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Catastrophic Care: Why Everything We Think We Know about Health Care Is Wrong
In 2007 David Goldhill’s father died from infections acquired in a well-regarded New York hospital. The bill, for several hundred thousand dollars, was paid by Medicare. Angered, Goldhill became determined to understand how it was possible that well-trained personnel equipped with world-class technologies could be responsible for such inexcusable carelessness—and how a business that failed so miserably could still be rewarded with full payment.
Catastrophic Care is the eye-opening result. In it Goldhill explodes the myth that Medicare and insurance coverage can make care cheaper and improve our health, and shows how efforts to reform the system, including the Affordable Care Act, will do nothing to address the waste of the health care industry, which currently costs the country nearly $2.5 trillion annually and in which an estimated 200,000 Americans die each year from preventable errors. Catastrophic Care proposes a completely new approach, one that will change the way you think about one of our most pressing national problems.
Catastrophic Care is the eye-opening result. In it Goldhill explodes the myth that Medicare and insurance coverage can make care cheaper and improve our health, and shows how efforts to reform the system, including the Affordable Care Act, will do nothing to address the waste of the health care industry, which currently costs the country nearly $2.5 trillion annually and in which an estimated 200,000 Americans die each year from preventable errors. Catastrophic Care proposes a completely new approach, one that will change the way you think about one of our most pressing national problems.
400 pages, Paperback
First published January 1, 2011
140 people are currently reading
1695 people want to read
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Displaying 1 - 30 of 88 reviews
October 6, 2013
While the author makes some good points about issues in the healthcare system and the flaws within the ACA, he approaches the issue from the standpoint of privilege and his suggestions don't really hold up for the majority of Americans.
November 20, 2021
this provided a lot of information that was insightful to understanding why the health care system in the United States is awful... I mean we already knew that but, it was interesting to actually know why
March 15, 2013
The fundamental message of Catastrophic Care is that our health care spending in the US is unsustainable because free market forces are almost entirely absent from the health care industry and bureaucracy. Wherever you are the political spectrum on the health care issue, it's worth a read to make you think more deeply about the issue.
Steven Johnson introduced the term "peer progressive" in Future Perfect: The Case for Progress in a Networked Age to encompass those of us (and I find myself in the "us") who are generally socially liberal and who believe that free market forces evolve the best outcomes, who believe that many small, diverse and decentralized efforts trump large, centralized planning, but who also believe that there is a need for a safety net when people are inevitably displaced by changing markets and societal trends.
David Goldhil, author of Catastrophic Care: How American Health Care Killed My Father—and How We Can Fix It fits quite well into that mindset, and it's these ideas he brings to US health care. Goldhill became known for his Atlantic article How American Health Care Killed My Father and has combined that experience with this experience of running a company as president and CEO to provide a view of the health care system, and a set of proposals for reform.
Goldhill spends much of the book demonstrating that because our health care ecosystem demonstrates as it's own separate island, disconnected from market forces, we get both much higher costs and also worse outcomes. Because consumers (all of us) pay for healthcare almost entirely through intermediaries (medical insurance, Medicare, Medicaid), we do not have either the power or the responsibilities that we have as consumers of other products. One could look at the expansion of health care and the profits being generated as the result of evil corporations, but Goldhill shows that those companies and organizations are doing what companies do given the incentives. In normal markets prices and levels of service are controlled by open competition, but in the case of health care, the opacity of the system and the emotional/stress of when we actually need it combine to stifle competitive forces.
Not that Goldhill puts all the blame on the system. In my favorite paragraph of the book, he says: "The dysfunctional, unsutainable, and dangerous health care system America has built is not merely a result of the errors of our leaders; it was designed in service to a wish - our wish. We don't want to know the truth about health care, so we've built a system whose main accomplishment is shielding us from reality." When it comes to health care, that frankly describes me at least - I'd rather not think about it, just tell me who to see and what to pay, and I'll do it.
Unlike many other books on the subject, the solutions Goldhill proposes take into account actually paying for this over the long run, starting from where we are now, while also providing a strong safety net for those not able to pay the full amount for themselves. It would require all of us to take a much more active role in managing our health care, especially paying for it and being better consumers. But the tradeoff would be a health care system that is both cheaper and qualitatively better. I have to say that after thinking about several models, I am swayed Goldhill's arguments. I hope he gets traction with this at the political level, but I worry that if there's any group that is more disconnected from market forces than health care, it's politician (of all stripes). They have very little skin in this game besides making partisan points, and very little reason to make hard decisions.
If you want to take a look other aspects of this, take this book, T.R. Reid's The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, and Steven Brill's excellent Time article on the cost of health care. Reid gives a perspective on how other development nations handle health care, and in many cases the details are somewhat different than the "centralized bureaucracy" view we often get from our media. Brill has less answers, but gets into great detail on where the costs come from in our current system.
Finally, I was struck by how similar our health care and educational systems are. Both are large systems where we want everyone to have an opportunity, that have a large component of government and political involvement, and that we are trying to manage by imposing standardized solutions and metrics upon. It seems reformers of each of the systems might learn from one another.
My only minus is that I thought it was a maybe 50-100 pages (paperback sized pages) too long and could have been condensed a bit. Still, very worth reading.
Steven Johnson introduced the term "peer progressive" in Future Perfect: The Case for Progress in a Networked Age to encompass those of us (and I find myself in the "us") who are generally socially liberal and who believe that free market forces evolve the best outcomes, who believe that many small, diverse and decentralized efforts trump large, centralized planning, but who also believe that there is a need for a safety net when people are inevitably displaced by changing markets and societal trends.
David Goldhil, author of Catastrophic Care: How American Health Care Killed My Father—and How We Can Fix It fits quite well into that mindset, and it's these ideas he brings to US health care. Goldhill became known for his Atlantic article How American Health Care Killed My Father and has combined that experience with this experience of running a company as president and CEO to provide a view of the health care system, and a set of proposals for reform.
Goldhill spends much of the book demonstrating that because our health care ecosystem demonstrates as it's own separate island, disconnected from market forces, we get both much higher costs and also worse outcomes. Because consumers (all of us) pay for healthcare almost entirely through intermediaries (medical insurance, Medicare, Medicaid), we do not have either the power or the responsibilities that we have as consumers of other products. One could look at the expansion of health care and the profits being generated as the result of evil corporations, but Goldhill shows that those companies and organizations are doing what companies do given the incentives. In normal markets prices and levels of service are controlled by open competition, but in the case of health care, the opacity of the system and the emotional/stress of when we actually need it combine to stifle competitive forces.
Not that Goldhill puts all the blame on the system. In my favorite paragraph of the book, he says: "The dysfunctional, unsutainable, and dangerous health care system America has built is not merely a result of the errors of our leaders; it was designed in service to a wish - our wish. We don't want to know the truth about health care, so we've built a system whose main accomplishment is shielding us from reality." When it comes to health care, that frankly describes me at least - I'd rather not think about it, just tell me who to see and what to pay, and I'll do it.
Unlike many other books on the subject, the solutions Goldhill proposes take into account actually paying for this over the long run, starting from where we are now, while also providing a strong safety net for those not able to pay the full amount for themselves. It would require all of us to take a much more active role in managing our health care, especially paying for it and being better consumers. But the tradeoff would be a health care system that is both cheaper and qualitatively better. I have to say that after thinking about several models, I am swayed Goldhill's arguments. I hope he gets traction with this at the political level, but I worry that if there's any group that is more disconnected from market forces than health care, it's politician (of all stripes). They have very little skin in this game besides making partisan points, and very little reason to make hard decisions.
If you want to take a look other aspects of this, take this book, T.R. Reid's The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, and Steven Brill's excellent Time article on the cost of health care. Reid gives a perspective on how other development nations handle health care, and in many cases the details are somewhat different than the "centralized bureaucracy" view we often get from our media. Brill has less answers, but gets into great detail on where the costs come from in our current system.
Finally, I was struck by how similar our health care and educational systems are. Both are large systems where we want everyone to have an opportunity, that have a large component of government and political involvement, and that we are trying to manage by imposing standardized solutions and metrics upon. It seems reformers of each of the systems might learn from one another.
My only minus is that I thought it was a maybe 50-100 pages (paperback sized pages) too long and could have been condensed a bit. Still, very worth reading.
June 10, 2019
I'm only 50 pages in, and I pretty much want to underline every other paragraph and blog about every bit of it. So well thought-out and explained. So far, I think this should be a textbook for students and mandatory reading for every politician.
... EXCELLENT. I dog-eared so many pages and read it aloud to my husband and talked about it animatedly several times. The whole book is clear, well researched, carefully considered and easy to understand. Even for a politician. Goldhill lays out a great solution at the end of the book, but of course, our society will have to have a major catastrophe in care, indeed, for anyone to even consider changing the whole way we deliver and "insure" health care. But it would be wonderful if we could start that change now before things do get horrific.
