Healing Health Care: Now is the time to make the necessary reforms.

Anne Casey lived in Houston, Tex., supporting herself by providing in-home care for the elderly and by making jewelry. My wife’s best friend, Phyllis, who was also a friend of Anne’s (not her real name) from high school, referred me to her. I came to enjoy sitting in her home studio on Saturday mornings, chatting and picking out materials from which she would create the most striking pieces of jewelry.

In 2007 a black lump appeared on Anne Casey’s neck; she had the fair Irish skin that is prone to cancers. She could not afford health insurance, so she paid cash for a dermatologist to biopsy the lesion. The doctor was notably concerned after seeing malignant cancer cells under the microscope and told her that she needed surgery right away, though he could not do it, since he was not a surgeon. Anne had a malignant melanoma, a potentially fatal skin cancer that is normally removed as rapidly as possible to prevent its spread throughout the body. The down payment alone for a hospital admission would have been $10,000—money Anne did not have.

Fearing for her life, Anne began the process of obtaining a “gold card” that would permit her to use the public hospital system in Houston. After four weeks of bureaucratic processing she received her card and, after four weeks more, a clinic appointment. The doctors who were to perform the surgery needed to determine the extent of the cancer through an M.R.I. scan. The problem: Ben Taub General Hospital, which had to serve the county’s 1.2 million uninsured, was the only public hospital with an M.R.I. scanner. Anne lay in the hospital for six days waiting for the study.

Phyllis, who each day was growing more anxious, called a radiologist friend, who agreed to perform the study free. Meanwhile, as Anne and Phyllis watched in horror and helplessness, the black growth on Anne’s neck grew larger every week. The M.R.I. was performed, but weeks passed without the anticipated call to come in for surgery. Phyllis, desperate to help her friend, called the doctor who had performed the biopsy and insisted that he telephone the doctors at the public hospital to expedite the process.

Four months after the diagnosis of her life-threatening cancer, Anne Casey finally underwent surgery to remove the malignant melanoma. Always gracious, she told me in early 2008 that she felt she received excellent care and was thankful for it. I thought too that she had been lucky, until I learned that Anne Casey died on Thanksgiving Day, 2008. I know the doctors had done the best they could with the limited resources available to them. It is ironic, however; had she been insured and had her surgery been delayed for four months for any preventable reason, the episode would have been classified as medical malpractice.

For 20 of the last 30 years that I have practiced neurosurgery, I have worked at the Texas Medical Center. It is a 700-acre complex of tightly packed medical facilities housing over 6,000 hospital beds, the largest concentration of medical resources in the world. Some of its hospitals have billions of dollars in reserves, with lobbies like fine hotels, complete with china cabinets, and valet and concierge services. Serving these hospitals is a mile-long row of gleaming professional office towers. Ben Taub General Hospital, on the other hand, where Anne was forced to seek treatment, lies in forlorn isolation in the back of Texas Medical Center and is the anchor for the care of the region’s uninsured, nearly one-third of the population. The facilities for the uninsured in Houston can be likened to a town of 30,000 with one operating room and one clinic. Houston is not unusual and Anne Casey’s story is not unique. Delayed diagnosis and treatment is the reason that 22,000 uninsured Americans die prematurely each year. Her story is a metaphor for the U.S. health care system.

Unbridled Consumerism

The goal of expanding insurance coverage is solidly obstructed by a fact well known in Washington, D.C.—soon the United States will not be able to afford its existing public programs. According to Thomas Saving, a Medicare trustee, in 2006 Medicare accounted for 11.6 percent of income tax spending. By 2020 the program will consume 21.2 percent; by 2030 over one-third of income tax revenue (at current-law taxes and premiums) will be spent on Medicare. Without action now we are less than a decade away from an unplanned health care reform conducted under duress with unpredictable results—a circumstance that is now familiar to Americans.

The good news is that there is plenty of money to work with, and these problems can be solved. Conservative estimates indicate that unnecessary medical services account for one-third of medical spending, or some $700 billion. In other words, the U.S. health care system could insure the uninsured seven times over with the amount of documented money wasted annually.

Unnecessary services come in three categories. The first and largest source of waste is the poor management of chronic diseases. If doctors in regions where spending for Medicare patients is high were to treat patients as doctors do in areas where Medicare spending is low, Medicare costs could be decreased by almost 30 percent—with improved quality. In higher spending regions, patients with chronic illnesses are hospitalized more often for longer stays, are more likely to end their days in a hospital rather than at home (regardless of their wishes) and are the recipients of more tests, consultations and minor procedures than in lower spending areas.

