"Money-Driven Medicine" by Maggie Mahar

As a “former” employee within the medical world, I have read more than my share of books, articles, and columns on our healthcare system that is now virtually universally described as broken. Maggie Mahar, a financial journalist, has written a book that captures much of what constitutes the problem in “Money-Driven Medicine”.

Getting to the bottom line first, one could pigeon-hole the problem is that healthcare does not respond to capitalistic, market-driven mechanisms, resulting in our dubious standing as the nation with the highest costs without commensurate outcomes.

Citing the likes of Don Berwick, she reports that 30-50% of health care costs are wasted. Procedures are unnecessarily repeated or ordered, interventions done with no clear expectation that the medical condition will be enhanced. Why? Ultimately, health care is not demand driven but supply driven. Technology and capacity is not determined by need but by the availability of capital. Once technology or beds etc. are available, then the supplier, i.e., physicians, order its use. The pharmaceutical and device makers are part of the problem. Their objective is to provide a profit to the share holders which motivates only their interest in new products regardless of their relatively little value to the patient population.

Moreover, the hospital system (whether for profit or non-profit) are inherently wasteful. In order to survive, there is a need to ensure that there is a margin which can usually be obtained only by some mechanisms that are ultimately self-defeating, e.g., acquiring more hospitals or health care system which temporarily boost short-term profits but ultimately collapse because of the inherent problems in the payment for services designed for a capitalistic system.

Attempts to control costs, e.g., HMO’s, work in the short-term but ultimately cost more for the taxpayers. They work in the short-term because insurance companies siphon off the healthy and the sicker population becomes even more expensive for the payers, i.e., tax payers.

While the author does not say it, it is clear to me that establishing universal health care under the auspices of the government, i.e., Medicare, is the only way to provide accessible health care to all in a relatively cost effective way.