Why do Europeans pay less for their health care and yet have better outcomes? Do Americans pay more because we have more illness? That dilemma has long perplexed scientists and economists.
Dr. Paul Hain, the North Texas market president for Blue Cross Blue Shield of Texas, tried to dissect that question this spring at the County Management and Risk Conference in Galveston.
Hain used peer-reviewed papers published in medical literature to analyze the current picture of U.S. health care. The M.D. previously worked at the Children’s Medical Center of Dallas and was an associate professor of pediatrics at the University of Texas Southwestern Medical Center.
“We do have more diabetes, cancer and trauma-related disorders. And we weigh more than Europeans do. But they smoke more than us, so it’s a wash,” he said.
Admittedly, our population is aging and growing faster, both of which exacerbate medical costs, he said. But those factors don’t account for even half of the staggering $930 billion increase in U.S. health care spending that occurred from 1996 to 2013.
“Drug prices are the top driver,” Hain explained, citing statistics showing Americans pay more for pharmaceuticals than any other country. Specifically, new specialty drugs are the major cost driver, he said. While traditional drugs are relatively stable in pricing, the cost of new drugs — specialty drugs for rare diseases — is soaring.
Fortunately, some specialty drugs have been capable of producing miracles, Hain said, noting that treating children with Hepatitis C used to take weeks in the hospital and cost around $80,000. Now young patients simply take a newly developed pill that is so effective “it’s like magic.”
On the other hand, some specialty cancer drugs carry exorbitant costs, yet extend life only a matter of weeks. “As a society, he said, “we’re going to have to start making decisions about what drugs are worth what money.”
The good news is that a whole lot of research and development is occurring. On the other hand, we’re paying for it all, and then the pharmaceutical companies “sell it everywhere in the world.”
Hain said another contributor to health care costs is the consolidation of hospitals. The patients generally lose out when hospitals consolidate. Doctors working independently are much better at controlling costs and competition among hospitals generally results in better patient care.
Additionally, a major cost driver is the proliferation of freestanding emergency rooms, he said. Often, they are located in strip malls, so the patient may not realize he has been in a freestanding emergency room until he gets the bill showing what his insurance won’t cover at an out-of-network facility. Treatment prices in these clinics are typically expensive and, if the medical problem is a true emergency, the patient will end up having to go to a hospital emergency room anyway.
What’s the best strategy to deal with high health costs? Stay as healthy as possible, which doesn’t have to be all that difficult, Hain said.
First, avoid tobacco. Smokers are 2.8 times more likely to die at a younger age than nonsmokers and their health care costs run about $5,200 more a year. Research has shown that a significant drop in heart-related hospital admissions occurs after cities and counties implement strong smoke-free laws. And remember that secondhand smoke can be damaging, especially to children.
Next, fitness is key to a healthy life, almost as critical as avoiding tobacco. Sedentary people are 2.6 times more likely to die young than the average exerciser. Lack of physical activity is believed to be a major factor in cases of lung and colorectal cancer.
“Just being an average exerciser isn’t hard. All you have to do is walk your dog twice a day, whether you have a dog or not,” Hain joked. “Walk with purpose, like you’re late for a plane.”
He said the minimum standard of daily exercise is 20 minutes (40 minutes is preferred) and can be split between morning and evening.
Finally, obesity is harmful to health, but even overweight people can partially overcome that disadvantage if they exercise regularly. “The more fit you are, the better you’ll do.”
Hain wrapped up by saying food choice is extremely important, so ease up on processed foods and added sugars. What about French fries? Just pass them by.