In 2007 David Goldhill’s father died from infections acquired in a well-regarded New York hospital. The bill, for several hundred thousand dollars, was paid by Medicare. Angered, Goldhill became determined to understand how it was possible that well-trained personnel equipped with world-class technologies could be responsible for such inexcusable carelessness—and how a business that failed so miserably could still be rewarded with full payment.
Catastrophic Care is the eye-opening result. In it Goldhill explodes the myth that Medicare and insurance coverage can make care cheaper and improve our health, and shows how efforts to reform the system, including the Affordable Care Act, will do nothing to address the waste of the health care industry, which currently costs the country nearly $2.5 trillion annually and in which an estimated 200,000 Americans die each year from preventable errors. Catastrophic Care proposes a completely new approach, one that will change the way you think about one of our most pressing national problems.
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David Goldhill is president and chief executive officer of GSN, which operates a U. S. cable television network seen in more than 75 million homes and is one of the world's largest digital games companies. He is a member of the board of directors of The Leapfrog Group, an employer-sponsored organization dedicated to hospital safety and transparency. Goldhill graduated from Harvard University with a BA in history and holds an MA in history from New York University.Excerpt. © Reprinted by permission. All rights reserved.:
How American Health Care Killed My Father
Becky is a twenty--six--year--old who’s worked in my company’s marketing department for three years. It’s her first job out of school, and she’s done very well. She’s smart, ambitious, and poised, and her future is promising.
Becky describes herself as a “bit hypochondriacal,” so she sees two primary care physicians a year. But she’s generally healthy and has no major health care needs. With the insurance plan she’s chosen, she can see any doctor she wants, but the annual deductible doubles, from $250 to $500, when she goes out of network. Most of the treatments she uses count as preventive care, which now has no cost sharing. So with her share of the company’s insurance premiums and her out--of--pocket expenses, health care will cost Becky just about $2,500 a year. That may be a bit more than she would like, but all things considered, it’s not terrible for someone just starting out, right?
Becky will actually contribute over $10,000 to America’s health care system this year—-most of it through payments she’s not aware of. That’s right: health care will consume just under a quarter of Becky’s true compensation, not the 7 percent she believes. I’ll be providing a detailed breakdown of these additional—-I call them deliberately disguised—-costs in chapter 2. For now, what you urgently need to understand is that beginning on the first day of her working career, the cost of health care will be the major constraint on Becky’s standard of living matching—-much less, surpassing—that of her parents.
And it will only get worse for Becky as she settles down and starts a family. Because, as I’ll show you, even if we somehow eliminate the explosive growth in health care costs—-literally reduce growth to zero—-our current system already ensures that Becky will pay well more than $1.2 million into it over her lifetime. If Becky’s hoping the new Affordable Care Act will somehow reduce her cost, then she’s unaware that the administration’s own projections show per capita health costs rising by 5 percent per year over the next ten years (which would mean her lifetime contribution to the system will be $1.8 million, even assuming that after those ten years health costs don’t grow at all). All this assumes she never has a major illness, in which case she will almost certainly pay much more.
None of this is on Becky’s radar screen today. Although she’s probably spending more this year on health care than on anything else (except maybe big--city apartment rent), and while she describes herself as a “true bargain shopper,” Becky has no awareness at all of what health care is really costing her. She thinks about her health care benefits, not about her health care costs.
Becky hopes to be successful, perhaps someday earning “several hundred thousand” a year. That would put her in the top 1 percent of earners in America. When I ask her how much she would need over her lifetime to pay for health care, she mentions the possibility of dealing with cancer or other major issues and says “millions.” There is “no way” she could afford to pay for her care on her own. But then I ask her how a society can afford health care for anyone if even people in the top 1 percent don’t have the resources to cover their care. Where would the money come from? She’s a bit embarrassed: “I’m sorry, that doesn’t make any sense. I haven’t really given this any thought.” I assure her there’s no reason to be embarrassed: almost no one seems to have given this much thought.
