We like to tell ourselves that even though we pay eight to ten times more for healthcare than any other country, we get the best care. But that’s not true. We wait for a median of 138 minutes (over two hours) in an emergency room. And that’s just the median. In Chicago emergency rooms wait times range from 3.5 to 10.6 hours. I am sure you experienced this yourself. The situation is so bad, that the New York Times published a (very helpful) strategy on how to navigate the emergency room. (In other words, how to get seen faster.) I wish I’d read it before I had my emergency.
And the waiting game does not end there. We wait anywhere from 29 days to 66 days to see a specialist. Less than 1% of us got a house-call from our doctor. By contrast, approximately 30% of a German doctor’s time is spent making house-calls. In other developed countries, that’s normal. A while back, my father in law (who lives in the UK) opened the door one day to a vaguely familiar looking gentleman. It was his doctor, come to check up on him. When was the last time that happened to you? Your loved ones? I am guessing never.
And on top of that, we have to manage our healthcare bureaucracy. We don’t just spend time waiting for a doctor or a surgery; we wait for the right prescription to be filled, we carefully file all our medical records (because insurance companies may not pay, approve or both). We spend hours just filling out the required forms. Being a patient in America is a full-time job. And that’s assuming nothing major is wrong with you. If you have to deal with something serious, being a patient can be all-consuming.
I could write a book about how the healthcare we get is often worse than the healthcare received by people in other developed countries. In places like Germany and Switzerland, people who do much the same jobs we do, have many of the same stresses, live longer and do not have to work so hard just to get healthcare. And they pay less for their care. With us, healthcare takes up an ever larger piece of our economy and of our pocketbooks.
The reason people in other countries pay so much less for healthcare is that providers and insurers, charge a lot less. Or, as economists (very subtly) put it “It’s the Prices, Stupid.” Now, it’s true as Sarah Kliff points out that providers in other developed countries charge so less because other governments (and insurers) regulate prices. But that’s not the whole story. Those governments are able to regulate prices because they can tell what they are regulating.
It is relatively clear in (say) Germany why an MRI costs what it does while a dose of insulin costs what it does. In America, that kind of clarity is impossible to come by. That’s because in the United States prices are set by associations representing their dues-paying members. Take doctors’ and nurses’ salaries, for example. These are based on the Current Procedural Terminology (CPT) codes. These codes are developed, maintained and copyrighted by the American Medical Association. In other words, the lobby representing doctors sets their salaries and hospitals and insurers pay those salaries. How are CPT codes set? No-one has any idea. And when I say no-one, I mean not you, not me, not a global services company such as Foundation Medicine.
In its Securities and Exchange Commission (SEC) filing, Foundation Medicine writes “most of the commercial third party payors that reimburse us do so based upon CPT codes, or based on other methods such as percentages of charges or other formulas that, to our knowledge, are not specific to us and not made known to us.” If a global company like Foundation Health with its vast resources, its armies of lawyers and its actuaries has no idea how the associations set prices, how can any of us figure it out? And if we can’t figure out how the prices were set to begin with, how can we regulate them?
In the essays that follow, I will outline what I think may be a solution. I think we should adopt a version of the hugely popular Bismarckmodel of healthcare coverage. A model that has been adopted by countries as different as Israel and Japan.
Because we can’t go on as we have been. We are getting ever worse and ever less affordable care. We have to change.