The healthcare problem in the United States is complex, but not necessarily complicated. By that, I mean there are numerous facets to the problem, but each is straightforward to understand and is remediable. Although discussions to date have focused nearly exclusively on the cost and availability of health insurance, that is really only a small part of more basic issues. And only when the real substance of a problem is understood can a viable solution be found. Here, then, is my perspective as a physicist and chemist on the linked issues that make healthcare complex and what can be done about it.

1. Causes

1. There is little or no relation between what doctors and hospitals charge for their services and the cost to them in time and materials. In virtually every other profession than healthcare, manufacturers, vendors, or service providers acting in good faith charge a price or fee that reflects their expenses plus a reasonable profit. Were they not to do so, consumers would take their business elsewhere. When one needs medical care, however, there is often no “elsewhere” to go. A sick or injured person is not a consumer with time and knowledge to go bargain hunting among physicians or surgeons—who, in any event, rarely inform their patients beforehand of the costs of treatment. What physician is willing to tell a patient that his 15-minute physical exam, which costs $400, amounts to a charge of about $27 per minute or $1,600 per hour? What surgeon who charges $800 to remove a small mole from the cheek of a patient in 20 minutes is going to tell him that the charge amounts to $40 per minute or $2,400 per hour? Where in any other profession—not car repair, not plumbing, not even law—do consumers encounter such exorbitant valuations of time. I once asked a healthcare professional why a certain procedure for one of my children, which would not take much of his time nor require any exotic equipment or material, cost a king’s ransom. “Experience and know-how”, he replied. Skill is important in any profession, but for “skill” to be a fair-priced economic commodity in a free market environment, there must actually be available a local free market with numerous competing providers. This is not the case in the US or anywhere else around the globe where I have lived.

2. One explanation beyond avarice for why doctors charge excessive rates is to compensate for the high medical school expenses they have had to pay. It is virtually impossible to acquire a medical education in the US without ending up with years of debt. The Association of American Medical Colleges reported that the average debt of a graduate from a US medical school currently exceeds $155,000.

3. A second explanation is that the US is a litigious society, and to protect themselves doctors have to pay high malpractice insurance premiums. In judging the rationale of high medical fees, one must consider “insurance” in addition to “time” and “materials”.

4. There is a justifiable reason for why there are so many malpractice suits with large compensatory awards: too many doctors in the US practice carelessly and incompetently. According to the news media, more than 90,000 Americans annually die needlessly from medical mistakes. Doctors who don’t wash or disinfect their hands whenever they go from one patient to another, particularly in hospitals, transmit drug-resistant infectious agents. Doctors read X-ray photographs incorrectly and operate on wrong limbs and organs. Doctors who are unskilled or untrained in the use of specialized equipment fail to treat the critical illnesses (like cancer) for which the equipment was designed and also end up damaging healthy organs. Doctors who are treated (or not treated!) for alcoholism or drug abuse still practice and perform botched surgery or toxic anesthesiology on patients. (All these statements paraphrase recent news reports.)

5. There are also unjustifiable reasons for a large number of malpractice suits. Many Americans, ignorant of basic science, especially as it may pertain to the anatomy and physiology of their own bodies, are not in a position to judge accurately whether the damage to them from a particular medical procedure resulted from carelessness of their physician or was a predictable risk that could have occurred with any physician, however careful. Therefore, when some procedure turns out poorly, they sue.

6. There is a reason for why incompetent physicians continue to practice medicine. Medical associations, hospitals, academic medical facilities, and individual physicians are reluctant to report, expose, or remove them. This reluctance derives from (a) the venality of organizations (especially hospitals and universities) that may profit from high revenues brought in by certain specialists on their staff and who thereby turn a blind eye to complaints about their malpractices; and (b) fear among individual physicians that someday they, too, may make an error that could cost them their reputation or license to practice.

7. Drug companies are not in business to provide affordable health-preserving drugs, but to make profits for their executives and shareholders. They—like doctors and hospitals—charge prices for drugs out of all proportion to the cost borne for research and production. They undertake deceptive, if not illegal, practices to prolong patents and suppress manufacture of generic substitutes. They suppress sponsored studies that show their products to be ineffective, less effective than other products, or outright harmful, and they pay ghostwriters to write or revise favorably the publication of studies implemented by sponsored researchers. They keep account of doctors’ prescription histories and bribe physicians to use their products by means of gifts. They retire lower cost drugs that work well and replace them with less effective drugs that cost more. (These statements, too, paraphrase news reports and published exposures by physicians.)

