Waste in Health Care System Demands Reform

Waste in Health Care System Demands Reform

by | Dec 18, 2017 | Blog

A large part of the waste in the “Health Care Swamp” can be attributed to our health insurance companies and our hospitals.

$750 billion is a huge amount of money. Taking it in perspective, it is more than the United States spends every year on the military. It is about as much as the entire federal government spent in Ronald Reagan’s second year in office, 1982. $750 billion is more than the gross domestic product of all but eighteen other nations on the planet.

Yet, that colossal sum represents just the amount of waste in the American health care system, based on estimates now five years old. That means the current figure could easily be $1 trillion or more!

The 2012 figure of $750 billion included $190 billion in excessive administrative costs, $105 billion in inflated costs, and $75 billion in outright fraud.

Simply eliminating that massive amount of waste would enable us to provide all 300 million Americans with a $2,500 per year ( $200 per month ) basic catastrophic health insurance policy to cover them in the event of a life-threatening medical occurrence, such as a heart attack, cancer, or accident which requires hospitalization.

Americans today spend more ( $4 trillion per year or $13,000 per person ) on health care to get less than almost any place in the world. We have fewer doctors per capita than comparable countries. We no longer enjoy the highest life expectancy rates and we are shamed by the low infant mortality rates abroad. A large part of the waste in the “Health Care Swamp” can be attributed to our health insurance companies and our hospitals.

The average surgeon earns $306,000 a year. The average general practitioner about $185,000. Do you know what the CEO of Aetna made in 2015? Over $17million and that was down significantly from $30 million in 2013. Cigna’s CEO earned about the same in 2015, including $12.9 million in stock and option awards. UnitedHealth’s CEO Stephen Hemsley only raked in about $14.5 million that year, followed by Anthem’s Joseph Swedish at $13.6 million and Humana’s CEO Bruce Broussard at $10.3 million.

Now, when you’re on the operating table or in the ER waiting for treatment, who will be showing up to care for you, the CEO of Anthem, Aetna, or Cigna? Not likely. It will be your surgeon or doctor, whose compensation pales beside the likes of the health insurance barons. Talk about misplaced priorities and misallocation of resources!

And, please remember that the giant health insurers are protected against competition by the federal government which grants them an exemption from the antitrust laws. Members of Congress are rewarded handsomely for this exemption when it comes time to collect campaign checks from the insurers at election time.

The hospitals are another big part of the waste problem. Check out some of these compensation packages:  Trevor Fetter, the CEO of Tenet Health Care, $15 million in 2015. Michael Dowling of Northwell Health, $10 million. Wayne Smith ofCommunity Health Systems, $9 million. These salaries, bonuses, and stock options are being paid out while millions of working Americans are buried in huge medical debts and physicians are struggling to pay six-figure medical school debts.

And, it doesn’t stop there. Some hospitals are marking-up bills by as much as1000%. A recent report in Health Affairs indicated many hospitals are charging out-of-network and uninsured patients, as well as auto and workers’ compensation insurers,  more than ten times what Medicare charges.  Why is a CT scan in the United States five times more expensive than in Canada?Is the CT scan in the U.S. of much better quality? Of course not. Why is  a teaspoon of Maalox in the hospital $12? That’s more than the entire bottle costs at Walgreen’s! How about $9,000 for a pair of surgical scissors? What, are they made of gold?

Happy Senior Patient Holding Hands Of Female Doctor In Hospital

Monopolies lead to high prices and poor quality goods. That’s basic economics and explains why socialism has never worked ( state monopoly ). Why then do we tolerate monopolies in health care that lead to a trillion dollars of waste, fraud and inefficiency? The health insurance companies are shielded from competition by the politicians in Washington who endorse the back of their campaign contribution checks. Hospitals are increasingly merging with others into bigger and bigger behemoths, stifling competition and hiking prices. Big Pharma stuffs the pockets of our Congress members and Senators so there is no price competition from importing prescriptions from abroad.

Just like in our educational monopoly where the money is scooped up by overpaid administrators and bureaucrats — not teachers — our health care system operates in the same way. The money isn’t going to the physicians and surgeons, it’s going to the health insurance company and hospital CEOs and their byzantine bureaucracies of paper-shufflers and billing battalions.

Isn’t it time for drastic reform now? It’s time for “Health Care by the People,for the People.” It’s time that health care worked for the rest of us.

Dr. James Veltmeyer is a prominent La Jolla physician voted “Top Doctor” in San Diego County in 2012, 2014, 2016 and 2017. Dr. Veltmeyer can be reached at dr.jamesveltmeyer@yahoo.com

About Me

I am a family physician and past Congressional candidate in San Diego, CA. I am on a mission to find smart, common sense solutions to many of our most challenging problems as a society.

I am a proud legal immigrant to the United States, arriving here when I was just eleven years old.

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