Traverse City Record-Eagle

April 4, 2013

Another View: Exploring roots of high health costs

By the Livingston County Daily Press & Argus

---- — Time magazine recently published a 35-page, 24,000-word report on the causes behind the high health-care costs in the United States.

The article named many of the usual suspects: High markups on hospital care, medical equipment and lab tests; expensive pharmaceuticals; high-paid hospital administrators; and medical malpractice costs.

The article also pointed to some nefarious actions, such as nonprofit hospitals that earn sizable profits while doctoring their numbers to overstate the amount of charity care they provide; or doctors who have unseemly conflicts of interests.

One of the more eye-opening observations was the fact that often hospitals charge their highest fees to those, such as the uninsured, who can least afford them.

There’s a lot to cover in 24,000 words. But these three themes stood out:

n Medicare does a better job of controlling costs than does private insurance.

Such a claim earns nasty glares from conservatives who are dead-set against a single-payer system. But it needs to be given serious consideration.

Medicare doesn’t pay the marked-up rate for many health-care products and services. It also has a much lower administrative cost than do private insurance companies. It has a remarkable record of data processing, using contracts with a large network of private vendors.

Such a record should give pause to those pushing for a voucher system to provide health care for those over 65. ...

n The current insurance system isn’t all that wonderful.

U.S. Rep. Mike Rogers, R-Brighton, was one of those who argued against Obamacare partly on the grounds that most people were happy with their insurance. So why make them change?

But should people be happy with their current coverage? That coverage is pretty much dictated by their employers who, over the years, have increased the amount employees pay while reducing benefits. That’s not a knock on management. Costs are going up and have to be covered somehow.

Also, many people have no idea of the effectiveness - or limitations - of their insurance until they desperately need it. The Time story told several examples of employed, insured individuals who sadly discovered that caps on their benefits left them with staggering health-care bills.

n The health-care debate is often positioned by those who spend the most money with Congress.

Pharmaceutical companies, health-care organizations and insurance companies are big spenders when it comes to influencing Congress. The health-care industry even dwarfs the defense industry when it comes to spending on lobbying.

Further, trial attorneys spend big bucks with friendly members of Congress to avoid meaningful tort reform. In addition to big malpractice payouts, hospitals and doctors spend large amounts on malpractice insurance. They also drive up costs with expensive and unnecessary tests and procedures as part of costly defensive medicine.

When politicians of both parties are speaking, it’s often their favorite lobbyists who are providing the script.

Livingston County Daily Press & Argus