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Piercing the Medical Guild - A Failed US Healthcare System Held Hostage

Politics / Healthcare Sector Jan 16, 2014 - 10:40 AM GMT

By: Stephen_Merrill


Even in our crisis ridden world, the healthcare sector in the United States tops the list of present-day economic catastrophes. 

According to figures issued by the World Bank for 2011, healthcare expenditures in the United States, astonishingly, consumed 17.9% of the gross domestic product.  By comparison, healthcare spending in Canada was 11.2% of the economy, in Japan 9.3% and in Britain 9.3%.  The proportion of healthcare spending in the US just about doubles the average figure for other major nations.

Yet, on the broadest of all measures for healthcare effectiveness, the scale of longevity in most advanced nations well surpasses the longevity in the US.  Europeans, Australians and the people of several Asian nations can expect to live into their 80’s.  In the United States the figure is 78.6.  China, at 75.6 years, now only marginally trails the US life-expectancy.

Despite the outsized spending in the United States, tens of millions of Americans are all but shut out from routine health care services due to the prohibitive costs of care.  That is unsurprising given overall healthcare spending has risen on average 4% each year since 1980.  The present cost of a weeklong hospital stay comes to well over $100,000, assuming it is only for something relatively simple.

In other words, economic insanity rules healthcare spending nationwide.  Few consumers could ever pay these astronomical charges for something everyone is going to need at some time in their life. 

The main source of the insanity, federal programs and spending, is well beyond anything citizens can do on their own to change things.  There are few free markets in American healthcare any longer that the average patient’s preferences can much affect.

Even state governments are irreversibly trapped in the present medical payments system by mandatory Medicaid spending and now by Obamacare regulations and mandates.  Every person and large business in America is going to soon be under strict orders from Washington, D.C. to sign up for Obamacare or pay a fine.

Being only a small cog in a national system, it is a near hopeless situation at the present time for the individual states in the short term to much reign in their own medical spending costs (though the most important way in general is discussed later).  It would take an act of secession by a state government to free itself of the Washington D.C. healthcare payment system.

The national network of healthcare interest groups and government agencies will control our spending fate on healthcare forever, short of a cataclysmic national crash or breakup.  That is a reality. 

What Americans may be able to do though is to improve by far on the other side of the equation when it comes to our healthcare services.  That is patient outcomes and open access to care. 

The first questions to ask? 

How does the quality of medical services in the US compare to other places?  Why so?

Patient Outcomes

According to a 2010 study published in the New England Journal of Medicine the United States disgracefully ranks 37th among nations in delivering healthcare to its citizens, the measurement of the system’s overall performance.  That shocking fact compares sharply with the elitist propaganda often floated that Americans generally enjoy a high-quality healthcare system.

As the citations in this article tend to show, there are surprisingly few US studies examining the overall proficiency of healthcare nationwide.  State medical boards generally offers few statistics at all on their web sites, along with no information concerning the quality of healthcare services in the state. 

To learn about a past disciplinary action against doctors in most states one can review at the state web site a list of all recent medical board actions, if you can locate the obscure link.  The case summaries are typically stated in a single paragraph.

State medical boards seldom, if ever, undertake a formal action against a hospital or other corporate health-care provider for the commission of medical errors or even fraud.  It seems to be largely beyond their writ for reasons hard to understand.

As a consequence of the dearth of competitive information on the medical profession, the public has little to judge the quality of their medical providers by.  The new privately managed online medical ratings services have scant input so far from most areas of the country.

The large annual expenditures on consumer protection efforts by the states somehow leave everyone completely in the dark about the quality or the cost of medical care in the US.  The same is true for just about any other profession closely regulated by the states.  The faults of the lawyers’ guild is for another day though.

This absence of competition and information in healthcare is the typical guild protectionism so prevalent across the United States and Europe.

Far from a modern development, physicians have always been the most avid professional group favoring a guild structure, a history dating all of the way to Ancient Greece and the original Hippocratic Oath.