Read my full review, including a rating for content, at RatedReads.com: https://ratedreads.com/catastrophic-c...
... EXCELLENT. I dog-eared so many pages and read it aloud to my husband and talked about it animatedly several times. The whole book is clear, well researched, carefully considered and easy to understand. Even for a politician. Goldhill lays out a great solution at the end of the book, but of course, our society will have to have a major catastrophe in care, indeed, for anyone to even consider changing the whole way we deliver and "insure" health care. But it would be wonderful if we could start that change now before things do get horrific.
Read my full review, including a rating for content, at RatedReads.com: https://ratedreads.com/catastrophic-c...
January 24, 2024
The author does a nice job of explaining how insane the American medical system is. For example, there’s a clever analogy of a lemonade stand being operated with cost-plus pricing that illustrates what a disaster that would be. As a long rant, the book works pretty well, especially for people outside the system who are trying to understand just how FUBAR it is for patients, doctors, nurses, society, families, and so on.
But it’s nothing new that our medical system is extremely expensive and that we have mediocre health outcomes.
In terms of looking for “visionary” solutions, I feel like the author did not go far enough in connecting the dots of the points he his making. For example, he points to the Oregon health insurance experiment, which found that more “insurance” led to more “care” but not to a measurable improvement in health.
If medical interventions are not connected well to health and the goal is health, then it might make sense to look into what makes nations healthier and do more of that. Where have there been dramatic improvements in health for not a lot of money? The author focuses on Singapore but doesn’t mention the broader social context there of housing, etc., etc, etc.
Alternatives:
Factfulness / Origin Story / Everything Happens for a Reason
The Origins of Human Disease
Prescription for a Healthy Nation: A New Approach to Improving Our Lives by Fixing Our Everyday World
But it’s nothing new that our medical system is extremely expensive and that we have mediocre health outcomes.
In terms of looking for “visionary” solutions, I feel like the author did not go far enough in connecting the dots of the points he his making. For example, he points to the Oregon health insurance experiment, which found that more “insurance” led to more “care” but not to a measurable improvement in health.
If medical interventions are not connected well to health and the goal is health, then it might make sense to look into what makes nations healthier and do more of that. Where have there been dramatic improvements in health for not a lot of money? The author focuses on Singapore but doesn’t mention the broader social context there of housing, etc., etc, etc.
Alternatives:
Factfulness / Origin Story / Everything Happens for a Reason
The Origins of Human Disease
Prescription for a Healthy Nation: A New Approach to Improving Our Lives by Fixing Our Everyday World
March 22, 2015
Goldhill's father died as a result of medical error in a hospital that then billed insurance and Goldhill's mother $635K for the "care." The author directed his pain and anger to an outsider's examination of America's health care system. The result is a clear, richly exemplified description of the structural features of American health care that inevitably lead to excessive cost, poor quality, and systemic disregard for the best interests of the "customer." Among the possible solutions Goldhill proposes, I believe that consumerization of health care on a massive scale is the most promising.
February 5, 2013
Overall, I found the book to be fair and thought-provoking, but the idea of a "Wal-mart of healthcare" sounds pretty repulsive to me. If anything, the book does a good job of explaining the complexities of health care and Goldhill does have a humane approach to the subject. I guess I just don't have as much faith as the author in a health system left to the devices of the free market.
May 13, 2018
Book notes
David Goldhill is a Television CEO but became passionate about healthcare after his father died from a hospital infection. He wrote a famous article in the Atlantic How American Health Care Killed My Father about the problems with the healthcare system and how to fix it. This book was published in 2013 and is an expansion of that article; you can read the article to get the main gist of the book.
Goodhill points out many flaws with the healthcare system, from moral hazard of consumers to lack of accountability with providers. Many of his arguments sound reasonable, but he sometimes fails to back them up with hard data. It would be good to get a more detailed breakdown of how health spending has risen over time, but the book doesn't examine the causes as closely as it could.
Europe
America spends about twice as much per capita on healthcare as European countries like the U.K. and France. It seems the simplest solution would be to just adopt the European single payer healthcare system, so why can’t the US just do that? Goldhill says that Americans would never accept a central authority rationing their care like they do in Europe.
It would be interesting to see a quantitative look at much this "unlimited care" model increases the cost of US healthcare. It's clearly a big factor but it can't explain the full magnitude of the spending difference, so it seems America could still learn a few things from Europe. For example, the US government could do a better job of negotiating when paying for drugs.
Health and Happiness
The books describes US healthcare as an "island" that works in a very strange manner compared to the regular "mainland" capitalist economy. It makes the following arguments against the "island" assumptions:
* Health care ≠ health - many other things, such as diet, exercise, and one's environment are more important to determining the length and quality of one's life than healthcare.
* Health spending ≠ everything - there are other valuable things people may want to spend their money on besides direct health-related costs.
* Health insurance ≠ health care - people should be able to get health care without always going through insurance. On the mainland, people pay out of pocket for standard procedures, such as a car tune-up.
* On the same note, health insurance ≠ insurance - insurances are usually for catastrophic events. By involving insurance in every purchase, the overhead costs go up, among other issues...
* Procedures ≠ good care - often health providers call for tests, prescribe medicines, and order one-off procedures when simpler methods or a more holistic approach could work better.
He then discusses how costs have gone up dramatically in the regular health care system where insurance pays for everything, but costs have gone down in areas where people pay out of pocket, such as LASIK. He also mentions elsewhere dentistry and veterinary services as areas where prices have gone down, but it would be interesting to see a more detailed analysis. (I'm not familiar with animal care, but it seems dentistry can still be rather expensive.)
Competition, choice and healthcare
The main part of the book discusses the flaws of health care. With insurance paying for so much of health care, people don't have the normal incentives to consider the costs of treatments. (I've noticed minor examples of this when doctors prescribe more medicines than necessary to treat e.g. strep throat.) Some things can also be addressed in non-medical ways but only the medical solution is covered. For example, a person could exercise or improve their diet instead of taking statins. (Though one could argue that the government or insurance companies should subsidize other healthy life choices outside of healthcare.)
He discusses the issue of why we need more and more healthcare even though we're healthier than we are in the past. Healthcare has mission creep so it looks to solve additional issues over time. For example, hypertension wasn't something treated in the past. While treating it has improved health, it's put almost a third of US adults in the cross eyes of health care. The next step identified by doctors is "pre-hypertension", which means more and more treatment will be covered by insurance.
The book says that marketing is a sign of capitalism working but in healthcare the marketing is bad since it doesn't mention cost. I'm not sure why he thinks marketing is so great in the first place; it's not like ads are just about showing the consumer the objective truth. The US likely has a problem with medicines being over-prescribed since it’s the only country that allows drug companies to advertise.
Next, Goldhill discusses how Medicare overspends and tests for many things that aren't necessary. This is a basic problem in medicine, dentistry and related areas where the medical providers can be biased to over-treat things. They earn more money this way (and are more protected from lawsuits), so it's unlikely they will be totally neutral on what's the actual best course of action. I wonder if there's a way in some cases to separate the financial incentives from the diagnosis. For example, it seems the diagnosis would be more objective if a different entity diagnosed than the patient than the one that treats the patient. Another possibility would be to track all the patient data and diagnoses in a system that can easily be reviewed by others (with proper privacy safeguards). This can help detect anomalies if some doctors are e.g. ordering too many procedures without reason.
The book discusses the excess of over-treatment in end-of-life care. This seems to be a particular acute problem in the US where politicians can't even mention taking a more balanced approach. This isn't even about cost, but about the ineffectiveness of trying every medical method when person is at the very end. (See also Slate Star Codex on this topic.)
Cost of Care
In 1983 the government switched from paying per service to paying per diagnostic category. This caused hospital stays to be shorter, yet the cost of hospitals has still grown by 700% overall, just like the rest of healthcare. The basic issue is that they system still sets reimbursements based on the providers’ costs but costs can be inflated in all sorts of ways. (Providers may even have an incentive to pick more expensive treatment options since they get higher reimbursements that way.) He says that the "surrogates" (insurance companies and the government) can't negotiate lower prices since they don't want to ruin the providers. It seems they should still be able to do a better job at negotiating, and the US seems to be particularly bad at this. There is a problem that insurance companies don't really have an incentive to bring prices down, and it seems that the US government isn't very good at that either.
The book discusses how general practitioners (GP) salaries actually went down as specialist salaries went down. Since it's not a market-based system, the GPs lost out due to various complex factors, such as not having enough leverage in negotiations. (It seems a little unclear why this happened exactly, even if the results are clear.) The book says that GPs and geriatric doctors could do a better job than specialists at giving overall advice to a patient, such as making lifestyle changes.
