The Most Wasteful Health Spending Is Also the Most Popular

Gather ’round, children, if you want to hear a scary story. Last time around, I pointed out that while everyone “knows” that there is a lot of waste in American health-care spending, we engage in widespread self-deception about the true magnitude of the problem. That half, approximately, of all U.S. health spending is wasted, is simultaneously scientifically uncontroversial, ignored by health-policy experts, and totally absent from public debate.

But that’s not the worst part. In fact, it could be good news in a way: The magnitude of the problem suggests that there’s a lot of room for improvement; more important, if we can only educate more people about the fact, then positive change might be on the horizon.

Because it’s not just that we waste so much money, it’s that the most wasteful spending is also the most popular.

Some of this is already broadly understood, at least among those with an interest in health-care policy. America’s two major health-care entitlements are gobbling up ever-bigger amounts of cash for less and less value. The two major health-care entitlements I am referring to, of course, are Medicare and employer-sponsored health insurance, which is subsidized by the biggest loophole in the tax code. (You thought I was going to say Medicaid? True, Medicaid is terrible, but for different reasons.)

Yes, the latter is very much an entitlement. Some conservatives resist that sort of language in the interest of a philosophical defense of private-property rights, the idea being that to call a tax break government spending presupposes that our money belongs to the government. I applaud and share the philosophical attachment to private-property rights, but we shouldn’t let it obscure the fact that macroeconomically, tax expenditures have many of the same effects as government spending, since they represent spending directed by the government rather than private individuals.

While Medicare’s dysfunction is mostly only on the radar for right-leaning health-policy wonks, there is broad unanimity that the tax break for employer-sponsored health insurance, passed during World War II to get around wage controls and having since ballooned into a monster, is one of our major sources of waste. It is a huge giveaway to insurers and virtually ensures that third-party payments — the “original sin” of the American health-care system, that which prevents consumer dynamics from operating — remain the center of the system.

It is also the most popular part of the American health-care system. There’s a reason why Barack Obama, no dummy, made a refrain of “if you like your plan, you can keep your plan.” And there’s a reason why breaking that promise made Obamacare so unpopular, and there’s a reason why the GOP suddenly became the party of keeping your plan — that is, the party of entitlements.

One of the few good parts of Obamacare was the so-called “Cadillac Tax,” an attempt, albeit a ham-fisted one, to get this monster a little bit under control by taxing the most expensive plans. It’s also no coincidence that it’s the part whose implementation keeps getting delayed and the part that Republicans are united in wanting to repeal.

This, at least, is fairly well understood among health-policy experts, even as the political impossibility of doing something about it looms so large. But wait, there’s more! There’s something that’s just as bad, if not worse, and even more popular — and that isn’t even on most health-policy experts’ radar: doctors.

Doctors are the biggest villains in American health care. They are also, of course, its most popular actors.

As with public-school teachers, we should be able to recognize that a profession as a whole can be pathological even as many individual members are perfectly good actors, and even if many of them are heroes. And just like public-school teachers, the medical profession as a whole puts its own interests ahead of those of the citizens it claims to be dedicated to serve.

One of the most celebrated pieces of health-care journalism in recent years has been Atul Gawande’s New Yorker exposé on the Herculean efforts by a handful of scientists to get intensive-care physicians to implement basic hygiene measures so as to stop hospital-borne diseases, which kill about 100,000 people per year according to the CDC. The “checklist” was of no cost to the doctors, and its scientific rationale was unquestionable. Doctors still resisted it with all their might because they found it mildly inconvenient; perhaps they found it even less acceptable that anybody might tell them how to do their jobs. Somehow, “sociopathic” seems a mild descriptor.

It goes on, of course. The evidence that artificial intelligence is better at diagnosis than most general practitioners is pretty robust at this point, and the profession resists it tooth and nail. In a few years, we’ll be able to know how many unnecessary deaths this led to, but the number will have lots of zeroes. It’s hard to think of a measure or policy in the interests of patients that doctors haven’t ferociously resisted as a group.

Much like public-school teachers, the medical profession has used its positive image to create a legal structure that fills its pockets and prevents accountability. Medical-licensure rules make the health-care system a gravy train run for their benefit. Countless procedures that doctors have a legal monopoly on could just as well be performed by less skilled experts. This is hugely wasteful, but it only scratches the surface.

The legal regime’s reification of medicine prevents new and successful forms of medicine from appearing. Milton Friedman liked to point out that the Mayo Clinic, by all accounts one of the world’s top hospitals, whose success is credited to its group practice and tertiary-care model, would have been illegal under the medical-licensure rules that were passed later on. In other words, the biggest problem with medical licensure isn’t that we’re paying too much for the services we’re currently getting (although its effects include that too); it’s that it is preventing new and much better services from being born.

It’s hard to say if general practitioners, as a professional category, should even exist. We treat the breakdown of medical practitioners into “doctors” and “nurses” as a self-evident law of the Universe or the product of some sort of scientific imperative. In reality, it is a mandatory reification of the way the medical profession worked a century ago, and there is no reason to believe that it is the way health care should be run. In Africa, which suffers from a dire doctor shortage, there are examples of professionally run clinics that deliver a first-world standard of care to hundreds of patients without a single doctor. It’s highly probable that in a deregulated system you would have a broad spectrum of medical professions going from less skilled to more highly skilled, perhaps even without the concept of “doctor” except in the same vague sense that an “engineer” can be both a low-skilled technician and a cutting-edge researcher and everything in between.

