NINE WAYS TO REDUCE HEALTH-CARE COSTS

SYNOPSIS:

    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.
In order to extend health-care to all American citizens
(and others legally in the United States),
we need to 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,
and several tax-supported methods of paying for health-care.

    All methods of paying of health-care will probably continue.
And controlling the costs at the point of use
might be the most effective way of extending health-care everyone.

OUTLINE:

1. REDUCE OR ELIMINATE THE USE OF EMERGENCY ROOMS
FOR ROUTINE MEDICAL CARE FOR THE POOR.

2. RE-USE SURGICAL INSTRUMENTS.

3. REMOVE THE PROFIT-MOTIVE FROM THE MINDS OF THE DOCTORS.

4. REDUCE THE CUT TAKEN BY INSURANCE COMPANIES.

5. REDUCE DEFENSIVE MEDICINE.

6. REDUCE MALPRACTICE INSURANCE.

7. PERMIT THE CHOICE OF VOLUNTARY DEATH.

8. STANDARDIZE THE PRACTICE OF MERCIFUL DEATH.

9. REDUCE FUTILE TERMINAL CARE.

10. CONCLUSION: THE CASH-FLOW PATTERN WILL CHANGE.


NINE WAYS TO REDUCE HEALTH-CARE COSTS

by James Park
    We 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 into avenues that produce more benefit to the patients.
And we can provide health-care for everyone.
If we fundamentally reform our health-care system,
we will reduce the over-all cost of health-care.


1. REDUCE OR ELIMINATE THE USE OF EMERGENCY ROOMS
FOR ROUTINE MEDICAL CARE FOR THE POOR.

    Health-care delivered in the emergency room of your local hospital
is the most expensive form of medical care anywhere in your town.
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 that we do have such emergency medical services available.

    But when poor people have no other form of health-care,
they go to the emergency room, where they wait their turn.
Often they must wait several hours,
since the real emergencies are always given priority, of course.

    Emergency-room physicians are trained to deal with sudden health problems,
which result from unpredictable accidents, strokes, heart-attacks, etc.
These specialists should not be called upon to provide routine medical care.
Everyday, predictable health problems
can easily be handled by doctors trained in family medicine.

    The basic reason that emergency rooms are clogged by poor people
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 care.

    People who have no health-care provided by employers,
who cannot afford to pay directly for their medical care,
and who probably do not have any regular connection with the health-care system
will show up at the hospital they know about and ask for care.

    Because almost all of this care is provided at the expense of tax-payers anyway,
it would be more cost-effective for free clinics to be established
near where the poor people live so that they will know where to go
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 room.

    How should free medical clinics for the poor be financed?
The tax-payers 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 income tax.
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 be expected to pay.
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 not sending the poor to the emergency room.

    Under our present system,
the tax-payers are already paying for the emergency room.
The same care can be provided in clinic settings
for a fraction of the present costs.

2. RE-USE SURGICAL INSTRUMENTS.

    In the United States, most instruments used in surgery are discarded after one use.
The reason for this practice is to protect the next patient from infection.
But with modern methods of sterilization,
it should be possible to follow the practices of surgeons
in the first few hundred years of the practice of surgery:
Clean the instruments and use them again
for as long as they do the job required of them.

    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.
The next time a patient has that kind of surgery,
he or she will get a brand-new instrument,
which has never been used on any other patient.

    Careful attention can be given to the possible problems
of re-using surgical instruments,
but a large portion of the instruments
now discarded every day from our operating rooms
can be cleaned 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 time.
And sometimes, it will still be cheaper to buy new.
But the vast majority of surgical instruments can be reused several times
before they are worn out and no longer safe and effective for use on new patients.

    One economic impact on this change
will be that the manufacturers of surgical instruments will have less business.
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 can be achieved in all systems of health-care.
People who provide health-care every day
are in the best positions to recommend ways to save money in their departments.
If they were paying these costs out of their own pockets,
what economies would they recommend?


3. REMOVE THE PROFIT-MOTIVE FROM THE MINDS OF THE 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 service.
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 present in 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 will consider less-expensive alternatives.
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,
I will 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 the 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
—and someone else will pay the bill later.

