The True Cost of a Flawed Health Care Paradigm
October 05, 2013
Story at-a-glance
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Americans spend twice as much on health care per capita than
any other country in the world; more than 17 percent of US
gross domestic product, or $2.7 trillion dollars every year,
is spent on health care
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Despite all of this spending and pill-popping, the US ranks
dead last in terms of quality of care among industrialized
countries, and Americans are far sicker and live shorter
lives than people in other nations
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A review of US healthcare expenses revealed that 30 cents of
every dollar spent on medical care is wasted, adding up to
$750 billion annually. Major areas of waste include excess
administrative costs, inflated prices, and fraud
-
Generic medications can cost 100 times less than their
brand-name equivalent, and usually cost less than most
insurance co-pays. This means you might actually pay LESS by
purchasing a generic medication out of pocket
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Most diagnostic tests and procedures are inexpensive to
perform. However, the charges for these tests and procedures
typically have no relation to the actual cost. Hospitals
routinely bill 10 or more times what they expect to be paid
By Dr. Mercola
Americans spend twice as much on health care per capita than
any other country in the world; in fact, according to a series
of studies by the consulting firm McKinsey & Co, the US spends
more on health care than the next 10 biggest spenders
combined: Japan, Germany, France, China, the U.K., Italy,
Canada, Brazil, Spain, and Australia.
Other astounding statistics include:
- The US spends more than 17 percent of our gross domestic
product (GDP) on healthcare1
- If the US health care system was a country, it would be
the 6th largest economy on the entire planet2
- While the US makes up only five percent of the world’s
population, Americans consume over 50 percent of all the
world’s pharmaceutical drugs
- Overall, Americans also pay 50 percent more
than other countries for identical drugs, as a result of
laws and regulations preventing the US government from
reining in drug prices like other nations do
Despite all of this spending and pill-popping, the US
ranks dead last in terms of
quality of care among industrialized countries, and
Americans are far sicker and live shorter lives than people in
other nations. Clearly, we have taken a wrong turn down the
wrong road somewhere...
The US Health Care System Is Fundamentally Flawed
A review of US healthcare expenses by the Institutes of
Medicine3
(IOM) revealed that 30 cents of every dollar spent on medical
care is wasted, adding up to $750 billion annually. For
perspective, the defense budget proposed by the Pentagon for
2014 was just under $527 billion.4
The IOM report identifies six major areas of medical waste:
Unnecessary services; inefficient delivery of care; excess
administrative costs;
inflated prices; prevention failures; and fraud. Also, as
stated in the featured Time Magazine article5:
“A central reason U.S. health care spending is so
high is that hospitals and doctors charge more for their
services and there’s little transparency about why.
There is no uniformity to the system, in which public
and private insurers have separate, unrelated contracts with
hospitals and doctors. The result is a tangled, confusing
and largely secretive collection of forces driving health
care prices higher and higher.
This isn’t possible in many other countries either
because governments set prices for health care services or
broker negotiations between coalitions of insurers and
providers.“
The True Cost of Health Care
The documentary film The True Cost of Health Care6
by Dr. David Belk, MD (featured above) also reveals a number of
shocking details that help explain the exorbitant cost of
American health care. For example:
- Generic medications can cost 100 times less than their
brand-name equivalent, and usually cost less than most
insurance co-pays. This means you might actually pay LESS by
purchasing a generic medication out of pocket, compared to
using your insurance if you have a co-pay. In essence, going
through your insurance amounts to paying extra for the
privilege of being overcharged...
- Hospitals routinely bill 10 or more times what they
expect to be paid for any given service. As I discussed in a
previous
article, most hospitals end up receiving just 35 percent
of what they bill, yet they still manage to make
tens of millions of dollars in operating profits each year.
Some hospitals, including Sloan-Kettering and MD Anderson,
who are tougher in their negotiations with insurance
companies, end up getting around 50 percent of their total
billings.
- Most diagnostic tests and procedures are inexpensive to
perform. However, the charges for these tests and procedures
typically have no relation to the actual cost. Each hospital
has an internal price list called a
chargemaster, which contains every single item you may
be given or come in contact with during your hospital stay.
The problem is, no one quite knows how the prices in the
chargemaster are created. What is clear is that there’s
absolutely no market feedback to regulate and control the
prices that are charged.
- Health insurance companies deliberately manipulate these
costs to maintain their profits. As explained by
TheTrueCostofHealthCare.org:7
“Health insurance companies can manipulate a patient’s
out of pocket payments to make it appear as though health
care is more expensive than it really is. Insurance
companies sell security against financial risk. If no one
really understands what that risk is (because all prices are
hidden or deceptive) then the price of the security
(insurance) can be grossly inflated.”
