A Bubble About To Burst

Health Tips / A Bubble About To Burst

Posted 10/03/2011

In ancient literature, the Romans went to the ageless Cumaean Sybil for prophetic advice and apparently she had a good track record. My friends consider me the antithesis of the Cumaean Sybil. My stock predictions doom a company. Oscar-wise, Ebert beats me to a pulp every year, and sporting events and elections fare even worse.

Therefore don’t be surprised or offended if this sweeping generalization about the future of health care turns out to be completely wrong. I am seriously not a futurist. But information accumulating from different sectors of the healthcare industry suggests that the entire system is headed in the direction of the internet bubble of the 90s and the housing collapse that’s still with us.

Too much medical care   Let’s start with an article in this week’s Archives of Internal Medicine that reported the surprising results of a mail survey to more than 600 primary care physicians, asking if they believed patients were receiving too little or too much medical care. The overwhelming majority replied “too much,” and they pointed toward four factors:

  • First, malpractice fears (“you’ll never get sued for ordering an extra test but you sure can get slammed if you forget to order one”).
  • Second, a reimbursement system that compels doctors to spend less and less face-time with patients, replacing “listening” with “ordering tests.”
  • Third, a manual record-keeping system virtually unchanged over the past 100 years, resulting in endless duplication of notes, tests, and procedures.
  • Fourth, specialists. Primary-care docs had harsh words for specialists who order far more tests and procedures than necessary, too often because they receive astonishing financial incentives to do so. I see this excess specialist testing when new patients arrive toting shopping bags and wheelie devices filled with medical records. As I plow through mountains of endlessly repetitive, negative test results I try to follow the thought processes of these specialists. Sometimes the only conclusions I can draw are intellectual laziness, greed, or college fees coming due for their children.

Since there’s virtually no system in place to put the brakes on unnecessary tests, drugs, and procedures, we can expect the concept of too much to continue unchecked. And as the next piece of news indicates, the real problem is that fewer people will be receiving any healthcare at all.

Dramatic shift in number of uninsured Americans  The second big-news announcement was that the number of uninsured Americans took a dramatic leap this past year, from 46.3 million to 50.7 million, or roughly 16.7% of the population.

The combination of fewer people receiving any care at all with others getting more than needed makes the third report, released last week, almost inevitable.

Health insurance premiums skyrocket  After several years of health insurance premiums rising 5% annually, in 2011 rates went up 9%, an average of $15,073 per family. Faced with declining health insurance enrollments (unemployment, remember?) and higher costs, insurance companies had to find the money somewhere, so they jacked up their rates. And by the way, being employed is no guarantee of health insurance: just 60% of the employed workforce receives health benefits.

So while premiums rise and over-utilization of services to a select few predominates the scene, prices for anything and everything in health care are exploding, spiraling out of control. Up, up, up, the language of “bubble,” bringing to mind the tulip-mania of 17th century Holland.

Here are few egregious examples. Overnight sleep studies, certainly one of the most over-ordered and generally useless of tests, now average about $3000. One patient recently told me she actually underwent six separate sleep studies in a six-month period “to get her mouthpiece right.” One owner of a four-bed sleep lab, essentially an office with four smallish bedrooms, anonymously confessed online to earning $300,000 a month (makes you want to reconfigure your garage, doesn’t it?).

Jazz Pharmaceuticals (what a name!) recently boosted the price of its prescription sleep aid Xyrem–this is a sleep aid, remember, not a cancer cure—from $2,100 per month to $4,143 a month, or about $130 a night.

Gilenya, a new oral drug to slow multiple sclerosis, costs $4,000 a month in the US, half that in the UK.

And what of the specialists themselves? Twenty minutes with a university-based endocrinologist recently set back one of our patients $400, which her insurance didn’t cover. My patient said, “And she didn’t even listen to me…she just ordered $3,000 in blood tests and walked away.”

Like the internet stocks of the 1990s and the housing market of the early 2000s, health care is in the foothills of its pre-pop bubble phase. And who’s holding the pin to pop the bubble?