    Doctors who are paid a regular salary independent of the services they provide
are able to recommend whatever is genuinely in the best interest of the patient
without any unspoken calculation of income for the doctor or the hospital.
Some of the best health-care systems in the United States
do employ all of their doctors and other staff on regular salaries.
And cost-comparison shows that they provide
good medical service at a lower over-all cost.

    The profit-motive cannot be completely eliminated from the practice of medicine.
But whenever tax-payer money is involved,
service provided on salary can be preferred over
providers who are paid for each service they perform.

    For example, in the free clinics for the poor referred to above,
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 salaries
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 the doctors
puts the doctors and patients on the same side
when they are trying to make the wisest health-care decisions for the patients.

    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 on 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 CUT TAKEN BY INSURANCE COMPANIES.

    Under most of the present health-care system,
private, for-profit insurance companies do the paper work
that collects the money from employers
and pays part of it to the medical industry for the health-care provided.

    Private health-insurance companies will not disappear
under any system of health-care reform now being considered.
But as alternatives methods of providing health-care emerge,
which do not pay a cut to insurance companies,
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.
It is an historical accident of the way health-care developed in the United States
that we have such a large role for insurance companies.
In Canada and the United Kingdom, there is still some role for private insurance.
But these industries are much smaller in those countries,
since most health-care is provided by the tax-payers directly,
without funneling any of the tax-monies thru insurance companies.

    If the tax-payers of the United States are going to pay for the health-care
of the millions of people who now have no health coverage,
why not put all this tax-money into health-care directly
instead of purchasing 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 companies?

    When employers pay for private health-insurance,
about 30% of that cash is kept by the insurance industry itself.
And the other 70% goes to the people who actually provide health-care services.
Millions of people are employed by insurance companies
that provide health-care coverage.
Many of these employees will lose their jobs
as more tax-money is sent directly to the health-care providers.
Not as many people will be employed as executives of such insurance companies.
And the stock-value of these insurance companies will go down.
They will pay less dividends to the share-holders.
And some insurance 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 companies
will find employment in providing health-care services.
Millions of dollars now going to insurance companies
could be redirected in order to provide medical services for all.


5. REDUCE DEFENSIVE MEDICINE.

    "Defensive medicine" means those practices of the medical profession
that are intended mainly to protect the providers from lawsuits for malpractice.
Because we do have a legal climate in which patients can easily sue
when they do not get the medical outcomes they wanted,
doctors must do unnecessary tests and create elaborate documentation
to be ready for a lawsuit that might come from a dissatisfied patient.

    Usually the next medical test does in fact have some value for the health of the patient.
But it is also being recommended because it will protect the doctor.
Perhaps it is 50/50: half for the benefit of the patient and half for the benefit of the doctor.
But, of course, the complete cost is paid for by the stream of money for health-care.
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 practice.
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 will have to recommend where defensive medicine can be cut.
Doctors already know what expenses are largely to protect other doctors.
Wherever defensive medicine can be reduced,
more health-care dollars will go to the actual benefit of patients.


6. REDUCE MALPRACTICE INSURANCE.

    All practicing 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 patient.

    One way to reduce this non-productive cost in health-care
is to limit the amount of damages a patient can receive when injured by 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 compensation?
What sense does it make for someone to receive hundreds of millions of dollars
as compensation for a medical error?
All of that money is ultimately paid by everyone who receives health-care in that country:
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 dollars
---the people who are receiving health-care services.

     Whenever we can reduce or eliminate these expenses,
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.
Sometimes they are trying to do too many procedures
to do any of them with complete safety.
Sometimes they are just too old to continue practicing.
Other doctors will have to take the lead in removing bad doctors from the system.
Colleagues know which other doctors should no longer be practicing medicine.
Some doctors who are correctly sued for malpractice
should be retired or forced to take up other lines of work.

    When more bad doctors lose their licenses to practice medicine,
the good doctors will not have to pay as much for their malpractice insurance.
There will be fewer mistakes and fewer lawsuits.

    An alternative to removing error-prone doctors from the profession
would be placing them in administrative positions,
where their medical knowledge would be useful
but where there would be no chance of them repeating their mistakes.

