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Causes of high medical expenses part three: the medical culture

2011-12-11

The third element that causes high medical expenses is the culture of medicine itself.  The expectations of profit that in part flow from pharmaceuticals and doctors have fostered an entire culture of products and services tailored to the specific needs of doctors and hospitals at higher prices.

Lawyers profit hugely from their services to doctors and hospitals.  Not only from malpractice prosecution and defense, but divorce proceedings tailored to the incomes of doctors as well.

Manufacturers of diagnostic equipment make large profit margins.  An example is the CAT scanner business, which has kept its retail prices so high that used CAT machines have become another market.  Any product that can be sold to a doctor or a hospital will fetch at least double what the ordinary market would bear.

Real estate, especially office buildings, is another market that enjoys preferentially high pricing when dealing with medical professionals.  Medical office buildings are always leased at high rates, with multiple middle men taking their cuts.

Finally, there are insurance companies, which have historically exploited the individual patient, have continued their reign of terror despite “Obama care.”  We don’t need to elaborate on the depradations of the insurance companies here.

What has happened, particularly since the introduction of Medicare, is that the entire sphere of medical economics has developed a highly inflated atmosphere.  The system has resulted in the exploitation of the individual patient and significantly higher overall costs (40 % higher) than in other, equally developed companies with longer life expectancies.  The problem has become so complex and has had so much negative impact on the quality of life in this country that only the federal government can control it.

It is long past time to pretend that the federal government cannot, or should not, take on serious and pressing problems that oppress the people in general.  There is no convincing argument that government cannot competently and cost-effectively control and solve problems.  Medicare is a perfect example.  It is inarguably far more efficient at processing claims than private insurance companies (overhead of less than 5 % versus 30-40 %.).  The only problem with Medicare is that it is faced with an enormous threat from outside: the inflation of the cost of medical care.

Therefore, I propose that the only way to control medical costs it to have the federal government take over the payment for all medical care and require all providers to accept controlled reimbursements with fraud surveillance and reasonable profit margins.  In addition, the medical education payment system should be gradually taken over by federal reimbursement with a universal four year service obligation for medical graduates (with postponement or forgiveness of all college loans.)  What is more, all medical research should be closely supervised and paid for by federal dollars instead of pharmaceutical companies with ulterior motives.   The money for this will have to come from progressive federal income taxes.  The cost will have to be justified by the benefit for everyone; after all, we all get sick and die eventually.

This, in brief, is what I propose and believe can be implemented, if legislated by a progressive Congress and administered by a competent Presidency.

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