David Goldhill, author of “How American Healthcare Killed My Father” describes himself as a businessman with no more expertise or connection with the United States healthcare system than any other patient with ordinary encounters. This is until his father entered a non-profit hospital in New York City with pneumonia. The end result of this hospital visit, which is not entirely uncommon for an elderly person, is an unexpected death and a son’s personal exploration of why it happened and what could be done to prevent this incident in the future.
According to the Goldhill, his father entered the hospital and acquired sepsis within thirty-six hours of admission. Over the course of the next five weeks, which were spent in the hospital’s intensive care unit, the infections acquired were more than the his father could fight and quickly led to his inexcusable demise. Shortly after his father’s death, Goldhill ran across an article in The New Yorker profiling the efforts of a Dr.
Peter Pronovost in reducing the incident rate of hospital acquired infections similar to his father’s. These efforts included implementing a basic checklist of standard ICU sterilization protocols including physician hand washing. While the solution seemed simple enough, and certainly inexpensive, the article noted that many physicians and hospitals were much less than receptive to the idea in spite of the potential to reduce infections rates by up to two-thirds.
Physicians viewed the move as belittling and intrusive, and because of this, hospitals were not willing to embrace the idea. Over the course of the following year, the unsettling information in the article and the grief from his father’s loss pushed David Goldhill to deeply explore the root of the many problems in our healthcare system that affect ordinary patients every day. With what he found, he comes to a general consensus of how to go about repairing the current system by doing away with it completely.
He, like many others, desires a move to a “consumer-driven” system similar to that of almost every other market with freedom of information and consumers in control of costs. In my opinion, the most effective and immediate means to implement his plan is through the use of Health Savings Accounts for individuals. With insurance in place to finance what it is truly intended for, catastrophic risk, he suggests that most all routine or non-catastrophic care be funded fully by the individual through the use of HSA’s.
These HSA’s would be funded by mandatory contribution of a percentage of one’s income at regular intervals. This percentage would also increase with age as wages and total wealth increase and the consumer would be free to withdraw funds for any reason with no penalties as long as a minimum balance is maintained. This system provides forced savings, and thereby available funds, for consumers working within standard market forces to use for payment of healthcare costs.
This system also has the benefit of allowing American healthcare consumers the choice they desire in what provider to use and, within limits, how much or how little care to get. In reality, forced savings is the role that has been taken on by Medicare and private insurance, however, without consumer forces and with the effect of moral hazard, much less effectively. The current system allows for nothing but increases in costs and it is apparent that it will not be able to be maintained without unrealistic increases in funding.
This funding must come from somewhere and is paid for by health consumers, whether they realize it or not, through skyrocketing premiums and increased taxes, denial of claims, limits on choice and access, and even potentially lower wages. The quality of service has no real impetus to improve because the patient is not actually the customer and insurance will pay regardless. Medicare and the insurance companies do maintain discounted rates of reimbursement for providers to control costs, but at the same time allow providers to bill for unnecessary service and the costs of medical error through the current Fee-for-Service protocol.
This then leads to the occurrence of moral hazard when patients, who are completely detached from the payment of their providers because of their insurance, not only allow all of this waste, but actually request it in the form of overuse of care. Patients have no knowledge of how much is being paid or how much is really needed and because it is not coming directly out of their own pocket, they don’t really care. Help in alleviation of the problems of our healthcare system will occur in a simple manner with the use of HSA’s.
When consumers are using finite funds that are completely under their own control, standard market forces are at work. These forces, in time, drive down costs to a natural equilibrium with the amount of service available and the amount of service needed. Consumers have a choice in where and how to spend their money. This forces providers to compete not only in price, but also in the quality of services that are provided, or face loss of business to other providers that are better able to meet the healthcare consumer’s needs.
Drive to use technology in ways to actually enhance the efficiency of the system evolves, as it has in every other industry, instead of only adding costs under the guise of better care. The incentive system dramatically shifts from charging more for more care to providing better care at a reasonable cost. With almost every other industrial market as a clear example, putting consumers in control will do much to increase the quality of the care they receive, reduce the cost they have to pay for it, and keep providers more accountable for the service they provide.