I started thinking about health care because of a personal tragedy: almost five years ago, my father died from a hospital--borne infection he acquired in the intensive care unit of a well--regarded New York hospital. Dad had just turned eighty--three and had a variety of the ailments common to men of his age. But he was still working the day he walked into the hospital with pneumonia. Within thirty--six hours, he had developed sepsis. Over the next five weeks in the ICU, a wave of secondary infections, all contracted in the hospital, overwhelmed his defenses and caused him great suffering. But although his death was a deeply personal and unique tragedy for me and my family, my dad was merely one of a hundred thousand Americans who died that year as a result of infections picked up in hospitals.
One hundred thousand preventable deaths! That’s more than double the annual number of people killed in car crashes, five times the number murdered, twenty 9/11s. Each and every year!
A few weeks after my father’s death, The New Yorker ran an article by Atul Gawande profiling the efforts of Dr. Peter Pronovost to reduce the incidence of fatal hospital--borne infections. Pronovost’s solution? A simple checklist of ICU protocols for physicians and nurses governing hand washing and other basic sterilization procedures. Hospitals implementing Pronovost’s checklist achieved almost instantaneous success, reducing deaths from hospital infections by more than half. But many physicians rejected the checklist as an unnecessary and belittling intrusion, and many hospital administrators were reluctant to push this simple improvement on them. Gawande’s article chronicled Pronovost’s travels around the country as he struggled to persuade hospitals to embrace his reforms.
It was a heroic story, but it was also deeply unsettling. Why did Pronovost need to beg hospitals to adopt an essentially cost--free idea that saved so many lives? In an industry that loudly protests the high cost of liability insurance and the injustice of our tort system, why did a simple and effective technique require such extensive lobbying?
And what about us—-the patients? Our nation is quick on the draw to close down an imperfectly assembled theme park ride or a business serving an E. coli–-infused hamburger. Why do we tolerate the carnage inflicted by our hospitals? The hundred thousand deaths from infections are compounded by a litany of routine mistakes that create preventable blood clots, drug dosage and prescription errors, and any number of other oversights. All this adds up to an estimated two hundred thousand Americans killed each year by medical mistakes. A single fatal accident at a school or even a nightclub will make headlines in your hometown newspaper. How did Americans learn to accept hundreds of thousands of deaths from avoidable medical mistakes as an inevitability of the system?
Keeping Dad company in the hospital for five weeks was an eye--opening experience. While the facility’s diagnostic equipment was state of the art, the technology used to record that diagnostic information and track the patient was less sophisticated than the desktop computer at my local
Jiffy Lube. And although we heard much about the hospital’s efforts to maintain sterility, the patients’ trash was picked up only once a day, and often only after overflowing onto the floor. Doctors and nurses discuss the importance of a patient’s mind--set to the recovery process, and yet we saw little to no effort to make the hospital room cheerful or even moderately comfortable. And whose needs are served by the bizarre and unpredictable scheduling of hospital shifts, assigning an endless string of new personnel to care for a patient? Why had this supposedly high--quality hospital missed out on the revolution in quality control and customer service that has swept over every other industry in the past two generations?
I’m a businessman and I’ve never worked in the health care industry. But like the rest of us, I’m also often a patient, and so I can’t help noticing that the industry of health care simply doesn’t measure up to the standards of other industries in our economy.
Many of us believe that health care is fundamentally different and that applying experiences and standards from the rest of the economy makes no sense in matters of life and death. But health care is an industry. And the persistence of bad practices seems beyond all normal industrial logic. There must be a business reason that this industry, year in and year out, is able to get away with poor customer service, unaffordable prices, and uneven results—-and even a business reason that my father and so many others are unnecessarily killed.
Like every grieving family member, I looked for that reason. I wanted some person or some institution to blame for my father’s death. But my dad’s doctors weren’t incompetent—--on the contrary, his hospital physicians were smart, thoughtful, and hardworking. Nor is he dead because of indifference on the part of the nursing staff—-without exception, his nurses were dedicated and compassionate. There were no financial reasons limiting my father’s quality of care; he was a Medicare patient, and the issue of expense never came up. No greedy pharmaceutical companies, evil health insurers, mindless hospital bureaucrats, or other popular villains populated his particular tragedy. So how is it possible that my father’s death was an avoidable accident with no one to blame?
Since Dad’s death, I’ve been looking at our health care system for an answer to this very troubling question. I’ve read as much as I could get my hands on, talked to doctors and patients, asked a lot of questions, and listened much more carefully to my friends’ stories of medical care dysfunction. All of this exploration has transformed my thinking about what we can and should expect from our nation’s health care system.
