CNN published an article from Associated Press on “Too high a price for life?” The article discusses the high prices for drugs and procedures that may extend life. It raises the question if extending life for a few months is worth the cost whether it is $50,000, $100,000, $250,000 or more.

Because I have been planning to write about the cost of health care in our society, I will take this opportunity to add my 2 cents to the discussion. The issues are too numerous to solve in one article. Thus, my intention is to raise awareness of some of the issues.

Is medical care worth the cost?

Whether or not to extend life at all costs is usually a hard decision. Some may say that you can not put a price on life, which is true. Yet, in our society, we commonly put a price on life. Think about how we

• Buy life insurance

• Use the legal system to create a financial settlement for lose of life or limb

• Desire to become a millionaire (to have a meaningful life)

With medical insurance, the question becomes easier. Many believe that because they (or their employer) paid the medical insurance premiums, they deserve the best care that money can buy. When you only need to pay $1,000 in co-payments to extend life a few months, the decision is easier than if you would be required to pay $100,000 for the full cost of treatment. And this desire to extend life is increasing. Per the article:

Faced with a lethal disease, more than a third of Americans now would want “everything possible” done to save their lives, up from just over a fifth in 1990.

Part of this may be due to medical care being better thus we expect miracles. Part of it may be due to families living farther apart where we want to have a few extra months to make up for the time apart. In other words, some people may not be ready to say goodbye.

Who is to Blame for High Cost of Health Care?

The finger has been pointed everywhere. We always want to blame someone else. Yet, in reality, we may be all to blame.

• Pharmacies – These companies are charging up to hundreds of dollars for a single pill. With all their profits and selling the same drugs at lower price in other countries, it is easy to say that they should cut the prices in the United States.

• Insurance Companies – Again, due to their profits and their denying treatment for those with insurance, they are easy to blame.

• Doctors – Because doctors can make $250,000 or more a year, why can’t they take a lower paycheck or give some time to treat the uninsured at free clinics?

• Hospitals – Have you seen the cost of surgeries these days? Hospitals have been blamed for trying to make a profit even with their not-for-profit status, so should they be blamed?

• Malpractice Insurance – The cost of this insurance are skyrocketing forcing physicians to increase their prices. Yet, if doctors are making mistakes shouldn’t they pay for their negligence?

• Patients – Usually the last to blame because all that the patient is looking for is to get well.

• Uninsured – Because someone has to pay for their costs, the cost of insurance for everyone else increases. So are they to blame for not paying their share of medical costs or are they a victim due to the higher costs? Did you know that 35% of the uninsured make more than $50,000 a year and 18% of uninsured make $75,000 or more? These numbers are not as far off of the average income distribution as one may thing (45% of households make $50,000 or more while 27% of households make $75,000 or more). So if the reason for forgoing health insurance is just due to cost then why is a large number of uninsured earning $75,000 or more?

Solution to the Problem

Some say that Universal Health care is the solution. This may or may not be the solution. Even if it is the solution, there are several philosophical issues that we needs to be solved as a society first, otherwise the intended cost reduction due to Universal Health will only be temporary.

• How much do we want the new purple pill?

A key reason why prescription costs are so high is because Americans are paying for the research and development costs for the newest drugs. Other countries refuse to pay this cost (in full) and thus have lower drug costs. If we refuse to pay the cost of producing the new drugs, the amount of time spent on drug trials will slow down and the next generation of drugs will be delayed. Buying drugs from Canada is doing the same thing, reducing R&D spending on the next generation of drugs.

• How much do we want to blame others?

I do not want to get into a large discussion about malpractice. It was formed based on a good principle of increasing the quality of care. Yet, is our legal system getting to a point where it is too burdensome? Two interesting points to think about:

• Are we better of if hospitals openly discuss their minor errors openly instead of trying to hide from them? Can we blame them for not admitting even a small responsibility for an unintended outcome (where the error did not materially affect the outcome) because if they do they are open to a million dollar lawsuit?

• Is negative press more powerful due to the internet (makes it easier for news to get out so patients can go elsewhere) compared to a lawsuit which was settled with its information sealed from the public? If lawsuits are more for punishing the defendant than for the money received, then why do we have settlements where the plaintiffs can not say a word as a part of the settlement?

I do not know the whole answer. Plaintiff lawyers tell us that insurance companies have exaggerated the cost increases by blaming large verdicts. Yet, tper their claim, the size of verdicts has not materially increased per their statistics. Yet, even if this is true, do we have a malpractice system out of control? A physician friend of mine (who I would trust with my life) has been sued 5 – 6 times and has won each one. Plaintiff lawyers would say that the system worked and proved him innocent, thus there is no need to change the system. Yet, he still moved out of Ohio (a state that has few if any limits on malpractice verdicts) because his malpractice insurance increased astronomically (his insurance practicing in Arizona is a fraction of the cost of insurance in Ohio) and due to the stress of lawsuits. Even though he was proven innocent, his insurance increased anyway to pay all the legal fees. In addition, for each lawsuit brought against him, he lost countless hours trying to defend himself instead of on providing quality care.

• How much do we push preventative care versus procedural care

If you look at the cost of care these days, the largest costs are for procedures and drugs used to treat problems instead of routine doctor visits for preventative care. If you look at the salaries of physicians, the physicians that perform procedures (urologists, radiologists, surgeons, etc.) are on average making $250,000 or more. If you look at other doctors (primary care, pediatrics, etc.), their pay is significantly less. This is based on how much Medicare and insurance companies pay for procedures versus doctor visits.

This discussion can be boiled down to how much we want to spend to have the best medical care and how much responsibility should have for their preventative care? Do we wait until we have a heart condition or cancer to get treatment? Or, do we recognize how we can prevent heart disease and cancer by working out, eating right and staying out of the sun without sunscreen?

We can ask if we are even getting our money’s worth for what we are spending on health care. Some will point out higher than average infant mortality rates and below average life expectancy (compared to other industrial countries) as a sign that we do not receive good health care for paying the highest health care costs in the world. Yet, in my opinion, we have one of the best medical procedure care in the world because many foreign leaders come to the United States for procedural care and many foreign physicians want to train here as well. Yet, if we do not want to do the preventative work (e.g., check-ups and proper nutrition and exercise programs), we will not see the benefits of our medical care system because the focus is on “the cure” versus a living a long life via prevention.

• Lastly, how much do we want to work to pay for this care?

If we all want these costly life saving measures, how much do we want to pay for it? In other words, how much do we want to work to pay for it? There is always a trade off. For some, they are working harder during their working careers to pay for these life saving measures at the end of lives. However, as the article said,

“The trouble with many treatments, though, is that average patients gain only several more months of life, studies have found. A lucky few may survive for years.”

So is extending life by a few months worth working harder to pay for these benefits?

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This entry was posted on Thursday, August 17th, 2006 at 2:10 pm and is filed under insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.