Summary: Economist Ed Dolan points to an amazing example of our mad health care system at work. It is one of the least discussed of America’s most serious problems.
This week I had a cardiovascular workup at a hospital. I got a physical exam, blood tests. chest x-ray, and treadmill EKG. The results were fine. While there I admired the surroundings. The good American big city hospitals (not those that treat the poor) are among our most opulent buildings, exceeded only by plutocrats’ mansions and corporate HQs. They are like American temples.
Even more impressive is modern medical technology. It makes the medical tech of my childhood look like antiques. All the instruments — blood pressure, x-ray, treadmill EKG — were computer controlled. With the hospital’s information systems automated, most of the receptionists’ desks were empty. I electronically received all of the test results within 24 hours, along with explanations,
It was all quite amazing. But this all raises a strange question. Why have these marvels not greatly improved American’s health and lifetimes? That is a complex question, with no obvious answer.
But there is another question, even more important. Economist Ed Dolan discusses it in a report at the Niskanen Center. We pay so much more (a fantastic 18% of GDP — two or three times what our peer nations’ spend. For that we get few or no extra benefits. America groans under the expensive of our mad health care system. It comprises the largest share of the massive government liability that so terrifies conservatives.
Where does the money go? For a small but illustrative example, he points to a recent study with some amazing results.
Excerpt from “Liquid Gold:
Pain Doctors Soak Up Profits By Screening Urine For Drugs“
by Fred Schulte and Elizabeth Luca
at the Kaiser Health News website.
“The cups of urine travel by express mail to the Comprehensive Pain Specialists lab in an industrial park in Brentwood, Tenn., not far from Nashville. Most days bring more than 700 of the little sealed cups from clinics across 10 states, wrapped in red-tagged waste bags. The network treats about 48,000 people each month, and many will be tested for drugs.
“Gloved lab techs keep busy inside the cavernous facility, piping smaller urine samples into tubes. First there are tests to detect opiates that patients have been prescribed by CPS doctors. A second set identifies a wide range of drugs, both legal and illegal, in the urine. The doctors’ orders are displayed on computer screens and tracked by electronic medical records. Test results go back to the clinics in four to five days. The urine ends up stored for a month inside a massive walk-in refrigerator.
“The high-tech testing lab’s raw material has become liquid gold for the doctors who own Comprehensive Pain Specialists. This testing process, driven by the nation’s epidemic of painkiller addiction, generates profits across the doctor-owned network of 54 clinics, the largest pain-treatment practice in the Southeast. Medicare paid the company at least $11 million for urine and related tests in 2014, when five of its professionals stood among the nation’s top billers. One nurse practitioner at the company’s clinic in Cleveland, Tenn., single-handedly generated $1.1 million in Medicare billings for urine tests that year, according to Medicare records. …
“Kaiser Health News, with assistance from researchers at the Mayo Clinic, analyzed available billing data from Medicare and private insurance billing nationwide, and found that spending on urine screens and related genetic tests quadrupled from 2011 to 2014 to an estimated $8.5 billion a year — more than the entire budget of the Environmental Protection Agency. The federal government paid providers more to conduct urine drug tests in 2014 than it spent on the four most recommended cancer screenings combined.
“Yet there are virtually no national standards regarding who gets tested, for which drugs and how often. Medicare has spent tens of millions of dollars on tests to detect drugs that presented minimal abuse danger for most patients, according to arguments made by government lawyers in court cases that challenge the standing orders to test patients for drugs. Payments have surged for urine tests for street drugs such as cocaine, PCP and ecstasy, which seldom have been detected in tests done on pain patients. In fact, court records show some of those tests showed up positive just 1% of the time.
“Urine testing has become particularly lucrative for doctors who operate their own labs. In 2014 and 2015, Medicare paid $1 million or more for drug-related tests billed by health professionals at more than 50 pain management practices across the U.S. At a dozen practices, Medicare billings were twice that high.
“Thirty-one pain practitioners received 80% or more of their Medicare income just from urine testing, which a federal official called a ‘red flag’ that may signal overuse and could lead to a federal investigation. ‘We’re focused on the fact that many physicians are making more money on testing than treating patients,’ said Jason Mehta, an assistant U.S. attorney in Jacksonville, Fla. ‘It is troubling to see providers test everyone for every class of drugs every time they come in.’ …
‘It Was Almost A License To Steal’
“Tests to detect drugs in urine can be basic and cheap. Doctors have long used testing cups with strips that change color when drugs are present. The cups cost less than $10 each, and a strip can detect 10 types of drugs or more at once and display the results in minutes.