Drug companies claim that procedures for drug research, testing, and approval are long and expensive. It has been reported, however, that approximately one third of their budget goes to advertising, not to research. Moreover, drug companies profit freely from the vast literature of publicly funded medical, chemical, and pharmaceutical research, which they then exploit in creating drugs they sell back to the American public at unreasonable prices.

8. Because commercial drug companies are primarily concerned with profit as distinct from product, the products of their research often relate more to appearance, indigestion, impotence, and other non life-threatening conditions than to serious medical conditions, illness or injury. Only if a particular medical condition is likely to lead to large market demand, will a commercial drug firm be interested in targeting it. This motivation is intrinsic to a business model geared for profit. The societal consequence, however, is that many conditions, some involving enormous remediation or long-term care costs, that could benefit from an appropriate drug therapy will go untreated.

9. Bio-tech companies, as well as academic institutions and individual research groups, retard critical medical research by obtaining patents on genes, proteins, cell lines, and other biochemical pieces or products of living organisms. These practices impede or prevent competing groups from carrying out research that could treat disease or debilitating injury. By stifling competition, these grants of patents aid the soaring cost of healthcare.

10. Private health insurance companies are not in business to facilitate healthcare, but, like drug companies, to make profits for their executives and shareholders. To make a profit, they deny coverage to people who have conditions that would likely lead to claims. They deny legitimate claims to make the process of reimbursement difficult and frustrating to policy holders and physicians. They provide policies that have exorbitantly high deductibles and minimal coverages. They write policies in ways to deceive prospective subscribers into believing that they are covered for conditions that the companies do not cover or that they will be reimbursed an amount greater than what the companies will actually pay. In contrast to nearly every other kind of business whose managers hope that use of their product or service results in customer satisfaction, the health insurance industry works to discourage use of their services—except for collection of premiums.

11. Health insurance companies may argue (presuming they would admit to the foregoing practices) that the nature of their industry requires such a business model. For-profit commercial health insurance companies, like all insurance companies, are organizations dependent on risk. As such, if every policyholder submitted claims, the companies would go under. Their existence is predicated on a calculated risk that most customers will not get sick or injured. Their business model requires that they seek paying subscribers who are unlikely to get sick or injured—and to try to deny coverage when they do. The risk for an individual insurance company is diffused when its pool of policy holders is sufficiently large. Below a certain critical threshold number of subscribers, a private health insurance company cannot remain viable. Because the supply of subscribers in any local geographical area is insufficient to sustain a large number of private insurers, the end result is a near monopolistic domination of the market by one or a few companies with concomitantly high premiums, or a scrambling for subscribers among a group of competing companies with associated deceitful business practices, or both.

2. Solutions

1. If access to a doctor, whether a primary care physician or specialist, is to become affordable through a free-market solution, then it is necessary for the nation to increase the supply of doctors so that competition will bring down the cost of “skill”. For doctors to price their services at rates commensurate with their legitimate expenses as in other businesses, these expenses must be made lower. One way is to relieve the best of would-be doctors of their crushing medical school debts by making available government-sponsored full graduate fellowships—awarded, for example, on the basis of undergraduate academic excellence and/or standardized tests—to those who agree to accept a mandated scale of fees for a prescribed period of time…let us say 8 years.

The US government has long supported graduate education in critical areas through fellowships provided by the National Science Foundation (NSF) and National Institutes of Health (NIH). Furthermore, branches of the US military—for example, the Navy Nuclear Propulsion Officer Candidate Program—have long had scholarship programs to cover the full cost of undergraduate education for selected applicants who met rigorous intellectual and physical requirements and who agreed to serve as active-duty officers for a stipulated number of years. Combine the two types of programs; create a corps of outstanding “fellowship physicians” distributed throughout the US and obligated to accept regulated rates of payment against whom other doctors must compete in the marketplace. With a sufficiently large corps of “fellowship physicians” whose fees are affordable to middle-class Americans, all physicians will eventually have to do likewise or lose their patient base.

2. Relieve all doctors of the crushing burden of malpractice insurance by eliminating from the profession quickly those whose carelessness fuels such lawsuits. Mandate the reporting—by hospitals, especially—of serious errors by their physicians and make this information available to the public (e.g. via internet) so that people seeking medical care can choose to avoid error-prone doctors.

