Exploring Human Potential

What Uwe Reinhardt (or Angus Deaton) Would Say About HC Costs.

Posted on | March 19, 2018 | Comments Off on What Uwe Reinhardt (or Angus Deaton) Would Say About HC Costs.

Mike Magee

A March 13, 2018 article written by scholars from the London School of Economics and published in JAMA focused on an all too familiar subject – comparative health care costs in America. That article was accompanied by a number of editorial reaction pieces including the one written by Zeke Emanuel who generated the comparative pricing chart below.

In general, most all agree that the facts suggest that in four areas – drugs, high volume/high margin interventional procedures, radiologic imaging tests, and administrative costs – the U.S. is financially out of whack. Other commentators placed a spotlight on our encouragement of “monopolists” in pursuit of “innovation”, and our reckless spending priorities at the beginning and end of life.

In return we have the dubious distinction of generating 57% of new chemical entities, at least some of which add little extra and have been advanced through DTC ad-driven market expansion with the tacit support of remarkably gullible over-prescribing physicians. And of course those new “Right-to-Try” policy shifts advocated by Trump should just add to our “American exceptionalism” in health.

One editorial written by two JAMA editors was entitled “What Uwe Reinhardt Might Have Said.” The much revered Princeton health economist who recently died was known for not pulling punches. In one analysis of our private health insurers, he documented that 18 cents on every insurer’s dollar was spent on “operations” which included “marketing, determining eligibility, utilization controls (eg, prior authorization of particular procedures), claims processing, and negotiating fees with each and every physician, hospital, and other health care workers and facilities.” All of this, he charged, proceeds within a “shroud of secrecy.”

Were he to be alive, the JAMA editors predicted he might have commented on “the many self-interested parties, including professional societies, patient groups, hospitals, drug and device manufacturers, and insurance companies, that profit from high health care spending.” Noting that Reinhardt often would initiate a comment with the phrase, “You Americans”, the editors offered two probing questions he might have posed:

1. “How can the US health care system and health care spending be recalibrated to ensure basic care for all US residents, particularly the less fortunate?”

2. “How is it possible to overcome the shortchanging of many other important sectors of society, including education, infrastructure, and the environment, because of the high cost of health care?”

Such comments only gently scratch the surface of the Medical-Industrial Complex’s full culpability. Were Reinhardt still alive, he would have done well to illustrate his legitimate points with the case study first exposed by his Princeton colleague, Angus Deaton. The still raging opioid epidemic demonstrates how far astray a health care system can wander when based on profit and greed rather than on planning and prevention; and how the leaders of Medicine, including those who own JAMA, played a critical role in igniting this disaster which continues to divert precious resources as it claims more and more American lives.

To my knowledge, they have never acknowledged or apologized for their institutional role in legitimizing Purdue-Pharma funded specialty pain societies; provided an advertising vehicle for their product, Oxycontin; and willingly enabled Purdue Pharma’s soft target, data driven physician prescription profiling through sales of their physician masterfile database.


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