“After noticing that some labs were levying huge charges for these simple urine screens, the Centers for Medicare & Medicaid Services moved in April 2010 to limit these billings. To circumvent the new rules, some doctors scrapped cup testing in favor of specialized — and much costlier — tests performed on machines they installed in their facilities. These machines had one major advantage over the cups: Each test for each drug could be billed individually under Medicare rules.
“‘It was almost a license to steal. You had such a lucrative possibility, it was very tempting to sell as many [tests] as you can,’ said Charles Root, a longtime lab industry consultant whose company, CodeMap, has tracked the rise of testing labs in doctors’ offices. …
There is likewise little scientific justification for many of these new types of drug testing that have made their way onto doctors’ order sheets and laboratory menus.
Many pain patients on opioids are routinely tested for phencyclidine, an illegal, hallucinogenic drug also known as PCP, or angel dust, Medicare records show. Yet urine tests have rarely detected the drug. Millennium, the San Diego-based company that once topped Medicare billings for urine tests, found PCP in fewer than 1% of all patient samples, according to federal court filings. …
Government officials have criticized the explosive growth in testing for some prescription drugs, notably a class of tranquilizers known as tricyclic antidepressants. Medicare paid more than $45 million in 2014 for more than 200,000 people to be tested for tricyclic drugs, often multiple times. Medicare was billed for 644,495 tests for one tricyclic drug, amitriptyline, up from 6,173 tests five years earlier.
The Department of Justice argued in a 2012 whistleblower case that these tests often couldn’t be justified because of “low abuse potential” of the drugs and a “lack of abuse history for the vast majority of patients.”
——————– See the full report here. ——————–
Conclusion
“If God didn’t want them sheared, he would not have made them sheep.”
— Calvera, bandit leader in the movie “The Magnificent Seven” (1960).
This is a tiny example of the extractive US health care system at work. It works much like the extractive defense industry and extractive Wall Street financial sector. These sector’s immense profits gives them the political power to resist reform. Both Democrats and Republicans love them. It is America’s “grifter economy.”
Little can be done to fix America without tackling these leaches. It can be done only by a broad citizen coalition that looks beyond the divisive issues that today keep us weak.
Being sheep is a choice, not a destiny.
For More Information
If you liked this post, like us on Facebook and follow us on Twitter. See all posts about health care, and especially these…
- Hidden truths about American health care.
- The core truth about our health care system — It’s quite mad.
- What does the health care debate reveal about us, and our future?
- Why do so many new-born babies die unnecessarily in America, the City on a Hill?
- Single payer healthcare is coming to America. It’s inevitable.
A new book explaining this vital issue.
Crisis in U.S. Health Care: Corporate Power vs. The Common Good
“The debate over U.S. health care — where to go next to rein in costs and improve access to quality health care — has become bitterly partisan, with distorted rhetoric largely uninformed by history, evidence, or health policy science. Based on present trends, our expensive dysfunctional system threatens patients, families, the government, and taxpayers with future bankruptcy.
“This book takes a 60-year view of our health care system, from 1956 to 2016, from the perspective of a family physician who has lived through these years as a practitioner in two rural communities, a professor and administrator of family medicine in medical schools, a journal editor for 30 years, and a researcher and writer on health care for more than four decades. There has been a complete transformation of health care and medical practice over that time from physicians in solo or small group practice and community hospitals to an enormous, largely corporatized industry that has left behind many of the traditions of personalized health care.
“This is an objective, non-partisan look at the major trends changing U. S. health care over these years, ranging from increasing technology and uncontrollable costs to depersonalization and changing ethics in medicine and health care. This book points out some of the highs — and lows — of these changes over the years, which may surprise some readers. It also compares the three basic alternatives for health care reform currently being debated.”
Because Americans are fat and lazy. Energy drinks, processed foods, sodas, candy and other tasty junk. Now add in the book tube and an aversion to fitness and what do you get – walking fatties. Instead of telling peeps to make better choices, restricting types of foods purchased with EBT cards, or making healthy foods more affordable we instead label lazy fatness as a disease and target people for fat shaming.
I predict the U.S. businesses and the military (especially the military) will become fat camps. Businesses will offer time during the day for employee health and fitness. Maybe even catering meals. Yeah, I think it’s gonna get that ridonkculous. The military needs bodies and American youth is getting fatter, higher and dumber all the time. So, where do we go – fat camps and prep like schools.
Gotta go my Pop Tarts just popped up.
Gute,
‘Because Americans are fat and lazy. ”
Please read the article before commenting, not just the title.
The critique presented is unfocused, combining insurance/Medicaid/Medicare abuse with the separate issue of the role of diagnostic testing in the healthcare system.