Innovation
The book has a short discussion of possible innovations in healthcare, such as using widespread devices for monitoring care. It does seem like part so healthcare could be "decoupled" into cheaper components, but one also shouldn't try to over-monitor things. There should also be more ways to consult with medical professionals without actually going to wait in a doctor's office. The book doesn't discuss this, but in long-term, computers should be able to diagnose many medical issues as well.
In other areas of the economy, innovative businesses can develop new ideas that can out-compete existing businesses by offering a better service or a lower price. This "creative destruction" is essential to economic progress, but the book says that the current centrally managed model discourages such innovation.
Singapore
If the book had to be summarized in three words, it would be “Be Like Singapore”. Singapore only spend 4-5% of their GDP on healthcare, compared to the US spending of 17%. Everyone generally pays something when using healthcare in Singapore, but there are many different levels of care offered. The government provides healthcare alongside the private sector. A big component of their health system is that everyone sets aside a percentage of their earnings in a health savings account. Since the patient cares about the cost of care, market forces are apparently able to work in healthcare there.
The US does have a model that adopts some of the Singaporean model, known as CDHPs. This is where individuals pick a plan with high deductibles and put money tax-free in a health savings account (HSA). The book says that due to the tax limits on HSAs, a person can often get better deal by opting instead for a low-deductible insurance plan with more coverage for their family. HSAs do seem to make more sense from an overall economic perspective, and I'm not sure if the tax issues with them have been addressed. Note that currently they are often the best deal for a healthy individual, since most likely one won't hit the annual limit of health spending, and they allow the money in it to grow tax free. The issue with HSAs is one now needs to think about the costs of healthcare, just like when buying services in other industries. Maybe it would be better to use healthcare without thinking about costs at all? The problem is the costs of healthcare don't seem to have a natural cap on growth, and (as the book points out), there are also other important things worth spending on. More care isn't always better either. By putting money in a separate health account, it makes it easier to spend money while not removing cost from the equation entirely. This seems like a balanced approach.
The outcomes of insurance
The book attacks ACA and its expansion of Medicaid. It also predicts that ACA won't necessarily increase the number of insured. This prediction was incorrect since insurance coverage has expanded (even as people debate exactly how much).
There's an interesting discussion of whether giving people insurance even improves coverage. At the time the book was published, there was an ongoing study in Oregon about this, where some people were picked by raffle to get free health insurance. This study has since concluded so I looked up the results. I assumed there has to be some positive health benefit to getting health insurance, since people with insurance will use more care, which should have some kind of net positive effect on their health.
The actual results are surprising:
I guess lifestyle changes are more important for general health outcomes than healthcare, and that the actual diseases where free care would make a difference are too rare to affect the statistical outcomes. Interestingly, people with insurance visited the emergency room 40% more than people without insurance, (the opposite of what some expected) probably since they knew they wouldn't be hit with a large bill for it.
There's something to be said for getting rid of people's financial strain, but these results do support providing people with help in other ways, e.g. such as funding their health savings accounts, and maybe funding to encourage better health practices. As the book mentions, there are other ways would could spend $10,000 per person annually. (See also the paper on the study.)
The last Appendix of the book discusses ways the government could encourage the right incentives in healthcare. This has a bunch of common-sense suggestions that seem like they would be really difficult to get different parties to agree to implement in practice:
* More transparency - Medicare keeps a database of information, but it doesn't allow people to access the results of individual doctors. But this would let people evaluate doctors with objective data. This sounds like a good idea, but one would need to address other issues, such as making sure doctors won't refuse to treat high-risk patients.
* National health database - It does seem like it would be really beneficial to track as much data as possible.
* The database would allow real world data for regulation instead of binary approval - Drug companies spend so much on studies and then one they're approved, no more information is tracked. If drugs could be released earlier, people could benefit earlier, and the continued evaluation of them would give a more objective picture than the Yes/No system we have now.
* Pro-competition - the government can discourage entities from all merging together, and require published transparency on the actual prices charged and the health outcomes.
David Goldhill is a Television CEO but became passionate about healthcare after his father died from a hospital infection. He wrote a famous article in the Atlantic How American Health Care Killed My Father about the problems with the healthcare system and how to fix it. This book was published in 2013 and is an expansion of that article; you can read the article to get the main gist of the book.
Goodhill points out many flaws with the healthcare system, from moral hazard of consumers to lack of accountability with providers. Many of his arguments sound reasonable, but he sometimes fails to back them up with hard data. It would be good to get a more detailed breakdown of how health spending has risen over time, but the book doesn't examine the causes as closely as it could.
Europe
America spends about twice as much per capita on healthcare as European countries like the U.K. and France. It seems the simplest solution would be to just adopt the European single payer healthcare system, so why can’t the US just do that? Goldhill says that Americans would never accept a central authority rationing their care like they do in Europe.
Can we imagine any discipline imposed by a national health agency surviving the first complaint from a potential Iowa caucus voter to a presidential candidate?
It would be interesting to see a quantitative look at much this "unlimited care" model increases the cost of US healthcare. It's clearly a big factor but it can't explain the full magnitude of the spending difference, so it seems America could still learn a few things from Europe. For example, the US government could do a better job of negotiating when paying for drugs.
Health and Happiness
The books describes US healthcare as an "island" that works in a very strange manner compared to the regular "mainland" capitalist economy. It makes the following arguments against the "island" assumptions:
* Health care ≠ health - many other things, such as diet, exercise, and one's environment are more important to determining the length and quality of one's life than healthcare.
* Health spending ≠ everything - there are other valuable things people may want to spend their money on besides direct health-related costs.
* Health insurance ≠ health care - people should be able to get health care without always going through insurance. On the mainland, people pay out of pocket for standard procedures, such as a car tune-up.
* On the same note, health insurance ≠ insurance - insurances are usually for catastrophic events. By involving insurance in every purchase, the overhead costs go up, among other issues...
* Procedures ≠ good care - often health providers call for tests, prescribe medicines, and order one-off procedures when simpler methods or a more holistic approach could work better.
He then discusses how costs have gone up dramatically in the regular health care system where insurance pays for everything, but costs have gone down in areas where people pay out of pocket, such as LASIK. He also mentions elsewhere dentistry and veterinary services as areas where prices have gone down, but it would be interesting to see a more detailed analysis. (I'm not familiar with animal care, but it seems dentistry can still be rather expensive.)
Competition, choice and healthcare
The main part of the book discusses the flaws of health care. With insurance paying for so much of health care, people don't have the normal incentives to consider the costs of treatments. (I've noticed minor examples of this when doctors prescribe more medicines than necessary to treat e.g. strep throat.) Some things can also be addressed in non-medical ways but only the medical solution is covered. For example, a person could exercise or improve their diet instead of taking statins. (Though one could argue that the government or insurance companies should subsidize other healthy life choices outside of healthcare.)
He discusses the issue of why we need more and more healthcare even though we're healthier than we are in the past. Healthcare has mission creep so it looks to solve additional issues over time. For example, hypertension wasn't something treated in the past. While treating it has improved health, it's put almost a third of US adults in the cross eyes of health care. The next step identified by doctors is "pre-hypertension", which means more and more treatment will be covered by insurance.
The book says that marketing is a sign of capitalism working but in healthcare the marketing is bad since it doesn't mention cost. I'm not sure why he thinks marketing is so great in the first place; it's not like ads are just about showing the consumer the objective truth. The US likely has a problem with medicines being over-prescribed since it’s the only country that allows drug companies to advertise.
Next, Goldhill discusses how Medicare overspends and tests for many things that aren't necessary. This is a basic problem in medicine, dentistry and related areas where the medical providers can be biased to over-treat things. They earn more money this way (and are more protected from lawsuits), so it's unlikely they will be totally neutral on what's the actual best course of action. I wonder if there's a way in some cases to separate the financial incentives from the diagnosis. For example, it seems the diagnosis would be more objective if a different entity diagnosed than the patient than the one that treats the patient. Another possibility would be to track all the patient data and diagnoses in a system that can easily be reviewed by others (with proper privacy safeguards). This can help detect anomalies if some doctors are e.g. ordering too many procedures without reason.
The book discusses the excess of over-treatment in end-of-life care. This seems to be a particular acute problem in the US where politicians can't even mention taking a more balanced approach. This isn't even about cost, but about the ineffectiveness of trying every medical method when person is at the very end. (See also Slate Star Codex on this topic.)
Cost of Care
In 1983 the government switched from paying per service to paying per diagnostic category. This caused hospital stays to be shorter, yet the cost of hospitals has still grown by 700% overall, just like the rest of healthcare. The basic issue is that they system still sets reimbursements based on the providers’ costs but costs can be inflated in all sorts of ways. (Providers may even have an incentive to pick more expensive treatment options since they get higher reimbursements that way.) He says that the "surrogates" (insurance companies and the government) can't negotiate lower prices since they don't want to ruin the providers. It seems they should still be able to do a better job at negotiating, and the US seems to be particularly bad at this. There is a problem that insurance companies don't really have an incentive to bring prices down, and it seems that the US government isn't very good at that either.
