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The Medical Arms Race and You

With the dissolution of the Soviet Union in 1991, the phrase “arms race” became a less frequently used part of our vocabulary. Before then, both the US and the Russians had been developing, building, and stockpiling larger and more threatening weapons, in the process draining wealth and increasing, rather than decreasing, the odds of armed conflict.

Money–simple greed, really–was behind much of it. In one of President Eisenhower’s last speeches he warned of a “military-industrial complex” whose interests were financial gain rather than the safety and well-being of the American people.

Now for a thought experiment. Replace the US and Soviet Union with any of Chicago’s outsized medical centers: Northwestern, Rush, University of Chicago, or Advocate. Competition among these giants for your business is ferocious. Health care now costs 17% of our GNP, or $3.2 trillion. That’s $10,000 for every person living in the US.

If you moved your lifetime of care–the appendectomy, delivering your babies, the knee replacement, your heart surgery–to a single medical center, that’s potentially millions of dollars in their pocket. Northwestern wants YOU! Rush wants YOU! And to capture your loyalty, there’s a medical arms race going on.

Money for warm bodies
Since you (and your doctor) are the meal tickets for these medical center giants, they’re willing to spend extremely large sums to get you into their system. They want you to equate excellent medical care with size, to be seriously impressed by their skyscrapers designed by internationally famous architects and by their investments in capital equipment: robotic surgery, gamma knife surgery, PET scans, and more.

Behind the scenes, these medical centers write enormous signing bonuses for superstar surgeons who can keep their operating rooms solidly booked months in advance. They’re buying up Chicago’s medical practices, writing generous checks to the physician-owners, and in the process acquiring thousands of warm bodies (yours and others your doctors can send their way) to feed the maw of their medical behemoth.

It really is like an arms race.

But ponder for a moment the concept of competition, let’s say between two grocery stores on Main Street or between Mariano’s and the Whole Foods situated across the street. Whole Foods is painfully expensive, but when Mariano’s sets up shop and starts offering many of the same products at lower prices, Whole Foods begins selectively lowering a few of its prices as well. That sounds sensible. That should be the consequence of competition.

But that’s not what happens in health care.

As giant healthcare systems grow, their prices skyrocket. Worse yet, in order to pay for all the stuff they bought–the scans, the robotics, the surgical teams–they have to use these tools, and use them a lot.

You’ve likely read about some of this. You might have heard that Blue Cross was no longer covering care at Northwestern, Rush, or U of C. That’s because Blue Cross simply got tired of the high prices and the excessive overutilization of services. Funding the medical arms race just got too expensive for Chicago’s granddaddy of health insurers. Until there can be some serious price negotiations (probably occurring as I write), everyone walked away from the table.

“But,” I can hear you splutter, “I want the best. I want access to those medical giants. I want my hysterectomy done by a robot!”

Let’s look at the facts
It came as little surprise to anyone following this medical arms race when a report published last week analyzed one tiny piece of it: robotic surgery.

To remind you, robotic surgery is performed by a surgeon sitting at a console, fingers in a glove-like device, controlling a robot-surgeon. It sure looks impressive. I tried it once (not on an actual person, of course), pouring a cup of coffee, adding a teaspoon of sugar, and stirring it and I thought, “Wow! Neat!” but it seemed a leap of faith to let the robot anywhere near my prostate. Maybe when you saw one of these surgical robots on TV you thought it was the ne plus ultra of health care, imagining your friends looking at you admiringly when you told them your hysterectomy had been done robotically.

But several conclusions from the recent report might dampen your enthusiasm:

  1. Robotic systems are mainly acquired by hospitals to attain a competitive advantage over other hospitals in a geographic area.
  2. Any surgical procedure performed using robotics is much more costly than the same procedure done directly by an actual human surgeon. The American Urological Association reported that using a robot to remove a prostate gland adds $6,000 to the cost of the procedure.
  3. To offset the capital expense of the robotic system, the number of procedures performed in the hospital must rise dramatically. Suddenly there’s a “need” for more prostatectomies, hysterectomies, etc.
  4. A second source of pressure to use the robot comes from the manufacturing company itself. The hospital must perform a minimum number of procedures each year in order to keep the machine in their facility.
  5. There is virtually no evidence that procedures done robotically have a better outcome than those performed directly by a surgeon.

The process
In order to get yourself scheduled for a surgical procedure, your primary care physician (PCP) must first refer you to a specialist. Further funding the medical arms race is the dramatic increase in the number of such referrals. Hospital administrators track this very carefully. They monitor PCP “physician alignment,” making sure referrals remain within their system lest they suffer the dreaded “referral leakage.” What they really dread is the proactive patient who uses the internet for physician research and discovers a better doctor at a competitor across town.

Hospital systems hire consultants like AdvisorsMD or Healthcare Success Strategies to the tune of $10,000 a month to teach PCPs to refer to specialists they may not have considered and to teach surgeons to build referral networks without resorting to sleazy billboards or huge Harry and David gift boxes around Christmas.

Nagging back pain? Your PCP will be taught to think orthopedist, rheumatologist, physiatrist, or pain management specialist or even to refer you to the hospital’s new laser spine surgery center. For more on this, you might want to read “The Surprising Secret Behind Doctor Referrals” that appeared in MarketWatch a few years ago.

The long and the short of it is this. At $3.2 trillion, there’s just too much money being spent. More and more these days, I’m envisioning all the so-called providers of US healthcare as pigs at a trough. Although legendary columnist Mike Royko was referring to Chicago politicians when he suggested the motto of the city should be changed from “I Will” to “Where’s Mine?” it certainly applies to health care today.

Just be cautious, be careful, take care of yourselves, know what you’re up against, and get second and even third opinions before you become a cog in the wheel of this medical arms race.

Be well,
David Edelberg, MD

Leave a Comment


  1. Keith Berndtson, MD says:

    Nobody sizes up the story behind the story better than Dr. E.
    Keep ’em coming!

  2. Susan Proffitt says:

    well said, as always

  3. Patrice Wooldridge says:

    Today I learned that the US doubled the acceptable amount of radiation for the US population so that CT scans would be considered safe. “The effective doses from diagnostic CT procedures are typically estimated to be in the range of 1 to 10 mSv. This range is not much less than the lowest doses of 5 to 20 mSv received by some of the Japanese survivors of the atomic bombs.”

    The base acceptable levels around the world is 3 mSv – which was also the US standard until CT scans became so prevalent.

  4. Drea says:

    But BCBS selectively dropped individual plans from the mentioned hospitals, not group plans, so there’s more to to this than mentioned. However, I agree that the hospitals try to capture you and help their buddies make money by referrals within their system only even though there might be someone better at the job.

  5. Dr. David W Bailey, DC Chicago says:

    I knew the big guns of Chicago hospitals had a small country’s worth of equipment but was unaware of the war between them and the absurd amount of funds needed to keep these behemoths operating. This new breed of ‘healthcare’ with their gadgets is not health care at all in the true sense.
    PS..Hello to Dr. Berndtson; it’s been about twenty years!

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