We’ve written quite a bit about single payer health care systems as well as other models that are a mixture of public and private spending.

We’ve also analyzed some of the sources of excess cost of US healthcare to other countries. What is uniformly true about universal health care systems is that they all spend less on medical care per capita than the US. The next nearest country in spending to us, France, spends 50% of what we do per capita while providing top notch care, possibly the best in the world. And while the cause of our excess costs are multifactorial, one of the greatest sources of excess cost is likely due to increased use of emergency rooms over primary care providers. We already have universal healthcare, if someone shows up injured or ill, hospitals are obligated to treat them. But forcing people to come to the ER when their problems have become critical increases the costs of treatment dramatically. Now a new paper in Health Affairs demonstrates the cost of ER use over PCPs and their findings confirm that as much the costs of the uninsured to the health care system dropped by 50% once low-income uninsured patients received health coverage. This is good news as it suggests as health care reform is enacted we should see huge savings just from having a universal system.

See more below…

In the paper, the authors studied the health care costs of 26,000 low income individuals before and after enrollment in a community health program in Richmond. After three years, total costs per capita dropped from $8,899 to $4,569 with concurrent drops in the number of ER visits (25%) and increased primary care visits (50%).

I’ve witnessed this problem first hand. Uninsured patients come to the ER with problems that were minor a week ago, but now are critical and will costs thousands of dollars to correct. The most egregious example I can think of was a patient with an infected boil that he ignored because he didn’t have a doctor or insurance. It eventually eroded through his skin as the infection failed to resolve after trying to put hot and cold compresses on it did absolutely nothing. When I saw him I could smell the rotting flesh from outside the examination room in the ER. The patient had to be admitted to the ICU as he was septic at this point, and needed IV antibiotics as well as an emergent operation to debride the wound. Followed by an even more expensive reconstruction since it involved his face. I would estimate the costs of his ICU stay, medications, and 12 hours of surgery were probably in the $60-90k range, and that’s a conservative estimate.

What would this problem have cost if he had a primary care provider? Probably 100-150 bucks. A PCP could have lanced this boil in office 2 weeks before, and maybe given him a short course of bactrim (an unnecessary use of antibiotics but a common enough one). The cost of the physicians time, a few alcohol swabs, some lidocaine and a knife would have been infinitesimal compared to the bill he racked up from not having insurance. Not to mention the pain, suffering, and shame he felt from how bad this problem got. And did he ultimately pay his bill? Nope. In the end we pay for it, with higher premiums, higher taxes, and higher medical bills for all. This is the hidden tax the uninsured place on us all. All Obama has done is acknowledged we pay this tax, and brought it out in the open, as well as requiring the irresponsible who don’t have health insurance and can afford it to buy it.

Sure enough, the evidence is coming in, the cost savings of having a universal system are likely to be substantial. It’s time to stop the whining about Obama care and acknowledge we already have universal health care. We just pay for it in the stupidest way possible that ensures problems are that much more disastrous and complicated when they’re finally treated.

Comments

  1. #1 Dunc
    February 14, 2012

    Shouldn’t you be rubbing your hands at the thought of all that extra filthy lucre, you big-Pharma shill? We all know those “excess” costs go straight towards your yacht payments. ;)

  2. #2 Tony P
    February 14, 2012

    You do know about the Missouri study a number of years ago right? The VA there was at the time spending $45K per year caring for patients.

    They decided to try something novel. They sent the docs out into the field to visit their patients. And guess what happened – cost dropped down to $17K per year per patient but the best part, the health outcomes for those patients improved.

    The other problem, we don’t have enough primary care doctors. It takes me months to get in to see mine. It shouldn’t be that way.

  3. #3 Calli Arcale
    February 14, 2012

    It burns me up when I see woos use the excessive cost of health care in America as some sort of argument against mainstream medicine. It’s not the medicine that’s the problem; it’s the stupendously inefficient “system” (if you can call it a system; that gives it too much credit) that we have for delivering it. People fear losing control, but they don’t realize how little control they already have. There are so many stupid things that we could fix to save gargantuan amounts of money. You could probably build a moonbase with the saved money.

