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It’s Time for the Political Left to Step Forward and Start Acting, Not Just Reacting — Part III.a

In part III.a I begin looking at healthcare costs. Meeting the basic healthcare needs of all citizens, requires gaining a full understanding of the issues.

I was born into a society where the healthcare provider was personified by the friendly and benevolent family physician. Those were the days when the doctor still made house calls and would accept payment when you got paid, payment over time or accept payment in trade. It was a very personal relationship between patient and physician. As such, physicians didn’t view patients as just demographic numbers and a means to achieving substantial personal wealth. The old time physician saw patients as people, neighbors and respected members of the community. However, those days are long gone and we are faced with the new realities of industrialized medicine. What is the impact on the U.S. population of this industrialized healthcare system?

Before surging forward; let’s get some general facts on the table.

  • U.S. GDP $15.06 trillion (2011 est.)
  • In 1980 the percentage of healthcare costs of GDP was 9.0 percent and by 2010 had risen to 17.6 percent = $2.64 trillion

Taken directly from Wikipedia titled: Healthcare in the United States:

  • “The U.S. Census Bureau reported that 49.9 million residents, 16.3 percent of the population, were uninsured in 2010 (up from 49.0 million residents, 16.1 percent of the population, in 2009). According to the World Health Organization (WHO), the United States spent more on health care per capita ($7,146), and more on health care as percentage of its GDP (15.2 percent), than any other nation in 2008. The United States had the fourth highest level of government health care spending per capita ($3,426), behind three countries with higher levels of GDP per capita: Monaco, Luxembourg, and Norway. A 2001 study in five states found that medical debt contributed to 46.2 percent of all personal bankruptcies and in 2007, 62.1 percent of filers for bankruptcies claimed high medical expenses. Since then, health costs and the numbers of uninsured and underinsured have increased.”[5]  CNN. http:/money.cnn.com/2009/03/05/news/economy/under-insured/.
  • “Life expectancy at birth in the USA, 78.49, is 50th in the world, below most developed nations and some developing nations. Monaco is first with 89.68. Angola is last with 31.88. US statistics are below the average life expectancy for the European Union. The World Health Organization (WHO), in 2000, ranked the U.S. health care system as the highest in cost, first in responsiveness, 37th in overall performance, and 72nd by overall level of health (among 191 member nations included in the study). The Commonwealth Fund ranked the United States last in the quality of health care among similar countries, and notes U.S. care costs the most.”[13] Davis, Karen, Schoen, Cathy, and Stremikis, Kristof (June 2010). Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally, 2010 Update”. The Commonwealth Fund. Retrieved June 23, 2010.
  • “A 2004 Institute of Medicine (IOM) report said: "The United States is among the few industrialized nations in the world that does not guarantee access to health care for its population. A 2004 OECD report said: "With the exception of Mexico, Turkey, and the United States, all OECD countries had achieved universal or near-universal (at least 98.4% insured) coverage of their populations by 1990.  The 2004 IOM report observed "lack of health insurance causes roughly 18,000 unnecessary deaths every year in the United States. While a 2009 Harvard study estimated that 44,800 excess deaths occurred annually due to lack of health insurance.”[16]  Davis, Karen, Schoen, Cathy, and Stremikis, Kristof (June 2010). Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally, 2010 Update”. The Commonwealth Fund. Retrieved June 23, 2010.

The facts attest to a crisis to the nation that is currently and will continue to have significant impact on our future wellbeing. For a nation that has the second largest GDP, the EU having the largest, in the world and the third largest population, I don’t see any evidence that the current healthcare system is meeting the universal needs of our society. If anything, the data indicates that we are heading in the wrong direction when compared to the rest of the global community.

There are many variables impacting the cost, quality and delivery of healthcare. In this posting I am going to address just one of the variables. We will start at the beginning, which are the high and rising costs associated with healthcare providers, specifically physicians.

Now, don’t get me wrong, physicians or healthcare providers are not the sole driving force to the high cost of healthcare, but, we need to be looking at what is and has been double digit healthcare costs making it unaffordable for a large segment of society.

Physicians and other healthcare providers make a very comfortable living. Physicians and healthcare providers’ high earnings are predicated on individuals having high skill demand with a low number of individuals possessing such skills. Physicians, nurses and other healthcare providers fall squarely into this category. It would not be rational to reduce the required skills to provide healthcare, but it probably does make sense to increase the numbers of those who possess such skills.

Currently the U.S. has 24 physicians per 10,000 of population, while Cuba leads the world with 67 per 100,000. As such, physicians as a single profession, represent the single largest group of individuals in the top 1 percent of earned income. The threshold for entry into this income bracket is approximately $387,000 per annum. The nation’s 137 medical schools graduate approximately 15,500 students each year and it is estimated that the nation in the future 25 years will need at least 7,000 to 10,000 more per annum to keep up and maintain a balance with the retiring boomer physicians. However there are some very real obstacles to achieving such numbers.

Included in the obstacles to increasing the number of trained physicians are as follows:

  1. The unwillingness of the established medical community to open its ranks to training more physicians.
  2. The high personal cost to the physician to receive his/her education and training.
  3. The limited number of medical schools and teaching hospitals.
  4. An over emphasis on specialist training.

