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.
While extending health-care to all American citizens
(and others legally in the United States),
we should control the total cost of health-care.

    Our money for health-care flows thru several channels,
including directly from 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 for health-care will probably continue.
And controlling the costs at the point of use
might be an effective way to extend health-care to 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 DOCTORS' THINKING.

4.  REDUCE THE AMOUNT TAKEN BY INSURANCE COMPANIES.

5.  REDUCE DEFENSIVE MEDICINE.

6.  REDUCE MALPRACTICE INSURANCE.

7.  SHORTEN THE PROCESS OF DYING.

8.  STANDARDIZE LIFE-ENDING DECISIONS.

9.  REDUCE FUTILE TERMINAL CARE.

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



NINE WAYS TO REDUCE HEALTH-CARE COSTS

by 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 patients.
And we can provide health-care for everyone.
What specific changes in our system will reduce the total cost?

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

    Health-care delivered in the emergency rooms of local hospitals
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 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 real emergencies always get 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 care.
Everyday, predictable health problems can easily be handled by other doctors.

    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 have no 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 by tax-payers anyway,
it would be more cost-effective for free clinics to be established
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 room.

    How should free medical clinics for the poor be financed?
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 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, since patients will not 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 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 emergency room.
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.



2. RE-USE SURGICAL INSTRUMENTS.

    In the USA, most surgical instruments 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 surgery:
Clean and sterilize the instruments and use them again.

    Some surgical instruments cost hundreds or 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 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
should 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 re-used several times
before they are worn out and no longer safe and effective.

    One economic impact on this change:
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 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 departments.
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 use?



3. REMOVE THE PROFIT-MOTIVE FROM DOCTORS' THINKING.

    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 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 somewhere in the background
of each and every medical decision.

    When we go to the grocery store, we usually look at the prices.
If we want to save money, we 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,
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 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 their services
are able to recommend whatever is best for the patient
without any concern for the income of the doctor or the hospital.
Some of the best health-care systems in the United States
employ all of their doctors and other staff members on regular salaries.
And cost-comparison shows that they provide
good medical service at lower over-all costs.

    The profit-motive cannot be 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 recommended 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 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 doctors
puts the doctors and patients on the same side
when they are making 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 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 INSURANCE COMPANIES.

    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 provided.

    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 insurance companies,
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.
How we pay for health-care in the United States is an historical accident.
Why should most of our health-care dollars
be channeled thru private, for-profit insurance companies?
Canada and the United Kingdom still have some private insurance.
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,
we should put 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 taxes go to insurance companies?

    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 services.
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 companies.
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 companies
will find employment in providing health-care services.
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 medical profession
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 did not get the medical outcomes they want,
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 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 doctor?
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 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 to the patients.

    Doctors themselves can recommend cuts in defensive medicine.
Doctors already know what expenses are largely to protect doctors.
Wherever defensive medicine can be reduced,
more health-care dollars will directly benefit patients.



6. REDUCE MALPRACTICE INSURANCE.

    Most doctors in the United States have 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 paid to a patient 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 compensation?
What sense does it make to pay hundreds of millions of dollars
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 dollars
—the people who are receiving health-care services.

    If we follow the money, we see who ultimately pays: the patients.
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.
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 should help to remove bad doctors from the system.
Which doctors should no longer be practicing medicine?
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 practice medicine,
or are moved into administrative positions,
the good doctors will pay less for their malpractice insurance.
There will be fewer medical mistakes and fewer lawsuits.

    Error-prone doctors could become administrators,
where there would be no chance of them repeating their mistakes.

7. SHORTEN THE PROCESS OF DYING.

    Standard medical practice sometimes provides useless terminal care.
But if we think more clearly about the goals of medicine at the end of life,
we will be able to shorten rather than prolong the process of dying.  

    When it become clear that this patient will never recover,
the doctor can increase pain-medication
while acknowledging that this will probably shorten the process of dying.
The doctor can even order terminal coma,
which will keep the patient unconscious until death occurs.
Terminal coma will probably include giving up food and water,
since an unconscious patient cannot eat or drink normally.
Curative treatments can be ended and life-support systems disconnected. 
These life-support systems might include artificial nutrition and hydration.

    Every patient who chooses to shorten the process of dying
rather than continuing questionable medical treatment
will help to reduce health-care costs
—perhaps by amounts measured in thousands of dollars per day.

    Another on-line essay explores these options:
Four Medical Methods of Managing Dying.

8. STANDARDIZE LIFE-ENDING DECISIONS.

    When we come to the end of our lives,
almost all of us will make important medical decisions.
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 discussed here:
Protecting Patients from Health-Care Administrators Who Must Save Money.

9. REDUCE FUTILE TERMINAL CARE.

    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 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
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 review questionable cases,
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 sometimes they would have the legal power to 'pull the plug'.

    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 method of reducing health-care costs is put into place,
someone who is now earning some of those 'health-care' dollars will suffer.
He or she will have reduced income or lose 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 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 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 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; 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; 1-14-2018; 2-6-2019; 2-29-2020; 

AUTHOR:

    James Park has written extensively about end-of-life issues.
Some related essays are linked below.
Much more will be discovered on his personal website,
which is the last link below.

    A small, free, on-line book has been created,
in which the essay above is Chapter 2,
called Controlling Health-Care Costs.


Here are a few related essays:
There is no Free Health-Care:
Tax-Supported Medical Care

Voluntary Rationing of Health-Care

Medical Futility Monitor:
Avoiding the Million Dollar Death

Losing the Marks of Personhood:
Discussing Degrees of Mental Decline

Advance Directives for Medical Care:
24 Important Questions to Answer

Fifteen Safeguards for Life-Ending Decisions

Four Medical Methods of Managing Dying

The Good Death Hospice:
Creating the First Right-to-Die Hospice

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

Helping Patients to Die


Books Supporting 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 on-line essays by James Park,
organized into 10 subject-areas.

Go to the beginning of this website
James Leonard Park—Free Library