The book discusses how general practitioners (GP) salaries actually went down as specialist salaries went down. Since it's not a market-based system, the GPs lost out due to various complex factors, such as not having enough leverage in negotiations. (It seems a little unclear why this happened exactly, even if the results are clear.) The book says that GPs and geriatric doctors could do a better job than specialists at giving overall advice to a patient, such as making lifestyle changes.
Innovation
The book has a short discussion of possible innovations in healthcare, such as using widespread devices for monitoring care. It does seem like part so healthcare could be "decoupled" into cheaper components, but one also shouldn't try to over-monitor things. There should also be more ways to consult with medical professionals without actually going to wait in a doctor's office. The book doesn't discuss this, but in long-term, computers should be able to diagnose many medical issues as well.
In other areas of the economy, innovative businesses can develop new ideas that can out-compete existing businesses by offering a better service or a lower price. This "creative destruction" is essential to economic progress, but the book says that the current centrally managed model discourages such innovation.
Singapore
If the book had to be summarized in three words, it would be “Be Like Singapore”. Singapore only spend 4-5% of their GDP on healthcare, compared to the US spending of 17%. Everyone generally pays something when using healthcare in Singapore, but there are many different levels of care offered. The government provides healthcare alongside the private sector. A big component of their health system is that everyone sets aside a percentage of their earnings in a health savings account. Since the patient cares about the cost of care, market forces are apparently able to work in healthcare there.
The US does have a model that adopts some of the Singaporean model, known as CDHPs. This is where individuals pick a plan with high deductibles and put money tax-free in a health savings account (HSA). The book says that due to the tax limits on HSAs, a person can often get better deal by opting instead for a low-deductible insurance plan with more coverage for their family. HSAs do seem to make more sense from an overall economic perspective, and I'm not sure if the tax issues with them have been addressed. Note that currently they are often the best deal for a healthy individual, since most likely one won't hit the annual limit of health spending, and they allow the money in it to grow tax free. The issue with HSAs is one now needs to think about the costs of healthcare, just like when buying services in other industries. Maybe it would be better to use healthcare without thinking about costs at all? The problem is the costs of healthcare don't seem to have a natural cap on growth, and (as the book points out), there are also other important things worth spending on. More care isn't always better either. By putting money in a separate health account, it makes it easier to spend money while not removing cost from the equation entirely. This seems like a balanced approach.
The outcomes of insurance
The book attacks ACA and its expansion of Medicaid. It also predicts that ACA won't necessarily increase the number of insured. This prediction was incorrect since insurance coverage has expanded (even as people debate exactly how much).
There's an interesting discussion of whether giving people insurance even improves coverage. At the time the book was published, there was an ongoing study in Oregon about this, where some people were picked by raffle to get free health insurance. This study has since concluded so I looked up the results. I assumed there has to be some positive health benefit to getting health insurance, since people with insurance will use more care, which should have some kind of net positive effect on their health.
The actual results are surprising:
Approximately two years after the lottery, researchers found that Medicaid had no statistically significant impact on physical health measures, but "it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain."
I guess lifestyle changes are more important for general health outcomes than healthcare, and that the actual diseases where free care would make a difference are too rare to affect the statistical outcomes. Interestingly, people with insurance visited the emergency room 40% more than people without insurance, (the opposite of what some expected) probably since they knew they wouldn't be hit with a large bill for it.
There's something to be said for getting rid of people's financial strain, but these results do support providing people with help in other ways, e.g. such as funding their health savings accounts, and maybe funding to encourage better health practices. As the book mentions, there are other ways would could spend $10,000 per person annually. (See also the paper on the study.)
The last Appendix of the book discusses ways the government could encourage the right incentives in healthcare. This has a bunch of common-sense suggestions that seem like they would be really difficult to get different parties to agree to implement in practice:
* More transparency - Medicare keeps a database of information, but it doesn't allow people to access the results of individual doctors. But this would let people evaluate doctors with objective data. This sounds like a good idea, but one would need to address other issues, such as making sure doctors won't refuse to treat high-risk patients.
* National health database - It does seem like it would be really beneficial to track as much data as possible.
* The database would allow real world data for regulation instead of binary approval - Drug companies spend so much on studies and then one they're approved, no more information is tracked. If drugs could be released earlier, people could benefit earlier, and the continued evaluation of them would give a more objective picture than the Yes/No system we have now.
* Pro-competition - the government can discourage entities from all merging together, and require published transparency on the actual prices charged and the health outcomes.
July 29, 2014
David Goldhill does a very good job of laying out many of the biggest issues in US health care pricing, a field I actually happen to know a lot about. From his experience running a company and being on the board of the Leapfrog Group, Goldhill is in a good position to understand the excessive, and growing, costs of our current system to individuals and companies, as well as the challenges in achieving price and quality transparency in health care.
Although he superficially comes out against the ACA, he seems to accept that it was the only thing politically possible at the time, though he would have liked something even more extreme. The short period of history since the book has been published has not been too kind regarding some of his speculative criticisms of the ACA. In particular, he suggests that the uninsured population may actually increase after the introduction of the ACA, when in fact it has decreased by about 10 million. His arguments against the ACA are some of the weaker parts of the book. One good point he does make about the ACA is that despite all the uproar, it actually affects a relatively small percentage of the population.
Where the book shines is in laying out the fundamental problems with our health care system regarding the relationships between health plans (a.k.a., health insurance companies, insurance carriers and payers), medical providers, employers and employees and their dependents. The financial incentives for providers have inevitably brought us to the situation where fee for service leads providers to perform more (and more costly) procedures. Similarly, health plans acting as third party administrators of self funded plans for medium to large employers. generally, those with more than 1,000 employees, are incented by higher volumes. Some of this is being addressed by Accountable Care Organizations and corrections to the Medicare reimbursement system, but it is the tip of the iceberg.
Goldhill also does a fantastic job of explaining how and why so much unneeded care is performed, and why it is not only economically bad, but actually produces worse clinical outcomes. More care can be worse. But, he also understands that in the extreme case of the heat of the moment when a family member or loved one is very ill, it can be very hard not to want the doctors to do everything possible to save them, regardless of cost or likelihood of success. Since the max out of pocket on insurance plans is roughly around $10k, the costs aren't typically borne by the family, but are spread across everyone in higher premiums.
October 20, 2016
Great book that explains what is so wrong with American health care. The author beats a dead horse a bit by repeating the same idea again and again. I wish he would have spent more time talking about the solutions and less time repeating the same idea over and over. His Atlantic article is the Cliff notes version, if you don't want to read the whole book.
May 6, 2013
After reading 3 chapters, I felt I got the information I needed. After that, it got wordy.
June 15, 2013
Very compelling. I don't agree with everything he's proposing, but I appreciate that he brought facts, and didn't yell at me.
January 18, 2016
The fact is that our health care payment system is completely messed up. The incentives are all out-of-whack and, as a result, we're dramatically overpaying for the level of care we receive and there is a very distinct disconnect between the consumers of healthcare and how much they think they're paying for it.
Goldhill does a very good job laying out the economic incentives inherit in our current system and also outlining your actual cost for the health care you receive - which is drastically higher than you normally think it is.
Goldhill is a self-proclaimed liberal, but, despite that, comes out very strongly against "single payer" type systems that the ACA and government-run health "insurance" plans offer...and he presents a wealth of information backing up his assertions.
Some interesting excerpts:
"A simple checklist of ICU protocols for physicians and nurses governing hand washing and other basic sterilization procedures. Hospitals implementing Pronovost's checklist achieved almost instantaneous success, reducing deaths from hospital infections by more than half. But many physicians ejected the checklist as an unnecessary and belittling intrusion..."
"For many of us, it feels somehow inappropriate for health care to come at a 'price.' It's uncomfortable to think of our beloved family doctor setting a price for her services or of the local hospital charging a price for emergency care."
"On the Island, no one refers to health care costs as invaluable market signals; instead, costs are cited as problems in need of regulation and better management."
"Almost half of all deaths in the United States each year are caused by heart disease, diabetes, lung cancer, homicide, suicide, and accidents - all of which are influenced as much by environment and lifestyle choices as by health care."
"The factors that most predict your health are your wealth, education, and lifestyle - not your access to health care."
"For all of life's other necessities - shelter, food, clothing, and education - we accept that a variety of funding mechanisms are appropriate. Not with health care. Anything we spend out of own pockets is considered an inadequacy of our insurance plan."
"If health insurance isn't real insurance, then what is it? Fundamentally, it's the payment mechanism for health care. Health insurers are essentially giant intermediaries between consumers and the health care system, negotiating charges, checking bills, assuring payment - basically shifting money around from consumers and taxpayers to providers. They perform this function at an almost inconceivable level of complexity and expense."
