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logo    On the Costs of Medical Care


The April 21-27 issue of the DBJ contains a sequence of articles on the medical care crisis in America. So many words; not a single thought, even though the articles contain all the information one needs to identify both the source of the problem and its only possible solution. The articles make clear that medical insurance is so costly that many people cannot afford it and many who can choose instead to spend the money elsewhere, mostly because medical insurance costs have increased 73 percent in the last five years alone while inflation has increased a mere 11 percent. In addition, the articles catalog various proposals and techniques hospitals are using to cope with the squeeze they are being crushed by because of the care given to the vast number of uninsured or underinsured patients.

First of all, the various proposals and techniques hospitals are using to cope with the problem all seem to be attempts to get more money into the system--from government at all levels, charity, and patients. But this is disingenuous for two reasons. We know, for one, that Americans pay more per capita for medical care than the residents of any other nation, and some to these other nations manage to provide comprehensive medical care to all. If other countries can do more for less, the only logical conclusion is that there is more than enough money already in the system. The problem isn't a lack of money, its where the money goes. Furthermore, putting more money into the system won't provide a solution to the problem. If the cost of medical care is rising 14 or more percent a year, any combination of income sources that manages to pay the bill this year will be inadequate when next years increases come due.

There is really only one solution to the problem, but people in the medical care delivery system won't acknowledge it or, as Mary Grealy does, only acknowledge it grudgingly. She is quoted as having said, "How can we increase access? . . . One of the ways we can do that is by reducing the cost." No, Mary, the only way we can do it is by reducing the cost; it is the only way we can get everyone to carry insurance and avoid the system failure that Dr. Ron Anderson predicts, and make the people that Britt Berrett is concerned about who buy BMWs but not medical insurance change their ways.

But, unfortunately, before any meaningful proposals can be made to reduce the cost of medical care, we really need to know where every dollar paid into the system goes. If Americans are paying more per capita for medical care than the people in other countries and getting less for it, we need to identify the sink holes into which that money is flowing. Yet I suspect very strongly that every segment of the medical care delivery system would resist revealing that information with their utmost political might, for I suspect that each segment has its own very special sink holes that must be kept secret to avoid the wrath of the American people. So, perhaps, reforming the system won't happen until the system brings down itself, which if my calculations are correct, won't take too many more years. (Dallas Business Journal 4/23/2006)