The Chargemaster: What You Need to Know if You Want to Avoid
Medical Bankruptcy
Each hospital has an internal price list called a
chargemaster, which contains every single item you may be given
or come in contact with during your hospital stay. That includes
the little white paper cup you get your medicine in, every box
of tissue and band-aid, even a toy to a child (which many
mistake as a “gift”) can be billed at upwards of $200. The
problem is, no one quite knows how the prices in the
chargemaster are created. What’s worse, there seems to be no
real rationale or process behind this important document. As
journalist and author Steven Brill has stated:8
“That so few consumers seem to be aware of the
chargemaster demonstrates how well the health care industry
has steered the debate from why bills are so high to who
should pay them... [T]he drag on our overall economy that
comes with taxpayers, employers and consumers spending so
much more than is spent in any other country for the same
product is unsustainable. Health care is eating away at our
economy and our treasury.”
There is no real marketplace as such, as you the buyer is
completely separated from the seller. There’s absolutely no
market feedback to regulate and control the prices that are
charged. For the most part, the hospitals charge as much as they
want, which plays a large role on why these charges have gotten
so outrageously out of control. This simply doesn’t happen in
countries outside of the US.
In response, a small grassroots-type industry has emerged as
a result of shell-shocked patients reaching out for help to
understand their medical bills. Referring to themselves as
medical-billing advocates, they help you not only read and
understand the content of your bills, but also negotiate with
the hospital to reduce the charges. The problem with that, of
course, is: what about the people who don’t realize they CAN
bargain with a major hospital? And should we really accept
“bills of fiction” to begin with?
Even with the help of a medical-billing advocate
(who of course charges a fee for the service), many uninsured
patients still overpay. After all, getting a 50 percent discount
on a test billed at $200, which should cost $15 is not
necessarily a great bargain, although it’s certainly an
improvement if we only take fictional numbers into account. The
sad thing is, as mentioned earlier, the overcharges are SO
grossly inflated that even if you get the bill cut in half, the
hospital still makes out like a bandit!
Conventional Medicine Is Actually One of Your Greatest Health
Risks...
There's no shortage of evidence that the US health care
system is in need of urgent transformation. Over a decade ago,
Professor Bruce Pomerance of the University of Toronto concluded
that properly prescribed and correctly taken pharmaceutical
drugs were the fourth leading cause of death in the US!
In 2000, the Institutes of Medicine reported that medical
errors were the eighth leading cause of death in the US, killing
between 44,000 and 98,000 people each year. This was followed by
a 2003 article aptly titled "Death
by Medicine", authored in two parts by Carolyn Dean, MD, ND,
which described in excruciating detail how the modern
conventional American medical system has bumbled its way into
becoming the
leading cause of death and injury in the United States,
claiming the lives of nearly 784,000 people annually!
These iatrogenic deaths (meaning deaths resulting from the
activity of physicians) include everything from adverse drug
reactions to medical errors, to hospital-acquired infections and
surgeries gone bad—including 37,000 deaths from unnecessary
medical procedures. The authors took statistics straight from
the most respected medical and scientific journals and
investigative reports by the Institutes of Medicine (IOM),
showing that on the whole, American medicine is causing more
harm than good. In 2010, two additional reports published in
New England Journal of Medicine9
and the Journal of General Internal Medicine10
respectively, showed just how little things have changed since
2003. For example:
- Out of 62 million death certificates dated between
1976-2006, almost a quarter-million deaths were coded as
having occurred in a hospital setting due to medication
errors.11
- An estimated 450,000 preventable medication-related
adverse events occur in the US every year.
- The costs of adverse drug reactions12
to society are more than $136 billion annually -- greater
than the total cost of cardiovascular or diabetic care.
Taking Control of Your Health Is Part of the Solution
Hundreds of thousands are killed by medical care itself,
while others are walking around with far less than stellar
health due to conventional treatments. Rates of chronic diseases
are through the roof, and we're facing epidemics of obesity,
heart disease, diabetes, depression and too many others to list.
As a whole, Americans are not healthy – they're tired,
depressed, stressed out and often in pain.
Out of sheer desperation, many people have taken their health
into their own hands by abandoning this fatally flawed medical
model and embracing holistic modalities that can help heal on a
body-wide level. It is through their many success stories that
we can discern a clear way out of this flawed and outright
deadly paradigm.