This is a good analogy: When computers were first invented, (largely male) skilled engineers worked on arcane computer code while (largely female) lower-paid and lower-skilled assistants turned the code into punch cards and the punch cards back into code. As the technology evolved, that division of labor became obsolete, and even as the word “engineer” remained, it covered a completely different reality. Imagine that at some point circa 1964, engineers had successfully lobbied so that only those with a Ph.D. could program computers (and that their association would control the accreditation of computer-science schools and how many people graduate each year). You can be sure that in that parallel universe, in 2017 a computer is something that looks like something from our 1980s and costs $20,000. We would have none of the economic and cultural transformations that the software revolution wrought — and even worse, we wouldn’t even know what we were missing.

But to circle back to this column’s original point, we have Stockholm’s Syndrome. Except for the more reckless libertarians, nobody dares to touch the doctors, because economic literacy is so low and because our emotional investment in the idea of their expertise and professional dedication is so high.

It’s not just that we’re wasting half the money. It’s that the most wasteful half is the most popular.

Editor’s note: Pascal-Emmanuel Gobry, a conservative writer and fellow at the Ethics and Public Policy Center, is writing a series of columns on uncomfortable truths about health care in America. Some will make conservatives more uncomfortable, others will make progressives more uncomfortable, but most should make everyone uncomfortable.

The current system generally requires each patient to have a gatekeeper GP who routes them to the appropriate specialist.

This makes some sense to me. When a patient comes in with some pain or rash or skin discoloration or nausea they don't necessarily know what the cause is. They would have no idea what specialist to seek out.

So what does this essayist have against GPs?

Aww, heck, it wouldn't surprise me if more than 90% of ‘office visits’ could be conducted with a touch screen and a couple simple sensors, and provide a far more complete health screening than any office visit would.

You'd imagine the medical profession would welcome such innovations with open arms. I mean, seriously, during flu season, what doctor really looks forward to seeing the same case 900 times?

But by extension, that's what PAs and technicians are for, to act as that automated screening device and to prune the patient list to those who actually need to see a doctor rather than get rubber stamped for their condition.

You'd imagine this would be technology that organizations like the Bill & Melinda Gates Foundation would be all over; hundreds of thousands of medical screeners who could easily be transported around in a van, bringing medical care to just about anywhere on the planet, and screening the most unusual cases to real doctors.

Meanwhile, insurance is paying upwards of $100 a day to transport people a hundred miles round trip for their methadone dose, not including the payment to the clinic for dispensing the dose.

The single biggest flaw in our health care system is that the buyers (patients) don't deal directly with the sellers (doctors and other medical practitioners). Any "health care reform" that doesn't recognize this problem and try to deal with it is a waste of time, and shouldn't even be called "health care reform" at all. The whole process is nothing more than a game that everyone must play with an underlying objective: How to get other people to pay your medical bills.

We're not even talking about actual health care here; we're simply dealing with who pays for it.

I have found through experience that most GPs can’t tell a freckle from keratosis from skin cancer. They will admit they don’t know, and send you to a dermatologist right away. The dermatologist will glance at it and tell you immediately what it is.

But if you have some internal ache what are you supposed to do? Go to a cardiologist and oncologist and urologist and gastroenterologist?

Maybe the gatekeeper can be an RN who performs a standard battery of simple diagnostic procedures, but there has to be something or else everyone is going everywhere to figure out what the heck they have.

Not all symptoms are skin deep.

Meanwhile, insurance is paying upwards of $100 a day to transport people a hundred miles round trip for their methadone dose, not including the payment to the clinic for dispensing the dose.

The simple step of executing drug dealers, from street level to kingpin, would do away with 95% of that problem. Make 'em go cold turkey when their dealer is gone.

But if you have some internal ache what are you supposed to do? Go to a cardiologist and oncologist and urologist and gastroenterologist?...

If you can’t tell the difference in regions like the stomach, the heart and the bladder, you have bigger problems than the pain you’re having :)

I probably wouldn’t see a cardiologist if it burned when i urinated :)

It’s definitely not health care. I pay $700/month (a non-subsidized ACA plan). I never call the doctor. I see Urgent Care $$ for problems because the PCP has no openings.
I saw her for a “check-up” where she regurgitated my history from my chart and did a cursory exam but it’s “included” in my insurance.
So by my count that’s an $8400 free office visit.
She spouts conventional medical drivel that I no longer believe in, like toxic statins for cholesterol.
But my goal is only to have catastrophic insurance so I won’t be bankrupted by a single disease or accident. So there’s that, for a full-care price.

Often heartburn and mild heart attacks can generate the same symptoms.

Most insurance requires you to have a gatekeeper that you see first. This is so that amateur doctors who surf WebMD for symptoms don't waste a lot of doctors' time by setting up appointments with specialists who can fix what the patient thinks he has, but not what he actually has.

Health care in this country and many others is a joke and a misnomer. It is not health care it is about making money and lots of it. It is a pure monopoly just as much about racketeering as the mob and just as much of a monopoly as John D. Rockefeller had.

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