Healthcare: Overserved or Underserved

Why do patients either get too much healthcare -- being “overserved” -- or do not get the care they need (being underserved), but never precisely what they need?

“Overservice” refers to unnecessary medical tests, avoidable procedures, or inefficient duplication of technologies such as an MRI scanner on every block. Overservice is thought to produce wasteful expenditures on healthcare that add little to no value to patients.

Patients complain of being “underserved:” waiting forever to see the doctor; having treatment delayed inordinately, such as a cancer allowed to spread too far; or not enough facilities or services to provide what we need, viz., too few burn units or no neurosurgeon available after a motor-vehicle accident. Underserving of patients is thought to be produced reduced spending.

Overservice

There are several reasons why patients are “overserved.” First and most obvious is the profit motive. When doctors and hospitals are paid for performance, the more they perform, i.e., the more they “serve” patients, the more money they make. In management theory, this is called a perverse incentive, where reward is given for a result the consumer doesn’t want.

Defensive medicine is a second reason for overservice. Doctors practice their craft knowing that both negligence lawyers and the federal government are circling the skies like vultures. The personal injury lawyers look for adverse patient outcome, preferably photogenic ones. Government compliance officers seek any infraction of federal rules and regulations.

In this environment, doctors focus defensively on what the record looks like more than what the patient looks like. Thus, they do a CAT scan for every head bump, or follow federal guidelines even if they know a specific patient would do better with different treatment. Behaving otherwise, the doctor could lose her life savings or her license.

Underservice

There are a number of reasons why patients are underserved: fail to get the care they need when they need it.

For the vast majority of Americans, the cost of health insurance is unaffordable and the cost of healthcare is totally beyond their means. While corporate greed plays a role, it is minor compared to the spending created by government greed. Forty percent of all healthcare spending produces no healthcare at all. This 40%, representing over $1 trillion (!), is siphoned off to healthcare BARRC–bureaucracy, administration, rules, regulations, and compliance. The cost of BARRC is the primary reason why patients in the U.S. are under-served.

In single-payer systems, like those in Canada and Great Britain, the government decides what care people will get and more importantly not get, i.e., how underserved patients are.  A central allocation process decides where money goes. After BARRC takes the first and biggest cut, what is left over becomes available for your health care needs. That is why in Canada, there are too few operating rooms, MRI machines, burn units, and chemotherapy drugs. Medical needs of individual patients play no role in the healthcare choices made by the government. Balancing the budget is the highest priority for bureaucrats who have now become decision makers for healthcare.

In single-payers (and soon here), the government tries to reduce medical costs by rationing. For example, treatments now rationed by Great Britain’s NHS include heart surgery, kidney dialysis, cataract surgery, hip replacement, and even arthritis injections. By definition, medical rationing underserves patient needs.

The doctor shortage is a third reason why patients cannot get the care they need when they need it. Though there are multiple reasons for the lack of doctors, the root cause is the system per se. Doctors are retiring early; leaving clinical practice; or not entering the field in the first place because they see a system designed to obstruct and punish healthcare providers at every turn while constantly reducing how much they get paid.

Inappropriate medical care – too much or too little – has become the norm. The problem is the healthcare system itself, whether is it the U.S.’s insurance-based approach, or the single-payer systems of Great Britain or Canada. 

Underservice ≠ cost saving

Underserving of patients does not save money. In fact, underserving generates overspending.

Providing insufficient, delayed, or no health care at all -- medical rationing -- makes people less healthy and can result in premature or avoidable death. As there are fewer healthy individuals, GDP goes down by both reduced production as well as reduced consumption. “Underservice” is detrimental to a nation macroeconomically.

In addition to rationing, the other way government “cuts costs is by increasing BARRC and compliance oversight, which costs more than what is saved. For example, the ACA “saves” $716 billion by rationing Medicare services while spending over $2 trillion, mostly on BARRC.

Both Overspend

Interestingly, both overserving doctors who practice medicine on individual patients, and underserving bureaucrats who practice population medicine “overspend.” Physicians gain personally as a result of pay for performance. The more they perform, the more of your money they spend, and the more money they take home.

Bureaucrats overspend even more than doctors. The rules and regulations just for ACA take over 10, 000 pages in the Federal Register. The writing, interpretation, implementation, legal defense, and oversight of such volume and complexity of BARRC require thousands of new hires: actuaries, administrators, billers, coders, consultants, lawyers, legislative aides, oversight officers, reviewers, and other sorts of bureaucrats. You pay for all of them and their associated costs.

In every healthcare system known:

You get more healthcare than you need, or you don’t get the care that you do need. Either way, you pay too much.

Dr. Deane Waldman MD MBA, is author of The Cancer In Healthcare; Host of We The Patients Newsletter-&-Forum; member of the Board of Directors of the New Mexico Health Insurance Exchange; Adjunct Scholar for the Rio Grande Foundation; and former Emeritus Professor of Pediatrics, Pathology, and Decision Science.