Two Professions Collide Injecting a Toxic Brew

If the general public has its issues with lawyers, just ask any physician his or her opinion on the value trial lawyers add to society.  Whenever the issue of excessive healthcare cost is raised the common reply from the medical conglomerate is the lawyers are killing the golden goose.

The actual impact of medical malpractice verdicts and settlements nationwide is overstated in the mainstream press coverage.  These paid compensations for unnecessary injuries comprised only 1.5% of healthcare revenues overall in 2011, the lowest amount on record.  Scandalously, well more than half of the payouts went to “administrative expenses”: read lawyers and expert witnesses for lawyers.

Contrary to public perception the medical malpractice lawyer has all but gone extinct in many states.  The last straw in my home state was the $250,000 cap on noneconomic damages passed by the Alaska Legislature in 2005.  The cap especially makes the economics of malpractice cases unworkable for a court case quite often.  Such caps apply in many states, including California.

So, it seems far fewer any longer wish to take on the high risk and great expense of medical malpractice litigation, neither attorney nor patient. 

But the actual annual payout for medicine-related injuries is not the bad number to be most concerned with when it comes to this problem.  The very bad numbers, the number of excessive medical procedures and the widespread patient distrust, afflict the practice of medicine in the United States more so than lawyers ever could on their own.

The cost numbers flowing from “defensive medicine” in the United States are staggering, up to one-third of all healthcare spending, something despised by professional groups of physicians and surgeons as well.

Reforming the US Medical System State by State

So, what can be done in one state alone to improve healthcare delivery and outcomes?

What would in large part drain the elitism in the medical field that prevails today in the US?  How can the patient be re-empowered in ways?

Greater Access and Readiness

One thing Alaska has done to improve access to healthcare is to allow doctors of osteopathy to practice medicine here just like a physician basically.  This is done though without unusual testing requirements for the osteopath addressing whether they are generally up to practicing medicine across the board. 

The practice of allowing non-lethal injuries and illnesses to be treated by lesser health professionals should be expanded everywhere and not just to osteopath academy graduates.  A seven year medical education is simply not needed to effectively contend with the majority of ailments that can afflict people.

However, a rigorous, ongoing system of testing should accompany the relaxation of basic healthcare provision by physicians only.  Testing in all licensed fields should be ongoing, not just attending seminars, even for physicians.  Sheepskins from a medical university, even an M.D., should not be the sole basis for a license to practice healthcare. 

The best proof of overall competency lies in the testing certification.  Those proven capable by recognized testing should be allowed to utilize their skills in the medical marketplace little matter their paper qualifications.  Those unable to meet present standards in their field should no longer be licensed, no matter how long they might have practiced.

The 21st Century revolution in information technology empowers dedicated self-learners like never before by far.  A reasonable medical education in most ways can be obtained seated as your desk at home reading, typing and listening.

As a result of broadening opportunity in the healthcare field, the number of good healthcare providers, and therefore general access to good medical care, will substantially increase.   The new capable people entering the medical field, all required to prove their worth to patients and to the public, will more than fill any gaps in patient needs that arise.                                                 

Keeping the Score

There is a most fundamental change that is sorely needed in the practice of US medicine: the prompt, accurate reporting of medical errors and their source.  Little could be more imperative.

Yet, the US healthcare system has always lacked the kind of common sense reporting that would help improve the prospects for every future patient across the board.

This shocking absence has huge real world consequences.  It was way back in 1999 the Institute of Medicine found that as many as 98,000 US deaths a year were due to medical errors.  The Institute then strongly urged mandatory and voluntary reporting systems for medical errors so the source of problems can be located and dealt with.

Years of hot air from Congress and federal agencies and healthcare special interest groups on this subject has resulted in no important action taken whatsoever when it comes to medical error reporting, amazingly.   For instance, the Alaska Medical Board has nothing on its radar at all for this essential need in medical care. 

Such reporting rules could be proposed and enacted anytime by state government.

If there were one regulatory need the state should first address in the practice of medicine it is the maintenance of a proper ledger of transactions, especially when it comes to troubling patient outcomes. The fact this obvious need is not addressed at all by state government is a most woeful example of the failure to the public of the professional guild in power. 