Probably you.

My prediction, and do remember I’m not good at predicting anything, is…

People will smarten up and realize they need doctors, tests, hospitals, and drugs a lot less than they thought. Take a look at this Newsweek article from August, 2011, entitled, “One Word Can Save Your Life: No!” My sense is that people will begin to take better care of themselves, see less of physicians, and those who can afford it will buy relatively inexpensive hospitalization insurance (a low-profit item for health insurers) instead of coverage that covers endless doctor visits and tests.

Next, the much-reviled-by-the-insurance-industry “public option” (aka, universal healthcare or Medicare for all) will ultimately pass and we’ll all end up buying reasonably priced coverage from the federal government. And when the Fed becomes an insurance company having to foot the bill for everything it will ruthlessly set all medical, hospital, and drug fees to a fraction of what they are now. The $3000 sleep study will drop to a sensible $300, etc. (For more on this, see my recent health tip on the French healthcare system.)

In fact, universal healthcare insurance will be so affordable for both employers and individuals that the public will flee the for-profit insurance companies in droves. Companies like Cigna and Aetna will be forced back to their original life, property, and casualty roles while Humana and United will disappear without a moist eye from anyone in America. The not-for-profit Blue Cross giants will be appointed by the government to manage the public option or, better yet, will become a division of the government, like the postal system. The egregiously overpaid Blue Cross executives will either commit mass hari-kari or become GS-15 civil servants and compensated appropriately.

Like my prediction or not, when finally 50% of us are uninsured I don’t see another way forward.

Be well,

David Edelberg, MD

0 thoughts on “A Bubble About To Burst

    Equating private interests with the public good is erroneous . It is left over from pre-Enlightenment monarchical days when kings and nobles stood above the law. “Rules and regulations” function as euphemisms for “laws” when spoken in a right of center context. No one, not even the far Right, wants to admit their advocacy of a segment’s standing above the law. But that’s exactly what they’re advocating. Business interests above the law. That’s what “no rules and regulations” means. I’m an advocate of unions, but I don’t believe fireman, policemen, emergency staff, doctors, etc. have the right to strike. Nor do I believe coporate executives, doctors, and inheritors of wealth should be granted the right to steal.

    Posted October 11, 2011 at 7:57 am

    I’ll thank you to Addie and this discussion forum for keeping our exchange civil. I do wish anyone ill, or think less of anyone for offering a different view on an idea, and I hope to earn the same respect.

    Second, I AGREE with the quote from the NY Times as to why costs are higher. We consume more health care and spend more dollars on it precisely because we “rely more on costly specialists, who overuse advanced technologies, like CT scans and M.R.I…”

    The unstated assumption from the NYT (and I believe that Addie agrees), is that paying doctors less, mandating different procedures, and creating a monopoly on marketing (to eliminate marketing costs) will lower health care costs. In aggregate that could 100% true – doing those things could mean spending less $$$ on health care. All those efforts seek to control the supply of health care, and limit (and I assume redistribute), the amount of health care in this country.

    But it will not reduce DEMAND for health services. As an example: decades worth of incentives, rules, regulations, etc. did not make a dent in American’s desire to drive. $4 / gallon gas drove the total number of miles driven down in less than 1 year.

    I’m not saying that consumers should pay all, or even most of their medical bills. I’m offering the idea that if everyone were required to pay for at least a little of their health care, just like the patients at Whole Health Chicago (disclosure – I am one), then the U.S. would see a dramaticly more responsible set of decisions. People would invest in preventative care, they would work with their doctors to decide when to rely on costly specialists and when to use costly procedures, they would find out how much prescription drugs ACTUALLY cost and discuss alternative therapies and would consume substantially less health care.

    The resulting excess capacity in health care system could be redistributed to the cases of those who truly couldn’t afford to pay anything.

    We’re all looking for the same end state here. I’m just saying that there is a way to get to that state where we willingly choose to come along for the ride.

    Matthew Kelley
    Posted October 5, 2011 at 2:10 pm

    I would love to hit the “like” button on your words of wisdom and post it to my facebook like I post Dr. mercola’s news letters.