    And the use of the ER as a primary care facility has got to be a huge part of that. You hit the nail on the head there; by childishly refusing to provide free care for all but the most critical, we end up paying orders of magnitude more than we ever needed to. It seems that private providers are slowly getting the message, and more urgent cares and walk-in clinics are opening up; it’s a start, but we’ve got such a very long ways to go.

  4. #4 MarkH
    February 14, 2012

    Calli I think Dunc is teasing. Poe.

  5. #5 Scott M.
    February 14, 2012

    Interesting post. It would be even more interesting if you would talk about your malpractice insurance premiums, and what you be paying for that if you were a doctor in, say, France.

  6. #6 Calli Arcale
    February 14, 2012

    MarkH — actually, I wasn’t even thinking of Dunc’s post; I was pretty sure he was joking about the same sort of thing.

    I’ve had a few run-ins with people using that argument in total seriousness lately, though, so it’s on my mind. One was a gal named Emily who was posting at Respectful Insolence; she finally flounced out when people started digging up enough information to call her on some untruths, but she was quite honestly using the excessive cost of American health care to argue against conventional medicine.

  7. #7 KQuark
    February 14, 2012

    Great to see you guys back writing blogs on a more regular basis again. I trust your laudable endeavors to further your medical career MarcH went well.

    Thanks to what I learned on Denialism, I’ve been preaching on my blog that a Universal Healthcare System is well, suppose to be as Universal as possible. Once more and more people get coverage that will drive down one major factor of costs, where reducing ER visits are a subset of lowering costs do to more people being covered.

    I try to inform the ‘Single Payer Only’ crowd of progressives that yes that would lower cost too but it’s not necessarily the best answer for the US and our healthcare culture yet. They have the mistaken belief that healthcare systems that are better and cheaper than the US all use single payer when the only thing they really have in common is that they are all universal. Who delivers the insurance is far less important especially since each state will have non-profit insurance available.

    I also try to teach them that our fee for service system and lack of a no fault type malpractice insurance (because of far too much CYA medical tests and procedures) are big reasons the provider costs are too high in this count.

    All forms of denial are just rampant in our society today. I’m a chemist who spent most of my career inventing and trouble shooting complex processes so I know where your logical and analytical approaches originate, as well as your frustrations.

  8. #8 Tsu Dho Nimh
    February 14, 2012

    The most egregious example I can think of was a patient with an infected boil that he ignored because he didn’t have a doctor or insurance. …. I would estimate the costs of his ICU stay, medications, and 12 hours of surgery were probably in the $60-90k range, and that’s a conservative estimate.

    I’ll raise the egregious expenses. When I worked lab at a county hospital, we dreaded the “walk in wonders” who were in labor. They had no prenatal care, no baseline anything, and when it went wrong it really went wrong.

    For lack of $1500 in prenatal care, one woman cost the system about 1/4 million dollars. $250,000, enough to provide prenatal care to 200+ women, went to save her because the stupid state (Arizona, what else) thought she made too much money for them to provide prenatal care.

    Her list of complications from untreated eclampsia and some other problems filled up about 2 pages. Kidney failure, DIC, septicemia, liver complications … we saw it all.

    It can’t possible be any more expensive with single payer universal coverage.

  9. #9 Henry Joseph
    February 14, 2012

    We had an outbreak of measles in one of our local schools recently. Yes, it’s a Steiner school.
    Anyway, at our child’s soccer practice, one of her teammates attends said Steiner school and its mother was moaning about what a nightmare the week had been because the children had been told to stay home for the week to prevent the outbreak from growing.
    One of the other mums, who is a Dr, asked, “So, is little XXX vaccinated?”.
    “oh, no”, came the reply.
    So….was it safe for her to be mixing with other children at soccer?
    “Oh, we’ve vaccinated her using alternative methods….”

    Lucky I wasn’t there myself or I would have told her straight up that she’s a complete f$%#ing idiot.

  10. #10 Dunc
    February 15, 2012

    Calli I think Dunc is teasing. Poe.