The present medical error reporting practice in the US is akin to a fire engine without a water hose, like a baseball game without an umpire, like a city without a police force.

Joining the People in the Courts

A third obvious solution for the broken healthcare system is more accountability and transparency in the disciplinary process for physicians and other healthcare providers. 

Given the way the practice of medicine has evolved into warring camps, doctors vs. patients and their lawyers, the present disciplinary system is far too defensive to be effective.  The medical boards’ track record in this area tells the tale in full.  The state board feels it has to almost always back up its physicians.

So, for the true benefit of consumers and taxpayers, the independent guild system for professions run by the state government should have its disciplinary powers transferred to where they have always belonged: that is in the court system that already operates.  If that system is good enough to adjudicate all matters for the rest of the citizens, the system is good enough to police professional competency and ethics, too.

While the courts are scrutinizing individual physicians, the hospitals and mega-corporations in the medical field should also face the disciplinary process.  The errors and vanities of hospital administrators and pharmaceutical executives should be judged by the legal process too, just as physicians are.  Their mistakes often greatly affect thousands of patients.

It is past time to end the medical profession regulating itself in virtual secrecy.                              

Balancing the Scales for Providers

If the medical profession is to be opened up to much closer scrutiny and self-criticism in the ways suggested here, what about the effect in the war over money with the lawyers?  Would not a more open and analytical assessment of individual patient outcomes lend fire to the prospect of legal liability?  Would the malpractice lawyer be possibly reborn from this change in medical practice?

For this reason and for more cogent ones, the medical malpractice suit should be abolished on the law books to be replaced by an automatic compensation system for those medical patients who can establish they have been seriously harmed in the course of their treatment or non-treatment by hospitals and physicians.  Fault or malpractice need not be specifically proven.  That 1 in 1,000 patients who do experience a terrible medical outcome, just due to bad luck largely, would be included for compensation also.

In return for future medical treatment and lost income tied to the poor patient outcome, the patient gives up his or her chance for a much larger payout in court years later. 

With such a practice in place, virtually all of the payouts made would benefit the patient rather than the lawyers mostly.

This change would be similar to the worker’s compensation systems that have been established in all fifty states. It is based on the same general economic principles as the no-fault car insurance regimes many states have successfully adopted.

The nation of Sweden long ago adopted an automatic compensation system for medical patients who receive injurious substandard care.  The Swedish system rests on agreements with hospitals and physicians and the choice of insurance to apply.    Medical error claims by patients consumed only 0.16% of total healthcare revenues in 2011.

The nations of Denmark and New Zealand have also adopted a compensation system similar to Sweden’s, but wider in its coverage of poor patient outcomes.

The physicians and healthcare concerns in all three nations broadly support the systems they have adopted.

With insurance for the patient in place in some countries, along with a strict medical error reporting system operating in most places now, many nations enjoy a more effective and much less expensive healthcare system than exists in the United States today.

 Far beyond making much more sense as an economic model, a vast change in perceptions in the US under the Nordic model would largely end the main reason for the wide distrust today between physician and patient, the very need for posturing and secrecy so widespread in the system. 

The prospect of a future court fight over the patient’s poor result would no longer exist.  Physicians could solely focus on solving the medical problem rather than thinking about a future malpractice trial or one for his or her colleague or hospital.  The patient would no longer fear being left financially destitute should things go horribly wrong unless the patient can prove fault by the doctor or hospital.

And, over time, all of the excessive medical testing, secrecy, posturing and defensive practices will fade away as a more rational way of doing things takes hold.  The conflict of interest between patient and physician that has harmed the US healthcare system for so long will be gone forever, at least in your home state.

Every state government in the United States could accomplish all of this change suggested here entirely on its own, whenever it wished to.

Mr. Merrill served in the Navy Judge Advocate General’s Corps and as a Navy Reserve Intelligence Officer.

Mr. Merrill is the editor of the Alaska Freedom News, formerly the Hampton Roads Freedom News

© 2013 Copyright  Stephen Merrill - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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