The best predictor of whether an area will spend highly on Medicare is an abundance of hospital beds and specialists. In most market economies the supply of a product or a service increases only when the demand for it increases. In medicine, the opposite is true—regions with a large supply of medical facilities will see a rise in demand that keeps them full. It is not as if a cabal of doctors gather in a room and decide to deliver a lot of services. It is that doctors are paid by the volume and complexity of the services they render. In the absence of any accepted or measured standards of medical practice, they all simply provide whatever services are required to keep themselves busy at their craft. On measures of quality, however, including mortality rates, low spending areas tend to perform better. In other words, more health care is not necessarily better health care.

A second source of waste is inefficient hospital processes. According to the 2007 semiannual report of the National Surgical Quality Improvement Program, the incidence of complications of surgical procedures (adjusted for factors like age and medical condition) is three or four times as high in some hospitals as in others, and cost likely varies accordingly. Hospitals are not safe places either. A patient is at greater risk of being subject to a medical error in a hospital than he is of having his bag misplaced by an airline.

The third source is the too-frequent performance of major procedures that are beneficial in many, but by no means all, of the groups of patients who undergo them. In the course of doing research for my book Flatlined: Resuscitating American Medicine, I calculated that major procedures of doubtful or unproven indications account for about 6 percent of hospital spending. A good example is back fusion surgery. Over half of these procedures are performed for unproven indications. In other words, the procedure could just as well cause additional back pain as cure it.

Principles for Reform

We face a crisis because of our success in financing and inventing new treatments, which are often developed in the absence of rigorous evaluation; by the public’s view of medical care as a service to be consumed instead of managed; and by a fragmented system of medical care in which profits flow exclusively from the volume and complexity of the procedures and services provided. The power of modern technology has outgrown the system through which we deliver it and the methods by which we pay for it. The only way to reduce the cost of health care so as to improve its quality is to create an efficient health care system. The alternative to efficiency is price cutting and rationing of services, which will worsen quality. For the uninsured, eliminating waste from health care is a matter of justice; for the insured it is a matter of quality and affordability.

Substantial reform of the system requires universal participation, guided by three principles: 1) pay providers for the quality of their care rather than its quantity; 2) each person should have one primary care doctor as the first point of contact with the medical system; 3) benchmarks for high quality medical practice should be measured and reported.

Primary care doctors (internists, family doctors and pediatricians) are trained to manage patients with chronic illnesses, to provide early diagnosis and treatment of new conditions and to prevent illness. The fee-for-service system pays a doctor on the basis of the manual difficulty of a medical intervention. For example, Medicare pays a primary care doctor $50 for a half-hour visit at which a colonoscopy to detect colon cancer might be recommended. The gastroenterologist who performs the procedure in the same amount of time, however, is paid $500. The result is that primary care doctors must see 30-35 patients a day, virtually a health care assembly line, to earn an annual income of $120,000 to $180,000. This is one-third to one-fifth of what a specialist can make. Under these circumstances it is no wonder that Americans have only a 55 percent chance of receiving standard treatments, such as aspirin for heart trouble or vaccination to prevent pneumonia, when they go to a primary care doctor. The United States has a procedure-driven health care system. The role of primary care doctors must change, and their payment should reflect it.

No primary care payment or quality scheme can be successful unless patients are anchored themselves to one primary care doctor or clinic as their first point of contact with the medical system. The average Medicare patient sees seven doctors in four practices, none of whom are likely to know what the others are doing. The public must allow one clinic of each patient’s choice to manage the patient’s care and should expect that clinic to be available to the patients, to know them and to make judgments in their best interest.

Similarly, hospitals are paid their cost plus profit, even if their cost is for treatment of complications that could have been prevented by more attention to detail, training and use of systems to manage care better. A better way to pay hospitals and hospital-based physicians is a bundled fee based upon the patient’s condition on admission—not based on how sick they become by the time of discharge—and indexed to the cost of the most efficient hospitals and specialists, not the least efficient.

Finally, the only standards for medical practice are now at the extremes. To operate on the wrong limb, for instance, is a “never event” for which there is no excuse. Yet there are currently no agreed-upon standards for what constitutes excess testing, unnecessary hospitalizations and futile use of an intensive care unit, excess consultations, unnecessary surgery or unacceptable hospital complication rates. Doctors in Miami provide two-and-one-half times as many interventions for patients with the same diagnosis as do doctors in Minneapolis. Who has it right, the Miami doctors or the Minneapolis doctors? Is it acceptable that a patient does not know whether he lying in a hospital with a 4 percent rate of hospital-acquired pneumonia or one with a 12 percent rate? Are the two hospitals equally acceptable?

In the end, America’s health care problems are collectively owned by the public and by providers, and they can therefore be solved only by a collective effort. If we address the problem of medical consumerism now, we can fund the uninsured, improve the quality of everyone’s health care and reduce its cost. We can also redeem ourselves for what we have permitted to happen to people like Anne Casey.