WAYS TO REDUCE HEALTH-CARE COSTS
In the United State of America,
we spend more for
the health-care of each person
than anywhere else on the Earth.
But our system of health-care does not include everyone.
While extending health-care to all American citizens
legally in the United States),
we should control the total
cost of health-care.
Our health-care is paid for from several sources,
including directly by the consumers of health-care services,
by means of private health-insurance,
tax-supported methods of paying for health-care.
All methods of paying for health-care will probably
And controlling the costs at
the point of use
might be an effective way to extend health-care to everyone.
REDUCE OR ELIMINATE THE USE OF EMERGENCY ROOMS
MEDICAL CARE FOR THE POOR.
RE-USE SURGICAL INSTRUMENTS.
REMOVE THE PROFIT-MOTIVE FROM THE MINDS OF DOCTORS.
REDUCE THE AMOUNT TAKEN BY INSURANCE COMPANIES.
REDUCE DEFENSIVE MEDICINE.
REDUCE MALPRACTICE INSURANCE.
SHORTEN THE PROCESS OF DYING.
STANDARDIZE LIFE-ENDING DECISIONS.
REDUCE FUTILE TERMINAL CARE.
10. CONCLUSION: THE CASH-FLOW PATTERN
WAYS TO REDUCE HEALTH-CARE COSTS
James Leonard Park
We Americans have the most expensive health-care system in the world,
but some people get little or no health-care.
If we can reduce waste, fraud, & abuse in some forms of health-care,
we can re-direct that money to produce more benefits for
And we can provide health-care for everyone.
What specific changes in our health-care system will reduce the total
1. REDUCE OR ELIMINATE THE
USE OF EMERGENCY ROOMS
FOR ROUTINE MEDICAL CARE FOR THE
Health-care delivered in the emergency rooms of
is the most expensive form of routine medical care available anywhere.
This is because the emergency room must be prepared 24-hours a day,
7 days a week for anything that might happen to anyone.
And we are glad to have such emergency medical services
But when poor people have no other form of
they go to the emergency room, where they wait their turn.
Often they must wait several hours,
since real emergencies are always given priority, of course.
Emergency-room physicians are trained to handle
sudden health problems,
which result from unpredictable accidents, strokes, heart-attacks, etc.
These specialists should not
provide routine medical
Everyday, predictable health problems can easily be handled by other
The basic reason that emergency rooms are clogged by
with non-life-threatening health problems
is that they have no other
place to go for health-care.
Or at least, they do not know
of any other places to receive medical
People who have no health-care provided by employers,
who cannot afford to pay directly for their medical care,
and who have no regular connection with the
will show up at the hospital they know about and ask for care.
Because almost all of this care is provided by
it would be more cost-effective for free clinics to be
near where the poor people live
so that they would know
where to get routine health-care
instead of showing up at the emergency room
when their health problems have become so advanced
that they are forced to seek medical care.
If they already had a connection with a group of doctors and nurses,
they would go to that clinic
rather than to the emergency
How should free medical clinics for the poor be
The taxpayers will pay one way or another.
It could be thru federal taxes, state taxes, or local taxes.
Because state and local politicians hate to raise taxes
and because the poor are not evenly distributed across the country,
it probably makes the best sense to finance health-care for the poor
by means of the federal
All people with income above the taxable level
will pay an appropriate amount from their income
in order to support free
clinics for the poor.
These clinics will be well-known to the poor.
And there will be almost no paper-work needed, since patients will not
Some controls might have to be in place
to prevent non-poor
people from using these free clinics,
but that additional cost will be very minor
compared to the huge savings achieved
by diverting the poor away
from the emergency room
when they have ordinary, everyday health-care needs.
At present, the taxpayers are already paying for the
The same care can be provided in clinic settings
for a fraction of the present costs.
Free clinics for the poor will reduce over-all health-care costs.
RE-USE SURGICAL INSTRUMENTS.
In the USA, most surgical instruments are discarded after
The reason for this practice is to protect the next patient from
But with modern methods of sterilization,
it should be possible to follow the practices of surgeons
in the first few hundred years of surgery:
Clean and sterilize the
instruments and use
Some surgical instruments cost hundreds or even
thousands of dollars.
