Monday, January 26, 2009

Costs, Culutre, effect of - Pogo Speaks Out on U.S. Health Costs

We have met the enemy, and he is us.


According to the McKinsey Global Institute, the U.S. per capita use of,

• CAT scans is 72% higher than in Germany.

• CAT scan reimbursement rates are 4 times higher than Germany.

• Knee replacements are 90% more frequent than in other countries.

And that is just the tip of U.S. health cost iceberg.

The message?

When it comes to health costs, we have met the enemy, and he is us – the U.S. culture.

We are a highly individualistic, entrepreneurial, legalistic nation suspicious of centralized supervision, and believers in perfect care delivered by perfect physicians offering the very best in drugs, advanced surgeries, and diagnostic tests that assure us of perpetual youth and optimal function – as long as someone else pays.

Since most of us don’t pay directly but through 3rd parties, cost is not a factor. Patients, doctors, hospitals, and drug companies have no interest in limiting care.

So, as Alfred E. Newman says, “Why worry?”

Blame high administrative costs for health costs, even though the Institute estimates administrative costs account for only 7.5% of health costs.

Blame emergency room visits for the uninsured, even though The Institute calculates that accounts for 3.5% of total costs, and probably less.

But don’t blame our culture. Don’t accept the fact that that’s the way we like it.

Yes, we could change our culture. We could remove tax advantages for corporations for providing care for employers. We could means test Medicare patients, and have those with higher incomes paid more. We could create a federal tax to cover all government health costs. We could make routine and mandatory health savings accounts and high deductible plans to make consumers partially responsible for costs of their care.

But these things would be politically unpopular, destroy entitlement illusions, threaten re-elections of politicians, and upset the status quo. Why do these things now, when you can blame someone else and continue to kick the can down the road?

There was a creature named Pogo.
An expert in U.S. healthcare cost Polo,
Pogo said it was the U.S. culture,
That was the real cost vulture.
Which made it hard for us to say No.

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