Since not every unfavorable outcome of a medical procedure is due to error—and certain medical disciplines (like obstetrics or neurosurgery) involve situations of greater risk than others—create independent review boards, comprising not just physicians, but scientists trained in such fields as physics, chemistry, biology, forensics, and statistics capable of evaluating scientific evidence, to review cases of alleged malpractice, rather than leaving such matters to courts of law or allowing universities and hospitals to police themselves (which they have been unable to do adequately). In other words, change medical adjudication from an adversarial system, where the goal of each lawyer is to win, to a scientific inquiry, where the goal of the review board is to uncover “truth” as best as scientific procedure allows. Should the review board find for malpractice in a particular case, the State would then be authorized to revoke the license of the offending physician, and the case could then go to the courts for determination of compensation and penalty. The significant improvement over current procedure would be that neither the physician nor the patient need become embroiled in a costly lawsuit at the outset—and many, perhaps all, of the kinds of frivolous medical lawsuits that now clog the legal system could be avoided. Moreover, by rapidly and permanently rescinding the medical licenses of incompetent or drug-abusing or alcoholic doctors, the number and cost of actual malpractice cases that eventually go to court would abate significantly.

3. Prohibit by federal law drug companies from advertising (in newspapers, magazines, radio, television, internet) to the general public. Create an online library of reports (e.g. by drug companies, academic and government labs, independent researchers) of all drugs submitted to the FDA for approval and follow-up. The reports (with supplementary supporting data files) would be available to physicians, as well as to those of the general public who care to read such material, and include summaries of the outcomes of all statistically significant tests, both favorable and unfavorable to the promotion of the product.

4. Stabilize drug prices at affordable and uniform levels throughout the nation by having the federal government, rather than individual insurance companies or States, negotiate drug prices with pharmaceutical companies. Regulate the price of drugs that have benefited from publicly sponsored research.

5. End the practice of granting patents on genes, proteins, cell lines, etc. and rescind such patents as have already been issued.

6. Ban the practice by academic (and other) researchers of ghost-writing drug-company sponsored articles. Require academic and government scientists who receive drug-company payments to disclose the sources and amounts in a medium available to the public. In medical schools especially, require faculty to report their drug company associations on the medical school website in a single location readily accessible to the general public. (One of the most egregious abuses reported by the media concerned undisclosed drug-company associations of Harvard medical school faculty who promoted company products in their classes. The abuses were discovered and decried by medical students themselves rather than by administrators or faculty.)

Penalize academic institutions whose employees (faculty and research staff) violate medical ethics laws by restricting future public funding and requiring reimbursement of grants received by the perpetrators.

7. For medical care, especially in cases of serious disease or injury, to be affordable, it is necessary to create and subsidize, where needed, public hospitals to provide a competitive alternative to for-profit private hospitals. There is an intrinsic conflict of interest in a for-profit hospital providing medical care, because the underlying goal is profit and not care. The drive for profit leads to the reported grossly inflated charges for everything from nightly rates to the cost of small dispensable items like cotton swabs.

For hospitals receiving public funding, regulate fees for services according to a scale of rates that accurately reflected the cost of materials and a valuation of time of administrators and physicians comparable to the pay scales for other professionals working in the public sector (e.g. research staff at federal labs; faculty, staff, and administrators at public universities). The reimbursement claims sent by not-for-profit hospitals to insurance companies should then be much lower than claims by for-profit hospitals, and the latter would either have to conform or else see their patient base dwindle.

Assertions that regularization of physicians’ salaries would discourage people from going into medicine as a career are, in my opinion, not valid. What might discourage a person whose motivations are appropriate—i.e. who wants to be in medicine out of a desire to do good, rather than to become rich—is the astronomical cost of a medical education and subsequent malpractice insurance, and the fear of years of debt. If relieved of these fears, doctors can be expected to fulfill their medical ambitions at compensations that make for a comfortable, not luxurious, standard of living.

2. Affordable Health Insurance

I have said little so far about health insurance. Were the foregoing recommendations to be implemented, ordinary medical care in the US could become affordable without insurance, as it was in the distant past when virtually no one had, or needed, health insurance. Nevertheless, the cost of catastrophic injury or serious illness will always be expensive—and so the problem remains of how it will be paid for.

As in the case of for-profit hospitals, there is an irreconcilable conflict of interest in the operation of companies that provide health insurance for profit. On the other hand, the health insurance industry has more experience than the federal government in managing healthcare. A sensible solution, therefore, would be to design an intelligent system that makes best use of both together, rather than insisting ideologically on one or the other.

Here, then, is a proposal for utilizing the efficiency of the private sector, while maintaining the universal coverage and affordability of a not-for-profit single-payer system.

