isn’t the cost of medical care an interesting topic?


I’ve been listening to the two-part “This American Life” examination of the health care industry in the U.S. of A. Below are a few items I took away from this broadcast. Caution: I sometimes get things wrong, so I advise listening to it yourself. It’s an entertaining and educational review of the topic.

Underlying causes of the spiraling costs of medical care include unnecessary medical procedures and tests (up to 1/3 of all care is in this category), higher costs for drugs, more expensive equipment, increasingly complicated patient billing and administration, patient demands for more care, the cost of malpractice insurance, and doctors expecting a big salary. In other words, just about everyone involved is complicit, and problems are pretty much built into the system.

Meanwhile, health care providers give the best pricing deals to very large insurance companies–the ones that bring them the most patients. The smaller insurance groups are charged higher prices for the same services. Increased competition by additional insurance companies doesn’t improve anything, and in fact may weaken bargaining power with providers. Health care providers will still set the prices and their highest volume clients will get the best deals.

The state of Maryland has dealt with this problem for the last 30 years with regulation. The state sets the same price for every medical procedure at all hospitals. You’ll pay the same amount for a colonoscopy, for example, no matter where you get it, and no matter if you’re on an employer insurance plan, a private plan, or a government plan like Medicare. Since health care providers aren’t allowed to compete in the pricing arena, they have to compete on quality of care. Allegedly this works pretty well.

At least that’s what I thought I heard. I certainly skipped over quite a bit in my tiny summary here, such as the fact that for the first time ever, everyone, from the patients to the executives, now truly believe that something must be done to reverse the crazed expense spiral. Also, I learned how it came to be that employers became the primary buyers of our health insurance, and how the current growth of health insurance and health care for pets closely reflects how our human health care got out of control. It’s happening all over again, except it involves dogs and hedgehogs.

You can listen to the episodes for free, “More is Less” and “Someone Else’s Money.”


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