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BY ROY NERSESIAN
COMMENTARY
Congress is wrestling with a compromise bill on healthcare, the makeup of which is impossible to predict. But there are certain aspects of where we're at in formulating a healthcare bill that are worthy of note.
Nothing has been done about tort reform
Although this case is not a healthcare case, it is indicative of medical malpractice suits. A woman was permanently injured in an automobile accident. Forgetting about the circumstances, a jury awarded her an astounding $860 million. What has gotten into our juries? Has personal injury claims become a bonanza lottery winning? We laugh when a woman scalds herself from buying coffee at MacDonald's and receives a low multi-million dollar settlement. We may not laugh so hard when we realize that she took the coffee to her car, set it on the dashboard, removed the cover and took off with the car causing the coffee to spill in her lap. Doesn't she bear any culpability in the accident? Maybe it isn't so funny after all. $860 million — why not make it $860 billion or trillion and bankrupt the world ten times over? There is no justification for this amount of award other than a jury that has lost its reality bearings. On appeal, the award was reduced to $86 million, but if everyone involved in an automobile accident was awarded this amount of money, the entire automobile industry would cease to exist.
Medical malpractice suits are another bonanza lottery for claimants. Lawyers are making a fortune with their one-third cut of the proceeds. Every baby that dies is guaranteed by a medical malpractice suit that holds the doctor at fault for not doing a C-section. Settlements are so frequent and so large that insurance premiums for obstetricians have been reported to be around $20,000 per month. Obviously obstetricians are going to charge fees sufficient to pay these insurance premiums; and if they can't, they have to abandon their medical practice, which has occurred. Moreover, to defend against potential malpractice suits, doctors will order what they consider unnecessary tests, but which are necessary from the point of view of defending themselves in court. Yet both houses of Congress, on several occasions, have refused to consider tort reform. Why? Could it be that most of them are lawyers? This is one reason why America's health costs are highest in the world.Nothing has been done about a la carte pricing
When we go to a restaurant, we commonly order a meal, which includes appetizer, main course, dessert and coffee or tea for a single price. Some restaurants only have a la carte menus where everything is priced separately. It doesn't take a genius to figure out that a la carte pricing is for the benefit of the restaurant owner, not the patron. Same with hospital care — everything is priced separately. A hospital visit generates a plethora of bills — one from the hospital for room and board, and a batch for each doctor and anesthesiologist and for drugs and IV bags and anything else that can be charged. I visited the emergency room with a broken wrist. The doctor on call pointed to the room that I should go to for treatment. Months later I received a $70 bill for "trauma treatment" from this doctor. In another hospital stay, my roommate was immobile. Obviously on Medicare, a parade of doctors (actually around six) would each day stand near me, not near him, and ask the patient how he felt. Sometimes they would be there twice a day; maybe even more because I wasn't counting. He would invariably say that he was fine. That was it. Then they would go to the desk and file their Medicare claim form. It was scandalous. The a la carte pricing system encourages such practices. There is no incentive to act prudently.
Nothing has been done to benchmark other healthcare systems
The hodgepodge system in the House version will call for the formation of one hundred new federal agencies — one hundred! Can any of us even dream up the functions for one hundred agencies -even naming them would be a real mental challenge. Each will be manned by bureaucrats who will spend most of their time protecting their turf, or should I say, their sinecures.
The cost of the U.S. healthcare system is totally out of control. The following chart shows per capita medical costs from data published in the "OECD Health Data 2009", which is based on 2007 data.
No surprise here, the United States is not only first in the world in per capita healthcare costs, but we beat second highest Switzerland by an impressive 65% and as an aside, we are tied with Switzerland for having the lowest number of per capita doctor visits per year. The next chart ranks each nation by the average life expectancy at birth.
Well, maybe we didn't expect to be first, but last? Portugal and South Korea beat us slightly in longevity, but at a small fraction of our cost. What are we getting for spending four times more on a per capita basis than South Korea?
Let's look at the top of the list. Japan and Switzerland are delivering a much better healthcare service than we are in terms of longevity. While Switzerland is significantly less expensive than our healthcare system, it is still the second most expensive system. The nation that appears to be getting the largest benefit per healthcare dollar is Japan, which by the way has the highest number of per capita doctor visits per year.
In listening to the dialogue of Senators and Congressmen, the only nations mentioned are Canada and the United Kingdom and never Japan and Switzerland. In a corporate setting when a company realizes that a process has to be drastically changed, the normal reaction is to first benchmark to measure relative performance and to identify the best performer and copy or adapt their process. We have just done a benchmarking exercise and Japan leads the list followed by Switzerland.
Why haven't we examined successful healthcare systems? Why not just copy the best, or the best from the best two, and give up on reinventing the healthcare wheel from scratch? What is so great about the Senate version of the bill that we are buying senatorial votes at $300 million per vote? Why are we excusing powerful union interests from paying a Cadillac tax on their healthcare system letting the cost fall on us?
I understand why there is such discontent in the nation. Maybe a third party can be organized to throw all the rascals out of office come next November and get things right for a change — that's my secret hope.
Roy Nersesian, a resident of Maplewood, teaches at the Leon Hess School of Business at Monmouth University in West Long Branch and also at the Center for Energy and Marine Transportation at Columbia University. He has authored several books, the last on Energy for the 21st Century published by M.E. Sharpe.
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