I’m sitting here in New Zealand feeling frustrated after reading Kinsey Gidick’s article True Tales about Healthcare Abroad. Nothing against Gidick, the article makes for an interesting read.

While the article does a great job of proving a point regarding the exorbitant cost of healthcare in the USA and the Medical Tourism alternatives available, Gidick, along with the vast majority of US media, polarizes the concept of socialized healthcare.

I’m referring to the section entitled “United Kingdom or Magic Kingdom”:

Dr. Evans disagrees. “I had a good friend of mine who lived on the west coast of England who was in his 80s and suffered from terrible chronic neuropathic pain,” he says. “After months of waiting, he was at last able to see a neurosurgeon who confirmed that he needed surgery to correct his problem. They put him down on the books for surgery 11 months out. Granted the surgery and all his care was free, but had he been in this country I could have picked up the phone and had him in a surgical suite in a week.”

Why is it that, regardless of whether they are ‘for’ or ‘against’ socialized healthcare, the US media insist on packaging a nations healthcare up in a nice tidy box that either has ‘socialized’ or ‘not socialized’ (or more correctly ‘American system’ or ‘Canadian system’) written on the front. The reality is that it is not this black and white.

Having lived and worked in the UK for a period of time, I’m in a fairly safe position to say that, much like New Zealand’s system, the chap Dr. Evans refers to had options, something that neither the US or the Canadian system would provide.

A quick Google of “private neurosurgeons UK” gives an abundance of competent surgeons. So had this patient been willing to pay he could have avoided the long wait he experienced.

or

Again through the powers of google it is pretty easy to confirm that there are elective insurance options available that would have covered this man for private surgery, again avoiding the wait lists.

or

He could have gone with the option he did…. Suffer the wait and receive free treatment.

Safe to say that even if Dr. Evan’s friend had chosen to pay, it would have been significantly cheaper than paying for the same care in the USA.

So why, when there are systems around that can offer so much choice, do the US media focus on perhaps the two least flexible systems around?

This recent article in the New York Times clearly highlights the disconnect between consumers and the US health system. These individual stories not only highlight the personal issues that these people face, but the economic concern that these people should be recognized as presenting to the US economy. These are stories about people in their economic prime who instead of being able live life and focus the contributions they can make to their families, communities and the wider economy through their work, worry more about the risks and complications of  living with or without Health Insurance, knowing that they are probably quite literally one medical incident away from potential financial disaster.

The New York Times introduces the story as follows and I quote.

“Much of the debate about health care reform focuses on people who don’t have insurance. But as Karen Barrow explores during the latest Patient Voices series, even people with insurance coverage are struggling with bills, confusing policies and red tape.

Six men and women share their experiences with health coverage and insurance issues. You’ll meet Tasha Huebner, 41, who found dealing with the insurance company worse than dealing with breast cancer. “With insurance, it was always a big surprise, what are they going to deny next?” she says.

Once she called her insurance company to find out why a $5,000 surgery bill had been denied. She was told it was because she had one too many nurses in the operating room during her surgery. “At that point I hung up on my insurance representative that I was talking to,” she says. “I didn’t even know what to do with that.”

Zoraida Reyes, 46, is a small business owner who was forced to cut health insurance, including her own. “I work six days a week, and I can’t afford insurance,” she says. “You can imagine the people who have a lot less than me, they’re probably worse off.”

And there’s Carl Arrington, 58, who lost his health insurance after his Internet company closed. Instead of paying for health insurance, he decided to invest in his health, changing his diet and exercising more. “If you’re in your 50s or 60s and you don’t have medical insurance and you don’t get it through your employer, it’s going to cost you two or three thousand dollars a month. With that kind of money I could see a doctor every week.”

Adrienne Schroeder, 31, has high-deductible health insurance through her husband’s job but is saddled with medical debt as a result of four pregnancies in six years, including two that ended in miscarriages. “Since we have insurance we should not be worried about having a baby or having a miscarriage and be stressed about how long it takes to pay it off,” she says. “Our daughter is near 18 months, and we’re nowhere near paying off these hospital bills.

The majority of the people in this story are representative of a Medical Traveler demographic that are coming to New Zealand in gradually increasing numbers for non-urgent or elective medical procedures as an alternative to the high cost of care in the US.

When considering travelling abroad for medical care a fundamental question is why is the destination I am travelling to able to provide healthcare at significantly less cost than America? The answer is two fold.

