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Health care costs - they seem uncontrollable
(December 2004)

In 2004, health insurance premiums rose 11.2 percent, pushing the cost of family coverage for many families over $10,000 annually. It was the fourth consecutive year of double digit increase. Total health care expenditures in this country are now $1.7 trillion a year. As recently as 1990, the total costs were $670 billion. The estimate for 2012, only seven years hence, is $3.0 trillion. This cannot continue indefinitely. Something has to give.

There are multiple reasons for the profound increases in health care expenses, including the costs of new technologies, an ever-increasing older population, a bloated bureaucracy, excessive hospital costs, inordinately expensive medications, physicians ordering too many tests, patients demanding too many tests, among others. One problem that needs to be fixed is paying for inadequately documented tests. For example, Medicare (as well as most health insurance companies) pays for annual prostate cancer screening for men over age 65 using the blood test Prostate Specific Antigen (PSA). That test does detect prostate cancers early, but most of these cancers would either do no harm or not shorten the men’s lives. The PSA test has not been shown to save lives (reduce deaths). The US Preventive Services Task Force, the premier group in regard to disease prevention tests, does not recommend it. Neither does Healthful Life, and now a highly-respected urologic group in California concludes the test is virtually useless. Why does Medicare pay for it with no co-payment? Not because of evidence. They pay for the test because Congress told them to. So, politicians who, in general, have no medical expertise and often get things wrong, override the evidence, ignore the costs of prostate cancer surgery or other treatments, and ignore the complications of the treatments. Even experts who still favor PSA testing agree that the test will not benefit anyone with a life expectancy of less than 15 years; so, no man over age 70 should be given the test. Yet, we will continue to do the test, including on men over age 70 and spend billions of dollars each year on the test itself, plus the followup tests, surgeries, etc.

That test should be labeled as inadequately documented. Men who want it should pay out of pocket or with supplemental insurance that covers it. Medicare and HMOs should not pay for it until such time, if ever, we have evidence clearly documenting its benefits.

We are going the same route with Alzheimer’s though the situation is different because there are medications that can delay somewhat the progression of Alzheimer’s; but there is no cure. Medicare has just announced it will pay for expensive PET scans of the brain for people with evidence of dementia to try and diagnose Alzheimer’s early. The test costs $1,200 to $1,500, or more. Medicare did put some restrictions; a proper work up for dementia supposedly has to be done first, but that will not stop huge overuse. Doctors and clinics will take older people with mild mental dysfunction, do the mandatory work up (charging for it) so they can get to the expensive PET scan test and increasingly people whose mental tests are borderline will be included. Everybody agrees it will increase testing and costs - the PET scan machine itself costs about $2 million and those buying the machines will work hard to get their investment back and make a profit. There also seem to be no specific restrictions on how often the PET scan can be done on each person.

All in all, it is going to be a bonanza for doctors and hospitals and misuse is going to outweigh any possible benefits. The PET scan is useful in diagnosis of Alzheimer’s, but until we have better treatment, Healthful Life believes the PET scan should be paid for only in properly designed clinical treatment trials. As with PSA, those wanting PET scans for diminished mental function should pay for them out of pocket or with specific supplemental insurance. Of course, when we have better treatment options, then the PET scan is warranted if studies show early diagnosis really does make a difference in outcome compared to starting treatment later when the diagnosis is more obvious and is made presumptively with history and standard tests.

We have to begin to make realistic choices. The law in New Jersey (Health Wellness Promotion Act), based on the Healthful Life Program, has a cap on required expenditures to carry out the included tests. At present, all the tests (except sigmoidoscopy or colonoscopy for bowel cancer screening) can be accomplished within that cap, including physician payments for the comprehensive prevention examinations. The current caps on required expenditures annually are $185 for a man or woman under age 40, $215 for a man over age 40, and $349 for a woman over age 40. There are also caps on costs of bowel cancer screening. The goal is to live within those caps which increase annually only in accord with the Consumer Price Index. When there are more documented health promotion-disease prevention tests than can be accommodated under the caps, the health care provider and individual participant will have to, together, decide what is best for that individual at that specific examination given the amount of money available within the cap. So, instead of just ignoring the cap, health care providers and participants will have to make choices - and that can be done without in any way endangering the health of the individual. That is fiscally responsible. What is being done now in the health care system is not.

The quickest way to destroy health promotion-disease prevention is make it too expensive and a guaranteed way of ruining the American health care system is to keep piling on costs. When total costs exceed $2 trillion a year, the system is in dire trouble. When those costs exceed $3 trillion a year, the system is in danger of collapsing.