Money-Driven Medicine: The Real Reason Health Care Costs So Much

Front Cover
Harper Collins, Mar 17, 2009 - Business & Economics - 480 pages

Why is medical care in the United States so expensive? For decades, Americans have taken it as a matter of faith that we spend more because we have the best health care system in the world. But as costs levitate, that argument becomes more difficult to make. Today, we spend twice as much as Japan on health care—yet few would argue that our health care system is twice as good.

Instead, startling new evidence suggests that one out of every three of our health care dollars is squandered on unnecessary or redundant tests; unproven, sometimes unwanted procedures; and overpriced drugs and devices that, too often, are no better than the less expensive products they have replaced.

How did this happen? In Money-Driven Medicine, Maggie Mahar takes the reader behind the scenes of a $2 trillion industry to witness how billions of dollars are wasted in a Hobbesian marketplace that pits the industry's players against each other. In remarkably candid interviews, doctors, hospital administrators, patients, health care economists, corporate executives, and Wall Street analysts describe a war of "all against all" that can turn physicians, hospitals, insurers, drugmakers, and device makers into blood rivals. Rather than collaborating, doctors and hospitals compete. Rather than sharing knowledge, drugmakers and device makers divide value. Rather than thinking about long-term collective goals, the imperatives of an impatient marketplace force health care providers to focus on short-term fiscal imperatives. And so investments in untested bleeding-edge medical technologies crowd out investments in information technology that might, in the long run, not only reduce errors but contain costs.

In theory, free market competition should tame health care inflation. In fact, Mahar demonstrates, when it comes to medicine, the traditional laws of supply and demand do not apply. Normally, when supply expands, prices fall. But in the health care industry, as the number and variety of drugs, devices, and treatments multiplies, demand rises to absorb the excess, and prices climb. Meanwhile, the perverse incentives of a fee-for-service system reward health care providers for doing more, not less.

In this superbly written book, Mahar shows why doctors must take responsibility for the future of our health care industry. Today, she observes, "physicians have been stripped of their standing as professionals: Insurers address them as vendors ('Dear Health Care Provider'), drugmakers and device makers see them as customers (someone you might take to lunch or a strip club), while . . . consumers (aka patients) are encouraged to see their doctors as overpaid retailers. . . . Before patients can reclaim their rightful place as the center—and indeed as the raison d'être—of our health care system," Mahar suggests, "we must once again empower doctors . . . to practice patient-centered medicine—based not on corporate imperatives, doctors' druthers, or even patients' demands," but on the best scientific research available.

 

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LibraryThing Review

User Review  - altonmann - LibraryThing

This is essential reading if you ever expect to see a doctor or visit a hospital. The business of medicine pushes the hippocratic oath into a dark corner more frequently than you might imagine. You ... Read full review

Money-driven medicine: the real reason health care costs so much

User Review  - Not Available - Book Verdict

Mahar (Bull!: A History of the Boom and Bust, 1982-2004 ) challenges the idea that American healthcare is simply a commodity whose problems free markets will solve. What we have instead, she writes ... Read full review

Contents

An Overview
30
A Flaw in the Business Model?
80
No Margin No Mission?
139
When More Care Is Not Better Care
155
The Cost of Rationing Care
198
Device Makers Drugmakers and the FDA
270
Everyone Out of the Pool
325
Notes
347
Index
431
Copyright

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Page 347 - ... from physician friends throughout the country — a barrage of well-intentioned but contradictory advice. " 'As a result, not only I but my wife, my son and daughter-in-law (both doctors), and other family members became increasingly confused and emotionally distraught,' he recalled. 'Finally, when the pangs of indecision had become nearly intolerable, one wise physician friend said, "What you need is a doctor.
Page 21 - We face a massive crisis in this area (health care) and unless action is taken both administratively and legislatively to meet that crisis within the next two or three years, we will have a breakdown in our medical care system which could have consequences affecting millions of people throughout the country.
Page 205 - emergency medical condition" means — (A) a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in...
Page xiii - Other Public" includes programs such as workers' compensation, public health activity, Department of Defense, Department of Veterans Affairs, Indian Health Service, and State and local hospital subsidies and school health.
Page 21 - But much of US medical care, particularly the everyday business of preventing and treating routine illnesses, is inferior in quality, wastefully dispensed, and inequitably financed. Medical manpower and facilities are so maldistributed that large segments of the population, especially the urban poor and those in rural areas, get virtually no care at all — even though their illnesses are most numerous and, in a medical sense, often easy to cure.
Page 4 - Because medical knowledge is so complicated," he noted, "the information possessed by the physician as to the consequences and possibilities of treatment is very much greater than that of the patient, or at least it is so believed by both parties
Page xiv - Other Spending" includes dentist services, other professional services, home health care, durable medical products, over-the-counter medicines and sundries, public health, research and construct1on.
Page 40 - ... case. When I failed with a third patient a few days later, though, the doubts really set in. Again, it was stick, stick, stick, and nothing. I stepped aside. The resident watching me got it on the next try. Surgeons, as a group, adhere to a curious egalitarianism. They believe in practice, not talent. People often assume that you have to have great hands to become a surgeon, but it's not true. When I interviewed to get into surgery programs, no one made me sew or take a dexterity test or checked...

About the author (2009)

Maggie Mahar is the author of Bull! A History of the Boom and Bust, 1982–2004, a book Paul Krugman of the New York Times said "makes a devastating case against the contention that the market is almost perfectly efficient." In his 2003 annual report, Warren Buffett recommended Bull! to Berkshire Hathaway's investors. Before becoming a financial journalist in 1982, when she began to write for Money magazine, Institutional Investor, the New York Times, Bloomberg, and Barron's, Mahar was an English professor at Yale University. She lives in New York City.

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