The established medical services community, a self regulated industry, are very cognizant of the impact of supply and demand on providing medical services. If the supply of physicians becomes too great, then it will exert downward pressure on the cost of healthcare and create a much more competitive marketplace to purchase healthcare services. Even though this would be good for the consumer and the nation; it doesn’t translate well into benefit to the medical community and the individual physician, affecting both social status and income.

I am not accusing the physicians or healthcare providers as being only money motivated or any greedier than the rest of society, but without a high probability of a large return on investment of both time and money; it may be more difficult to attract the best and brightest to enter the profession. This argument doesn’t seem to have a high degree of validity.

In the academic year of 2011 – 2012, there were 43,919 applicants to U.S. medical schools with an acceptance of 19,230 accepted. There appears to be a high supply of applicants to fill additional open spots. In fact, since the academic year of 2000 – 2001, enrollment has increased a full 30 percent and we are still not satisfying the need for more physicians.  

Currently physicians spend, on average, eleven years after high school in post secondary education and training. They finish their education with school debt averaging approximately $175,000 compared to a PhD with a similar time investment; begin their career with approximately $70,000 in education debt. The availability of funds is critical to the number of people who will enter the medical profession. Few students enter into medical school on either full scholarship or their education completely paid for. Often, medical school students have pursued their education by taking advantage of programs offered by the federal government. The government will pay for medical training for physicians in the Army, Navy, Air Force and Public Health Service. The trade off is a commitment to between six to 10 years of mandatory service. However, the vast majority of medical students go to school on student loans. This can inhibit qualified students from taking on the years of education and training. The bottom line is that newly emerging physicians must “go for the gold” and start earning as much as possible as quickly as possible.

The 137 medical schools are limited to the number of students they can accept. Medical schools are expensive propositions and the start up costs is prohibitive. Associated with the medical schools are teaching hospitals, which are also expensive. There is a plan to increase medical schools by another 25 institutions. However, to meet the demands over the next 25 years the number of medical schools should increase by another 25 with a total of 50 new schools. The real question is where is the money to come from to open all these schools and are there enough experienced teaching physicians to staff them.

Currently, the funding for residence programs is uncertain due to billing issues with Medicare and Medicaid programs, limiting the number of residents per Medicare and Medicaid patient. Funding for training will continue to be an issue as well as the demanding schedules of residents.

The U.S. medical system comes under severe criticism with our emphasis on specialized medicine. Whereas, we, as a nation are always short of general practitioners, especially in the inner cities and rural areas; we are focused on the production and training of specialists. Specialist physicians earn a great deal more money than general practitioners and attract beginning MDs. Since, medical education and training is so expensive it is no wonder that new M.D.s immediately go into high paying specialties. However, if we are to lower the costs of medical care and meet the medical needs of the two to four decades, we must find a way to entice the new MD into general practice medicine.

In the next post I will address an action plan to address the problem with too few physicians for a nation of 311 million people. Included will be a plan to move from our current private system to a mixed private/public partnership that will increase affordable healthcare availability to all.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Chris June 28, 2012 at 01:47 PM
@J.B. There has to be some upside to making positive choices (other than an inner euphoria), and a severe downside to making negative health choices, which would include NOT getting a yearly physical, smoking, obesity, substance abuse, etc. If I personally make poor decisions regarding my health (perhaps something as benign as not warming up properly before I workout), I have a negative impact (other than the embarrassment of doing something stupid) on my life (added cost). But his goes to all levels. I have something to lose with any negative decision I make...where we as a society have determined that no matter how many poor decisions one makes, there is a limited downside to that negative behavior. So, once a person has dug themselves a hole, we have removed any incentive for them to stop digging.
Jay Sykes June 28, 2012 at 01:58 PM
Please read this 2009 WSJ detailing the experience of Safeway Grocery with health discounts,health screenings and the overall healthcare market. Be certain to make note that the federal government severely restricts the availability and usage of health discounts. This governmental limitation effectively raises rates,by about 40%, for those of us that act responsibly http://online.wsj.com/article/SB124476804026308603.html
Randy1949 June 28, 2012 at 02:14 PM
Not running to the doctor for every little thing usually saves money ninety-nine times out of a hundred. But you do get that rare occurrence when a simple antibiotic could have prevented a week in the hospital. I'm completely self-pay, so I usually adopt a wait and see philosophy, even with what once might have been a broken bone. But once, I was bitten severely by a cat, and I did the smart thing and paid the Urgent Care visit and the cost of the expensive antibiotic prescription. It's better than risking the loss of a hand. People without healthcare access who allow small problems to develop into large problems will actually cost us more in the long run.
Daniel S. June 28, 2012 at 05:55 PM
"However, the bulk of medical costs expended in our system is during the last six months to two years of life" Home Hospice and the acceptance of the reality of death can help to considerably lower this. As for Bankruptcies being due to medical bills, it's highly debatable. You could say numbers don't lie, but people do. We don't know why a bankruptcy was really filed, except that they were over their heads per their filed documents.
Greg June 30, 2012 at 02:42 AM
WEA Trust is a universal health care system? HMMM...

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