    Elke knupp
    Posted October 5, 2011 at 11:02 am

    Matthew Kelley’s error is his assumption that demand drives health care costs. According to a NY Times article, here’s what drives up health care costs:
    “. . we pay hospitals and doctors more than most other countries do. We rely more on costly specialists, who overuse advanced technologies, like CT scans and M.R.I. machines, and who resort to costly surgical or medical procedures a lot more than doctors in other countries do. Perverse insurance incentives entice doctors and patients to use expensive medical services more than is warranted. And our fragmented array of insurers and providers eats up a lot of money in administrative costs, marketing expenses and profits that do not afflict government-run systems abroad.” David’s analysis exactly! Matthew Kelley appears to believes in the Free Market, which he’s free to do. He’s also free to believe in Tinker Bell and the Tooth Fairy.

    Posted October 5, 2011 at 10:22 am

    I believe that K Maver misunderstood the central piece of my argument. The observation was that dropping the price of health care to zero would increase demand for health care. The solutions offered by Maver (making ads illegal and changing doctor incentives) would change the SUPPLY of health care, but they would do nothing to change the core demand (see Canadian waiting lists as a prime example). As for the fire you might set to your house example, I’d point to a different type of insurance – home owners insurance. You pay your own money to insure your house, and then you take risks to make sure you don’t burn it down. The more risky you are with the house, the most insurance you pay. That’s actually an example of a correctly functioning insurance market, versus the health care market where the consumer of health care does not bear any cost of his or her decisions.

    Overall, I read Dr E’s point as being this: there is a finite amount of health care in the world, and we are fast approaching the limit of it. Further, more and more of that health care is being consumed by a smaller set of people. So in aggregate there is too much demand and not enough supply – how do you get people to make smarter decisions about their consumption of health care individually so that there is room in the system for the person who has colon cancer?

    I aruge that the best way to 300,000,000 people to simeltaneously examine their health care consumption choices and reduce their demand on the system is not to make it free, but make charge responisibly for it.

    Matthew Kelley
    Posted October 5, 2011 at 10:00 am

    Thank you – that is the most hopeful thing I have read recently. I hope the Supreme Court does the right thing when they take up the Health Care Reform case.

    Beverly Bojanowski
    Posted October 4, 2011 at 10:11 pm

    I disagree with Matthew Kelley. First of all, it’s immoral. Under Mr. Kelley’s system, if you’re some poor unfortunate soul with a McDonald’s job and colon cancer, you’d have a death sentence. Second, take away a physician’s financial incentive to test and retest and retest, and you’ve dropped the cost of healthcare by scads of percentage points. Then erase the financial incentive that pharmaceutical companies have to advertise from the equation and people won’t be clamoring to see their doctors quite so much. As for increased use of doctors when a public option becomes available, this has not been the case in other countries with public payor systems. And here’s an analogy: I pay for fire department services with my taxes, but I’m not about to torch my house so I can take full advantage of them.

    K Maver
    Posted October 4, 2011 at 2:07 pm

    Terrific! Here’s an example of gouging: I have a long-standing corn on left food little toe, a direct result of wearing those pointy-toe shoes many years ago. Went to a podiatrist (recommended by friend) who pared it, sent me on my way after about 20 minutes. Medicare payment: $175!!! I am reporting this to Medicare and Senators Durbin and Kirk.

    Posted October 4, 2011 at 1:58 pm

    This is an interesting perspective that i ultimately agree with IF AND ONLY if the “public option” is NOT passed. The first set of trends suggest that people consume too much health care (agreed). Economists would argue that this is because there is little incentive for a patient to say no to an incremental test (hey- it doesn’t cost them a thing!), but there is large incentive to order extra tests, as Dr. E outlines above.

    Making health care public would, essentially lower the cost of consuming health care down to free. I can’t think of any other product or service in the world that doesn’t see an increase in demand for when the price goes down. Its wishful thinkIng to believe we would demand less health care if the government took over (note the government can ration out care, as it does In Canada or France – to the politically connected, or by waiting list. This is reduced supply, not reduced demand).

