Broken US Healthcare System Exposed – Will Federal Reserve-Like Overseer Lead to a Solution

The broken U.S. healthcare system is the subject of a new bestseller by Pulitzer Prize-winning authors Donald L. Barlett and James B. Steele, investigative reporters for the New York Times. In their book Critical Condition: How Health Care in America Became Big Business and Bad Medicine, the authors expose the vagaries of American healthcare and propose detailed solutions for many of the problems.

The authors begin by examining what U.S. politicians call the world’s best healthcare system. The United States certainly spends more for healthcare than any country in the world: 75 percent more than Canada and twice as much as anywhere else. Yet, the World Health Organization ranks the United States 29th among the countries of the world — between Slovenia and Portugal — in years of healthy living. The authors characterize the U.S. healthcare system as a “stunningly fragmented collection of businesses, government agencies, healthcare facilities, educational institutions, and other special interests wasting tens of billions of dollars and turning the treatment of disease and sickness into a lottery where some losers pay with lives.”

How did the U.S. healthcare system get so bad? The authors’ answer is that America sold out to Wall Street. The business practices that the Street has introduced — cutting corners, trimming costs by eliminating nurses, hiring less-qualified physicians, replacing skilled employees with unskilled, paying poverty-level wages to many workers, driving down the salaries of professionals, and even curtailing the cleaning of hospital rooms, operating rooms, and doctors’ offices to meet financial projections — also have been adopted with a vengeance by the so-called nonprofit side of medicine, so much so that the nonprofit and for-profit sides of medicine now are often indistinguishable.

The federal government also bought into the business model. Government policymakers thought that investor-owned managed care companies would solve the problem of high priced healthcare through competition. First hospitals were bought up by large corporations. Then doctors’ practices also become part of big business.

Even so, costs have continued to rise. The authors point out that one of the reasons for increasing costs can be traced to Madison Avenue. Since 1997 the U.S. Food and Drug Administration has opened the door wide to advertising directly to consumers on television, and Americans are being blitzed with advertising. For example, the pharmaceutical industry presents the treatment for erectile dysfunction as its approach to public service, creating a demand for a treatment even when a medical need may not exist.

At the same time, administration of the healthcare system has become increasingly complicated. The authors do a pretty good job of illustrating how insurance companies game the system to avoid paying doctors for services they have performed. They also describe the new trend of outsourcing everything possible to overseas labor.

Then, in the best chapter of this book the authors say, “It need not be this way.” Americans do not have to be the most overtreated, undertreated, and mistreated patients on earth. The authors propose a new system that is universal and provides affordable, accessible care. They want a single-payer system but don’t want the government to run it, suggesting instead a quasi-governmental organization like the Federal Reserve System, which oversees the nation’s money and banking policies. The organization they propose, which they want to call the U.S. Council on Health Care, would be largely independent of politics.

The funding mechanism would consist of just two taxes — a gross-receipts levy on business and a flat tax, similar to the current Medicare tax, on all individual income. Everyone would be covered for the basics, and copayments would be based on income. Any catastrophic illness would be covered. Patients would have complete freedom of choice of doctors and hospitals. The system would emphasize prevention and would include basic formulary; the council also could negotiate the best possible prices for drugs. In addition, to reduce medical errors dramatically, the council could oversee creation and operation of a single information technology system that links all healthcare players.

What will be the driving force that convinces Americans that we need a new healthcare system? First it will be working Americans disenchanted with rising costs and shrinking care. Secondly, it will be corporations that can no longer compete with foreign companies because of the cost of healthcare benefits. The crisis that we face represents an exceptional opportunity to rethink our values, our priorities, our budget, and our options.

Gary Vander Ark, MD, is director of the Neurosurgery Residency Program at the University of Colorado. He is the 2001 recipient of the AANS Humanitarian Award.