"The administrative cost of managing our system of health care payments alone is almost $1,000 a year per American household. So for most Americans, their annual share of this administrative cost exceeds the amount of actual health care they use in a typical year."
"We patients have mostly bought into this model, demanding useless antibiotics for viral infections, tests to rule out improbable diagnoses, surgical solutions to lifestyle issues."
"Almost all of the components of nonprofit hospitals are identical to those of for-profits."
"The health care system does not consider us its real customers, which means we can't command the customer service that underlies billing in all other industries. So who are the customers? For your doctor and the other providers you use, the real customer is your insurer, Medicate, or Medicaid. Everything about the billing process is set up to address their needs, and your role is merely to pay whatever they won't.
"Our system has taken away our traditional role as customers and assigned it to big intermediaries - insurers, Medicare, and Medicaid."
"Yet the practices of 'affordable' health care are virtually the same practices now outlawed in mortgage lending: we all make our health care decisions with their financial implications intentionally hidden from us."
"What is the end result of all these disguised costs? Becky, whose salary is $35,000 a year (and whose real compensation, from my company's perspective, is just over $43,000, including all of her benefits and employer taxes), effectively poured $10,050 into our health care system this year - $10,050! This sum represents more than 23 percent of her true gross income - her entry level, just-starting-out contribution to our economy - going to support our current system of health care."
"...how much do you think Becky will contribute into the health care system for herself and her dependents over her lifetime? I'll give you a hint: Becky will earn $3.85 million over her career. The answer is $1.9 million!"
"The answer is quite simple: the three types of giant intermediaries-private insurers, Medicare, and Medicaid-have minimal incentives to control the size of the health care economy and fundamental incentives to see it expand."
"...health insurers can achieve long-term profit growth only if the amount of money spent on health care increases."
"Medicare has license to spend as much as it must to meet all 'needs.'"
"So here's the problem: our reliance on the Surrogates as the customers in health care is based on our faith in their superior judgment in controlling health care spending. But none of them have any real institutional incentive to control spending over the long term."
"We have extensive evidence that the very availability of insurance pushes up the amount of treatment, as well as it's price. For example, Medicare spends almost twice as much per patient in Miami, where there is a surplus of doctors and care facilities, as it does in San Francisco, where supply is tighter."
"Here's another example: when Medicare cut reimbursements in 2005 on chemotherapy drugs, it saved almost 20 percent of the previously billed costs. But Medicare's cancer treatment costs actually rose in this period, as the total number of treatments ordered by doctors rose to compensate for lost income from the lower reimbursement rates."
"It seems that the average insured American and the average uninsired American spend very similar amounts of their own money on health care annually: $654 and $583, respectively. But they spend widely different amounts of other people's money: $3,809 and $1,103, respectively."
"The most important strategy of the health care industry has been to endlessly increase our demand for health care."
"As Shannon Brownlee points out in her book Overtreated, recent studies suggest that having a full-body CT scan every year for fifteen years itself creates a 0.4 percent risk of dying from radiation-related cancer - roughly the same risk of dying in an auto accident."
"I suspect that if legislation required all citizens to buy a new suit, most of us wouldn't be celebrating the 'benefit' of our new outfit. We'd be complaining that the government had forced us to pay for the outfit. But with few exceptions, no one seems agitated by the government forcing us to pay for coverage of others' procedures..."
"But the plain numbers are unambiguous: even though seniors pay only a tiny percentage of their own health care costs, the explosion of excess medicine, price inflation, medical accidents, and waste means that even this small percentage is now more costly to seniors themselves than when seniors paid almost all of their own health costs."
"The amount of all physician services per Medicare beneficiary has increased by almost 50 percent just for the past ten years. Imaging and other testing per senior has almost doubled in a decade."
"Claiming that Medicare is administratively inexpensive while ignoring billions of losses in fraud and other improper payments is absurd. In fairness, Medicare's administrative failings are by design; politicians haven't wanted the agency to intervene in treatment decisions."
"Unbelievably, Medicare even pays for screenings for the terminally ill; 15 percent of terminally ill men were screened for prostate cancer, while a similar share of terminally ill women received mammograms."
"According to a 2010 study by the inspector general of the Department of Health and Human Services, roughly one in seven Medicare beneficiaries can expect to suffer serious harm to their health from care received ("adverse event") during a hospital visit, with another one in seven suffering an event that results 'only' in temporary harm."
"Several studies have shown that many physicians rarely discuss preferences with their seriously ill patients and that many patients who express a strong desire to die at home wind up dying in a hospital."
"In the next two decades, Medicare enrollees will increase from forty-eight million to eighty million. If their rate of use in Medicare's services grows at the same rate as in the past decade, the 2030 Medicare budget will be $2.8 trillion - in today's dollars! This is meaningless; such large number should make clear to any sensible person that Medicare as it currently functions is doomed."
"...the average person joining Medicare today has paid roughly $60,000 into the program over their lifetime and will use $170,000 in benefits."
"Prior to Medicare, the average senior used somewhere between 10 and 15 percent of his income to cover out-of-pocket health care costs; today, the average senior uses almost 20%. [And that doesn't include the additional money the government pays for their Medicare services!]"
"...The New York Times ran a story about a more effective blood-clotting treatment widely used on the battlefield but barely at all in U.S. hospitals. The problem? The new treatment was too inexpensive to be of interest. Medicate's incentives don't drive better care; they drive more costly care."
"Medicare allows some urologists to own interest in pathology services they use for patient samples. Not surprisingly, urologists with interests in pathology centers order far more biopsies than those who send the samples to an independent lab. And it's not surprising that these urologists have much lower prostate cancer detection rates..."
Referring to Reagan's Prospective Payment System (an attempt to reform cost in Medicare by reducing hospital says): "Because starting in 1983, the cost of a day in a hospital skyrocketed. Yes, the number of inpatient days declined from 112 million in 1983 to 66 million in 2010, but the amount Medicare paid per day rose from $300 to $1,800....So the PPS succeeded in its policy tactic of reducing hospital stays, while failing in its overall goal of reducing total amounts spent on hospital care."
"A recent Economist article on dialysis perfectly illustrates the inflationary impact of cost-plus pricing. Since U.S. clinics are paid on a cost-plus basis, they prefer to use expensive drugs rather than cheaper ones. In fact, many appear to order drugs in units that exceed what a standard dosage requires because they can charge the government for the waster. Quoting a stock research firm, the article noted that many clinics preferred an injected drug with a price of $4,100 a year over the identical drug in oral form, priced at only $450 a year. Not surprisingly, the manufacturer of the oral drug responded by increasing its price above that of the inject version to make it more competitive!"
"...the reimbursement for a procedure performed in a hospital on an outpatient basis will be almost double that for the exact same service performed in a doctor's office."
"Insurers are an easy political target, but it's absurd to believe that health insurance can somehow be made affordable when health care isn't. So to achieve its twin goals of affordable insurance for all without anyone seeming to pay more for care, the ACA is fundamentally an exercise in Rube Goldberg-like financial engineering.
"We want to believe someone else is paying for our care, so we operate an employer-based insurance system, as if those premiums don't reduce our compensation. Or we impose treatment mandates, coverage requirements, and maximum cost sharing, as if the cost of each of these isn't merely added to our premiums. Or we demand tax benefits for health spending - for everyone - as if their effects don't drive up health prices, not to mention other taxes."
"In health care, all of us are spending insane amounts of money. Yet the system makes use feel like paupers, as if we should be grateful for whatever we get."
"Becky understands that even trusted medical professionals are in the business of selling tests and procedures, so she's naturally skeptical when care is suggested."
"In the past couple of decades, billions of dollars of value have been created by Apple, Amazon, Ikea, FedEx, Southwest Airlines, Google, all the major credit card companies, and countless others simplifying something complicated. In health care, no company in any sector can make this claim - or even seems interested in pursuing the goal. The Island experts revel in our system's complexity like priests of ancient religions, jealously guarding their exclusive relationships with the gods."
"There is no health care system that can protect all people against their choices, nor any system that can provide everybody with everything."
"As Singapore's example demonstrates, high-tech high-quality medicine can be quite cheap in a market where price is an object."
"The NNT (which stands for 'numbered needed to treat') is a particularly valuable corrective to much medical information, reversing the perspective on treatment efficacy that patients usually get in health care advertisements. For example, the site will translate a pharmaceutical company's technically correct claim that its drug reduces the risk of a specific illness by 40 percent into a more meaningful fact: a hundred patients will have to be treated with the drug before a single patient can expect to benefit."
"...U.S. government programs have little leeway to deny any care - no matter how wasteful or excessive - to their beneficiaries."