I’m a Democrat and once held views about health care common in my party. But the more I’ve looked at our system, the more I’ve come to believe that the obsessions of our political debate—-universal access, health insurance regulation, cost control—-are irrelevant to the real problems that have created our mess. Despite the partisan screaming, I suspect all Americans have the same goal: high--quality, safe health care that is affordable for all. And yet the frustrating reality is that despite more than sixty years of government efforts—-representing the work of both political parties—-we are moving further and further away from what we want. Prices are higher, more people are excluded from needed care, more excess treatments are performed, and more people die from preventable errors. Why?
Life on the Island
Over time, I’ve come to believe that health care is indeed different from other industries, but primarily because we insist on treating it as different. Everything about health care—-how we pay for it, how we regulate it, how we judge its effectiveness, how we’re willing to accept low standards from it, even how we talk about it—-exists on a separate island from the mainland of every other service or product in our economy. Forget the rhetoric: our health care system isn’t an example of “socialism” or “profit--driven medicine.” In fact, it is such a strange beast that I’m not even sure we have an appropriate label for it. The best analogy might be the Galápagos Islands, set so far offshore from the mainland of industrial evolution and economic laws that it has produced odd, anomalous creatures of policy and regulation. Though these products of convoluted laws and rules manage to thrive on the Island of Health Care, they would not survive on the Mainland, where all other industries are forced to compete for their customers.
Every business would like to get away with high prices, poor quality, and miserable service, but this behavior carries an unacceptable cost: lost customers, lost revenue, lost profits. In health care, bad behavior doesn’t produce these bad results; bad behavior is often rewarded with additional revenue, and efficiency is penalized with less. All of the actors in health care want to serve patients well, but understandably most respond rationally to the backward economic incentives baked into the system.
At the heart of these perverse incentives is insurance. Unlike with anything else in the economy, we rely on insurance as the sole means of paying for everything in health care—-from the most routine to the most urgent. Even our government health programs take the form of insurance. But not only is insurance the costliest way of financing our spending, it is the most distortive; the insurance model requires that we turn over our role as consumers to what I call the Surrogates: private insurers, Medicare, and Medicaid. As I’ll show, their actions—-and our own absence as a disciplinary force in the health care marketplace—-create many of the incentives for bad behavior.
We are all patients
I first raised these ideas in “How American Health Care Killed My Father,” the cover story of the September 2009 issue of The Atlantic. At the time, Congress was just beginning its debate on health care reform. In the months that followed, I received countless invitations to do interviews, speak at public events, engage in debates. At industry gatherings, at business groups, even at Harvard Medical School, I found myself publicly jousting with traditional experts—-economists and public policy analysts who had spent their careers studying all angles of our complex health policy mess. Although my arguments received a broadly favorable reception, the most accurate description of the article came when it was called “widely praised and completely ignored.” Everyone could find something to like. Traditional liberals appre-ciated my call for true national insurance. Traditional conservatives agreed that sensible economic incentives needed to be the centerpiece of any reform and that Medicare and Medic-aid were unsustainable. But the whole of my argument—-that we needed to rethink our entire approach, that this emperor had no clothes—-had no supporting army in the gathering political war over health care reform.
Among the hundreds of e--mails, letters, and phone calls I received was one from a woman who had also lost her father to a hospital infection: “The hardest thing for me was the indignities this proud and humble man suffered, and the helplessness we felt through it all. When I talk to other families who have had a similar experience, they can still recount each hour in stark detail.” Each of the many notes like hers confirmed what my father’s death had already seared in me—-fixing our health care system is about much more than money and politics. A call for true health care overhaul may have no natural constituency among the interests fighting over health care policy, but it should have an ally in the largest and ultimately the most important interest group: patients. And that includes every single one of us.
Health care is not an abstract policy issue for me, and I suspect it isn’t for most families. I worry to the verge of panic when my mother or another relative needs to enter a hospital, even for a routine test. I watch more and more of my employees’ compensation eaten up by health expenses and see my middle--aged friends making their professional decisions on the basis of health coverage. I listen to doctors complain that they are becoming glorified insurance clerks.
While the debate has focused on the vulnerability of the uninsured and uncovered, this book will show that our current health care system is also a ...
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