As I go to work today, I will see a number of patients who present to my emergency department with a variety of medical conditions and questions. And even as a physician, I myself am a consumer of healthcare – though not usually in the ED. According to the CDC, approximately 81% of adults had a visit with a doctor or other health professional in 2021. Healthcare is one industry that is used by and affects nearly everybody. As a result, healthcare is on the forefront of our national consciousness and conversation. This is largely due to the fact that a service that we all need has become remarkably expensive.
The cost of healthcare has risen dramatically over the past 50 years. According to CMS data, health expenditures per capita have risen from <$1000 prior to the 1980s to over $12,000 in 2021. The $4.3 trillion that we spend in the United States accounts for 18% of our national GDP. By comparison, the United States spends approximately 3% of GDP on defense. Few would argue that the notion that healthcare is too costly, and the price we pay is having devastating financial consequences for everyday Americans.
In this book, Dr. Marty Makary discusses the financial side of healthcare. Dr. Makary is a Professor at Johns Hopkins School of Medicine and practices clinically as a pancreatic surgeon. He has served in leadership positions at Johns Hopkins, the WHO, and African Mission Healthcare. Dr. Makary's research interests include health policy and health care costs.
The book is divided into three parts. The first part focuses on hospitals and how our medical institutions inflate the cost of care, beginning with the lack of price transparency. The opacity of cost to the various insurance companies or patients gives hospitals the ability to inflate costs between 2x and 20x the cost that Medicare pays for services and then provide variable discounts based on payer leverage. Some hospitals add to this predatory pricing by pursuing legal action against patients (particularly low to moderate income patients) who are unable to pay their hospital bills, even when non-profit hospitals receive IRS tax exemptions for providing "Charity care." All of these practices inflate the cost of care, hurt patients, and increase the cost of other living expenses by damaging patient's credit scores.
Part two focuses on physicians. Medicine is part science and part art. While there is an individual component and practice preference that a physician applies to patient care, there are a myriad of ways that physicians practice can be standardized. This gets at the idea of appropriateness of care. Is this medicine or procedure appropriate or is it putting the patient at unnecessary risk or increasing unnecessary costs? Should a skin cancer surgery be performed in 2 stages or 3? Does the Friday afternoon delivery need to be performed by C-section? Does this patient with moderate pain really need opiates? Should a patient get back surgery before physical therapy? All of these are modifiable practice patterns that are evidence based and through standardization can have an impact on the cost of care.
Part three discusses the various peripheral industries that comprise the healthcare delivery supply chain. Insurance brokers help individuals or employers find health insurance plans. Pharmacy Benefit Managers (PBMs) provide a central place for employers to manage and purchase the thousands of different medications that are available. Group Purchasing Organizations (GPOs) provide the same service for hospitals who want to simplify and standardize purchasing everything from paper towels to medical supplies. And as burnout has affected frontline providers, a wellness industry has grown up to help employees live a healthier life. While each of these industries provide helpful and needed services to support the healthcare delivery system, each of these industries have also created a vast web of middlemen and obscure markups with perverse conflicts of interest and financial incentives that inflate the cost of care.
Personally, I found this book fascinating and helpful by exposing many of the reasons for escalating healthcare costs. Much of the national conversation about healthcare centers around delivery models. Do we want a fee-for-service model or value-based payment model? Do we want a single payer or a marketplace with a number of payers? While we all can probably agree that healthcare is both too expensive and the world's best care is here in the United States, when it comes to models of delivering care, there is no universal consensus. And practically, a major overhaul of the healthcare system is unlikely given the political realities of making such a change happen. But this book illustrates that there are a lot of changes that are feasible to enact that can have a dramatic effect on the cost of healthcare in America.
So, what can we do about healthcare costs? Here are a few suggestions based on the book.
1. Educate Yourself. Whether you are a patient or a provider, we all stand to benefit from a greater understanding about the business side of medicine. As this book illustrates, the finances of healthcare are shrouded by a web of markups and discounts, middlemen, and minimal transparency. Knowing the scope of the problem is the first step toward searching for a solution.
2. Shop around. Much of the healthcare that Americans receive is planned care - that is care that does not need to be done today. It can be planned and scheduled. As a result, consumers can shop for the best intersection of cost and quality. As providers, we can help our patients make cost effective decisions. One resource that I have used with some of my patients is GoodRx. This internet-based service allows me to look up a medication that I am prescribing for patients and recommend local pharmacies with the cheapest prices. It's amazing how one pharmacy may charge $15 while another charges $5.
3. Practice wisely. Limiting healthcare expenses is not just the responsibility of policy makers, insurance companies and hospital administration. As healthcare providers, we also share responsibility for making wise decisions about how we practice. This has been one of the most challenging parts of my practice. As an emergency physician, I need to cast a wide enough net to be able to pick up surprise diagnoses in undifferentiated patients while trying to limit my utilization of unnecessary tests. Fortunately, there are many ways to reduce unnecessary testing by following evidence-based guidelines. The American Board of Internal Medicine (ABIM) launched the “Choosing Wisely” campaign and the American College of Emergency Physicians (ACEP) has followed with similar emergency medicine specific recommendations.
4. Start the conversation. We may not be in a position where we can enact profound changes to healthcare billing or purchasing. But as we rub shoulders with those in hospital leadership and policy makers, begin asking questions. Change will not happen if we don’t start the conversation.
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