Our healthcare guilt trip
Aesculapius Is The Celebrated God of healing from Greek mythology. But few know what a tough time he had. As a mere mortal physician he was so successful in extending life--and even snatching a few back from the dead--that he incurred the wrath of the gods. Hades, facing depopulation, whined to the big guy, Zeus, who was also threatened by this doctor's tinkering with immortality.
So the beloved Aesculapius was downed by a thunderbolt and brought to the heavens as a lesser god--under strict Mount Olympus control. This is arguably one of the earliest recorded efforts at managed care.
Like Aesculapius, modern medicine is the victim of its own success. Cynical wags say that the rest of the world treats death as an inevitability, while Americans see it as merely an option. Cynical, perhaps, but they have a point. Americans seem willing to spend whatever it takes to cure disease. And with our prosperity, heavy investments in medical research, and public distaste for healthcare rationing, we have created both good and expensive healthcare. So good that we are the world's mecca for medicine. So expensive that it costs us almost as much as the entire $2 trillion federal budget of the United States.
National spending on healthcare is $1.5 trillion, or 15 percent of the gross domestic product. That 15 percent number has caused a lot of public hand-wringing, if not guilt, and we cringe at the thought that it could creep even higher. But in the ever raging debate about healthcare, we haven't agreed on the basic premise: How much can and should we be spending? Is 15 percent too much or too little?
Clueless. To put medical costs in perspective, consider the other big segment of the GDP with skyrocketing growth--personal computing. PCs eat into the consumer pocketbook to the tune of almost a trillion dollars a year, yet one rarely or ever hears a complaint about this expenditure. The difference here is that PC purchasers know pretty well what value they want and at what price. In the healthcare arena, by contrast, most people don't have a clue to what they're paying for and--unless they're uninsured and scared--don't much care.
One way of thinking about what 15 percent of the GDP really means is to compare today's healthcare with that purchased in the 1950s, when expenditures were only 5 percent of GDP. Back then, medicine was pretty simple and very cheap. But hospitals were shabby and barely equipped. There were few specialists and no intensive care units. Most of the expensive stuff we now take for granted--MRIs, CT scans, sonograms--were absent. There were virtually no good drugs to drop cholesterol, lower blood pressure, lift moods, or cure cancer. We simply didn't replace bad hips and knees, repair faulty hearts, or transplant organs. Genetic wonders were unknown. As for the elderly, osteoporosis and senility were seen as inevitable to aging. Infant mortality was four times as high, and life expectancy was shorter by nine years. From that vantage point, the jump from 5 percent to 15 percent was a pretty good investment. And it might explain why a recent Harris Poll found healthcare to be the public's top priority for future spending--far higher than leisure and entertainment (a good sign for productivity), clothes (a win for dress-down Friday), and even food (some hope for obesity).
With all this success, however, there is the nagging problem of the uninsured--almost 44 million Americans with no safety net. The problem of the uninsured is partly tied to the fact that the insured are insulated from what they are spending. Many mistakenly think new and more are always better, and they have no incentive to weigh price and value as they do when buying that PC. This insulation from real cost drives up prices for everyone and turns the uninsured into charity cases.
Fortunately, plans for money-wise patients are starting to emerge. A few companies offer employees tax-free, self-managed medical savings accounts along with less expensive catastrophic health coverage. Last week congressional leaders negotiating the new Medicare bill not only agreed to means-testing premiums but also were coming together on tax-free medical savings accounts controlled by retirees. If this idea catches on, we will see a lot more savvy consumers shopping around for their healthcare. That's important, if we want to ward off those thunderbolts from on high.
This story appears in the October 27, 2003 print edition of U.S. News & World Report.