    The ONLY way to drive demand for care down is start making the people who consume it also have a stake in paying for it. Imagine how much better you’re cconversation win your doctor would be if you had to pay for 1% of eveythig out of pocket? You would be informed of options and make decisions collaboratively with your doctor based on your best outcomes for each dollar spent.

    This is exactly the type of practice that WHC has built! By asking patients to pay out of pocket- they see people who want to be actively engaged in their own well being. We need MORE places like WHC that charge, not less via a public run system! If that happens, I imagine Dr. E. will be proven correct.

    Matthew Kelley
    Posted October 4, 2011 at 12:27 pm

    Not to mention an increased sense of personal responsibility for prevention. Good insights here!

    Posted October 4, 2011 at 12:27 pm

    You hit the nail on the head. I saw Dr. Micheal Freidman for my lack of taste. He did all the test in the world but I was OK with that. He put me on meds that might help. When they didn’t in 8 weeks he wanted to repeat ALL the test again. Even the smell test where I passed with flying colors. I said no and went elsewhere. Funny how he pushed a sleep study even though my husband told him I dont snore at all. I told him no. 5-6 more times I was pushed to do it. Each person I spoke with pushed it and wanted to set up a time. Seems as thought everyone in the waiting room was going to have one. This Dr. is one of Chicago’s Top Doctors yet when you read reviews about him they all say the same thing. He is making money on tests and sleep studies. Never send anyone to him!

    Gail Alexander
    Posted October 4, 2011 at 11:17 am

    It’s HarA Kiri

    Posted October 4, 2011 at 10:30 am

    This is definately an interesting article. I’m only 26 and don’t have a lot of health issues but I have noticed in the older generations are turning to natural nutritional alternatives (such as Moringa , Acai Beeries or Goji Berries) in efforts to prevent symptoms that the drugs treat. Do you foresee people moving more towards these types of “natural super foods”?

    Aaron Dorsey
    Posted October 4, 2011 at 9:49 am

      Sure but that is one very small component of “life-style medicine” as practiced at WholeHealth Chicago. Taking responsibility for one’s own health should be paramount.

      Dr. R
      Posted October 4, 2011 at 9:55 am

    I recently spent a week at Patch Adams place in West Virginia. After a week of incredibly wholesome, organic food, hiking around in the mountains, doing the Virginia Reel, deep conversation, singing and laughing with a group of newfound friends, I came away with the same impression as one of the above posters. What happened in West Virginia was real Health Care. What happens in most doctors offices (present company excepted) is just disease management.

    Kate M.
    Posted October 4, 2011 at 8:22 am

    I hope you are right about your predictions for the future of health care in this country. The GOP is definitely trying its best to stop Americans from getting adequate health care at a reasonable cost. Profit is their goal for every corporation. The poor and middle class are suffering.

    Carol Ring
    Posted October 4, 2011 at 7:51 am

    Absolutely agree with you. And it’s about time the above happened.

    Posted October 4, 2011 at 7:29 am

    May the bubble burst! I am about to recommend Whole Health Chicago to my wife who has undergone a series of tests at about $3000 each that have told her essentially nothing. Clearly, she has a heath problem that is interfering with both of our lives. Also clear, is that she has been receiving only medicine.

    What has been missing is Medical Care. From her physician to several specialists, she has received primarily medical treatment, not medical care.

    I wonder how many procedures are required by our brand new CAT facility in order to break even. Perhaps that is why she was scared into believing that she might have cancer and had to have a CAT scan, although her blood tests showed normal in all regards as did other indicators. She had the test, we paid, and – big surprise – the results showed nothing. This scene has been played out many times over the last few years, all with the same result – nothing.

    One thing is certain, though. We have contributed significantly to helping the medical partnerships pay for their new facilities, CAT and MRI scanners, and a variety of fancy and expensive analysis equipment.


    Mark S.
    Posted October 4, 2011 at 6:24 am

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