These specialized instruments are designed for one purpose only.
And when they have performed that function, they are discarded.
When another patient needs that kind of surgery,
he or she will get a brand-new instrument,
which has never been used on any other patient.
All problems associated with re-using
surgical instruments can be solved.
A large portion of the instruments now discarded every day
from our operating rooms and clinics
can be sterilized and stored for use on other patients.
The costs of cleaning to 100% certainty of no danger
to the next patient
will have to be compared with the cost of buying a new instrument each
And sometimes, it will still be cheaper to buy new.
But the vast majority of surgical instruments can be re-used several
before they are worn out and no longer safe and effective.
One economic impact on this change:
Manufacturers of surgical instruments having less
But all people who have operations will have lower costs.
And the money now wasted on discarded surgical instruments
will be available for more cost-effective medical care.
The re-use of surgical instruments is just one small
example of savings
that could be achieved in all systems of health-care.
People who provide health-care every day
could recommend ways to save money in their
If they were paying these costs out of their own pockets,
what economies would they recommend?
Sterilizing all medical instruments for reuse (when
practical and safe)
will reduce the over-all costs of medical care.
At home, do doctors and nurses throw away their silverware after one
3. REMOVE THE PROFIT-MOTIVE
FROM THE MINDS OF DOCTORS.
Under most system of medicine as now practiced in
the United States,
the daily income of the doctor depends on how much he or she does.
The payment systems have numerical codes for each kind of medical
The more medical services that can be recorded in a given day,
the more money that doctor will earn that day.
And this profit-motive is somewhere in the background
of each and every medical decision.
When we go to the grocery store, we usually look at
the price of each item.
If we care about saving money, we consider less-expensive
It is a cost-benefit analysis at each point of decision.
Most doctors think in the same way:
If I recommend treatment A rather than treatment B,
will I have more money at the end of the day?
For example, when a surgeon knows that he will earn
thousands of dollars for each surgery he does,
he then becomes a salesman
for the surgery he is offering.
When he meets with the potential patient,
he will make the case for
choosing a costly operation
rather than considering less-expensive alternatives.
Because payment is automatic and behind-the-scenes,
the doctor and the patient often do not know how much money
any specific course of treatment will cost.
It is like a car-salesman and a car-buyer looking over the new cars.
Except neither of them knows how much each model costs.
They will just settle on what is 'best' for the customer
or whatever the customer wants
someone else will pay the bill later.
Doctors who are paid a regular salary independent
are able to recommend whatever is in the best interest of the
without any unspoken calculation of income for the doctor or the
Some of the best health-care systems in the United States
do employ all of their doctors and other staff members on regular
And cost-comparison shows that they provide
good medical service at a lower over-all cost.
The profit-motive cannot be completely eliminated
from medical practice.
But whenever taxpayer money is involved,
service provided on salary
can be preferred over
providers who are paid for each
medical procedure they perform.
For example, in the free clinics for the poor
all employees can be paid regular salaries,
independent of all of their medical decisions.
They will do what is best for each patient,
without considering what is best for the income of the provider.
The more we can put health-care providers on regular
the more money we collectively will save on our health-care expenses.
Unnecessary services and high-profit services will be avoided
since cheaper alternatives can always be recommended by the doctors.
Removing the profit-motive from the minds of
puts the doctors and patients on the same side
when they are trying to make wise health-care decisions for the
Who will lose income under such a system?
High-paid specialists who are practicing largely for their own benefit
will find that they cannot earn as much being paid a regular salary.
But some of them will be pleased to be released from
the economic calculations that used to guide their recommendations.
Millionaire doctors will disappear.
But more people will get standard medical care.
And the over-all costs of health-care will be reduced.
4. REDUCE THE AMOUNT TAKEN BY
Under most of the present health-care system,
private, for-profit insurance companies do the paper work,
collect the money from employers and the government,
and pay the medical industry for the health-care
Private health-insurance companies will not disappear
under the health-care reform enacted in 2010.
But if we invent or expand methods of providing health-care
that have no role for
then, obviously, those dollars will be saved
and the private health-insurance industry will decline.
