March 23, 1990
"Revive Health Care Watchdog"
San Jose Mercury News
By Timothy Taylor
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A LOT of so-called reforms of the health care system are really just quarrels
over whether business or consumers or the government (meaning taxpayers) should
foot the bill.
Instead of arguing over who should pay for medical care, it's time to start
examining what is being purchased. A frightening amount of evidence is accumulating
that a sizable share of U.S. medical care serves no therapeutic function.
One study, for example, found that Medicare patients in Boston are far more
likely than those in New Haven to have hip and knee replacements, far more likely
to be hospitalized for gastroenteritis, pneumonia and diabetes, and far more likely
to have certain surgical procedures like removing blockages from the carotid artery.
Medicare spends an average of 70 percent more for Boston patients than New Haven
patients, with no discernible difference in benefit to their health.
Many medical procedures seem to be performed more often than warranted by the
health of the patients. An American is four times more likely than a European
with the same symptoms to have coronary bypass surgery. Studies by the National
Institutes of Health and others have led to estimates that three-quarters of the
250,000 coronary bypasses performed each year lead to no gain in life expectancy
compared with less extreme treatments.
In 1970, one birth in 18 was by Caesarean section. Today, it is roughly one
in four. Some studies have estimated that half of them are unnecessary.
Of the 120,000 pacemakers implanted each year, half may be unnecessary.
Perhaps 20 percent of all lab tests are unnecessary.
The prevalence of examples like these has led to some eye- popping extrapolations.
Joseph Califano, who was secretary of health, education and welfare in the Carter
administration, estimates that at least a quarter of the $560 billion that this
nation spends on medical care is wasted.
Other estimates back him up. Dr. Arnold Relman, an editor of the New England
Journal of Medicine, has estimated that as much as 20 percent to 30 percent of
all things done by well-meaning physicians in good hospitals are either inappropriate,
ineffective or unnecessary.
Robert D. Ray, formerly governor of Iowa and now chairman of the National Leadership
Commission on Health Care, cites estimates that 20 to 40 percent of all procedures
performed may not be warranted.
Dorothy Rice, former director of the National Center for Health Statistics,
has argued that as much as 50 percent of health resources may be spent unnecessarily.
In some sense, these figures should come as no surprise, since both patients
and doctors have incentives to overuse medical care. Most patients want their
doctor to do something; they are in no position to evaluate whether they truly
need what is suggested; they tend to assume that a more complex and costly procedure
is probably more beneficial; and private or government insurance covers the bulk
of the cost.
On the other hand, doctors naturally want to help; they have developed a professional
and emotional attachment to tests and procedures they believe are beneficial;
they know that insurance is covering most of the costs; and they know that neglecting
anything that has even a small chance of helping will put them at risk of a malpractice
Back in 1978, after hearing estimates that 80 percent or 90 percent of medical
procedures had never been adequately assessed, Congress created the National Center
for Health Care Technologies. Its purpose was to pull together evidence on costs
and benefits and appropriate use of health care technologies, while filtering
out the bias of medical manufacturers and specialists. Its recommendations were
binding only on Medicare, but they served as guidelines for private insurance
But although the recommendations of the fledgling agency saved the government
hundreds of times more than its $4 million annual budget, the center was abolished
in 1981, largely due to pressure from the American Medical Association.
Dr. Seymour Perry, the director of the National Center during its brief lifetime,
explained to me that today only about $50 million is spent each year on assessing
medical technology. This total is spread among many different programs with slightly
different goals. But no central agency exists to synthesize the findings and put
them in a useful context.
The National Center for Health Care Technologies was a good idea, but far too
limited in its scope. The government has an important role to play in collecting
and disseminating assessments of medical procedures and technologies, a duty that
it shirked through the 1980s.
America is already spending plenty for health care; the current total is 11
percent of GNP, a far greater share than any other country. If the estimates of
Califano and others are even close to accurate, then identifying and finding ways
to eliminate just half of the medical spending that provides no health benefit
would save $70 billion a year.
That would be more than enough money to provide medical care to all of the
30 million or so Americans who have no health insurance.
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