America’s Inefficient Health Care: One Possible Cure Could Be Rationing

Health costs in the United States have become an economic cancer that threatens the national economy. We have so sanctified the notion of health care that we fail to ask hard questions, and it’s costing us more than $1 billion a day. That is a nation-threatening mistake.

Just as man cannot live by bread alone, a nation can’t live by health care alone. The United States has multiple demands on its limited resources, yet health care is growing disproportionately to other important needs. Twelve cents out of every dollar spent in America is now spent on health care, up from six cents not many years ago--and growing at more than twice the rate of inflation. We are now spending about $450 billion a year for health care; more than $2,100 for each man, woman and child in America. Our industries are rusting, our trade deficit staggering, our infrastructure deteriorating, our schoolrooms overcrowded, yet we continue to pour uncontrolled amounts of money into health care.

A nation thrust into an international marketplace must start to see such social systems as health care as part of its international competitiveness. Health costs are as much a part of the overhead of our goods as are wages and raw materials. Thus skyrocketing health-care costs are one of the factors making U.S. goods uncompetitive on the international marketplace. American business paid more than $100 billion in health-insurance premiums last year, adding to the cost of U.S. products on the international marketplace. A nation moving its basic industries offshore and running up record trade deficits cannot blindly spend massive assets giving ex-smokers heart transplants. Like an industry suddenly faced with new competition, it must closely examine each and every part of its overhead.

In 1950, national spending on health care was 45.9% of what our society spent on education; this year it will be well over 100%. No sector of our national spending can grow at twice the rate of inflation. Health care is important, but it isn’t our only national priority.

What are we getting for our money? I don’t want to minimize the miracles of the American health-care system. It is full of dedicated, highly professional doctors and the best facilities in the world. But again, like the company with the best and most expensive health facilities in its industry, it is of little value to brag to the bankruptcy court that your health benefits are the finest. Similarly, the United States must be concerned that its health-care costs are far higher than most other nations, although in many cases America is not as healthy.

There is little correlation between what a nation spends on health care and how healthy it is. The United States has significantly higher rates of mortality and morbidity than many countries that spend far less; our health-care system is full of fancy hospitals and miraculous technologies but it is highly inefficient and fraught with inequities.

Medical history shows us that a nation’s health is more closely tied to its public-health efforts than to its doctors or hospitals. The great advances in health have been due to pasteurization, chlorination, sanitation and refrigeration. Similarly today, a nation’s health has more to do with its smoking habits, its diet, its pattern of alcohol consumption, its life style than with the number of doctors and hospitals. Japan has the fewest doctors and hospitals per capita in the industrialized world; Japan spends less than half what we do on health care, yet is healthier.

America must ask itself some hard questions.:

Do we really want to spend more of our national assets on health care? Economists say capital is the “stored flexibility” that a society has to build a better life for its children. We can’t keep pouring so much of our national wealth into health care.

Should we not concentrate on increasing the efficiency of our existing health care system? It is estimated that we have 200,000 empty hospital beds in America, that defensive medicine costs tens of billions of dollars and that the whole incentive system in health care leads to the highest costs. We can get far more health care for our $450 billion. We should concentrate on efficiency, not expansion.

Should we not better prioritize the dollars we do spend? We have money to treat lung cancer but not to help people stop smoking. We announce that Medicare will pay for heart transplants, yet 20% of the children in America don’t have polio shots and a third of the children have never seen a dentist. We never seem to ask ourselves how to buy the most health with limited dollars.

We must recognize that the miracles of medical science are exploding faster than the public’s ability to pay for them. Americans have entered into a Faustian bargain with high-technology medicine--wise enough to invent marvelous machines, yet not wise enough to use them thoughtfully. America is today supporting 10,000 comatose people who have no reasonable hope of recovery on life-support systems, at the same time one in eight Americans have serious problems finding access to care.

Thousands of times a day some terminally ill person is brought back to life so that he or she can die tomorrow at great cost to the taxpayer. Technological marvels have mass-media appeal but we too often forget that at least 1 million American families last year had at least one member who was refused basic medical care. America must start to discuss openly the concept of “cost-effective” medicine. We cannot do everything technically possible for everyone in need. We must be wise enough to use the machines we were intelligent enough to invent.

Should we not rethink some of the shibboleths we apply to health care? Increasingly we hear that health care should be a “right” for all Americans. It’s great political rhetoric but doesn’t advance the complex public-policy dilemma facing us. We say grandly that money can’t be a factor if a life is at stake. That is not a bad general rule, but it can’t be an inviolate principal. We don’t follow that standard in any other area of public policy. We design highways for safety but not for absolute safety. If we used the “life at stake” standard we would perform no human functions. We must be respectful of life but in a world of limited resources we must ask a more cosmic question: How do we spend limited dollars to give the most health to the most people?

Similarly, we must not be paralyzed if someone accuses us of setting up a “two-level health care system.” Public policy has a two-level system for every other public function. We provide people public housing but do not buy them a house. We would do better to recognize that any system that denies some health care to 37 million people is already a two-level system, and concentrate on providing basic health care to the maximum number of people. We too often do harm by unrealistic idealism.

Lastly, I believe America must openly discuss the rationing of medicine. The forces leading to this conclusion seem inescapable: the aging of America promises staggering health-care costs; the marvels of technology promise a dramatic increase in technological options available to the medical community; and yet the percentage of working Americans is shrinking. Infinite medical needs have run into finite resources; at some point we will have to make rational allocation decisions.

I think health-care rationing can be characterized with the same words that Mark Twain used to characterize Wagner’s music: “It’s not as bad as it sounds.” If we ask hard questions and approach the subject with a good heart and common sense, I believe we can give better medical care to more people for the billions we now spend.