Why are health costs rising? Here are a few reasons:
“…The big problem that may explain why health care spending is so much higher in some places than others — without any evidence that the patients do better because of it — is that doctors have too many incentives to give patients more and more care, rather than better care. As long as they get paid for each medical service they give their patients, they have little reason to ask whether a test or procedure is really necessary.
“In an influential article in The New Yorker last year, author and surgeon Atul Gawande compared the practice of medicine in two Texas towns, McAllen and El Paso, to find out why McAllen spends so much more on its health care even though the demographics are about the same in both places. He found that McAllen had lots of doctors who owned surgical or imaging centers and used them to bring in revenues. McAllen didn’t have better care. It just had more of it.
“The problem isn’t just that health care providers are paid to perform too many services. It’s that specialists are rewarded more than the primary care physicians who are likely to be needed in coming years. Robert A. Berenson, a senior fellow at the Urban Institute, studied Medicare’s payment rates and found that radiologists, surgeons, cardiologists and dermatologists earn more per hour than the primary care physicians who perform important, basic services. The same is true for private health insurance, which often takes its cues from Medicare.” The full report, “Medicare: An Entitlement Out of Control/Health Care Program Is Unsustainable, but Politically Untouchable, by David Nather of the Center for Public Integrity (Nov. 7, 2010) is available here.
Jeanne Pinder is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded ClearHealthCosts.
She was previously a fellow at the Tow Center for Digital Journalism at the Columbia University School of Journalism. ClearHealthCosts has won grants from the Tow-Knight Center for Entrepreneurial Journalism at the Craig Newmark Graduate School of Journalism at the City University of New York; the International Women’s Media Foundation; the John S. and James L. Knight Foundation with KQED public radio in San Francisco and KPCC in Los Angeles; the Lenfest Foundation in Philadelphia for a partnership with The Philadelphia Inquirer; and the New York State Health Foundation for a partnership with WNYC public radio/Gothamist in New York; and other honors.
Her TED talk about fixing health costs has surpassed 2 million views.