"When the FDA announced that it would not allow the drug to be prescribed for treatment of late-stage breast cancer - because it didn't believe it was effective - Medicare reassured its beneficiaries with an announcement the next day that it would continue covering the drug anyway. The ACA's 'tough' new Medicare cost control agency has a mandate that prohibits it from even considering a reduction in services to achieve required spending cuts!"
"...what's really needed now is a change of philosophy, a new way to think about health care. Today, health care is, essentially, something we expect someone else to take care of. That won't work. Once we recognize the personal nature of health care, we can make a broad range of sensible changes - some quite minor - that can put us on the road to recovery."
"We're stuck in a vicious cycle in health care. The more we try to protect ourselves from the realities of care, the more complex and unconnected from us the system becomes. We respond to these problems by seeking greater protection, further distancing this system from our real needs."
"...the bill (the ACA) seeks to reverse the growing burden of out-of-pocket expenses...to have insurers pick up more of the tab - but without directly increasing the cost of health insurance to beneficiaries. Of course, someone must pay higher premiums to cover the costs of the greater benefits 'reformed' insurance will provide. To some extent, the ACA merely shifts the immediate impact of these higher costs away from some groups to others."
Goldhill does a very good job laying out the economic incentives inherit in our current system and also outlining your actual cost for the health care you receive - which is drastically higher than you normally think it is.
Goldhill is a self-proclaimed liberal, but, despite that, comes out very strongly against "single payer" type systems that the ACA and government-run health "insurance" plans offer...and he presents a wealth of information backing up his assertions.
Some interesting excerpts:
"A simple checklist of ICU protocols for physicians and nurses governing hand washing and other basic sterilization procedures. Hospitals implementing Pronovost's checklist achieved almost instantaneous success, reducing deaths from hospital infections by more than half. But many physicians ejected the checklist as an unnecessary and belittling intrusion..."
"For many of us, it feels somehow inappropriate for health care to come at a 'price.' It's uncomfortable to think of our beloved family doctor setting a price for her services or of the local hospital charging a price for emergency care."
"On the Island, no one refers to health care costs as invaluable market signals; instead, costs are cited as problems in need of regulation and better management."
"Almost half of all deaths in the United States each year are caused by heart disease, diabetes, lung cancer, homicide, suicide, and accidents - all of which are influenced as much by environment and lifestyle choices as by health care."
"The factors that most predict your health are your wealth, education, and lifestyle - not your access to health care."
"For all of life's other necessities - shelter, food, clothing, and education - we accept that a variety of funding mechanisms are appropriate. Not with health care. Anything we spend out of own pockets is considered an inadequacy of our insurance plan."
"If health insurance isn't real insurance, then what is it? Fundamentally, it's the payment mechanism for health care. Health insurers are essentially giant intermediaries between consumers and the health care system, negotiating charges, checking bills, assuring payment - basically shifting money around from consumers and taxpayers to providers. They perform this function at an almost inconceivable level of complexity and expense."
"The administrative cost of managing our system of health care payments alone is almost $1,000 a year per American household. So for most Americans, their annual share of this administrative cost exceeds the amount of actual health care they use in a typical year."
"We patients have mostly bought into this model, demanding useless antibiotics for viral infections, tests to rule out improbable diagnoses, surgical solutions to lifestyle issues."
"Almost all of the components of nonprofit hospitals are identical to those of for-profits."
"The health care system does not consider us its real customers, which means we can't command the customer service that underlies billing in all other industries. So who are the customers? For your doctor and the other providers you use, the real customer is your insurer, Medicate, or Medicaid. Everything about the billing process is set up to address their needs, and your role is merely to pay whatever they won't.
"Our system has taken away our traditional role as customers and assigned it to big intermediaries - insurers, Medicare, and Medicaid."
"Yet the practices of 'affordable' health care are virtually the same practices now outlawed in mortgage lending: we all make our health care decisions with their financial implications intentionally hidden from us."
"What is the end result of all these disguised costs? Becky, whose salary is $35,000 a year (and whose real compensation, from my company's perspective, is just over $43,000, including all of her benefits and employer taxes), effectively poured $10,050 into our health care system this year - $10,050! This sum represents more than 23 percent of her true gross income - her entry level, just-starting-out contribution to our economy - going to support our current system of health care."
"...how much do you think Becky will contribute into the health care system for herself and her dependents over her lifetime? I'll give you a hint: Becky will earn $3.85 million over her career. The answer is $1.9 million!"
"The answer is quite simple: the three types of giant intermediaries-private insurers, Medicare, and Medicaid-have minimal incentives to control the size of the health care economy and fundamental incentives to see it expand."
"...health insurers can achieve long-term profit growth only if the amount of money spent on health care increases."
"Medicare has license to spend as much as it must to meet all 'needs.'"
"So here's the problem: our reliance on the Surrogates as the customers in health care is based on our faith in their superior judgment in controlling health care spending. But none of them have any real institutional incentive to control spending over the long term."
"We have extensive evidence that the very availability of insurance pushes up the amount of treatment, as well as it's price. For example, Medicare spends almost twice as much per patient in Miami, where there is a surplus of doctors and care facilities, as it does in San Francisco, where supply is tighter."
"Here's another example: when Medicare cut reimbursements in 2005 on chemotherapy drugs, it saved almost 20 percent of the previously billed costs. But Medicare's cancer treatment costs actually rose in this period, as the total number of treatments ordered by doctors rose to compensate for lost income from the lower reimbursement rates."
"It seems that the average insured American and the average uninsired American spend very similar amounts of their own money on health care annually: $654 and $583, respectively. But they spend widely different amounts of other people's money: $3,809 and $1,103, respectively."
"The most important strategy of the health care industry has been to endlessly increase our demand for health care."
"As Shannon Brownlee points out in her book Overtreated, recent studies suggest that having a full-body CT scan every year for fifteen years itself creates a 0.4 percent risk of dying from radiation-related cancer - roughly the same risk of dying in an auto accident."
"I suspect that if legislation required all citizens to buy a new suit, most of us wouldn't be celebrating the 'benefit' of our new outfit. We'd be complaining that the government had forced us to pay for the outfit. But with few exceptions, no one seems agitated by the government forcing us to pay for coverage of others' procedures..."
"But the plain numbers are unambiguous: even though seniors pay only a tiny percentage of their own health care costs, the explosion of excess medicine, price inflation, medical accidents, and waste means that even this small percentage is now more costly to seniors themselves than when seniors paid almost all of their own health costs."
"The amount of all physician services per Medicare beneficiary has increased by almost 50 percent just for the past ten years. Imaging and other testing per senior has almost doubled in a decade."
"Claiming that Medicare is administratively inexpensive while ignoring billions of losses in fraud and other improper payments is absurd. In fairness, Medicare's administrative failings are by design; politicians haven't wanted the agency to intervene in treatment decisions."
"Unbelievably, Medicare even pays for screenings for the terminally ill; 15 percent of terminally ill men were screened for prostate cancer, while a similar share of terminally ill women received mammograms."
"According to a 2010 study by the inspector general of the Department of Health and Human Services, roughly one in seven Medicare beneficiaries can expect to suffer serious harm to their health from care received ("adverse event") during a hospital visit, with another one in seven suffering an event that results 'only' in temporary harm."
"Several studies have shown that many physicians rarely discuss preferences with their seriously ill patients and that many patients who express a strong desire to die at home wind up dying in a hospital."
"In the next two decades, Medicare enrollees will increase from forty-eight million to eighty million. If their rate of use in Medicare's services grows at the same rate as in the past decade, the 2030 Medicare budget will be $2.8 trillion - in today's dollars! This is meaningless; such large number should make clear to any sensible person that Medicare as it currently functions is doomed."
"...the average person joining Medicare today has paid roughly $60,000 into the program over their lifetime and will use $170,000 in benefits."
"Prior to Medicare, the average senior used somewhere between 10 and 15 percent of his income to cover out-of-pocket health care costs; today, the average senior uses almost 20%. [And that doesn't include the additional money the government pays for their Medicare services!]"
"...The New York Times ran a story about a more effective blood-clotting treatment widely used on the battlefield but barely at all in U.S. hospitals. The problem? The new treatment was too inexpensive to be of interest. Medicate's incentives don't drive better care; they drive more costly care."
"Medicare allows some urologists to own interest in pathology services they use for patient samples. Not surprisingly, urologists with interests in pathology centers order far more biopsies than those who send the samples to an independent lab. And it's not surprising that these urologists have much lower prostate cancer detection rates..."
Referring to Reagan's Prospective Payment System (an attempt to reform cost in Medicare by reducing hospital says): "Because starting in 1983, the cost of a day in a hospital skyrocketed. Yes, the number of inpatient days declined from 112 million in 1983 to 66 million in 2010, but the amount Medicare paid per day rose from $300 to $1,800....So the PPS succeeded in its policy tactic of reducing hospital stays, while failing in its overall goal of reducing total amounts spent on hospital care."