Why do patients either get too much healthcare -- being “overserved” -- or do not get the care they need (being underserved), but never precisely what they need?

“Overservice” refers to unnecessary medical tests, avoidable procedures, or inefficient duplication of technologies such as an MRI scanner on every block. Overservice is thought to produce wasteful expenditures on healthcare that add little to no value to patients.

Patients complain of being “underserved:” waiting forever to see the doctor; having treatment delayed inordinately, such as a cancer allowed to spread too far; or not enough facilities or services to provide what we need, viz., too few burn units or no neurosurgeon available after a motor-vehicle accident. Underserving of patients is thought to be produced reduced spending.

Overservice

There are several reasons why patients are “overserved.” First and most obvious is the profit motive. When doctors and hospitals are paid for performance, the more they perform, i.e., the more they “serve” patients, the more money they make. In management theory, this is called a perverse incentive, where reward is given for a result the consumer doesn’t want.

Defensive medicine is a second reason for overservice. Doctors practice their craft knowing that both negligence lawyers and the federal government are circling the skies like vultures. The personal injury lawyers look for adverse patient outcome, preferably photogenic ones. Government compliance officers seek any infraction of federal rules and regulations.

In this environment, doctors focus defensively on what the record looks like more than what the patient looks like. Thus, they do a CAT scan for every head bump, or follow federal guidelines even if they know a specific patient would do better with different treatment. Behaving otherwise, the doctor could lose her life savings or her license.

Underservice

There are a number of reasons why patients are underserved: fail to get the care they need when they need it.

For the vast majority of Americans, the cost of health insurance is unaffordable and the cost of healthcare is totally beyond their means. While corporate greed plays a role, it is minor compared to the spending created by government greed. Forty percent of all healthcare spending produces no healthcare at all. This 40%, representing over $1 trillion (!), is siphoned off to healthcare BARRC–bureaucracy, administration, rules, regulations, and compliance. The cost of BARRC is the primary reason why patients in the U.S. are under-served.

In single-payer systems, like those in Canada and Great Britain, the government decides what care people will get and more importantly not get, i.e., how underserved patients are.  A central allocation process decides where money goes. After BARRC takes the first and biggest cut, what is left over becomes available for your health care needs. That is why in Canada, there are too few operating rooms, MRI machines, burn units, and chemotherapy drugs. Medical needs of individual patients play no role in the healthcare choices made by the government. Balancing the budget is the highest priority for bureaucrats who have now become decision makers for healthcare.

In single-payers (and soon here), the government tries to reduce medical costs by rationing. For example, treatments now rationed by Great Britain’s NHS include heart surgery, kidney dialysis, cataract surgery, hip replacement, and even arthritis injections. By definition, medical rationing underserves patient needs.

The doctor shortage is a third reason why patients cannot get the care they need when they need it. Though there are multiple reasons for the lack of doctors, the root cause is the system per se. Doctors are retiring early; leaving clinical practice; or not entering the field in the first place because they see a system designed to obstruct and punish healthcare providers at every turn while constantly reducing how much they get paid.

Inappropriate medical care – too much or too little – has become the norm. The problem is the healthcare system itself, whether is it the U.S.’s insurance-based approach, or the single-payer systems of Great Britain or Canada. 

Underservice ≠ cost saving

Underserving of patients does not save money. In fact, underserving generates overspending.

Providing insufficient, delayed, or no health care at all -- medical rationing -- makes people less healthy and can result in premature or avoidable death. As there are fewer healthy individuals, GDP goes down by both reduced production as well as reduced consumption. “Underservice” is detrimental to a nation macroeconomically.

In addition to rationing, the other way government “cuts costs is by increasing BARRC and compliance oversight, which costs more than what is saved. For example, the ACA “saves” $716 billion by rationing Medicare services while spending over $2 trillion, mostly on BARRC.

Both Overspend

Interestingly, both overserving doctors who practice medicine on individual patients, and underserving bureaucrats who practice population medicine “overspend.” Physicians gain personally as a result of pay for performance. The more they perform, the more of your money they spend, and the more money they take home.

Bureaucrats overspend even more than doctors. The rules and regulations just for ACA take over 10, 000 pages in the Federal Register. The writing, interpretation, implementation, legal defense, and oversight of such volume and complexity of BARRC require thousands of new hires: actuaries, administrators, billers, coders, consultants, lawyers, legislative aides, oversight officers, reviewers, and other sorts of bureaucrats. You pay for all of them and their associated costs.

In every healthcare system known:

You get more healthcare than you need, or you don’t get the care that you do need. Either way, you pay too much.

Dr. Deane Waldman MD MBA, is author of The Cancer In Healthcare; Host of We The Patients Newsletter-&-Forum; member of the Board of Directors of the New Mexico Health Insurance Exchange; Adjunct Scholar for the Rio Grande Foundation; and former Emeritus Professor of Pediatrics, Pathology, and Decision Science.