• Lisa Simpson
• Aug 7,2009
• In: Finance

Mayhem in USA Healthcare Causing Financial Losses

Mayhem in USA healthcare is causing financial losses to the individual and the country apart from not improving the health index of the country. Among the developed affluent countries USA has the worst health figures as regards wastage and quality.

To analyze the reason for this, studies have been conducted on the macro level by Alan Garber and Jonathan Skinner and on the micro level by Atul Gawande.

According to Gawande, Miami spends the maximum on healthcare understandably because a large number of rich retirees reside here. After Miami comes a small county in Texas – McAllen. Why is so much spent on Medicare spent here? One answer is that the people are sick and poor. It is partly true because McAllen boasts a good number of drunkards – 60% above the country’s average. 38% of the people are obese but here there are less heart diseases, asthma, cancer, infant deaths and even injury. All the figures were less than the national average. So the answer was not more sickness. Actually the reason was not more sickness but that more dollars were being spent to address a unit of illness.

Gawande tried to find out if the reason was because of improved healthcare. Grades are awarded by Medicare analyzing the quality. The grades in McAllen were not much better than any of its adjacent counties. Gawande was told that in McAllen the proportion of patients suing doctors and hospital was relatively high. To get protection from legal harassment the doctors prescribed costly tests. But here too could not be found a satisfactory answer because Texas has passed a law that has put a ceiling on lawsuit awards limiting it to one million dollars. Since then the legal suit numbers had dropped.

Thus Gawande too, not unlike the explanation offered by Garner and Skinner came to the conclusion that over-treatment was at the root of the problem. Skinner, upon the request of Gawande, analyzed the data from McAllen and came to the same conclusion that patients here in McAllen had to undergo more tests, hospitalization, surgery as well as home care than elsewhere. The irony was that over-treatment did not necessarily mean better medical care.

Mayo Clinic is the best hospital in USA – at the forefront where technology in treatment is concerned. It is the main hospital serving Rochester in Minnesota. Spending on health care per person is the lowest in Rochester in comparison to the rest of the country.