"A recent Economist article on dialysis perfectly illustrates the inflationary impact of cost-plus pricing. Since U.S. clinics are paid on a cost-plus basis, they prefer to use expensive drugs rather than cheaper ones. In fact, many appear to order drugs in units that exceed what a standard dosage requires because they can charge the government for the waster. Quoting a stock research firm, the article noted that many clinics preferred an injected drug with a price of $4,100 a year over the identical drug in oral form, priced at only $450 a year. Not surprisingly, the manufacturer of the oral drug responded by increasing its price above that of the inject version to make it more competitive!"
"...the reimbursement for a procedure performed in a hospital on an outpatient basis will be almost double that for the exact same service performed in a doctor's office."
"Insurers are an easy political target, but it's absurd to believe that health insurance can somehow be made affordable when health care isn't. So to achieve its twin goals of affordable insurance for all without anyone seeming to pay more for care, the ACA is fundamentally an exercise in Rube Goldberg-like financial engineering.
"We want to believe someone else is paying for our care, so we operate an employer-based insurance system, as if those premiums don't reduce our compensation. Or we impose treatment mandates, coverage requirements, and maximum cost sharing, as if the cost of each of these isn't merely added to our premiums. Or we demand tax benefits for health spending - for everyone - as if their effects don't drive up health prices, not to mention other taxes."
"In health care, all of us are spending insane amounts of money. Yet the system makes use feel like paupers, as if we should be grateful for whatever we get."
"Becky understands that even trusted medical professionals are in the business of selling tests and procedures, so she's naturally skeptical when care is suggested."
"In the past couple of decades, billions of dollars of value have been created by Apple, Amazon, Ikea, FedEx, Southwest Airlines, Google, all the major credit card companies, and countless others simplifying something complicated. In health care, no company in any sector can make this claim - or even seems interested in pursuing the goal. The Island experts revel in our system's complexity like priests of ancient religions, jealously guarding their exclusive relationships with the gods."
"There is no health care system that can protect all people against their choices, nor any system that can provide everybody with everything."
"As Singapore's example demonstrates, high-tech high-quality medicine can be quite cheap in a market where price is an object."
"The NNT (which stands for 'numbered needed to treat') is a particularly valuable corrective to much medical information, reversing the perspective on treatment efficacy that patients usually get in health care advertisements. For example, the site will translate a pharmaceutical company's technically correct claim that its drug reduces the risk of a specific illness by 40 percent into a more meaningful fact: a hundred patients will have to be treated with the drug before a single patient can expect to benefit."
"...U.S. government programs have little leeway to deny any care - no matter how wasteful or excessive - to their beneficiaries."
"When the FDA announced that it would not allow the drug to be prescribed for treatment of late-stage breast cancer - because it didn't believe it was effective - Medicare reassured its beneficiaries with an announcement the next day that it would continue covering the drug anyway. The ACA's 'tough' new Medicare cost control agency has a mandate that prohibits it from even considering a reduction in services to achieve required spending cuts!"
"...what's really needed now is a change of philosophy, a new way to think about health care. Today, health care is, essentially, something we expect someone else to take care of. That won't work. Once we recognize the personal nature of health care, we can make a broad range of sensible changes - some quite minor - that can put us on the road to recovery."
"We're stuck in a vicious cycle in health care. The more we try to protect ourselves from the realities of care, the more complex and unconnected from us the system becomes. We respond to these problems by seeking greater protection, further distancing this system from our real needs."
"...the bill (the ACA) seeks to reverse the growing burden of out-of-pocket expenses...to have insurers pick up more of the tab - but without directly increasing the cost of health insurance to beneficiaries. Of course, someone must pay higher premiums to cover the costs of the greater benefits 'reformed' insurance will provide. To some extent, the ACA merely shifts the immediate impact of these higher costs away from some groups to others."
November 30, 2017
One of the best takeaways from this book is the absence of consumers in health care! This had never occurred to me and it is the basis of the "disconnect" as the author put it. We will never get anywhere until the consumer of healthcare is returned to the consumer role.
Cost vs. price of health care.
Health care in not about health, it is sick care.
Insurance is not health care.
Health insurance is a payment system for the health care we know we are going to need.
Procedures do not equal good care. I could go on about this for about a month!
Technology is an inflator.
The 'cruel joke' of nonprofit status.
The "This is not a Bill" tree killing rampage.
"Effective" health care...(think Lipitor - ruining minds and bodies as we speak...Vaccines with no safety studies....chemotherapy that bankrupts us with 97% NON effectiveness! I need another month for this soapbox!)
The historically sacred role of health care has been kidnapped by the evil empire of sick corporate greed.
The "benefits" I have now purchased with Medicare coverage that I do not even want.
Our surrogates overseeing our health care are not functioning in our best interests, as patients or as payers.
My parents generation followed the doctor's advice because they were, well, the doctor. ("The passivity disease?" Our children may see through the corporate greed that has crippled the health care system, but they are already mired in life's treadmill. How can they explore viable options to mandated vaccines when everywhere we look, 'health' care is required for their job, school and day care attendance?
Is more health care better? Or is less more? I believe the latter. Does a yearly physical evoke efforts to improve health? Or is it likely to send one home with a discouraging non-diagnosis such as thinning bones or high cholesterol? (Cholesterol isan antioxidant, mind you, that, if women have an arbitrarily determined "too much," they live longer and better. But more on this subject would require, you guessed it, another month of me at the pulpit...)
Transparency and consumer education are key to adopting a program that would be sustainable and improve the health of our citizens. Health coaches are doing more now to improve health than doctors are. Chronic disease is a no-man's land of each person figuring out for themselves what helps them when they realize that the medical community will push them towards the revolving door of chemical symptom control and procedures that don't help.
The idea of banking $8500 dollars to each of us to spend or save as we see fit would be ideal. There are a lot of ways this could go wrong, starting with who will police this so that it is not used for a spanking new car, and who would NOT police this so that I could not see an acupuncturist instead of a medical doctor for my issue?
I hope the author can convince people of the merit of his BALANCE concept. Good luck! I will be applauding it when it happens!
"Becky," the office gal's perspective gives a stark example of the hurdle
Cost vs. price of health care.
Health care in not about health, it is sick care.
Insurance is not health care.
Health insurance is a payment system for the health care we know we are going to need.
Procedures do not equal good care. I could go on about this for about a month!
Technology is an inflator.
The 'cruel joke' of nonprofit status.
The "This is not a Bill" tree killing rampage.
"Effective" health care...(think Lipitor - ruining minds and bodies as we speak...Vaccines with no safety studies....chemotherapy that bankrupts us with 97% NON effectiveness! I need another month for this soapbox!)
The historically sacred role of health care has been kidnapped by the evil empire of sick corporate greed.
The "benefits" I have now purchased with Medicare coverage that I do not even want.
Our surrogates overseeing our health care are not functioning in our best interests, as patients or as payers.
My parents generation followed the doctor's advice because they were, well, the doctor. ("The passivity disease?" Our children may see through the corporate greed that has crippled the health care system, but they are already mired in life's treadmill. How can they explore viable options to mandated vaccines when everywhere we look, 'health' care is required for their job, school and day care attendance?
Is more health care better? Or is less more? I believe the latter. Does a yearly physical evoke efforts to improve health? Or is it likely to send one home with a discouraging non-diagnosis such as thinning bones or high cholesterol? (Cholesterol isan antioxidant, mind you, that, if women have an arbitrarily determined "too much," they live longer and better. But more on this subject would require, you guessed it, another month of me at the pulpit...)
Transparency and consumer education are key to adopting a program that would be sustainable and improve the health of our citizens. Health coaches are doing more now to improve health than doctors are. Chronic disease is a no-man's land of each person figuring out for themselves what helps them when they realize that the medical community will push them towards the revolving door of chemical symptom control and procedures that don't help.
The idea of banking $8500 dollars to each of us to spend or save as we see fit would be ideal. There are a lot of ways this could go wrong, starting with who will police this so that it is not used for a spanking new car, and who would NOT police this so that I could not see an acupuncturist instead of a medical doctor for my issue?
I hope the author can convince people of the merit of his BALANCE concept. Good luck! I will be applauding it when it happens!
