The Death Spiral Of The American Health Care System: Australians Beware

The Death Spiral of the American Healthcare System: Australians Beware
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G’day Mates:

The first time President Trump and Malcolm Turnbull, Australia’s prime minister, communicated, Trump infamously cut the phone call short, dissing Oz’s PM. President Trump, in his latest go-round with Malcolm Turnbull, gave the Aussie PM about three hours of his time during a celebration on the Intrepid Aircraft Carrier Museum upon the fiftieth anniversary of the Battle of the Coral Sea. Trump was reported to have told Turnbull that he thought the Aussie Medicare system was superior to the American way of managing health and sickness.

A few days later, Trump also reiterated his “death spiral,” prognosis for America’s healthcare system when reacting to news that the major insurer, Aetna, was pulling out of the insurance exchanges in Virginia. For a change as an American MD provider/patient who was also a provider/patient in Australia for a year ending June 2016, I couldn’t agree with him more.

As most of you know I had to opportunity to experience the Australian health care system not only as a provider MD in my year’s stay but also as a patient (“I left my heart in San Francisco and my prostate in Melbourne”). I got to know the relative efficiencies and costs of Australian Medicare system even though I was “self-pay”. Indeed, I well knew the prices because except for one time dealing with the Alfred Hospital emergency room (in Melbourne where I lived), I had to pay everything with a credit card either before or right after the time of services.

Now I’ve been back in the U.S. for ten months and finishing up treatment for prostate CA ― increasing my chances post-surgery of living without metastatic disease from 80-90% to 98-100%, e.g. I’ll die from something else. While the care has been state of the art and the frontline radiotherapists, superlative – the hospital health care system’s billing, charges and insurance process have confirmed for me that our U.S. system of fee for service is on its last legs. I predict that within three to five years the average person in the United States will not be able to afford any health care premiums offered because the costs and amount of care are absolutely out of control.

I’ve already mentioned to some of you that part of my treatment for prostate CA was getting two anti-testosterone shots of Lupron or leuprolide – a drug that was approved by the FDA in 1985. The first shot which lasted one month cost $6000 (US) and the second for three months cost $11000. At least that’s my best estimate of the costs because after three hours of total time on the telephone with four insurance and three hospital reps I still could not determine the exact cost of the two shots. The hospital negotiates with the insurance company to define what’s called the “allowable” charge for every drug, procedure, etc. offered by the hospital and covered by the insurance company. Apparently neither party is obligated to share this specific cost with the patient!

So, all I know is what the hospital statement read which did not tell me exactly what I was to pay for the shots. The charges were lumped together with other charges and I could determine only overall what I and the insurance company shared in paying the reduced hospital charges (the allowables are never what the hospital charges – are you Aussies following all this?). Even though I paid only 15% of the allowable charge (my insurance paid the rest), I was frustrated and outraged.

I’m also not certain how much Alta Bates/Summit Medical Center (the enormous corporation billing me for my radiation/hormone treatments at Herrick Hospital in Berkeley) marked up what Abvie (what Abbott Labs is now called), the pharmaceutical company that makes Lupron, charged.

I am not alone at alone in experiencing the opacity of hospital statement charges. An article in the New York Times Magazine section six weeks ago made my particular experience seem like a holiday compared to a woman who was admitted with a vascular emergency who thought she had insurance and didn’t. It took three years and the assistance of many advocates for her to figure out just exactly for what she was charged and her bills ran into the hundreds of thousands of dollars.

I do know after checking a Canadian pharmacy website that Lupron one month and three-month depot injections were being offered at about 10% of the U.S. costs. The obscene charge for this drug that is 30 years old is only one part of the out of control costs and price gouging that is going on in the last days of our current American health care system. Lupron is regularly used as a complementary treatment for prostate and breast cancer which are among the most common neoplasms affecting Americans and Australians.

