U.S. not getting money’s worth in healthcare

“We’re not getting what we pay for,” says Denis Cortese, president and chief executive of the Mayo Clinic. “It’s just that simple.”

“Our health-care system is fraught with waste,” says Gary Kaplan, chairman of Seattle’s cutting-edge Virginia Mason Medical Center. As much as half of the US$2.3 trillion spent today does nothing to improve health, he says. Not only is American health care inefficient and wasteful, says Kaiser Permanente chief executive George Halvorson, much of it is dangerous. Those harsh assessments illustrate the enormousness of the challenge that awaits President-elect Barack Obama, who campaigned on the promise to trim the average American family’s health-care bill by US$2,500 a year. Delivering on that pledge will not be easy, particularly at a time when the economic picture continues to worsen.

Senate Finance Committee Chairman Max Baucus, D-Mont., has already warned that improving and expanding health care will cost money in the short run, money that his Republican counterpart, Sen. Charles E. Grassley (Iowa), argues the government does not have. Yet among physicians, insurers, academics and corporate executives from across the ideological spectrum, there is remarkably broad consensus on what ought to be done.

A high-performance 21st-century health system, they say, must revolve around the central goal of paying for results. That will entail managing chronic illnesses better, adopting electronic medical records, coordinating care, researching what treatments work best, realigning financial incentives to reward success, encouraging prevention strategies and, most daunting but perhaps most important, saying no to expensive, unproven therapies. “There is more than enough money in the system,” said former House speaker Newt Gingrich, who runs the Center for Health Transformation. “We just are not spending it well.”

The United States today devotes 16 percent of its gross domestic product to medical care, more per capita than any other nation in the world. Yet numerous measures indicate the country lags in overall health: It ranks 29th in infant mortality, 48th in life expectancy and 19th out of 19 industrialized nations in preventable deaths. One way to reconfigure health spending is to shift large sums into prevention and wellness, said Reed Tuckson, a physician and executive vice president at UnitedHealth Group in Minneapolis. The idea is to tackle the handful of preventable, chronic illnesses such as heart disease and diabetes that account for 75 percent of health-care costs.

Each year, for example, the United States spends US$450 billion treating heart and artery disease. The “good news,” Tuckson said, is that former certain killers such as heart attacks, strokes and aneurysms can now be treated. But the price of maintenance drugs, ongoing tests and procedures such as stents is high. It would be wiser, he argued, to attack underlying problems such as smoking, diabetes, high cholesterol and high blood pressure.

Since Obama’s victory, official Washington has been racing to demonstrate its seriousness about expanding health coverage to every American, while at the same time improving the quality of care. But few of the politicians talk about the difficult trade-offs that will come with any real reform, said Kaplan in Seattle, whose health system follows Toyota’s quality-control model.

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