The U. S. medical care system consumes almost 15% of our gross national product. The money to pay for it is starting to go away.

       A recent article in Barron’s explained why Secretary of the Treasury Paul O’Neill may have been suddenly sacked in 2002. An academic study from the Treasury Department was about to be published. Going out to 2030 and beyond, it calculated the total Federal debt. If the costs of Medicare, Social Security, Medicaid, and unfunded pensions were included, the actual costs to the Treasury added up to $67 trillion. That’s about seven times the total yearly output of our economy.

       What were the options? According to the study’s authors, the government could:

1. Double personal and corporate income taxes or,
2. Cut Social Security and Medicare benefits two-thirds — starting immediately.

       The Administration buried the Treasury study. The same folks who told the chief actuary of the Social Security he would lose his job if he told Congress how much the Medicare drug benefit would really cost, were not about to derail their programs to cut corporate, income and estate taxes.

       Yet the financial reckoning is coming. Present day plans for Medicare call for 4% cuts in reimbursement to providers every year. Recently, hospitals and medical device companies were told their payments would be cut 20-30% for major cardiac services.

       Will the cuts actually take place? No. Congress has already cut its cuts, leaving doctors and hospitals looking at payments 2%-3% below where they were before.

       Yet medical care costs have skyrocketed. The new Medicare Part D system costs upwards of $100 billion a year. Based on published reports and patients’ complaints, the system has:

1. Added a whole new bureaucratic layer of health care;
   
   
2. Given some poor patients a better deal, if they can figure out the paperwork; many cannot;
   
   
3. Created the “doughnut hole” of elderly paying out $2,600 after limits are met, a bureaucratic nightmare that confuses many;
   
   
4. Provided a new profit center to pharmacy benefit managers, health insurers, and pharmaceutical companies.

       Is it Part D worth $100 billion a year? Much of the money has gone into administrative waste. Some pharmaceutical giants, which make most of their profits in the U.S., are greatly advantaged. In the original Part D legislation, Medicare was not allowed to negotiate prices. No doubt European countries appreciate our largesse in keeping the pharmaceutical companies kitties full; the US then pays for most of their R&D. What is not in doubt is a further $100 billion has been added to our yearly federal shortfall — as far as the eye can see.

       Though lauded as the “best system in the world,” American mortality and morbidity statistics are far below those of most European countries. Our life expectancy rank in the world — 40th. A recent US UK study showed that the top third of Americans, those with high incomes and full insurance, were as well as off healthwise as the bottom fifth of Britons. Britain’s proportionate medical care costs are about 35% of ours.

The Way Out

       The price of American medical care is high. It is so high General Motors blames it as the major factor pushing it towards bankruptcy. There is a way out. It requires a paradigm shift, much as happened to U.S. industry after the 1970s. Now we need to move from a medical care system to a health system.

       Medical care is only one way for Americans to live longer and better, avoiding the diseases of civilization, which plague our lives. Exalting medical high technology may eventually bankrupt us, but even with a blank check will not quickly make us healthy. We need to pay full attention to health, not medical care. We have to get our population well. Then we need to stay well.

       Many countries have already undergone this paradigm shift towards public health. We can start by using our virtually unknown 20 schools of public health.

       Public health institutions deal with vaccinations, health education, maternal care, nutrition, toxicology and epidemiology. Their goal is prevention, to prevent and delay illness. The differences between a health versus a medical care paradigm can be portrayed with some examples:

1. Paying for vaccinations of newborns, versus ICU admissions for children with rubella and measles.
   
   
2. Nationwide smoking cessation programs, versus paying for cardiac care units filled with smokers dying of heart attacks.
   
   
3. Childhood education and nutrition programs and the return of physical activity to schools, versus paying for gastric bypass surgery, and the tens of thousands dollars charged by plastic surgeons removing excess skin.

       Does the medical care industry desire a new emphasis on national health? It’s sort of like asking the oil industry how they’d feel if supercheap, extremely efficient solar panels suddenly appeared.

       Corporate health care in America now makes over $100 billion a year. It will vigorously fight any attempts to cut its part of the pie, particularly highly profitable high tech devices and procedures. HMOs, like Kaiser, used to work for prevention. But prevention can take decades to pay off. In the short term, it can cost more. Employers look to the cheapest health plans they can buy. Health insurers find it better to take profits now.

       Yet an increasingly elderly population requires more and more expensive care. Even now, the money isn’t there. With medical care inflation running around twice the rate of economic growth, funding will become scarcer in the future. Providers will refuse to provide care for smaller payments as their costs escalate.

       When the Bush Administration was planning its mammoth tax cuts, reports ran around Washington that political fallout from greatly increasing the Federal debt would prove minimal. Dick Cheney was reported to have said, “Reagen proved that deficits don’t matter.”

       Until they do. Medical care costs are off the rails. A public health paradigm for our national health programs is required, now.

Dr. Matthew Edlund, M.D., M.O.H., director of The Center for Circadian Medicine, is an expert on applied public health, sleep medicine and psychiatry. A former professor at Brown and University of Texas medical schools, he can be reached
via email to DocME@DoctorEdlund.com. And CLICK HERE to subscribe to our new Fitcast, via the iTunes Store.