The issues of opioid abuse, the pain management industry and reimbursement fraud are each hugely important to our society and rarely subjected to rational discussion in an us or them political environment.
On the other hand the explosion of new diagnostic tests, AI systems for healthcare diagnosis and emerging approaches for preventive medicine and health extension present the potential for a transformation of sickcare into wellcare. This will require more, not less, emphasis on diagnostic testing, genetic analysis, etc. It will be fought tooth and nail by much of the existing healthcare establishment, that makes its money from disease management, not disease prevention and, yes, from pain “management” not pain prevention. Confusing legitimate use of diagnostic testing with the abuses described in the article could further inhibit the movement to preventative medicine in our healthcare system.
John,
“The critique presented is unfocused, combining insurance/Medicaid/Medicare abuse with the separate issue of the role of diagnostic testing in the healthcare system.”
Funniest thing I’ve read all week.
“Confusing legitimate use of diagnostic testing with the abuses described in the article could further inhibit the movement to preventative medicine in our healthcare system.”
Almost as funny.
Makes me appreciate just how fortunate I am to live in New Zealand where we enjoy a universal health system which spends a fraction of the amount spent in the US and yet delivers most New Zealanders what they want without additional expense. There are some drawbacks. Surgery which is considered non-essential or is for conditions which are not life-threatening often faces a waiting list or may be rejected by the “system” and to get around that problem some people carry additional insurance so that they can get treatment in private hospitals. The public hospitals are instructed by Government to keep the waiting lists as low as possible and most work on about 4 months.
Being retired and on a fixed income, I do not carry health insurance and, indeed, only ever carried it if an employer provided it for me. But in the last 3 years I have undergone major surgery: a radical prostatectomy in 2014; major surgery on both feet to correct bunions which were causing me a lot of grief in 2015; and last year urgent surgery to remove lymphoma from my small intestine followed by chemotherapy and radiation therapy. None of these treatments cost us any more than travel expenses for my wife to visit me while I was in hospital and those are pretty small compared to surgical and therapy costs (oh, yes, plus some decent coffee!). Even then, had we lived remote from the two hospitals in which I was treated some travel expenses would have been provided, as would have been accommodation for a support person while I was undergoing the cancer therapies. I faced no waiting lists in 2014 or 2016 but did for the 2015 surgery because although the condition was painful it was not life-threatening. All three situations required numerous blood tests, X-rays, several CT scans, and some MRI scans, and a PET scan.
However, the tenor of this article, which is about what we would refer to as “rorting” the system to make a large profit, could also be applied to New Zealand, but to a lesser extent. Prescribed opiate addiction is rapidly becoming a problem in NZ and the testing regimes expensive. I have no doubt that there are entities exploiting this to make what might be considered an exorbitant profit. We enjoy another universal system controlled through the Accident Compensation Commission which was established to circumvent liability problems and very significantly reduce litigation arising from accidents. All New Zealanders are covered in the work place, in public places (including roads), the home, and in their leisure activities. Claims are made to ACC through a General Practitioner or other recognised health professional and I have no doubt that most of the claims are made are legitimate and reasonable. I am aware, however, where a clinic has made a claim which in my opinion was excessive, and which was paid out. No system is immune from such practices without introducing regulations that are so prescriptive as to allow no discretionary action. To prevent the “rorts” we need to establish systems which help control them without strangling the benefits to users.
Gary,
“There are some drawbacks. Surgery which is considered non-essential or is for conditions which are not life-threatening often faces a waiting list or may be rejected by the “system” and to get around that problem some people carry additional insurance so that they can get treatment in private hospitals.”
It is not a “drawback” unless there is an available system that operates differently (there is no need for health care in Heaven). There is not. In fact, that is a far better situation than in the US – where a large faction of the population faces not a waiting list — but total unavailability of such surgery. So that is an “advantage” of New Zealand vs. the more poorly run systems (let alone systems in poorer nations), not a “drawback.”
Gary,
Follow-up comment — thanks for telling us about NZ’s system. That’s valuable since conservatives have spent a great deal of effort and money lying about other nations’ systems, convincing millions of Americans that elsewhere health care is socialist dystopian system from Hell.