    Not really a Poe, as I did include a smiley to mitigate the risk of being taken seriously… ;)

  11. #11 John
    February 16, 2012

    Nice to see someone actively thinking about the problems in US health care. They are:

    For-profit insurance companies are largely an illegitimate business. Given 30 years of dominance they haven’t helped anyone but their shareholders, while the justification for their ascendancy– that they would lower costs and improve quality– have proven wrong. So-called “competition” between self-serving private bureaucracies helps them meet their fiduciary commitments to their shareholders, but it does nothing for patients except gum up the system.

    Invasive specialist MDs get paid way way way too much. Bring your child to the clinic with a fever and the doc will get $45 after having to answer your 1AM phone call and then have hired staff wrangle with your insurance company. But if the doc can stick a tube in somewhere, or inject some dye or make a cut, then we’re talking hundreds or thousands of dollars in compensation, even if the procedure was unnecessary or unlikely to provide any proven benefit.

    The work environment for primary care doctors is unsustainable. Primary care docs carry the liability of the world in an oppressively micro-managed environment with relatively little pay. Ask any health policy maker what should be done and it will inevitably involve MORE regulations and paperwork affecting that poor doc who answered your call at 1AM and then examined your child for $45 after wrangling with your insurance company. Ask any insurance company what to do and they will advocate for nurses, drug reps, or janitors to be allowed to take over primary care practice, just because those folks are not as bright and easier to manage.

    Policy wonk interventions damage the doctor-patient relationship. Let’s say that some nice foundation paid two million dollars for a group of armchair wonks to improve an outcome. The wonks probably developed some pre-authorization procedure that would in theory improve an outcome, but in practice creates another obstacle to a therapeutic doctor-patient relationship, which is actually what patients want most from their medical encounters. It is quite likely that a large part of medical efficacy comes from the quality of time that a doctor is able to spend with a patient, yet this is exactly the thing that every “quality improvement” intervention prevents.

    Trial attorneys. According to Atul Gawande and others, there are plenty of studies showing that malpractice fears do not drive up costs. Puh-leeeeeez! I would require that any MD who holds such an opinion go and practice for 6 months in Canada or France or anywhere else that is blessed with a less litigious culture. He or she will find medical decisions being made using medical reasoning rather than fear of lawsuits. Upon return to the US he or she will be shocked at the degree to which legal liability enters every single medical decision process, often resulting in extra tests and the choice of more expensive treatments. It’s just an obvious fact.

    Big pharm… enough said.

  12. #12 Auntiegrav
    February 16, 2012

    My simplistic answer is that we should draft all medical personnel into the military and require 3 years of medical service from everyone instead of a military draft (maybe make it a choice between military, peace corps, and medical aide). Everyone should have basic knowledge of medicine and how to handle injuries and infections, and who to ask for help.
    If socialized medicine is good enough for the troops, it’s good enough for everyone.
    It just might turn out to be the best thing.
    On the side note of that, we need to integrate health with the food production in this country. The medical ‘industry’ is not concerned about food, and the food ‘industry’ is not concerned about health. This is a government Failure of the first order.

  13. #13 DaveD
    February 17, 2012

    Universal health care is not a panacea, however. In Massachusetts, we have universal health care (well, more or less — about 98% of the population has health insurance). It has indeed reduced pressure on emergency rooms, so it succeeded in that area.

    What it hasn’t done is reduce costs. Massachusetts has the most expensive health care in the nation. We also have a ton of bleeding-edge hospitals that I’m sure don’t come cheap, but the point is that simply covering everyone does not automatically reduce costs. Even though it seems like it should help.

    I don’t know why costs are so high here. I suppose it’s in part that the universal-coverage system wasn’t designed to reduce costs — it was designed to make sure everyone had health insurance. Which they now do, but clearly, there’s more to the problem. The current governor has proposed some fairly drastic changes to try to contain costs — whether they’ll work, I have no idea.

  14. #14 Wow
    February 18, 2012

    “but the point is that simply covering everyone does not automatically reduce costs.”

    Well, yes. This could be because rather than universal health care you have: “well, more or less — about 98% of the population has health insurance”.

    On the “I don’t know why the costs are so high”, you can answer that by considering why CEO and director salaries are so high.

