U.S. 'Not Getting What We Pay For'

Many Experts Say Health-Care System Inefficient, Wasteful

By Ceci Connolly
Washington Post Staff Writer
Sunday, November 30, 2008; A01

Talk to the chief executives of America's preeminent health-care institutions, and you might be surprised by what you hear: When it comes to medical care, the United States isn't getting its money's worth. Not even close.

"We're not getting what we pay for," says Denis Cortese, president and chief executive of the Mayo Clinic. "It's just that simple."

"Our health-care system is fraught with waste," says Gary Kaplan, chairman of Seattle's cutting-edge Virginia Mason Medical Center. As much as half of the $2.3 trillion spent today does nothing to improve health, he says.

Not only is American health care inefficient and wasteful, says Kaiser Permanente chief executive George Halvorson, much of it is dangerous.

Those harsh assessments illustrate the enormousness of the challenge that awaits President-elect Barack Obama, who campaigned on the promise to trim the average American family's health-care bill by $2,500 a year. Delivering on that pledge will not be easy, particularly at a time when the economic picture continues to worsen.

Senate Finance Committee Chairman Max Baucus (D-Mont.) has already warned that improving and expanding health care will cost money in the short run -- money that his Republican counterpart, Sen. Charles E. Grassley (Iowa), argues the government does not have.

Yet among physicians, insurers, academics and corporate executives from across the ideological spectrum, there is remarkably broad consensus on what ought to be done.

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One fundamental problem is how doctors are paid, he said. Under the current fee-for-service scheme, "the more you do, the more you make," Kaplan said. There is no incentive to keep people out of doctors' offices, hospitals, imaging centers and dialysis clinics.

More tests lead to more procedures, which often result in mistakes, complications, misdiagnoses or the use of untested therapies, said Donald Berwick, president of the Institute for Healthcare Improvement in Cambridge, Mass. "The current system is very hospital-centric," he said. "We wait for people to get sick, and then we invest enormous sums to fix them up. We should build primary care as the core."

It is possible to change the incentives, Kaplan said. Partnering with Starbucks and the insurer Aetna, Virginia Mason devised a new strategy for dealing with back pain, the leading medical complaint of Starbucks' coffee-pouring baristas. Virginia Mason made big money on MRIs, but there is little scientific data that the scans resolve the problem.

So they flipped the process, trying physical therapy first. To make up for some of Virginia Mason's lost revenue, Aetna increased its payment for the therapy. Today, the majority of Starbucks employees with back trouble return to work within 48 hours without an MRI or a prescription, Kaplan said.

"We've shown that you can have superior outcomes at lower costs," Kaplan bragged. He acknowledged, however, that the success on back pain is "one small vignette" in a mega-mess.

Moving from pricey, high-tech solutions such as MRIs to older, low-tech approaches such as physical therapy requires solid data and a culture change, said Helen Darling, president of the National Business Group on Health, which represents large employers. Americans are attracted to innovations, regardless of cost or whether they have been proven to achieve results.

A whole-body scan that is covered by insurance may seem like a bargain, Darling said. "But one way or another we're all paying" for it in higher premiums, increased government expenditures and even false-positive results that lead to more costly, invasive procedures.