US Healthcare Costs Explained

Here’s another facet to the phenomenon laid out in the previous post.

Coming into work today, I was struck by the latest radio advertising from CPMC (a San Francisco hospital) touting “Robotic-Assisted Cardiovascular surgery”.  Being the cynic that I am, I was skeptical that this new procedure was clearly better than previous surgeries and my brief reading of the literature confirmed my suspicions.  But this highlights why our systems costs so much more than any other country, without improving outcomes.

1)  Americans love technology.  CPMC is not stupid.  They feature “Robotic-Assisted Cardiovascular Surgery” because that’s what people think the latest and greatest medical breakthrough should sound like.  CPMC is merely giving what the people want:  High-tech, unclear benefit healthcare.

2)  The American System doesn’t care about costs.  Medicare is expressly forbidden to consider costs in coverage decisions.  As you may guess, Robotic assisted surgery uses more high-tech equipment and thus the justifiable costs are higher.  So, the hospital buys expensive equipment (making the medical manufacturer happy), then tries to use is aggressively to recoup costs.  See this post about the financial aspects of robotic surgery:  https://geripal.org/2012/02/study-robotic-surgery-financials.html

Multiply this scenario by hundreds of hospitals around the country, by hundreds more types of technology and you get a sense of why the US spends over 2x as much on healthcare as the UK without clear improvement in health outcomes.  We as a country repeatedly choose to pay more for the same health outcomes.  It’s as if we decide to buy a chair, find the exact same one at 2 stores and choose the one at the more expensive store because the store is newer and has fancier elevators.

To be fair, we may find years later than robotic technology does lead to clear benefits.  But we don’t know that now and there any tons of examples of new technology that sounded great that hurt, rather than helped in the long run (e.g. all metal prosthetic joints).  CPMC is operating as a rational business entity, like most hospitals these days.  The surgeons involved probably have seen many positive outcomes with this procedure and probably fervently believe that what they are doing is saving lives.  However, the US system lacks a grown-up who is making the tough decisions about where limited resources need to be spent, and that leads to a free-for-all where everyone is spending money we as a society don’t have for unclear benefits.

by: Sei Lee