The Price We Pay: What Broke American Health Care–and How to Fix It

An eye-opening critique of the American healthcare system
Dr. Makary was one of my professors at Vanderbilt and is very respected in the industry.His book sheds light on the hidden politics and financial motivations that drive many decisions in hospitals and medical practices. He reveals how certain practices, while financially advantageous for institutions and providers, may not always align with the best interests of patients. With a blend of investigative reporting and personal insight, this book is essential reading for anyone interested in understanding the complex interplay between healthcare economics and patient care.

Correct diagnosis but Rx unrealistic wishful thinking
In its early days, medical care was both an entrepreneurial and philanthropic endeavor. The context of care delivery was limited to doctor and patient with doctors bound by a code of ethics to act in the best interest of their patients. In modern American society, medical care has evolved into a highly complex, multifaceted $3.5 trillion dollar industry with multiple stakeholders including payers, large medical corporations and pharmacy benefit managers. Per Makary’s account, this development has fundamentally broken the relationship between patients and caregivers and fueled ethical lapses and poor practices that drive up prices and overall medical care spending without commensurate gains in quality. As a medical care insider and surgeon, Makary shines a brutally revealing light, citing multiple examples of provider greed, opaque and predatory billing practices and tests and procedures of dubious value posing more risk than benefit.Medical care has become one of the nation’s biggest industries. As a business, Makary apparently believes it can be reformed to return to it mission of public trust with private market forces. His Rx is making medical care more of a competitive market like that for other service industries. Starting with greater price transparency so people can shop for the best deal from hospitals, surgery centers and medical offices.That’s a tall order and doesn’t comport with the reality of how medical care is purchased and financed. Health plans, employers and the government foot the great majority of the bills, not patients directly. Any market-based reform requires the ultimate consumers – patients — to call the shots on when and how they receive care and what they’re willing to pay for it. That might have been the case in the 1800s, but not today.It’s wishful thinking to believe medical care can be purchased like a discretionary consumer service and it’s thus an unrealistic reform principle. Simply because medical care can often be scheduled in advance unlike emergency care, it isn’t a discretionary purchase like other consumer goods and services. No one really wants medical care unless they need it – and often tend to put it off — regardless of whether it can be scheduled in advance. Hence, few people will be diligent shoppers.Because medical care is for the most part not a discretionary purchase, demand for it tends to be inflexible. Inflexible demand strengthens the sell side for providers and conversely weakens buy side purchasing power for individuals and families. A competitive market requires relatively equal market power on both the sell and buy sides. Aside from personal services not covered by payer plans like elective cosmetic surgery, individuals and families who receive medical care do not directly select among providers and bargain for services since their public and private medical plans — and not them — bargain for the cost of procedures. Also, their ability to choose among providers is limited to increasingly narrow provider networks.The highest cost medical procedures are performed in hospitals and surgery centers. High staffing, equipment and staffing and patient safety regulation create high cost barriers to competitor entry. Those high costs tend to incentivize provider consolidation and create oligopolistic market conditions in most areas, increasing sell side market power. Finally, patients have traditionally heavily relied on trusted relationships with their doctors to recommend both medical care and the provider, substantially reducing their exercise of choice essential to the market-driven reform Makary favors.

Brilliant! A MUST read!

Well articulated and real problems with healthcare prices. It’s specific to the US but is very helpful to understand as the trend is happening globally .