….
I'm also unconvinced by Uwe's argument on its face, which seems to be a lot of handwaving. And, at least in part, it really seems to amount to: "We gotta pay doctors high salaries, or they'll kill even more of us." (See above.)
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