Healthcare is a $3 trillion industry in the U.S. with one out of every $5 passing through the hands of someone working in the industry, Dr. Samuel Metz of Physicians for a National Health Program, told a City Club audience Monday night.
And, everyone agreed costs are not going down. ”The best forecast I’ve seen shows healthcare (costs) will rise faster than GDP by about one percent,” a year said John McConnell, an economist who heads OHSU’s Center for Health Systems Effectiveness.
New, high-cost drugs put additional cost pressure on the system, and the stock market sees more money to be made in high-tech solutions that don’t give what McConnell called a “return on health.”
“Competition between large health systems causes us to acquire more technology,” said OHSU’s Dr. Paul Gorman. If one hospital systems buys the latest cardiac technology, competing systems buy it too – and hire staff to use it, creating what he calls “overproduction of capacity” that leads to “some cities having 10 times more procedures than other cities, not because it’s needed. We do overdo quite a lot of things.”
Then there’s administrative costs. “We have a byzantine system,” said Gorman, with an estimated $350 billion difference in the cost of administration between the Canadian and U.S. health systems and makes health literacy almost impossible. When his attorney son was struggling to choose a health plan, Gorman and his wife, both physicians, couldn’t help figure which health plan was best.
Will the current trend in consolidation of health plans, hospitals and health systems help or create too much market power?
“It’s too soon to say what’s going to happen,” said McConnell, who sees interesting “tinkering on the edges” with Medicare pilots bundling rates for hip replacements in random communities and Medicaid reform throughout the country.
Some audience questions seemed beyond the professors’ pay grade: Could a Medicare for all system slowly be achieved by reducing the age limit to qualify for Medicare each year? What will happen to health reform with a Republican president and Congress? Why is change so hard?
“Mythology is more powerful than facts,” said Gorman, noting that even medical students sometimes think the US has the best healthcare in the world while tribalism – who is proposing the reform –plays a role.
ObamaCare succeeded at getting more people insured, especially those with pre-existing conditions, Gorman said, but 29 million people remain uninsured and high deductibles make access difficult for many. “Co-pays reduce access for patients in the lowest social economic strata.”
And, with more people going on Medicaid, the healthcare system can’t always provide sufficient care – and except for emergency rooms, providers are not required to take Medicaid patients.
Under a single payer system, “95 percent of households would save money,” Gorman said. But the feasibility of such a system is “challenging politically” because the healthcare industry comprises 18 percent of the economy, McConnell said.
Still, McConnell was pleased with the broader conversation. “It’s neat to see people this energized about it. There’s a lot of passion and interest in public health.”
Jan can be reached at [email protected].