  15. #15 DaveD
    February 19, 2012

    Wow, I like your comments in general, but I think you’re off base in this case. Even if CEO and director salaries are high, they’re no higher in Massachusetts than in other places. And while I’ll concede that 98% is not the same as universal coverage, it’s also far higher than in any other state.

    So, how come Massachusetts isn’t seeing lower health care costs than other states?

  16. #16 MarkH
    February 19, 2012

    DaveD, it takes some time for the cultural shift to occur, and this was seen in the cited study. But eventually ER visits start going down. The most recent data on ER visits vs PCP use in Mass shows a small but statistically significant drop in ER usage, and ER usage for non-emergency conditions. Compared to 2006 fewer patients have had high out-of-pocket costs but about the same number of people describe difficulty affording health care. This may be reflective of the general economy.

    Also remember, that the people that benefit most from universality are being diluted into the previously covered pool. This will tend to shrink effects. But they are there.

  17. #17 DaveD
    February 19, 2012

    I’m glad to hear it — I was under the impression that, although ER visits have come down (which is good, and a strong step in the right direction), overall costs were simply not being contained. As I said in my original comment, this isn’t entirely surprising, because overall cost containment wasn’t part of the original goals. And, surprise surprise, it didn’t happen.

    Now that coverage is in place, they’re also looking at costs. I’m hopeful that this will succeed, because it would also give a boost to “Obamacare.” (A term I loathe, since it’s being used as such a perjorative, but at least people know what I mean by it.) Perhaps having a single state function as a laboratory will provide valuable results that can be applied to the nation as a whole.

  18. #18 TimLeePeters
    February 20, 2012

    Can a decent society really justify charging $90,000 to care for one boil? Somethings broken alright.

  19. #19 Calli Arcale
    February 21, 2012

    We need more than just universal coverage; there are plenty of places where the system of delivery could also be improved to make it much more efficient. More urgent care clinics would be a big help, especially urgent care clinics that cover more than just strep throat and vaccinations and are open 24 hours.

  20. #20 harold
    March 5, 2012

    I try to inform the ‘Single Payer Only’ crowd of progressives that yes that would lower cost too but it’s not necessarily the best answer for the US and our healthcare culture yet. They have the mistaken belief that healthcare systems that are better and cheaper than the US all use single payer when the only thing they really have in common is that they are all universal.

    Correct, but the culturally closest model is the Canadian model. Full disclosure – I am a US/Canadian dual citizen with relatives on both sides of the border. Canada is the second most expensive, but second by a wide margin, and the system is highly similar.

    We also already have a potential single payer system in Medicare.

    We need more than just universal coverage; there are plenty of places where the system of delivery could also be improved to make it much more efficient

    Although it would be interesting to see what just providing true universal coverage would accomplish.

    In Massachusetts, we have universal health care (well, more or less — about 98% of the population has health insurance). It has indeed reduced pressure on emergency rooms, so it succeeded in that area.

    The Massachusetts system is more or less based on mandating that people buy private health insurance.

    In addition to being inefficient and required to make profit for non-contributory middle men, private insurance tends to cut off people whose costs go above a certain level, leaving their costs to the taxpayers and non-profit institutions.

    The MA “Romneycare” system produces exactly the effects I would have predicted – better coverage, yes, some public health benefits, yes, significant reduction in costs, no, not with the health insurance companies playing a key role.

  21. #21 Wow
    March 6, 2012

    “Nationalizing our health care system is a point of no return for government interference in the lives of its citizen”

    Or, in other words: “Get Government Hands Of My Medicare!”.

    Teabagger.

  22. #22 Wow
    March 6, 2012

    “Even if CEO and director salaries are high, they’re no higher in Massachusetts than in other places.”

    Thanks for your appreciation.

    My point was about the fact that when you have to take extra from the insured to pay those who can’t afford insurance, you set in motion a vicious cycle.

    CEO pay doesn’t make a difference to that, it only ensures that there will be a class in power who are NEVER affected by this and therefore don’t care.

    And therefore since they see no problem, they will fix no problem.

The site is currently under maintenance and will be back shortly. New comments have been disabled during this time, please check back soon.