Of course, private insurance companies will fight
any such changes.
But the larger benefit to all of the people will eventually prevail.
The way we pay for health-care in the United States is an historical
Why should most of our health-care dollars
be channeled thru private insurance companies?
In Canada and the United Kingdom, there is still some private
But private health-insurers earn much less in those countries,
since most health-care is paid for by the taxpayers directly,
without funneling any of the
tax-monies thru insurance companies.
If the taxpayers of the United States are going to
pay for the health-care
of the millions of people who previously had no health-coverage,
why not put all this
tax-money into health-care directly
instead of purchasing
private health-care insurance for the poor?
When we pay our federal income taxes,
a portion of that money will provide health-care for the poor.
But why should any of
our federal income taxes go to insurance
When employers pay for private health-insurance,
about 20% of that cash is kept by the insurance industry itself.
And the other 80% goes to the people who provide health-care
Millions of people are employed by insurance companies
that provide health-care coverage.
Many of these employees will lose their jobs
if more tax-money is sent directly to the health-care providers.
Not as many people will be executives of such insurance
And the stock-value of these insurance companies will go down.
They will pay less dividends to their shareholders.
And some companies who had no other kind of insurance business
(such as paying compensation for fire-losses, auto-damage,
death-benefits, etc.), will simply go out of business.
Their former employees will have to find other work.
But perhaps they will find some line of work
that has a more obvious
benefit to someone besides themselves.
And some of the former employees of the insurance
will find employment in providing
Millions of dollars now going to insurance companies
could be redirected in order to provide health-care for all.
Thousands of people now employed
in the complex systems of channeling money
will seek other ways of making a living.
5. REDUCE DEFENSIVE MEDICINE.
"Defensive medicine" means those practices of the
intended mainly to protect
the providers from lawsuits for
Because we do have a legal climate in which patients can easily sue
when they did not get the medical outcomes they want,
doctors must do unnecessary
tests and create elaborate
to be ready for a lawsuit
that might come from a dissatisfied patient.
Usually the next medical test does have some
value for the patient.
But is it also being recommended because it will protect the doctor?
How much benefits the patient
and how much benefits the
But all the costs are covered by health-care money.
The doctor does not offer to pay half of the cost
because he will be protected from second-guessing
from trial lawyers and their expert witnesses.
Good record-keeping is essential to modern medical
But the health of the patient is even more important.
If less time and expense were devoted to defensive medicine,
more time and resources could be devoted toward helping the patients.
Doctors themselves can recommend cuts in
Doctors already know what expenses are largely to protect
Wherever defensive medicine can be reduced,
more health-care dollars will
directly benefit patients.
6. REDUCE MALPRACTICE INSURANCE.
Most doctors in the United States are
burdened by malpractice insurance.
Unless their organizations cover these costs
or offer to defend them in
case of lawsuit,
they must pay thousands of dollars each year to insurance companies
to protect them in the unlikely event that they might be sued by a
One way to reduce this non-productive cost in
is to limit the amount of
damages a patient can receive for
a medical mistake.
There are genuine mistakes in the medical system every day.
And sometimes grievous harms are visited upon the patients.
So they should be compensated in meaningful ways for their suffering.
But should there be limits on financial
What sense does it make to pay hundreds of millions of
as compensation for a medical error?
All of that money is
ultimately sucked out of the health-care system:
The costs of malpractice settlements is paid by the insurance companies.
And they get the money from other physicians and providers,
who in turn must get it from the ultimate payers of health-care
people who are receiving health-care services.
If we follow the money, we see who ultimately pays:
Whenever we can reduce or eliminate malpractice insurance,
more money will be available for actual health-care.
One way to make the system better for everyone
would be to get rid of doctors who are practicing poor medicine.
Sometimes they are impaired
by drugs and/or alcohol.
they are trying to do too
to do any of them with complete safety.
they are just too old
to continue practicing.
Other doctors should help to remove bad doctors from
Colleagues know which doctors should no longer be
Some doctors who are found guilty of malpractice
should be retired or moved to less-risky forms of medical care.