Many organizations (the academic institution where I work is one example) are self-insured. The organization pays the medical bills, but the claims are administered by a private insurance firm hired to do that work. Imagine, then, a single-payer system—the federal government—with the cost-effective measures described previously (in regard to doctors’ fees, hospitals’ charges, malpractice review boards, federally negotiated drug prices, etc.) in place. The single-payer would have the largest possible pool of subscribers, i.e. the entire US population, who would be paying affordable premiums, perhaps through their federal taxes as is currently the case with Medicare. The overall cost to the government would be more predictable, stable, and lower than under the present system or any system that relied on private insurance companies for payout. However, private insurance companies would be engaged by the federal government to administer the program at contracted rates of compensation.

Such a system would work out satisfactorily for everyone—except the greedy. Private insurance companies would not be risking their own money, and therefore could apply their administrative skills and efficiencies to make sure the system worked smoothly rather than to conjure up ways to circumvent payments and deny coverage. Their objectives would be to authorize payment of legitimate claims and detect fraudulent ones. For their services, they would receive compensation that afforded a reasonable profit commensurate with their much lower level of risk.

All US citizens and legal residents would be eligible to participate. The US government, like current private insurance firms, could offer several plans—a minimal basic one at low price and more expensive ones with more extensive coverage. Americans would have the option of purchasing the same insurance available to members of Congress—or, to rephrase this in a way that appropriately emphasizes my intent: Members of Congress would have available to them only such federal insurance plans as were available to the general public. (It would be to their advantage, therefore, to pass legislation that gets all the details right.) For the employed, payment could be deducted automatically from paychecks. For the unemployed and retired, payment could be made by check at stipulated regular intervals.

4. The Three R’S: Rights, Responsibilities, & Restrictions

Implementation of the preceding recommendations should reduce the cost of health care, i.e. the price of health insurance and direct payments to medical providers, sufficiently to be affordable to most Americans. Nevertheless, a national “safety net” would require federal and state governments to subsidize those who could not afford to pay for health insurance, which may be a lot of people, particularly during periods of economic distress. This is a matter that needs to be thought through very carefully, for the prospect of substantial welfare costs could make the entire system unsustainable if appropriate safeguards are not imposed to insure that such subsidies go only to qualified citizens and legal residents with no other recourse for payment.

Whether undertaken by private insurers or by the federal government, health insurance (any insurance) is still a statistical matter of risk assessment. If too many subscribers get sick or injured, then the fund of available reserves will become exhausted, and the public health insurance system will break down. It stands to reason, therefore, that the federal government, if it is the insurer, must have the right to charge subscribers more who pose greater risks, particularly if these risks relate to lifestyle choices. This raises some prickly, but necessary, questions concerning privacy.

Differential pricing in the insurance business is nothing new; consider, for example, car insurance. Car insurers ordinarily charge lower rates to better drivers. The reason is obvious: better drivers make fewer claims. But to determine whether you are a better driver, the insurer will ask for personal, perhaps confidential and personally sensitive, information: How many accidents were you involved in over the past 5 years? Were you considered at fault? How many citations have you had? Were you ever arrested for drunk driving? And so on.

If the federal government is to provide health insurance to all Americans at premiums that are affordable yet reflect accurately the risks involved, then, just like private insurers now, it, too, will have to be able to ask personal questions and set higher rates for those who are more likely to make claims. This is simply a matter of probability and statistics, not racial, ethnic, geographic, or any other kind of profiling done for malicious reasons.

There already is a kind of consensus regarding one critical area of concern: a person’s genetic composition. Whereas it may be necessary and fair to ask what diseases and conditions you have had or do have, the prevailing sentiment is that it is inappropriate to inquire into what diseases or conditions you may have in the future because of your genetic makeup. The reasoning is that your genetic makeup is something over which you have no control and therefore should not be penalized for. Personal behavior, on the other hand, is something which people can change and for which they should be held responsible.

When it comes to health, many Americans, according to numerous news reports, are their own worst enemy.

• They eat too much and exercise too little, becoming obese and at high risk for diabetes and other degenerative diseases.
• What they do consume (highly processed meals, snack foods, soft drinks, alcohol, cigarettes, illicit drugs, etc.) is not healthful.
• They engage in risky sexual practices that lead to disease or unwanted children or both.

The situation is particularly serious among the poor and uneducated—i.e. those most likely to require public assistance.

