Monthly Archives: May 2017

Making The Diagnosis, But Falling Short On The Cure- A Book Review of An American Sickness: How Healthcare Became Big Business and How You Can Take It Back by Elisabeth Rosenthal, MD

This book by Dr. Elisabeth Rosenthal, an internist-turned-journalist, starts with detailed, well-researched, and appropriately indignant description of the factors that have turned the American health care system into an expensive, inhumane, and dangerous mess in the last twenty-five years.  I consider myself well-informed to the point of wonkiness about the shortcomings of my industry, and yet I learned a lot from this book about the actions of hospitals, insurance companies, drug manufacturers, and, yes, my fellow physicians in building a system that comprises a fifth of our national economy and does an incredibly poor job of achieving its stated gains.

Every libertarian who believes that the individual pursuit of self-interest will result in a functioning marketplace for medical goods should read this book and prepare to lose their faith.  Hospitals compete for market share by adding expensive but useless amenities, recommended by expensive and nearly useless administrators and consultants.  If that’s not enough, the hospitals in a market gather together to exert monopoly power in pricing their services.  They are in constant battle with the insurance companies, who have discovered that the road to prosperity is to enthusiastically take in premiums but only reluctantly pay medical bills.  But even though hospitals and insurers are adversaries in individual transactions, they rely on each other to keep our bloated, expensive system of healthcare in place, enriching each other but impoverishing the patients and taxpayers who are paying for this bureaucracy.

Pharmaceutical companies spend as much effort rigging the market in old drugs as they do in finding new drugs.  Patients are charged hundreds of dollars a month for drugs whose development costs were recovered decades ago.  Device manufacturers bring new models to market with the same gusto as the fashion houses bring out new dresses, and for much the same reason.  There are devices that have been on the market for years that work perfectly well, but once their patents have expired the manufacturers dismiss them like last summer’s frocks in favor of newer, more expensive, “cutting edge” devices. 

Doctors in this environment, I think, are driven as much by envy as by greed.  They know how much the executives of hospitals, insurance companies, and the drug and device manufacturers are paid.  They resent their salaries, because they feel that they add more value to patients’ lives than these overpaid former B students.  So too many doctors read articles, attend seminars, and cut deals so that they can learn how to earn more money for doing no more than what they were doing last year, or, at least, no more that adds value.  They want the money to salve their hurt feelings, but they disregard the welfare of their patients. 

There is a frantic quality to all of the conniving that Dr. Rosenthal describes.  I have to believe that all the players know that this horrible game cannot go on forever.  They are investing their lives and fortunes in a financial bubble.  Some of them may be unaware that American healthcare is a financial bubble, but experience has shown that even when investors know they are facing a bubble, each of them believes that he can get out just before it pops.

Unfortunately, Dr. Rosenthal doesn’t see the bubble, either.  Her prescription for improving the American healthcare system is a combination of optimistic consumerism, preaching virtue, and small adjustments to great mistakes.  She encourages patients to engage in a level of comparison shopping and informed advocacy that is frankly well beyond the capacity of an average person.  In order to take care of yourself in the healthcare system as well as she advises, you pretty much have to be her: Harvard educated in medicine and a black belt in healthcare finance.

Small changes to how all the vendors get paid in the system are unlikely to result in any meaningful change.  They are all of them ardently minding their own business, and the public good is none of their business. Hectoring them from a pulpit won’t change that.   Legislators and regulators will slowly make rules to limit abuses, and the hospitals, insurers and everyone else making money off this system will quickly find loopholes in the new rules just as they found them in the old rules. The rule makers are motivated by what they see as righteousness, but the people selling goods in this market are motivated by profit.  As long as this market exists, my bet is on profit to win.

I want to call out Dr. Rosenthal on one particularly naïve and destructive assertion that she makes about doctors: that they should be available, presumably by telephone, 24/7/365, and do this for free as part of their calling.  She was a general internist, so she knows that this is a burden that has usually fallen to primary care physicians.   A few years ago I noticed that very few primary care physicians will do this uncompensated work any longer.  Nowadays, the patients are sent to the ER for every question, or they now have the option of consulting by telemedicine with a physician who has never seen them, let alone examined them.  These are terrible options, but you get what you pay for. 

Personally, I take call for my patients nights and weekends, as this is part of the service I offer with a direct care subscription fee.  I think it is a shame that this is not available to more patients.

I recommend to Dr. Rosenthal, and everyone reading this review, to stop trying to fix the current American healthcare system and to think about what they want to replace it when it collapses.  She recommended some models of healthcare, such as the Kaiser Permanente system, that are possible models for how we should do things differently in the future.    I am an advocate of public financing for universal healthcare, perhaps these models can be a template for this.  I am also an advocate for a free market for innovative businesses providing private healthcare, because there is no single system that can meet everyone’s needs or invent better ways to care for people.

Healthcare prices can’t rise faster than inflation forever, this system can’t keep taking up more and more of the economy, greed cannot reach all the way to the skies.  The healthcare industry is an unsustainable bubble. It is the nature of bubbles that bubbles don’t gradually deflate.  Bubbles pop.  When this one pops, a lot of sick, terrified patients are still going to need healthcare.  Dr. Rosenthal has written a book that everyone should read to learn how this bubble formed.  I would like to hear what she would recommend after the pop.

J. Timothy Ames, MD