When more bad doctors lose their licenses to
or are moved into administrative positions,
the good doctors will pay less for their malpractice
There will be fewer medical mistakes and fewer lawsuits.
Error-prone doctors can still use their medical
knowledge in administration,
where there would be no
chance of them repeating their mistakes.
7. SHORTEN THE PROCESS OF
Standard medical practice sometimes provides useless
But if we think more clearly about the goals of medicine at the end of
we will be able to shorten
rather than prolong
the process of dying.
When it become clear that this patient will never
the doctor can increase
while acknowledging that this will probably shorten the process of
The doctor can even order terminal
which will keep the patient unconscious until death occurs.
Terminal sedation will probably include giving up food and
since a sleeping patient cannot eat or drink normally.
can be ended and life-support
These life-support systems might include artificial nutrition and
Every patient who chooses to shorten the process of
rather than continuing questionable medical treatment
will help to reduce health-care costs
by amounts measured in thousands of dollars per
Another on-line essay
explores these options:
Methods of Managing Dying.
8. STANDARDIZE LIFE-ENDING
When we come to the end of our lives,
almost all of us will have some important medical decisions made.
If we do not make these decisions ourselves,
our duly-authorized proxies will make them for us.
When most of the 26 recommended
safeguards for life-ending decisions
have been carefully fulfilled,
then even people more remote from the medical choices
can be confident about the decisions.
Each decision to shorten the process of dying
will save the health-care system thousands of dollars
that would otherwise have been spent on useless terminal care.
But we must guard against any danger
of rushing patients
prematurely into death in order to save money.
This problem can be avoided by using the eight safeguards
Patients from Health-Care Administrators Who Must Save Money.
9. REDUCE FUTILE TERMINAL
All of us will die.
And if we make no statements to the contrary,
we will be subjected to standard terminal care,
which often means keep this
body alive as long as technically possible.
We can reduce health-care costs by making sure
that our own terminal care
will be reasonable.
We can discuss how we want to be treated in our
last year of life
in our Advance
Directives for Medical Care.
Another way to reduce useless terminal care
is to create a system of Medical Futility Monitors.
These would be almost-retired terminal-care physicians
who would evaluate continuing to treat patients
close to death but who are being sustained on life-supports
because no one knows how
to say "enough".
These Medical Futility Monitors would review
visiting each dying patient and reading the medical records.
Based on experience with similar medical situations,
they would recommend
termination of useless end-of-life care.
And in some situations they would have the legal power to 'pull the
Medical Futility Monitor is explored more fully here:
Avoiding the Million Dollar Death.
10. CONCLUSION: THE CASH-FLOW PATTERN
When any method of reducing
health-care costs is put into place,
someone who is now earning some of those 'health-care' dollars will
He or she will have reduced income or might be completely out of a job.
The number of people in the health-insurance
business will be reduced.
But a comparable amount of money can be shifted to actual health-care.
For example, more nurses
will provide medical care to the poor.
The people who will lose income will protest the
But the common good
should prevail over any special
The total amount of money spent on health-care
might actually increase with health-care reform.
But the money will be spent more wisely,
where it can do more
—more people actually receiving the
health-care they need.
More people will be employed
to give hands-on health-care.
And fewer people will be paid
to do office work.
Money now being spent where it produces little
benefit for patients
can be re-directed where it will do more good.
Let's look for better ways to spend our health-care dollars.
July 31, 2009; Revised 8-1-2009; 9-2-2009; 3-31-2010; 10-31-2010;
3-12-2011; 7-14-2011; 5-12-2012;
1-7-2013; 1-10-2013; 10-11-20113; 10-12-2013;
5-2-2014; 1-24-2015; 9-29-2016;
James Park is an independent philosopher and medical
He has written extensively about end-of-life issues.
Some related essays are linked below.
Everything else you might like to know about him
will be discovered on his website, called
A small, free, on-line book has been created,
in which the essay above is Chapter 2,
Here are a few related essays:
Books on Voluntary Death
Books on Preparing for Death
Helping Patients to Die
on Terminal Care
Go to the Right-to-Die
Return to the DEATH
Go to the Medical
Go to other
on-line essays by James Park,
organized into 10 subject-areas.
Return to the