7. PERMIT THE CHOICE OF VOLUNTARY DEATH.

    Voluntary death is not the same as irrational suicide.
A voluntary death is wisely chosen by the patient himself or herself
after careful consultation with all other who might be concerned.
In contrast to irrational suicide, voluntary death is:
(1) helpful rather than harmful,
(2) rational rather than irrational,
(3) well-planned rather than capricious, &
(4) admirable rather than regrettable.

    Every person who chooses a voluntary death
rather than continuing medical treatment
(which might be producing no further meaningful life),
will help to reduce health-care costs
perhaps be an amount that can be measured in thousands of dollars per day.

    How we can separate irrational suicide from voluntary death
is explained more fully in another cyber-sermon:
Four Differences between Irrational Suicide and Voluntary Death.

8. STANDARDIZE THE PRACTICE OF MERCIFUL DEATH.

    Merciful death is not the same as mercy killing.
A merciful death is chosen by duly-authorized proxies for the patient
who has lost the capacity to make meaningful medical decisions.
When most of the 26 recommended safeguards for life-ending decisions
have been carefully fulfilled,
then even distant observers can be assured that this death was wisely chosen.

    Each patient who is granted a merciful death
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 worry is explicitly addressed by using the eight safeguards listed here:
Protecting Patients from Health-Care Administrators Who Must Save Money.

    The application of careful, public safeguards is the operational way of separating
the crime of mercy killing from the wise choice of a merciful death.

    The following cyber-sermon makes the distinctions in exquisite detail:
Four Differences between Mercy-Killing and Merciful Death.

9. REDUCE FUTILE TERMINAL CARE.

    All of us will have to die.
And if we make no statements to the contrary,
we will be subjected to standard terminal care,
which often means keep the body alive as long as technically possible.
We can reduce health-care costs by making certain
that our own terminal care will be reasonable.
We can define and describe exactly 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 the wisdom of
continuing to treat patients who are close to death
but who are being sustained on life-supports
because no one knows how to say "enough".

    These Medical Futility Monitors would examine the patients and their 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 plug' themselves.

    The role of the Medical Futility Monitor is explored more fully here:
Medical Futility Monitor:
Avoiding the Million Dollar Death.

10. CONCLUSION: THE CASH-FLOW PATTERN WILL CHANGE.

    When any of the proposed methods of reducing health-care costs are put into place,
someone who is now earning some of those 'health-care' dollars will suffer.
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 will be put into health-care where it was not spent before.
For example, there will be more health-care workers giving medical care to the poor.

    The people who will lose income will protest the loudest.
But the common good should prevail over any special interests.
The total amount of money spent on health-care
might actually increase with health-care reform.
But all of the money will be spent more wisely,
where it can do more observable good
—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 actual patients
can be re-directed where it will do more good.
Let's look for better ways to spend our health-care dollars.

Created July 31, 2009; Revised 8-1-2009; 9-2-2009

AUTHOR:

    James Park is an existential philosopher and medical ethicist.
He has written extensively about end-of-life issues.
Some related cyber-sermons are linked below.
Everything else you might like to know about him
will be discovered on his website, called
An Existential Philosopher's Museum.

    Here are a few related cyber-sermons also by James Park:

Voluntary Rationing of Health-Care

Medical Futility Monitor:
Avoiding the Million Dollar Death

When Is A Person?
Pre-Persons & Former Persons .

Advance Directives for Medical Care:
24 Important Questions to Ask .

Fifteen Safeguards for Life-Ending Decisions .

Four Legal Means to Choose a Voluntary Death or a Merciful Death .

Pulling the Plug:
The Paradigm for Life-Ending Decisions .

Voluntary Death by Dehydration .
    Further Reading:

Books on Medical Futility

Best Books on Voluntary Death


Best Books on Preparing for Death


Books on Terminal Care

Books on Helping People to Die


Books on the Right-to-Die
Books Opposing the Right-to-Die


Go to the Right-to-Die Portal.


Return to the DEATH page.


Go to the Medical Ethics index page.

Go to other cyber-sermons by James Park,
organized into 9 subject-areas.

Return to the beginning of this website:
An Existential Philosopher's Museum .






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The contents of this page have not been reviewed or approved by the University of Minnesota.