The more you take responsibility for your own health – in the
form of nurturing your body to prevent disease – the less you
need to rely on the "disease care" that passes for health care
in the United States. In the majority of cases, you’ll likely
find that you can prevent or resolve common health conditions by
following these basic tenets of optimal health:
- Eat a healthy diet focused on fresh, whole foods
(ideally organic and/or locally grown). Try to eat a large
portion of your food raw. You want to pay careful attention
to keeping your insulin levels down, which means avoiding
sugars and grains of all kinds, and replacing the lost carbs
with healthful fats. Also be mindful of your protein
sources, making sure they’re of high quality (ideally
organically-raised and pasture-fed). A high fat, moderate
protein, low carb diet is likely to improve the health of
most people. My optimized
Nutritional Plan can guide you, whether you’re at a
beginner’s or advanced level.
- Consume healthy fat. The science is
loud and clear on this point:
omega-3 fats are essential for optimal health.
Unfortunately, most fish commercially available today are
polluted with mercury, PCBs and other toxic substances,
which is why I recommend you take a supplement like krill
oil instead of getting it from your food. Other healthy fats
include coconut oil, avocados, olives, olive oil, butter and
macadamia nuts. All these fats are low in protein and carbs
and will not impair insulin, leptin or mTOR.
- Make clean, pure water your primary beverage,
and steer clear of all sweetened and/or flavored beverages,
including those that contain artificial sweeteners.
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Manage your stress.
- Exercise regularly. Ideally, you want a
comprehensive fitness
regimen that includes
stretching, high intensity
interval training,
core strengthening exercises and
strength training.
- Get plenty of appropriate sun exposure
to optimize your vitamin D levels naturally. UV exposure
also has additional health
benefits beyond vitamin D production. A robust and
growing body of research clearly shows that vitamin D is
absolutely critical for your health. The D*Action project
has been initiated by GrassrootsHealth along with 42 leading
vitamin D researchers to demonstrate how health can be
achieved right now with what’s known about vitamin D with a
combination of vitamin D measurement and health outcome
tracking. To learn more, please see this recent
article.
I encourage you to
participate in the D*Action Project, which has multiple
concurrent vitamin D programs going on. Not only will you be
able to take control of your own health by participating,
you’ll also become part of one of the most profound public
health projects of the 21st Century. To participate, simply
purchase the
D*Action Measurement Kit and follow the registration
instructions included.
As a participant, you agree to test your vitamin D levels
twice a year during a five year program, and share your
health status to demonstrate the public health impact of
this nutrient. There is a $65 fee each 6 months for your
sponsorship of the project, which includes a test kit to be
used at home, and electronic reports on
your ongoing progress. You will get a follow up email every
six months reminding you "it's time for your next test and
health survey."
- Limit your exposure to toxins of all
kinds. The number of
toxic chemicals and their sources is so large,
addressing them all could easily require an entire library,
but I believe you can help you keep your toxic load as low
as possible by becoming an informed and vigilant consumer.
This includes tossing out your toxic household cleaners,
soaps, personal hygiene products, air fresheners, bug
sprays, lawn pesticides, and insecticides, just to name a
few, and replacing them with non-toxic alternatives.
- Get plenty of quality sleep. Scientists
have discovered that your circadian rhythms regulate the
energy levels in your cells. In addition, the proteins
involved with your circadian rhythm and metabolism are
intrinsically linked and dependent upon each other.
Therefore, when your circadian rhythm is disrupted, it can
have a profound influence on your physical health. For
example, research has also linked disrupted sleep cycles to
serious health problems like depression, coronary heart
diseases, and even cancer. If you have any kind of sleep
problem, whether you’re having trouble falling asleep or
staying asleep, my article
33
Secrets to a Good Night's Sleep is packed with great
tips to help you finally get some good rest.
8 Things Your Grandparents Did That Could Save Your Life
For even more inspiration and guidance, check out the
following eight “forgotten wisdoms” your grandparents adhered to
that could quite literally save your life. To learn more, please
follow the hyperlinks provided:
In the event you do need medical care, seek out a health care
practitioner who will help you move toward complete wellness by
helping you discover and understand the hidden causes of your
health challenges, and create a customized and comprehensive –
i.e. holistic – treatment plan for you.
What's more, you can have a positive influence on your
doctor's tendency to recommend natural alternatives, as when you
inquire about them, some health care providers do in
fact listen and do the research. Remember, when you do go to the
doctor, know that it's OK to ask questions and opt for less
medical intervention while choosing a more natural way of
healing your body. If your physician is not open to such
options, it may be time to find one who is, who can help coach
you and your family to take control of your health.
© Copyright 1997-2013 Dr. Joseph Mercola. All Rights Reserved.
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