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01/19/2015

Why Buying A Car Is So Unlike Buying Healthcare

Let’s say you are looking to buy a car. You think you might
want to buy a Volvo so you go down to the Volvo dealer and check out the new
models. But you are shocked by what you see. You realize that you really don’t
need to spend $35 to $40,000, or more, on a new car, so you decide to visit the
Subaru dealer. There you find very nice alternative models for thousands of
dollars less. You are delighted to have a new Outback for about $27,000.

The above story is how private markets and market choices
work for the vast majority of items that we purchase to meet most of our needs
as human beings. However, it has become painfully obvious that healthcare is an
area where the normal model of markets and market choices do not apply. I’ll
use a personal example.

A little over 15 years ago, I was diagnosed with colon
cancer, which left me scared and shocked, especially for someone who has no
family history of this disease and who had always exercised regularly and
maintained a healthy diet. I gladly agreed to aggressively use the most
effective technology, medications, and surgical procedures to deal with my
condition; and I never once thought of whether my treatments cost too much
money or whether I could get a better deal at another hospital. Shopping around
for a lower price on my treatments would have been simply preposterous for me
to consider at such a time. In due course I started getting statements of the
medical costs in the mail associated with my treatment from my provider, most
of which I did not have to pay because my insurance covered it. It was
noticeable that the charges that were actually paid by the insurance company were
only a fraction of the amount billed by the hospital. But it didn’t matter to
me at the time that these complicated market games were being played by large
healthcare organizations. I was only focused on the treatments I needed to get
healthy again. If I had not been covered by an excellent healthcare plan, my
care could have been delayed or not provided at all, and I would not be alive
today.

A patient, like myself, with a medical condition who needs
attention is not and cannot be a rational consumer in a free marketplace. Not
only is it not possible, at least for the vast majority of patients like me, to
function rationally in such a stressed state of mind when the only thing that
matters is getting the needed medical care, it is also impossible given the
structure and nature of the healthcare system in the U.S. Assuming I had wanted
to be a rational consumer, the first question is, whose interests am I serving?
Since I am only paying a co-pay, shopping around for the lowest price on CT
scans, radiation therapy, and surgery, might save my insurance company money,
but not me. But even if I had had more skin in the game, finding the best price
would mean that all of the hospitals and providers I needed would have to post
their prices for all the required services. And even if they had done that,
does anyone really think someone with a life-threatening illness is going to be
motivated to choose their healthcare provider and the services they provide on
the basis of the lowest cost? If anything, most of us might choose the higher
price with the likely false assumption that it is of better quality. After all,
forgoing a car at a higher price is one thing, but possibly missing out on the
best treatment possible for cancer is quite another.

Which is to say, the mindset of patients and their families
about their concerns over their healthcare needs cannot be compared to
purchasing normal market items and services. We humans just don’t have that
kind of detachment toward ourselves—the well being of our bodies represent the
hope we have to live out our lives and our dreams. But to reiterate, just as
patients are not normal market consumers, neither is the healthcare system
itself a normal market setting. One only needs to look at how our nation
inefficiently spends vast amounts of our wealth on healthcare, the wide
variability of costs for medicines and procedures from one hospital and provider
system to another, and the poor overall outcome measures achieved compared to
other countries. Clearly, the U.S. healthcare system is rigged to make money
for those well situated within the system, not to provide efficient care to the
greatest number of people. And for the most part, patients, and too often
physicians, have no idea how much their healthcare costs at the point of
delivery. We are all, mostly insulated from cost for which we as a society pay
a huge price as a result of the inefficiencies.

If we are to have affordable, quality, accessible healthcare
for all citizens, or even for most citizens, we must first fully admit that
healthcare left to capitalistic market forces all major players—including private
insurance companies, pharmaceutical companies, medical device and equipment
makers, medical specialties and sub-specialties, healthcare organizations and
their executives and shareholders, and all of their lobbyists, and all others
invested in the U.S. healthcare system—are motivated by their own economic
self-interests first and foremost. This is not to say that all of these
entities don’t do remarkable work—I owe my life to the U.S. healthcare system.
But the fact remains there is too much money in the U.S. healthcare system that
has nothing to do with improving quality care for patients. It is time that
more of us understand that we need a system that is built around the interests
of patients, not those trying to make as much money as possible on patient
care. This is a topic that I will develop in my next few blogs.

The Alden March Bioethics Institute offers a Master of Science in Bioethics, a Doctorate of Professional Studies in Bioethics, and Graduate Certificates in Clinical Ethics and Clinical Ethics Consultation. For more information on AMBI’s online graduate programs, please visit our website.  

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