By Jacob Goldstein
The U.S. spent $2.472 trillion on health care last year, according to a paper out today in the journal Health Affairs. That’s $282 million an hour.
Health spending as a percent of GDP — a key metric that shows how much of all U.S. spending goes to health care — rose from 16.2% in 2008 to 17.3% in 2009, far higher than any other industrialized country. That’s the largest one-year increase since 1960, when the feds started closely tracking national health expenditures.
The figure went up so much because health spending continued to rise, even as the overall economy shrank. The aging population accounted for a small part of this rise, but two other factors were more important: rising prices and increasing use. Health-care prices rose by 3.2% in 2009, according to the Health Affairs paper, significantly faster than prices rose for the overall economy. Utilization, which includes both volume and intensity of health-care services, rose by 1.5%.
The share of health-care spending paid for by the government (through programs such as Medicare and Medicaid) is also rising, and is projected to cross the 50% threshold soon. A story in this morning’s WSJ looks at what the government’s rising share of health costs means for the health-care debate in Washington.
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Much like President Obama discussed in his 2010 State of the Union about politics, Medicine is messy. Does it have to be? Actually, yes to some extent. We are not starting from scratch. Also, we want to encourage everyone in the system to think freely and try and solve problems. When you let the mind free like that, it does create some messiness, but it fixes a lot of ailments. We also do an absolutely incredible job in the most acute of situations - people are living today from treatments that couldnt have happened just a decade ago and arent happening in most other countries at the scale we make this available to the general public. That being said, US Healthcare is far from perfect and there things we can do to bring costs down.
We do spend an inordinate amount of money on care which can be attributed to both the actual healthcare system, but also societal issues. In general, the US does not eat very healthy, does not exercise well, and we eat a lot of red meat. You can agree or disagree with whether this is a good lifestyle or not, or whether we should try to change, but this does drive our costs up. But the goal of this column is to review the system itself.
In my eyes, as the Institute of Medicine, in its famous 1999 book "To Err is Human" stated that the caregivers in the systems are inherently good and skilled. However, they have been put into a position to fail by the actual healthcare system itself. This leads to errors, resulting in injuries and death. This also leads to vast waste in the system, causing US hospitals 10's of $billions annually.
There are many factors in the system that cause both patient safety and efficiency (I'll call that "Quality Care") issues. But as I look at the problem, I see it is the routine, every day that is the problem, not large scale situations. There are three main issues at play. First, the drivers in medicine tilt the delivery of care to happen only after problems have become extremely acute. Doctors are paid, and paid extremely well, when they perform surgeries, give expensive treatments. This causes massive amounts of money to be spent in this area - this is actually partly very good: how else could we be delivering the cancer and other treatments that we can today? But the expense poured into acute problem is to the detriment of the routine. We do not solve problems before they become acute. Even the simple act of setting up an annual doctor's exam is a huge problem (when I go to the dentist, the next appointment is setup before I get out of the chair; at my PCP, as I walk out the door, the scheduler tells me his/her book doesnt go out that far and to call back in a few months!).
Second, we have a system that has pockets of information here, but incredibly inconsistent transfers of information there. Even within a particular hospital, this can become an issue. I have been involved in Healthcare IT for quite sometime. There is something wrong when the OR's in a hospital use on system for billing, and Cardiology uses a completely different system for billing (this is just one example; dont get me started). Transferring information BETWEEN hospitals? Forget it! In the age of being able to remotely start my car from an app on my iPhone, its a horror story for me to hear people bringing film xrays from one hospital to another.
Lastly, the logistics of healthcare are well behind the biologics. We have done an incredible job in the US in finding some treatment for almost every ailment imaginable. There is trillions of dollars spent annually on trying to research solutions to every thing that could affect us. However, the path that the delivery of treatment, including the patient, has to take is like we are in the 1920's. I like to say that its like driving Ferrari's on dirt roads. This last point is why founded Mobile Aspects (www.mobileaspects.com), where we have assembled top minds and hospitals to collaborate from around the globe to think about and solve these delivery problems.
There is no simple answer to "solving healthcare." A lot of it is actually politics, with all the entrenched drivers and companies and people and money, and so it can be quite messy. We cant start from scratch. However, there are ways to attack the problems in healthcare and make a significant impact immediately.
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