"Becky," the office gal's perspective gives a stark example of the hurdle
July 30, 2024
Well, this book has a lot of useful facts and information about the health care system. David Goldhill, author and owner of the Gas Station Network, gives a deep dive into the economics and policy of American health care at the time of 2013 when writing. He essentially says that health care is thought of as an island from other industries, socially detached from other mainland industries. He argues that consumer driven markets in other industries control for lower costs, more efficiency, and better experiences overall. He thinks patients are not the consumers in modern care, rather the insurance companies that he calls surrogates. The idea is we put too much trust in the surrogates, while they have not served us and have little incentive to. He goes in depth into bashing the newly passed, at the time, Affordable Care Act and also how medicare and medicaid got started and their massive issues. The three hands, private insurance, medicare, and medicaid do not lead to better health outcomes. More healthcare does not lead to better health, and increasing health care is not always a good thing. In the end of the book he designs a new system where people have government funded health savings accounts for TruCat (true catastrophic) insurance. This has high deductibles and accumulates every year people live. he believes routine stuff should not be covered by insurance and the cost will go down as well as decreased errors if patients are actually being consumers and paying it directly. Anyways, I’m in the middle on his solutions but the ideas and realities he writes about are cool and were fun to explore. I think his system endorses and works within late stage capitalism too much (which will only continue to hurt real consumers) and relies on the entire american population to do something radical which is a pipe dream to me. I like his passion. His dad died due to medical error in a hospital and you can really see his thought process and where he is coming from. Not a bad read, just not earth shattering. A decent first book on the subject for me.
October 19, 2017
The big question this book asks is, "Is insurance the best way to finance healthcare?" Goldhill argues that for the vast majority of situations (basically anything other than an unpredictable rare disease), the answer is no.
I disagree with some of Goldhill's assumptions, both ones he acknowledges and ones he doesn't, but reading this book has drastically changed my perspective of healthcare financing and challenged my understanding of what expanding health insurance coverage achieves.
I was skeptical throughout most of the book because he doesn't outline his "plan" until the end, and even still I am skeptical that the US can truly move away from a system based on employer sponsored insurance. However, Goldhill's ideas take you out of the nitty-gritty that healthcare reform debates often get into, and force you to take a big picture look at how much the US spends on healthcare and what kind of incentives and structures are driving that spending.
Recommended read!
I disagree with some of Goldhill's assumptions, both ones he acknowledges and ones he doesn't, but reading this book has drastically changed my perspective of healthcare financing and challenged my understanding of what expanding health insurance coverage achieves.
I was skeptical throughout most of the book because he doesn't outline his "plan" until the end, and even still I am skeptical that the US can truly move away from a system based on employer sponsored insurance. However, Goldhill's ideas take you out of the nitty-gritty that healthcare reform debates often get into, and force you to take a big picture look at how much the US spends on healthcare and what kind of incentives and structures are driving that spending.
Recommended read!
February 6, 2021
breath of fresh air for healthcare policy.
- don’t read this book if you identify as a liberal or a conservative wrt healthcare because this lives in neither world but incorporates elements of capitalism as well as healthcare as a human right.
- making consumers a central part of healthcare.
- use govt for catastrophic coverage only
- prioritize govt role as regulator not payer
- medicare is not good at cost control
- think he got it wrong about ACOs though, and cmmi does foster innovation in payment policy but i agree it’s all about the insurance
- we don’t need insurance for routine care
- insurance in healthcare unlike insurance for auto or home covers an inevitability for humans which is the fundamental problem. spreading risk not across high risk people to low risk people but across people in their old age to other people in their young age.
- wish there was a hsa you could have as an adult and keep money in there like an ira until you need to spend it on health issues
- don’t read this book if you identify as a liberal or a conservative wrt healthcare because this lives in neither world but incorporates elements of capitalism as well as healthcare as a human right.
- making consumers a central part of healthcare.
- use govt for catastrophic coverage only
- prioritize govt role as regulator not payer
- medicare is not good at cost control
- think he got it wrong about ACOs though, and cmmi does foster innovation in payment policy but i agree it’s all about the insurance
- we don’t need insurance for routine care
- insurance in healthcare unlike insurance for auto or home covers an inevitability for humans which is the fundamental problem. spreading risk not across high risk people to low risk people but across people in their old age to other people in their young age.
- wish there was a hsa you could have as an adult and keep money in there like an ira until you need to spend it on health issues
This entire review has been hidden because of spoilers.
April 30, 2021
Outstanding. If I were absolute ruler of America, I would declare this to be the new law.
Great dissection, criticism, and suggested reconstruction of the American healthcare "system." Medical errors kill more people than car crashes every year. Medical prices' going up and up and up are going to bankrupt us all. And the real reason for the disaster is the fact that the health care system has become divorced from the free market system, leading to unintended consequences, worsening of care and outcomes, and a death spiral of cost increases. There is a cure for what ails us though, and the author provides a reasonable explanation for how a Singapore-style economic and policy approach to health care could save us all within a generation.
Great dissection, criticism, and suggested reconstruction of the American healthcare "system." Medical errors kill more people than car crashes every year. Medical prices' going up and up and up are going to bankrupt us all. And the real reason for the disaster is the fact that the health care system has become divorced from the free market system, leading to unintended consequences, worsening of care and outcomes, and a death spiral of cost increases. There is a cure for what ails us though, and the author provides a reasonable explanation for how a Singapore-style economic and policy approach to health care could save us all within a generation.
January 15, 2024
This book accurately captures the dysfunctionality of the American healthcare system and demonstrates how we are all paying far more than we realize for really bad outcomes. Sadly, he then proposes a solution that doesn’t resolve the very issues that he’s clearly outlined and which I further believe create some immediately concerning issues, such as the fact that people paying out of pocket pay the most of all (because they don’t have negotiation leverage and the rules about Medicaid) and that health loans will be a ripe mechanism for exploitation rather than providing economic benefits to patients.
This entire review has been hidden because of spoilers.
February 1, 2018
Wish I could give this book a 3.5. Learned a lot about the history of health care and how we got to our current system. It's biggest fault is that it beats you over the head with negativity about how broken our system is. Although that may be justified, it can make for a tough read. Also, his chapter synopsis of his solution felt like an obligatory chapter saying, "well I brought you this far, might as well give you a solution," whereas he could have presented solutions throughout. Overall, I'd recommend this book in spite of it's flaws.
September 17, 2018
The CEO of the Game Show Network is on a vendetta against the American healthcare systemic incompetence that helped kill his father. This book is great anti-propaganda against the American health insurance industry's messaging system. Goldhill lays out many (retrospectively obvious) truths: health is not the same thing as having health insurance, Americans pay higher taxes than they thing on healthcare, the insurance industry is really a fucked up payments system, etc. Good read.
This entire review has been hidden because of spoilers.
July 12, 2021
Book provides some interesting reflections but it is very repetitive.
At the same time the author is criticizing the “island” of healthcare, he is very simplistic when suggesting a lot of changes which would revolutionize how healthcare works.
For complex problems, only complex solutions can thrive.
PS: it’s important to note that the point of view is extremely American (pro privatizations, less government, less insurance, etc)
At the same time the author is criticizing the “island” of healthcare, he is very simplistic when suggesting a lot of changes which would revolutionize how healthcare works.
For complex problems, only complex solutions can thrive.
PS: it’s important to note that the point of view is extremely American (pro privatizations, less government, less insurance, etc)
July 2, 2017
What a marvellous book. Not that the content filled my heart with joy however the message that this author shared was well worth reading...and laid out in a way that even I ((a non American) could understand. Fascinating stuff. Probably the should be compulsory reading for all Americans, especially their politicians and law makers.
July 8, 2017
Extremely compelling book that does a great job of breaking down and explaining the health care system. This book is especially valuable as the author is a democrat who recognizes that while the Affordable Care Act increased overall coverage it also extended an awful system with insurers as payment mechanism that is leading to incredible waste and poorer overall care. I would recommend this book to anyone, especially right now as Health Care is the most heated debate in our country.
February 22, 2018
Do you want to understand why the US healthcare industry is the world's most expensive while at the same time delivering poorer outcomes than those of other developed nations? Would you like to hear about a plan that would lower costs and increase healthcare availability for poor and middle class people? Then read this book. I bought multiple copies to lend to friends.
July 10, 2019
It's an interesting read to just understand what to think about. I haven't finished the book (audio) though because it has just a lot of information and opinions that need to be checked. At some point I started loosing track of what I've already read about, and I still had no idea what to do with it. It felt more like "everything's bad, but it's unclear how to fix American healthcare".
September 29, 2017
central thesis that the lack of competition for dollars drives up prices and drives down quality is sound to a degree. the recipe for the fix is missing some ingredients and will likely ruin dinner before the dessert course. it is worth the read although i question some of the economic analyses.
March 10, 2018
I don’t necessarily agree with all his proposed solutions. However this book does an excellent job articulating the problems of the health care industry, and pulling back the curtain on its more perverse and predatory interworkings.
March 28, 2018
Extensive rhetorics, examples, studies and research. A bit too long. Main points could have been highlighted, summarized and driven home in shorter text. But an academic, fact-driven look at healthcare market in the US
December 21, 2018
Refocuses the issue: healthcare costs are exorbitant because the natural forces that control prices do not exist in American healthcare. Tries to envision a way of designing the system to maximize natural price limits.
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