Healthcare delivery in the United states is a complex issue. while the article focuses on a couple of facets, they are reflective of the incentive/disincentive tug-of-war constantly at work. One of the largest misconceptions in the debate is the concept of primary care vs. tertiary care. Diagnostic testing is indeed overused. It is not a new revelation either. A good primer on this particular aspect is “Over-Diagnosed, Making People Sick in the Pursuit of Health” By H. Gilbert Welch MD. In fact, I witness this everyday. I am a Registered Diagnostic Cardiac Sonographer, and have studied not only my field, but the medical field at large. I saw first-hand how the Affordable Care Act (Obamacare to the uninitiated) was twisted from the intent of keeping people out of tertiary or acute care, too how services in acute care could be maintained at the status quo or even expanded. I am not interested in arguing with the uninitiated about some of the more arcane aspects of diagnostic testing, collecting urine specimens being one of them, but that is only one of the tips of an iceberg with many others. The underlying theme among them all is driven by for-profit industries, most of them multi-national, who have taken over healthcare in the United States, and find it a very lucrative market. There is no real concern among these companies about “patient outcomes”, an area the US does not rank well in, despite the technologic resources we enjoy. It boils down to resource utilization, and which one is easier to bill for. It should therefore come as no surprise that companies specializing in diagnostic drug screening (used in your example), are able to profit from diagnostic testing for their presence, while in the midst of “an epidemic”, insurance companies will pay for the very drugs that are at the heart of the epidemic, because they are “cheaper” than those on the market engineered without addictive side-effects. Which incentivizes the pharmaceutical companies to continue manufacturing the drugs, and even flooding markets after DEA diversion investigators have identified those particular markets as operating outside the requirements for Schedule II pharmaceuticals. See the triad there? That is only one…..
Thanks Timothy. As you indicate, the issue at hand is what is the purpose of healthcare in the first instance, keeping people well or fixing them after they are sick. A great book for that is Beat the Heart Attack Gene http://beattheheartattackgene.com/, which demonstrates that heart disease, diabetes and stroke are genetic and lifestyle conditions that affect a high percent of Americans and that can in many cases be prevented from leading to an acute healthcare event that requires expensive intervention from the traditional healthcare system. Proper diagnosis, treatment (including lifestyle modification) and monitoring cost money, but only a fraction of the cost of one heart attack, kidney failure, amputation of necrotic feet resulting from diabetes or some other health crisis that results from failure to timely address the underlying causes and prevent them from progressing into full blown disease.
The system is not designed to prevent disease. My wife has been treated for breast cancer at a cost of tens of thousands of dollars to Medicare, fortunately to address a stage 1 cancer caught early by conscientious adherence to her mammogram schedule. Following her treatment, she was advised that she is only entitled to a preventive healthcare visit every other year, even though she is now likely at higher risk for appearance of cancer elsewhere in her body. Should she choose to wait until her next visit is covered by Medicare to save the cost of checkups and as a result fail to find early on a new cancer, the system will, of course, gladly spend hundreds of thousands of dollars on advanced cancer care. We fortunately can afford the out of pocket cost of preventive car, but many in her position will have no choice but to wait for a crisis coverable for their insurance.
A license to print money, once you’re in (as a supplier or service provider)… That is exactly what the US medical system is set up to be, at many, many different levels.
I worked briefly at a med diagnostic facility that ran 5k patient samples and probably 100k tests per day. Watched a million$ automated line get put in … the big boys don’t do manual pipetting. At one point I had a similar experience – a $1000 bill for a battery of tests I know for a fact were done in under 2 minutes with a push of a button. I moved on to an equipment maker to pharma. Now I occasionally help bring together pieces for the manufacturers of the diagnostic tests. The license-to-$$$ concept goes really deep, all the way up the chain of tech and manufacturing, in addition to the care providers, diagnostic equipment and service providers, researchers, approval agencies, IP law, “customer” dispute settlement law, contract law, insurers, tech development funding agencies, and the biggest of them all, pharma.
One added dimension to this, which I think might be distinctly American, is that the whole mega-system, in each of the above areas, is broken up into all these vertical layers. The opposite of vertical integration. That has several effects: (1) anyone of financial significance is shielded from responsibility for anything by 4-6 layers of contractors. (2) each layer along the way takes a cut to maintain their internal structure (besides the actual work they do) (3) although the lines of communication are usually really simple straight-chains, a holistic vision is often absent, providing feedback up the chain is difficult, and therefore everything is overdesigned to counteract other effects, undertested in anything beyond the narrow sense of whatever was written down at project inception, and expensive. (4) due to the organizational complexity as well as the regulatory hurdles, once something is established, you’re $$$. (5) the incentive to defend the $$$ positions frivolous lawsuits and insurance system subterfuge is enormous.
If you care to look, you can see this in each of the high-tech objects you encounter in a modern hospital. It really does add up. It’s a fantastic gordian knot for some future reformers to tackle.
Pete,
Thanks for the first person observations of our mad health care system.