A Diagnosis of Our Ailing Health Care System

By James Rippy

It should be obvious to everyone that the present system of delivering Health Care is totally unsustainable for the future. The double digit percentage increases over the last three years (40%) while overall inflation remains very low (7%-8%) or less in the last three years should be sending loud warning signals to everyone. Health care is becoming so expensive that large percentages of our society cannot afford to use the system as it is operated today. Ask why the cost of medical care continues to skyrocket during times of very low inflation and you will get many answers depending on whom you ask.

Ask the Hospitals why the cost of delivering Health Care continue to skyrocket and you will get answers that Doctor’s use many more of the Hospital’s resources than ever before. Qualified personnel such as technicians and nurses are in short supply so it is necessary to pay higher wages.  Technology gives many more diagnostic tools and options than ever existed before. MRI’s-Cat Scans, and many more useful diagnostic tools are helping treat illnesses that were not available in the past and these tools are very expensive.

Ask the Doctors why the cost of delivering Health Care continues to escalate so much more than inflation year after year and the answers you get are as follows with out prioritizing. The tremendous amount of administrative bureaucracy associated with Medicare and Insurance Companies is a major reason you will hear. It has been estimated that as much as 25% of the total cost of Health Care is associated with the paper nightmare associated with this bureaucracy. Another reason you always hear is the high cost of Malpractice Insurance due to the threat of lawsuits. Most working people do not have the opportunity to watch afternoon Television, but those that do will find at least every third commercial is a law firm advertising for clients who feel that they have been injured by a Doctor. The fear created by this system causes excessive and unnecessary tests that drive the cost of delivering health care upward. Many Doctors individually, without fear of quotation will admit readily that the fear factor increases the cost by excessive and even unnecessary testing.

Fraud plays a part in this system that is failing and heading for a catastrophe. How many articles or news stories have you heard or read about pertaining to fraud. Everything from thousands of fraudulent Medicare Claims to the over zealousness of folks marketing wheel chairs and people moving devices to give immobilized people freedom.

A lot of blame for the failing system is placed with the insurance companies. Some folks think that the greed for larger profits plays a major role in this terrible problem

User’s (patients) of the Health Care System are accused of demanding more and more from Hospitals-Doctors etc. It has been stated that our lack of intelligent usage and increasing demands on the system has been a large factor in the continuing increases.

All of these reasons and many more share reasonable validity, but unless this problem is analyzed by performing a detailed root cause analysis, our system as we know it today is doomed to failure and will crumble. We spend more money for Health Care than any other developed Nation and continue to fail. What do I mean by fail? Everyday, thousands of people are added to the roles of uninsured and no longer have Health Care Insurance. Companies continue daily to cancel and eliminate Health Care Insurance for Retirees and Active employees. Premiums continue to go up annually exceeding 10% annually in a lot of cases. Health Care premium cost is already at the crisis stage. Even folks with middle class incomes can no longer afford insurance.

We have been through all types of (“proposed fixes”) Managed Care-Preferred Provider Organizations (PPO’S) -Health Maintenance Organizations (HMO’s) –All types of Networks and today the system is worse than ever before measured by availability and cost of service. A complete disaster is in motion and absolutely unsustainable in the present form. Some people are even advocating the British system of socialized medicine with a nationalized system of health care or the Canadian Version-the German Version or anything that has the potential to fix this terribly broken system.

Our Congressmen and Women, Our Senators can never really understand this system because none of them are affected by it. Health Care and the availability and cost are not a factor in their lives. They have coverage with no worries. They live in a totally different world from the average citizen.

I am afraid that the system that our legislators come up with when we reach 100 million uninsured folks and are forced to deal with this problem, will not be desirable to anyone in the Health Care Industry especially Doctor’s and Hospitals. We are rapidly heading for a nation with half the population priced out of the Health Care system without insurance. Do Doctor’s and Health Care professionals really want the Health Care Delivery system mandated by elected politicians? I really do not think they want this to happen.

Why do we make it such a complex problem? Why not stop all the finger pointing and really analyze why Health Care has increased 40% over the last 3 years and overall inflation has been approximately 7%-8% in the same time frame. Some body is receiving the money. The billions of dollars generated by a 40% increase in Health Care over the last three years are not vanishing in to the air. The Doctor’s state that it is not going to them, the Hospitals say “Not me”. The Insurance Companies accepts no blame. How difficult can it be to do detailed analysis of each cost area associated with the delivery of Health Care over the last three years line item by line item? Simply comparing the cost of 3 years ago to the cost of today by delivery component would be enlightening. Certainly, it would provide a factual base for study.  How hard can it be to determine where the real culprits are in the escalating cost of Health Care? Are Doctor’s fees up? Has the hospital increased room rates-diagnostic procedure cost? Have diagnostic and corrective procedures increased? How much? How much have Insurance companies increased premiums? How much has the cost of Malpractice Insurance increased? After defining these facts, it would require a lot of why? -why? and why? to understand the root causes.

Root causing the true culprits in the horrendous double-digit increase in delivering Health Care will at a minimum bring transparency to one of the most serious problems we face in our society today. If the cost of Health Care continues the upward spiral of the past few years, the system will crumble and what replaces it will not please anyone in the industry. The people responsible for delivering Health Care Today should be running as fast as they can to find solutions before they are forced to accept solutions that are not in the best interest of anyone. Everyday, more and more people are added to the ranks of uninsured and cannot afford basic care. Where is a trigger point of folks without insurance that forces drastic action? Is it 50 million? -75 million?-100 million?. It should be obvious that not fixing the runaway cost in our Health Care delivery system is not an option. It will happen. The question is when and what type of system will we have if the corrective action is a forced action under crisis conditions.

Hospitals-Doctor’s-Insurer’s and yes, patients need to be focused on reducing the cost of Health Care while continuing to maintain high quality care, rather than building new facilities. Without cost containment the system is doomed. The annual increase in health care cost equals billions of dollars and it is going somewhere, even though the components of the delivery system continue to point fingers at each other and say “Not my fault that cost are out of control”.
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NOTE: In the interest of full disclosure; Jim and I grew up in the same neighborhood and attended the same grammar school. I was married to his sister (now deceased) for twenty-one years. Jim is a retired Executive V.P. of an international tire manufacturing company and is intimately familiar with the rise in health care cost. We disagree on root causes and solutions, but his understanding of the problem is unsurpassed. More of his articles on the health care issue is available from the archives of the Mt. Vernon Register News, Mt. Vernon, Illinois. This column was first published in 2003, but is as up-to-date as yesterday’s newspaper.


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