Firstly from a historical perspective most of the destinations offered in the past have been third world countries which have built hospitals not to service their own population , who in many cases can not afford them. but to cater for the local wealthy and overseas patients, yet leverage a local economy offering cheaper labour and materials.

However with the advent of first world countries like New Zealand, Belgium, Ireland and Germany offering their themselves as destinations one asks how can they provide such high quality care at significantly less cost than the US system? How can cardiac surgery in New Zealand cost 25% of the same surgery in the USA, even though both sets of surgeons are US trained?

One fundamental difference is the widespread practice of defensive medicine throughout the US system, illustrated in the recent article Costs of Defensive Medicine

A 2005 study of 824 doctors in Pennsylvania by Havard School of Public Health and Columbia Law School found 93% reported practicing defensive medicine

Driven by the financial need not to be wrong doctors in America it seems over treat and over diagnose. Operations it seems are performed that are both unnecessary and wasteful, let alone an unnecessary risk to the patient. Screeds of CTs and MRIs are done because the punishment of missing something is far greater than the satisfaction of having the confidence to say to the patient ”Even though we could do this test in my opinion you don’t need it”.

In other first world countries it is perceived that doing that unnecessary test is a risk to the patient. In America it is perceived that not doing the test is a significant risk to the doctor.

In Atul Gawande’s erudite commentary of the state of the US  healthCare system- The Cost Conundrum we hear that

Spending on doctors, hospitals, drugs and the like now consumes more than one of every six dollars we earn, The financial burden has damaged the global competitiveness of American businesses and banrupted millions of families, even those with insurance

Well to use a wellknown American saying ” Houston we have a problem….” and to an outside observer…it seems to be a big one.

The issue is that other first world healthcare sytems are not really cheap; its just that Americas healthcare system is really and truly massively expensive. The dramatically high prices American consumers are paying is for not higher quality procedures but for a wasteful system.

Other English speaking first world countries offer just as good quality healthcare as the USA; in some instances due to the co-ordination of aftercare, the access to the surgeon for the patient, they offer a better more personalized healthcare experience.

Its just at a cheaper price.

Related posts:

1. Boutique Medicine – American style or New Zealand?
2. The Great Unknown – Is leaving home for healthcare really that scary?

America spends more on health than any other developed country with it seems little to show for it in terms of superior health outcomes. When one tries to find out the actual reason for this high spend as surgeon and author Atul Gawande attempted to do in his essay in the NewYorker titled The Cost Conundrum many a blind alley confront you. However a logical place to start would be the costs of inputs into the medical system.

While items like wages and salaries are potentially easily found, once we enter the realm of the ‘hospital complex’ things gather increasing amounts of secrecy. I talked recently with a hospital CEO in Oregon about this and he freely admitted he had no idea as to the actual cost of a hip replacement in his hospital but with a quick telphone call he could tell me the price. One therefore has a twinge of sympathy for the unsuspecting patient who actually wants to know how much their surgery will cost

In the US the ‘starting price’ for surgery is the billed or advertised rates which on rare occasions are found in hospital web sites but are also found by covertly contacting the hospital directly.

After this things get tricky because it seems that the value system for surgery in the US is not the price of the operation per se but discount off the price. That is the focus is on the extent of the discount one can negotiate rather than what the starting price actually is. While this may sound bizarre there is plenty of evidence that suggests the large insurers in the US (the BUCHA group) obtain on average 50% discount on the billed or advertised rate.  Hospitals knowing that insures want a 50% discount off the ‘billed rate’ are therefore incentivized to make sure the billed rate is a large number so the price they actually end up with, they can live with.

On the flip slide and potentially more worrying is that if hospitals are negotiating with insurers on percentage discounts and not on actual price linked to the procedure’s base cost (which they don’t know) then potentially they are underselling their procedures by a significant amount. This means a focus on increasing volumes to obtain the same return. The inevitability of increasing hospital debt and bankruptcy then seems a factor of time.

In such a system the underinsured or uninsured patient or even small self insuring businesses do not stand a chance; they are rabbits in the headlights with no bargaining power in a pricing system not based on logic or accountancy; where the starting price bares no relationship to cost (because no ones seems to know the cost) and is purely a point to negotiate down from; if you have the power to negotiate. If you don’t have this power then Surgery USA is off limits.

In many other developed countries that have private fee for service surgery, the surgeon themselves can provide you with an accurate price guide that relates to the cost of the provision of that service. The costs are known and hence the prices are known.

Why does America have to be so different?