Should The Blame For High Costing Healthcare Be On High Expectations

When the topic of Health Care is discussed, the high cost of care is a recurring issue. And as always the reasons for high expenses are politicized. One side argues malpractice and frivolous lawsuits, the high price of research and development of medics and the costs of maintaining a hospital. The other side usual blames corporate greed, Washington Lobbyists. They bring up ethics, bad record keeping and needing more IT. Technology is a very high cost but not in the way usually discussed.

There is elephant in the room that many don’t want to admit to, we want the state of the art technologies available to doctors and patients.

It is a time in The Medicine Industry and the Tech Industry that many new advances are made at ever diminishing increments. And just like other industries, they have the capability to invest in very expensive ideas. Couple that by the clients’ (doctors, hospitals, insurance companies and patients) demands of the latest and best of everything and you now have all the reasons for high costing healthcare.

The patient benefits from the latest technologies by receiving better care. The doctors benefit by giving wonderful care to the patient. The hospital increases patient numbers by marketing higher successful procedures, the latest medical equipment and highly skilled doctors. And the companies producing the high costing, latest technologies benefit by making money on a product that can sell for millions.

The pharmaceutical companies have been getting a bad reputation but only amounts to about 10% of the total amount of money spent for healthcare. According to Majorie Baldwin, a health economist working for W. P. Carey School of Business at Arizona State University, the pharmaceuticals may in fact be driving down costs. “It is much cheaper to treat health conditions through pharmaceutical than it is to treat them with surgeries or with hospital stays or with frequent visits to a healthcare provider and so on.”

The type of technology that is driving healthcare cost at all-time highs is the kind found at University of Maryland Medical Center. It is one of the hospitals in the U.S. that uses a robot, called Da Vinci, for heart bypass operations. The robot being operated by a doctor a few feet away allows for the tiniest of incisions and enables doctors to operate in extremely tight places. The robot is a very popular option for prostate surgery and it trims patient recovery time by a third.

The Da Vinci robot costs $1.5 million and has an operating cost of approximately $2,000 per procedure. It takes a surgeon 12 to 18 months to train for the machine, and a procedure using Da Vinci usually takes longer than operating hands-on. A University of Maryland study estimates that the robot adds about $8,000 to the price of a bypass surgery.

If you have been to the hospital recently or frequently, you may have noticed the staff complain about operating the new equipment. Many nurses and other health workers complain about the designing of the equipment and also the training required to properly operate the new machines. Improvements on the designs and the additional training all add costs to healthcare.

Better medical technology is rarely simpler technology. Implantable cardiac defibrillators used to regulate the heartbeat of patients who have suffered serious heart damage, took decades to perfect. These defibrillators are tiny and complex. Manufactured by Medtronic and St. Jude Medical, they can reduce the risk of death from a heart attack by 30%, a significant benefit. Almost half of heart attack survivors now receive one but the cost of implanting one can run anywhere from $68,000 to $102,000.

In an article for Business Week, Catherine Arnst, wrote of a situation she called, “The Field of Dreams syndrome. If you build it, patients will come.” Many of the advances in technology are produced knowing that demand for the unmet medical need will be high.

Many times the hospital does not make back the money off of new technologies like The Da Vinci robot unless the product was donated.

Studies by the Kaiser Family Foundation show that better anesthetic drugs have resulted in faster patient recoveries and lower cost per patient. “But the improvements,” Arnst explains, “also made it possible to perform surgery on patients once considered too frail, adding to the health-care burden. These patients are inevitably costlier to treat than their more robust counterparts.”

Arnst also reported about Erbitux a drug that can cost $100,000 or more, but adding only a few months to the life expectancy of the patient. However there is a slim chance of a longer benefit to few patients, so cancer victims ask for them and doctors recommend them in the hope of getting lucky.

The constant updating of medical technologies has been the “envy of the world” according to Carolyn M. Clancy, M.D., Director of the Agency for Healthcare Research and Quality (AHRQ). “Many of these developments,” she said before the Joint Economic Committee, “offer the potential for greatly improving the quality of life for patients; in other cases the improvements are marginal at best. In some cases, innovation leads to the same or even higher quality of care at significantly lower costs, while other innovation is cost increasing.”

The high cost of healthcare is high because we expect the best from our doctors, hospitals, drugs and surgery procedures. The solution to the problem would seem to be the implementation of cost analysis when a treatment is under consideration.

In the U.S., an insurer will rarely deny payment for a treatment based on its price and it is illegal for the FDA to consider the cost of a new device or drug when deciding to approve it. Though these practices are implemented in European countries where there is universal healthcare.

The answer to controlling increasing cost of healthcare may not be impossible though. Technology is improving at a quick pace. And the research and development of drugs and devices are producing breakthrough after breakthrough. Perhaps with the demand for more affordable healthcare increasing due to the recent popularity of the topic, the price of the drug or equipment may be taken into greater consideration during the development process, thereby making affordability an innovation that is sort after.

And perhaps medical technology will plateau as far as costs are concern while at the same time maintaining the pace of technological advancement.