Healthcare Costs: Barking Up The Wrong Tree

If you have been following the progress of President Obama’s proposed healthcare reforms, you would have noticed the numerous obstacles and protracted course it has taken. When he first mooted it during the presidential campaign, Obama the Democrat stood for government to provide healthcare for everybody by expanding the role of the existing Medicare into a compulsory public insurance scheme. This has now metaphosised currently into two Bills to be considered in Congress: the House Bill and the Senate Bill, both with differences. But whatever the Bill, Obama had to backtrack by accommodating private insurance companies; with the proviso that they would operate in a single insurance exchange incorporating public insurance schemes.

Too Much Emphasis On Who's Paying For What!

Why is this important to all of us outside the US? Quite simply, healthcare is a massive trillion dollar industry in the US and whatever happens here is bound to affect the rest of the world. Meanwhile, as the bureaucrats and politicians mull over what’s next,  healthcare delivery seems to be spluttering along. Take for instance, the plan to close the only acute care hospital in Greenwich,NY (St Vincents) because of insurmountable debts (see here). This has understandably created a strong protest from the local community.

St Vincents Hospital,Greenwich Village,New York - in near-bankrupcy and facing imminent closure as an acute-care facility (pic from New York Times)

Elsewhere, I wrote in a recent posting about the plan to close the Royal National Orthopaedic Hospital in London for very much the same reason – soaring expenditure well over budget.

If we look at the healthcare reforms in the US or Great Britain, the question regulators need to ask is not who’s going to pay for the costs. The bigger question should be : how to reduce costs?

There’s a growing feeling that not enough attention is being given to look at ways and means to bring expenditure down. Rather, more attention seems to be  devoted in identifying the payors. Should not more focus be given to minimising duplication of services for  a particular geographical region to enhance efficiency? Or capping the litigation costs and awards for medicolegal suits? Or enhancing the usage of generic drugs that have proven efficacy?

Many of these measures will generate strong opposition from vested parties, but since the health reforms are about fundamental rights to healthcare, it would seem logical that the wellbeing  of the public should override the interests of those with vested interests, like  big pharmas and private insurance companies, for instance.

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