Grow and Hide: The History of America's Health Care State

Grow and Hide: The History of America's Health Care State by Colleen M. Grogan

The United States spends huge amounts on health care, but only achieves middling health outcomes. Despite heavy dependence on private companies, American government spends more on the health system than many countries that have fully funded government health systems. This book details the history of public healthcare and the way that the system has been steadily grown, while the true government involvement has been hidden.

At the outset, public health improvements were tied closely to sanitation improvements. Garbage collection and sewage handling were key areas of public health. Alas, this was al done in city governments, which were beholden to patronage systems. Doctors did not want to be beholden to random patronage employees, so worked to separate out public health from areas like trash collection. There was also a difference between "public health" and "individual health". This was deemed important and would lead to much of the "hiding" of true government health expenditures.

The health care system has continued with this grow and hide since. The healthcare industry is eager to take government funding when offered. The industry will even work to write regulations to their benefit. Then they will complain about state interference when it gets in the way. Both Democrats and Republicans are guilty of expansion of this super expensive highly-regulated healthcare system. the current "privately funded" healthcare system has become a means where the maximum number of private entities can extract government money. Investors, such as private equity have realized this and swept in to get their share of the healthcare bonanza. All in all, ths US likely spends more public money on healthcare, yet also requires citizens to spend a huge amount of private money to top it off. With so many feeding at the trough, reform has become difficult, and attempts often lead to more benefits for the entrenched interests. (See Obamacare). The book does a great job of identifying the problem and its history, which alas, has few easy solutions.

America's Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System

America's Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System by Steven Brill

The United States spends significantly more on health care than other countries, yet does not have better health outcomes. One way to look at this is a subsidy from the rich to the poor. Americans pay high prices for drugs to support research that benefits all the world. This could explain a small part of the problem. However, it gets much worse than that.

The roots of the American disfunction dates back to World War II. There were strict wage and price controls. To counter this, unions negotiated additional benefits, such as health insurance. This benefit was tax-free thus adding value. After the war, much of the world introduced government-run health care. However, the unions did not want to give up their health-care perk, and the government was loathe to offend one of their key bases. Eventually, the government did step in with Medicare and Medicaid. These programs were targeted to the poor and elderly and thus didn't interfere with union perks.

Then things got worse. The government health plans set low payment rates. Health care providers made up for this by setting ridiculously high list prices.set up ridiculously high list prices. Most people with insurance paid a lower "negotiated rate" that was still higher than Medicare rates. However, the only way to really get insurance is through an employer. Employer-provided insurance is tax free, while self-paid insurance is after tax. Self-paid insurance is also difficult to obtain as it requires individual underwriting, while employer provided insurance is a group policy for everyone. This leaves a number of intermediaries between the patient and the payment. For most people, this system worked relatively well. However, for those without employer-provided insurance could often be hit with ridiculous bills.

The many players makes reforming the health care system difficult. There are doctors, hospitals, health plans, companies, drug companies, medical device manufacturers, health laboratories and more. While it would be great to remove the "fat" from the system, attempts can often be passed on. Attempts to squeeze insurer profits may instead result in doctors getting paid less. Health care also suffers from the "crisis" mentality. Abstractly, it sounds great to reduce spending when somebody is near death. However, when your loved one is near death, you are willing to spend whatever is needed to possibly prolong the life even a short amount of time. 95% of the expense may be wasted, but how do you make sure you don't cut into the important 5% that will help?

This is the background for the quest for Obamacare that is detailed here. There had been a few tries before. Hillary Clinton tried a reform during Bill's term, but failed miserably. In Massachusetts, Mitt Romney led a successful health care reform effort with mandatory insurance. Obama campaigned against Hillary's failed effort. Yet, he set out a priority of reforming health care along the Romney model. This proved quite challenging. There were twin desires to expand health care and reduce costs that had to be balanced against impacting current care and companies. How can fat be reduced while still maintaining a robust system?

There was a lot of back-room wheeling and dealing involved. A lot of shenanigans were needed to get it into place. Unions didn't want "cadillac taxes" on expensive plans. Drug manufacturers rejected price controls. Reduced reimbursements were off the table. Eliminating the tax break for employer-provided insurance was also dropped. The primary benefit was an "exchange" to provide health care for individuals to purchase insurance. This included income-based subsidies as well as eliminated pre-existing condition restrictions. The insurance was better than what could have been obtained previously, however, still not nearly as good as what could be obtained by an employer.

The roll out of Obamacare was less than ideal. The web site was implemented by people that were more experienced in politics than software development. It essentially went through a "public QA" process for the first months after rolling out. The law was complex and contained numerous drafting errors. This left it vulnerable to lawsuits. Some of the regulations were not defined for years after the law passed. Is are health care system better than it was before then? Possibly. Is it cheaper? Probably not.

Why Our Health Matters

Why Our Health Matters: A Vision of Medicine That Can Transform Our Future by Andrew Weil 

The United States healthcare system is broken. Insurance companies rake in the money for simply abstracting the cost from the doctor-patient relationship. If you could buy futures on the cost of healthcare, you could easily rake in a fortune. Yet, by some measures, American healthcare ranks far below that of other industrialized nations. Why is that?

In Why our health matters, Dr. Weil argues that there is a lot of blame to go around, though big pharma is perhaps the single greatest factor. The drug companies spend huge amounts marketing their new wonder-drugs. Thus, the role of the doctor becomes primarily that of a drug subscriber participating in "disease management". The system is further hampered by a focus on "evidence-based medicine" that focuses on individual symptoms rather than the root cause. His solution is to advance "integrated medicine" in which doctors and patients have deep, long term relationships. Traditional medicine could still be used to treat acute symptoms, while lifestyle changes and alternative medicine may have a role in improving long-term health. Other policies must also be put in order. (Why is junk food so much cheaper than healthy food?)

The content and message of this book are extremely positive and well thought-out. However, finding somebody that fully carries them out is a challenge. Even Dr. Weil moonlights as a vitamin salesman. (Is there a real difference between taking a pill that his been determined to help a condition and a vitamin that has also used to help improve a condition?)

I see doctors as being a lot like the QA team in software development. They analyze the current state and make suggestions for improvement. However, it goes back to the actual software developers to implement the fixes. They do both "unit" tests of isolated bits of functionality and "system tests" of the entire software products. Developers are also supposed to run their software through unit tests before delivering to QA, though there are often items that slip. QA also runs through all previous test cases before certifying a new release to ensure that no "regression" bugs have appeared.

Our medical system is one in which doctors perform a standard set of unit tests on all human "software" and then prescribe the appropriate "bug fixes". The drugs are typically targeted towards a single symptom. As long as they don't have a strong negative impact on other areas when tested, they are deemed ok, regardless of the potential long term impact. Alas, this often disregards the entire function of human body. It also ends up assigning a one-size fits all system to everyone. It would be as if there were a few "software test" laboratories throughout the world. They may find a great test case and a potential solution for it. Local QA teams would run the standard "test suite". If they found a problem, they would ask the developers to implement the fix. It wouldn't matter if they were developing video games and the "fix" involved font sizes in Microsoft Word. It would still be a similar fix.

Alas, that is our medical system. We get more and more specialists working on specific obscure systems and conditions, but not enough focusing on improving health to make sure we don't reach those conditions. The tax program provides tax incentives for treating acute conditions, but not for preventing that condition from occurring in the first place. And then we have the health care "reform" which merely entrenches the current broken system. Crony capitalism at its best.

The problem with US healthcare: childbirth

We just got a >$22,000 bill from the hospital for the birth.

The services provided:
1) A private delivery room for about 2-3 hours
2) A shared recovery room for about 36 hours
3) shared nurse service for the duration of the stay
4) some baby diapers, a water bottle, a baby outfit
5) meals

The charges don't include the services of a midwife, hearing test or the pediatrician.

The insurance company negotiated rate for this was around $3200, and our cost was another order of magnitude lower. We have this wonderful system where charges are nearly an order of magnitude greater than what is really "paid". The main "advantage" of insurance companies is that you get a real rate, instead of this sky-high rate. (Perhaps they are hoping to catch un-aware PPO patients. If a PPO paid 70% of the charges at a non-participating provider, the patient could be on the hook for over $6000 - assuming the insurance company even considered the rest to be reasonable and customary.)

Why don't hospitals actually charged the $3000 rate to normal people to everyone, instead of playing this game with insurance companies?

Even this reduced insurance company rate seems extreme.
An alternative to get the same cost (though with a much higher quality of service):
1) Two nights in a high-end luxury hotel: $1000.
2) Six meals at high-end ultra-luxury restaurants: $600
3) Private nurse: $1500
4) Very nice supplies: $100

Good luck getting the insurance company to pay for that.

A home birth would not have any of these hospital expenses. The charges for the home-birth midwife would likely be similar to the hospital midwife. Thus, the overall charges would be much cheaper than the hospital birth. However, since the "insurance" plan doesn't cover homebirths, the patient would have to pay for everything out of pocket. Thus the "cheaper" homebirth costs much more than the "expensive" hospital birth.

Don't you love the US system?