Doctors’ fees are also out of control. As long as we remain primarily a fee for service system there will always be a financial incentive for doctors to do more. I am not saying that doctors are completely unethical. But in those 50/50 situations (which are very common) to offer a service or perform a procedure ― or not ― getting paid and covering your ass legally (to avoid an over-zealous malpractice legal culture) lead to much excess care and costs.

Seventy per cent of medical care in Australia takes place in “private rooms” – meaning seeing the doctor privately. Australian Medicare is billed by the doctor and paid at rates that seem in general one-third what American doctors get for the same procedures or services. Australian patients share in the expense with a co-payment.

However, the Australian system works – “better” according to Sir Donald, himself. The main difference between the two healthcare systems is the result of a broader overall acceptance of government regulation over corporate interests in Australia compared to America. Many of you have heard me talk about this in the past. Markets should be efficient but are immoral. In the case of American healthcare, the highly-vaunted market systems are not working at all. Government could serve as a useful bulwark against the corporate hegemony that operates here in the States in all sectors of life.

Most American aren’t aware that 20% of all American health costs are spent on the last two weeks of peoples’ lives. When the Affordable Care Act (ACA) aka Obama Care was being considered, the cost cutting/savings associated health maintenance organizations (HMOs) were considered. Oregon’s decision to limit spending on how state money should be used in the last stages of life – provoked a media calumny of “death panels” – groups of doctors who might deny funds for care at the end of life. That epithet brought a sensible and necessary discussion of the limits of healthcare costs in the U.S. to its own quick demise.

The majority of American patients and doctors alike are very unhappy with our system of health care. Perhaps our current President has had his own negative experiences which led him to compliment his Aussie counterpart’s system. The rich are not immune to the regular insanities. They are just better insulated.

I am in the middle of reading Elisabeth Rosenthal’s new book, An American Sickness: How Healthcare Became Big Business and How You Can Take It Back. Rosenthal also wrote the above-mentioned New York Times Magazine article. I’m having confirmed (and learning) so many dysfunctional aspects of our healthcare system which have developed via a highly-flawed market approach to healthcare.

I haven’t gotten to the end of the book where she provides her own prescribed remedies to this mess. But I suspect today’s American patients, at best, can only tinker with protecting themselves from the worst aspects of this out of control system. And I recommend this book to any Australian who is deeply into schadenfreude (pleasure at someone else’s pain).

Rosenthal says we spend 20% of our GNP on health compared to most other developed countries’ 10%. Our outcomes are worse. Insurance companies under the ACA must spend at least 82% of their premium payments on direct patient care (Medicare spends 98%). So, any way they can expand the amount of their 18% share, makes the company more money. It’s to their advantage then to accept $11,000 hospital charges for Lupron as long as paying for higher and higher premiums hold out.

The total charges for my forty radiation treatments (each lasting about 4 minutes) was $27,682. The insurance contractual adjustment was $6,643.66. Insurance paid $19,535.56. I was left owing $1502.76 ― which didn’t seem that much for the forty treatments. However, after factoring in the insurance adjustment, the total cost of each treatment was about $525! These numbers don’t include the physician charges which weren’t too bad.

Since my state of the art PSMA PET scan I had in Melbourne only cost me 25% of what UCSF charged me for the exact same scan in San Francisco, I imagine the charges to Australia Medicare for my radiation treatment would have been about $130 each ― but I’m just guessing. I have no idea how much an Australian with Medicare insurance (which they have from birth) would have had to pay out of pocket, but I suspect around $150 total for all the treatments. I already suggested in a previous blog ― consider traveling to Australia for the treatment of your prostate cancer. You’ll save considerable money and have a great time with the mates.

Our system of healthcare in America is doomed. The recent Republican “victory” in the House of Representatives repealing some aspects of ObamaCare may ironically only hasten the end of the current system. But unfortunately, nothing short of a natural or social catastrophe can offer sufficient political momentum which might then dislodge the current beneficiaries of our present system: the doctors and hospitals and the drug, medical device and insurance industries. In America, patients come last.

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