Fixing Health Care Without Spending Trillions Of Dollars

Many times we have reviewed the fallacy that the current health care bills President Obama is pushing are fatally flawed by one simple fact: no one in the political class did the necessary analysis to determine the root cause of the problem. High and rising health care costs are the symptoms of the problem,they are not the root cause of the problem. For a simple to understand analogy, read Step 28 in "Love My Country, Loathe My Government." Every past and current political class solution to the health care cost problem has treated the symptoms without eliminating the cause.

Today we will look at a few simple, inexpensive fixes that could be implemented that probably address the root causes of high health care costs. The first of these is medical malpractice tort reform. The good thing about these fixes is that they have been successfully implemented at the state level. According to many sources on the Web, the following states have had great success in medical tort reform:

• In 1975, California passed the Medical Injury Compensation Reform Act (MICRA) which, among other things, capped the amount of medical malpractice awards. Since then, the California cost for medical malpractice insurance has gone up 168% on average while nationally the cost has gone up 420%.
• In the 1990s and again in 2003, Texas passed major medical malpractice tort reform. Since then, the number of malpractice awards have gone down 25% and the cost for malpractice insurance from the state's largest insurers is down over 50%. See another post we did in late 2009 that detailed other positive, cost reduction details on the Texas tort reform experience.
• In 2005, Georgia also capped malpractice awards and has seen the number of malpractice lawsuits go down 39% and medical insurance rates go down 18%.
• The Congressional Budget Office estimates that medical malpractice tort reform would reduce the cost of medical insurance anywhere from 10-30%.

By significantly reducing the overhead cost of running a medical establishment as a result of reduced insurance premiums, general health care costs should go down. Also, the costs of defensive medicine, i.e. running additional, unnecessary tests just to make sure there are no potential loopholes left open for a devastating malpractice suit, should also go down once the threat of frivolous and expensive lawsuits is reduced.

Now, a few things to note. Most Internet articles and blogs that think this is a bad idea are written by lawyers or law associations, those that stand to lose the most in any type of tort reform. Thus, be careful when you read contrary opinions for this type of reform, understand where the writer is coming from. Second, there should be an exception to capping damages when, and only, there is gross, gross negligence, on the doctor's behalf. Third, a mechanism would still have to be implemented to continue to reduce defensive medicine that is unnecessary but is done because the doctors get paid for running excess tests. Some defensive medicine would be reduced by tort reform, it is doubtful all unnecessary defensive medicine would be eliminated since the doctors would still benefit from doing some unnecessary defensive medicine.

Given that some states have been successful with reducing health care costs without massive government intrusion into individual's lives, just a little mix of tort reform, does it not makes sense to try this approach and see how it goes before devoting TRILLIONS of dollars via the current health care reform bills that have not yet identified the root causes?

How about another way to simply and inexpensively reduce health care costs? This approach would mimic some of the policies at the Cleveland Clinic which, according to an article in the March 1, 2010 edition of Fortune magazine, "provides the highest quality care at costs well below the national norm." How does the clinic do it? According to the article, an interview with its CEO, Dr. Delos Cosgrove, they understand the root cause of health care problems:

• Three activities, smoking, diet and lack of exercise cause 40% of the premature deaths in the country.
• These three activities are major causes to 70% of chronic diseases including heart disease and emphysema.
• In turn, these chronic diseases eat up 75% of the nation's cost of health care, i.e. control the root causes and you could control up to 75% of the health care related costs.

How would one control these root causes? The CEO provides a number of proven strategies:

• Given that two thirds of the U.S. population is overweight and one third is obese, getting the weight problem under control is imperative. At the Cleveland Clinic they addressed that problem directly by removing all fryers from the cafeteria and they no longer use trans fat in any cooking they do. They also removed the candy and soda machines from their facilities.
• They also encouraged their employees to exercise by providing free Curves memberships and Weight Watcher memberships, free access to their gyms, free pedometers, etc. In the first year of the program, their employees lost a combined 120,000 pounds.
• They also made their entire operation smoke free and provided free smoking cessation classes to their employees They helped get a state law passed that banned public smoking throughout the entire state of Ohio. Not satisfied, they offered free smoking cessation classes to everyone in the county where they have their offices. This offer helped reduce the smoking rate in the county from 28% to 18%. Finally, they stopped hiring people that were smokers.

All of these measures are relatively inexpensive but they had dramatic results with significant numbers of people now slimmer, smoke free, eating better, healthier and thus, less likely to incur health care costs. You do not need to spend TRILLIONS of dollars to get these types of significant results.

The other aspect of medicine that has allowed the Cleveland Clinic to keep costs down is that their doctors are paid a salary rather than being paid on how many tests they do. This removes the incentive to do any extra, unnecessary and expensive tests. However, the Clinic also gets the finest medical people to come work for them since they are able to practice medicine at the Cleveland Clinic, not practice filling out insurance forms.

The article also touches on other, logical solutions to the health care cost problem including technology and insurance/doctor relationships. All of their actions are simple, cost efficient and effective since the Cleveland Clinic takes the time to understand the root causes of the problem. It is a novel approach relative to the political class, i..e understanding what is causing the problem before you write 2,500 page, multi TRILLION dollar legislation that may or may not (more likely outcome) solve the problem. Given the skyrocketing Federal deficits and national debt, simple, inexpensive but effective steps to curbing health care costs (diet, smoking cessation, exercise, insurance bureaucracy reduction, tort reform, etc.) are definitely something to try first and see what works and what does not.

Because, seriously, ask yourself: name one major Federal program in the past forty years that 1) has worked as planned and 2) has come in under budget? I cannot come up with one either. That makes it highly, highly unlikely that Obama's current health care bills will work either. Simple and cheap and already proven effective beats a 2500 page complex, TRILLION dollar expensive and yet to be proven effective solution. For more examples of how to fix this problem, go to Step 28 in "Love My Country, Loathe My Government" for the process that Obama SHOULD have used to write health care legislation.

Our New book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble.