Conway McLean, DPM, Journal columnist

These are difficult times for many Americans, at least when it comes to financial matters. Too often, jobs pay wages insufficient to meet the cost of living, especially when kids are involved. Prices continue to rise, and even the staples, those items required to sustain life, are a challenge to obtain. Two working parents is becoming the norm, and too often a necessity. A big part of these difficult economic times is the cost of medical care.

Increasing medical expenses have been experienced by most US residents and many have struggled to pay their medical bills. Health insurance premiums have risen steadily over the years and employers have found it impossible to shoulder the financial burden. Patients commonly forgo necessary care rather than pay the out-of-pocket costs. State government coffers are stressed as well. Public programs, specifically Medicaid and Medicare, are placing an ever greater burden on state budgets.

A critically important question is why? Why is health care costing each of us so much? Another one we need to ask why is our health care costing us more than other industrialized nations? This latter is a surprisingly difficult question, with a multitude of factors. Some blame the complexity of the healthcare system in the United States, with its separate rules, complex funding, and out-of-pocket costs for varied employer-based insurances, private insurance plans, Medicaid, and Medicare.

In each case, consumers are barraged with critical decisions, with a plethora of choices, none of which are adequately explained or described. Choosing amongst the many tiers of coverage, deductible plans low to high, managed care plans (HMOs and PPOs) and fee-for-service systems, few Americans know the real complexity of this system. Making an informed decision is nearly impossible for the average individual.

Perhaps the most glaring explanation for the cost of health care is the result of having such a splintered, disorganized system for its provision. We have multiple payors, varying requirements for each, and different systems for health care providers to contend with. This leads to tremendous administrative waste and redundancy at every turn. The U.S. spends about 8% of its healthcare dollar on administrative costs, compared to 1% to 3% in the other industrialized countries.

Providers face a huge array of usage and billing requirements, making it necessary to hire costly administrative help for billing and reimbursements. This means dealing with myriad regulations about usage, coding, and billing, activities making up the largest share of administrative costs.

Many lay blame on the high cost of prescription drugs. Americans pay almost four times as much for pharmaceutical drugs as citizens of other developed countries. Numerous studies have found this number is even higher for some of the most common prescriptions as compared to Canada, as much as seven times more. One report found that a common daily dosage of insulin, a must-have drug for many diabetics, costs more than 10 times what is charged in Canada. The disparity is so great the US Department of Health and Human Services has proposed a program in which various entities, from state governments, to pharmacies, even drug wholesalers, would be able to purchase approved drugs from Canada.

Some claim the problem is driven mainly by the aging population. The cost of caring for those with chronic or long-term medical conditions and an aging population obviously means a greater utilization of services. But what about the increased cost of new medicines, new procedures and technologies?

Is the crisis a result of how well we pay hospitals and doctors? The average U.S. family doctor earns $215,000 a year, and specialists about $316,000. This is far more than the average in other industrialized countries. The same holds true for nurses in the US who make considerably more than elsewhere. But hospital costs have been increasing much faster than professional salaries. Hospital care accounts for 33% of the nation’s healthcare costs.

A critical difference between the practice of medicine here versus other developed countries is the malpractice environment. The U.S. system for compensating injured patients requires a medical malpractice lawsuit. With an over-abundance of lawyers matriculating, it has become easier to find one willing to take an injured party’s case. The U.S. has become a litigious place. But this system has shut out many patients when the potential reward is small. In addition, proving negligence is generally the standard for winning compensation, but that is difficult to do. And our system provides no incentives for physicians or hospitals to apologize, or to reveal any details of what happened.

In most of Europe and in Canada, these issues are decided by judges. This typically mean the payouts are smaller and the cases resolved in less time. Canada has a maximum compensation set at about $350,000, no matter what the damage might be. Compare that to the state of New York which had 10 cases where the awards were more than $3,500,000……in 1 year alone.

The health care system here relies more on costly specialists. And these specialists tend to overuse advanced technologies, like CT scans and M.R.I. machines. Specialists also typically resort to costly surgical or medical procedures a lot more than doctors in other countries do. Perverse insurance incentives entice doctors and patients to use expensive medical services more than is warranted. As mentioned, our fragmented array of insurers and providers eats up a lot of money in administrative costs, marketing expenses and profits that do not afflict government-run systems abroad.

Long before this pandemic, the U.S. led other industrialized nations in excessive spending on healthcare. Many experts say we are not getting a good bang for our buck in terms of health outcomes. Take, for example, life expectancy. In the U.S., it is 78.8 years, while it averages roughly 83.2 in 10 other high-income countries. A number of studies have shown health care costs to be far higher in the United States than in any other advanced nation, regardless of what is being measured, whether it be total dollars spent or on a per capita basis. The ACA resulted in 90% of the population in the U.S. having health insurance, clearly an improvement. But compare that figure to the 99% to 100% of the population in the other industrialized countries.

An estimated 530,000 families turn to bankruptcy each year because of medical issues and bills. Two oft-mentioned reports state two-thirds of the people who file for bankruptcy do so because of medical debt. Although these results have been called into question, no one can deny the burden of health care costs are stressing the finances of a great number of US residents.

Health care costs are skyrocketing, and have been for years. Experts have declared it the worst long-term fiscal crisis ever faced by the US. Health costs here have been rising significantly faster than the economy, or personal incomes for more than 40 years. This a trend that cannot continue forever.

If health care spending continues on its current trajectory, the United States will reach the point where every penny of the annual increase in gross domestic product would have to go for health care. Estimates say this could come as soon as a few decades from now. There would be less and less money for many things that may be equally or more important to the well-being of society. But who is to make these decisions? Things like education, environmental protection, scientific research and national security may have to be cut or dropped to pay for our health care. Meanwhile, millions of Americans live every day one accident or illness away from bankruptcy. Things have got to change; the question is in which direction.

Editor’s note: Dr. Conway McLean is a physician practicing foot and ankle medicine in the Upper Peninsula, with a move of his Marquette office to the downtown area. McLean has lectured internationally on wound care and surgery, being double board certified in surgery, and also in wound care. He has a sub-specialty in foot-ankle orthotics. Dr. McLean welcomes questions or comments at drcmclean@outlook.com.