I have frequently heard Americans voice concern (e.g. in street interviews by radio reporters) that they do not want the federal government (or any government) telling them what to eat or drink. But the simple fact is that a national healthcare system cannot remain solvent if a substantial fraction of participants are unwell or persistently engaged in self-destructive lifestyles. That national healthcare works well in countries like Finland or Sweden is attributable in no small way to their basically healthy populations. For-profit private health insurers in the US deal with self-destructive lifestyles by “cherry-picking” healthy subscribers and turning down people with pre-existing conditions. In a national healthcare system, the federal government cannot do that. Nevertheless, if the system is to remain solvent, the government will have to be able to induce people to change self-destructive behaviour costly to the rest of society. Financial incentives are one way—e.g. higher premiums or restricted coverage for obesity or lifestyle choices that endanger health. However, for those on public assistance who are not paying for their medical care anyway, other means will have to be found to ensure conformity with certain basic cost-reducing measures that promote health.

The short of it is that subsidized healthcare should not be construed as a right or entitlement, but a charity provided by one’s fellow citizens—and, as such, could be taken away if abused. Ultimately it must be recognized that people are responsible for the choices they make, and that those who persistently disregard practices of good health and hygiene cannot continually be kept alive at taxpayers’ expense.

Lack of exercise, poor diet and illicit drug use are not the only lifestyle matters that can undermine national healthcare. At least as serious—yet virtually invisible in debates over healthcare reform—is the issue of reproduction and population growth. The out-of-wedlock birthrate in the US is soaring. Recent news reports indicate that about 4 out of 10 births of babies in the US were from unmarried mothers, and that children born out of wedlock in the US have poorer health and poorer educational outcomes than those born to married women. Data from the US Census Bureau show that approximately 50% of first marriages in the US end in divorce. The rising US population (from births and immigration) lies at the root of the nation’s three major problems: (i) energy (more people = more demand for energy), (ii) environment (more people = more demand for resources, more waste and pollution), and (iii) healthcare.

Without a check on population—in particular a major reduction in the number of unwanted and ill-cared for children who will live a substantial part of their early lives, if not also their adult lives, at the public expense—the cost of healthcare will become unsustainable. Reproduction is frequently proclaimed in the US to be a human right. But, like all rights, it must be tempered by responsibility and curtailed when, by its exercise, the rest of the nation must bear the high cost of the consequences. Other nations have dealt with this problem. India has tried financial compensation to those who voluntarily submitted to out-patient medical procedures to prevent insemination or pregnancy. China has used the threat of financial disincentives (loss of benefits) to restrict family size. Sooner or later the US will have to address the issue seriously. As with nearly every other social problem, to deal with it later when it has grown larger will be harder.

5. The Ultimate Solution

In the preceding sections I recommended various ways, whose effects would be felt immediately upon implementation, to bring down the cost of healthcare in the US. But it must be understood, however, that the problem of healthcare in the US is linked to nearly everything that affects the nation’s health, well-being, and stability. A genuine long-term solution, therefore, will inevitably require:

• a peacetime environment, because the astronomical cost of ongoing wars in Iraq and Afghanistan and newly undertaken incursions in Libya drains the financial resources that otherwise could be used to implement initiatives to reduce the cost of healthcare;
• a stable work environment, so that citizens can receive a steady income with which to pay their taxes, rent, mortgage, food bills, and healthcare costs;
• a stable family environment, so that couples who bring children into the world will (a) remain together to rear them with their own financial resources, rather than depend on the charity of taxpayers, and (b) inculcate these children with values stressing health, work, integrity, and personal responsibility;
• a public educational system that can turn out scientifically informed, functionally literate adults who will be able to take care of themselves, as well as their children;
• and the most critical element of all: a stable population size, where births and immigration are balanced by deaths and emigration, to ensure that the nation is living within the constraints posed by available land, water, energy, and jobs.

The complexity of the US healthcare problem reminds me in some ways of the complexity of a supernova, the unimaginably large explosion of a massive star exhausted of its nuclear fuel. Nearly everything in physics goes into theoretical models to explain it: gravity, nuclear physics, elementary particle physics, atomic physics, electrodynamics, thermodynamics, chemistry, and more. If any critical component is left out of a model, then the computer simulation fails to reproduce the star’s explosion. The healthcare problem is like a societal supernova waiting to happen. It is an explosive issue comprising multiple components that can ultimately bankrupt the national economy. The essential difference, fortunately, between a supernova explosion and the impending healthcare explosion, is that understanding all the causes of the former does not stop it from happening, whereas understanding all the causes of the latter is the only way to stop it from happening.