A Publication of WTVP

…Sir Winston Churchill’s analysis of the American way of addressing challenges. Was he correct? And if so, do his observations reflect our current approach to healthcare reform? How many alternatives to the delivery of healthcare are we bound to test before we get it right? Getting it right is of utmost importance to all of us—life and death decisions could be in the balance.

There are basically two reasons why we are embarking upon this overhaul:
The first reason is the humanitarian need to provide healthcare for those who cannot afford it. Some have asked, “Where in the Constitution does it say that the country is obligated to provide healthcare for everyone?” The answer is that it probably does not. But, just because the Constitution doesn’t provide for an action or service, does that mean that it should not be provided? You may have heard about the elementary-school-aged boy from an economically depressed background who was bounced from one hospital emergency room to another until he died of overwhelming sepsis. The boy had an abscessed tooth…but no insurance. True story! Certainly, civilization in the United States has progressed to the point that instances like this should not occur, and it is society’s responsibility to see that they don’t.

The other basic reason to overhaul the system is the impact healthcare is having on the standing of the United States on the world economic stage. The U.S. dollar is losing its credibility and value internationally as the world’s reserve currency for international business. OPEC countries, as well as India, China, Russia, the European Union and others, are taking steps to move to another currency, basket of currencies, or virtual currency for international trade, leaving the dollar behind. Dependence upon the dollar worldwide has contributed to the demand for it and support of its value. If the rest of the world loses faith in the greenback and moves to another reserve currency, the value of the dollar will fall. Some might consider that a good thing, but it could mean falling into a bottomless pit, especially when other economies are coming out of the recession faster than we are. Also, what if other countries decide there are safer havens around the world than U.S. government financial obligations and pull out the $3.5 trillion in Treasury securities they now hold? Foreign investors also own real estate and other securities in this country. What if they decided that the investment is too risky and unload those assets?

President Obama has said that we must get healthcare costs under control before we can address the financial crisis. Healthcare accounts for approximately 17 percent of the Gross Domestic Product (GDP) and is growing at around seven percent per year, while the GDP is only growing at two percent or less per year. Healthcare also accounts for approximately 15 to 20 percent of government expenditures.

While we agree with President Obama that healthcare costs must be controlled in order to address our other economic problems, we do not believe that the economic case has been clearly and comprehensively laid out to the American public. Maybe, the administration is afraid that, as Jack Nicholson said in A Few Good Men, “You [we] can’t handle the truth!”

Healthcare costs in the United States average twice as much per capita as the average in the European Union countries. There is no doubt that the U.S. system of healthcare is riddled with the costs of waste, fraud and abuse. We should be attacking these problems seriously and putting the money in the bank for future needs. For, if we ignore the gold in the system waiting to be mined, we are bound to resort to healthcare rationing—based upon age and not evidence-based medicine.

At this point, it is important to point out that those who want to change the system challenge the quality of healthcare in the United States. They point out international comparisons of infant mortality, longevity, cancer survival, mortality between the ages of one and five, and the United States’ being listed as 37th by the World Health Organization. The truth is that the unfavorable rankings are due to the way the data is counted and recorded, societal and cultural issues, the cherry-picking of data, and self-serving study designs. Space does not allow a full explanation here; however, all of these issues, and others, are discussed in our book, Reasoned Health Care Reform. It is available on, at I Know You Like a Book in Peoria Heights, and on our website, When people in other parts of the world, including the European Union, are faced with serious health conditions, they come to the United States for care—if they can afford it.

We spent one-and-a-half years looking into original documents from which the poor-quality assertions were made, and concluded that the data is misquoted to support somebody’s agenda. This led us to an exploration of where the dollars for healthcare are spent, who spends them, who receives them, what the administrative costs are, who is getting rich, and whose ox is getting gored. As we pursued and digested volumes of data, it became apparent that there is more than enough money in the system to pay for all of the uninsured and underinsured and still have hundreds of billions of dollars left over each year. If we could recoup those wasted dollars, we would be taking a giant step toward financial stability for the nation. Unfortunately, as our elected representatives have tried to develop a solution, special interests have taken control and we have lost sight of our two goals. Are we proving Sir Winston right again?

As we have followed the various healthcare bills introduced in Congress, we were pleased to find that many of them contained recommendations made in our book. As the 10 or so various bills and their markups have been reduced to two, we find that many of the true cost-cutting provisions that would not affect quality have been removed to try to satisfy all the major players. Here are a few examples:

We are of the opinion that caps on noneconomic damages will not significantly affect healthcare costs. It is the defensive medicine with needless specialist referrals, extra tests, biopsies and other procedures, which have risks in and of themselves, that help drive healthcare costs. Physicians fear malpractice suits because of the publicity and time for both themselves and their office staff to prepare a defense. The mere lowering of malpractice premiums will not significantly affect the nine percent of healthcare costs due to the defensive practice of medicine (U.S. Government Office of Technology Assessment). Surveys of physicians in surgical specialties indicate that 40 to 60 percent of the increase in healthcare costs are due to defensive medicine. If we assume that only 10 percent of healthcare costs are due to the practice of defensive medicine, and through major tort reform as mentioned above, we can positively affect 70 percent, the savings would be over $175 billion per year. Why has Congress taken tort reform off the table?

Does Healthcare Fit the Free Market Model?
While giving a presentation on Reasoned Health Care Reform to a group of primary care physicians, we asked if anyone could remember having had a patient question the price of services or negotiate fees. The answer: NONE! In a free market, almost everyone is price-conscious. They make informed decisions after due consideration whether or not to purchase goods or services. A variety of suppliers are always willing to offer discounts to obtain the business. Monopolies are illegal except, of course, utilities. By the way, Congress is now considering treating banks as utilities in order to exert tighter control. Does healthcare fit the free market model, or is it unique? Consider these observations.

Another example is the huge market for proton pump inhibitors that reduce acid reflux. Remember that Nexium, the little purple pill, hit the market when Prilosec’s patent ran out. Essentially the same two drugs. Wouldn’t it be great if the Institutes of Medicine or some other responsible governmental agency, immune from the politics, determined the drugs needed and funded contracts for research and development. Once the drug is developed, the people of the United States own the patent and determine the cost of the drug based upon a reasonable profit for the manufacturer through a bidding process. The U.S. would derive a percentage of the profit from overseas sales. The same scenario could apply to the manufacture of medical devices. Remember, we currently own a part of General Motors and several financial institutions. Why not?

A unique business model is needed at this time in the evolution of healthcare. Decisions should be based upon the actual needs of society, and not so much on profit motive, market share and competition.

How Has the Healthcare Free Market Model Influenced the Process?
Because healthcare is big business, the stakeholders have been very active—wheeling and dealing, making backroom deals, and lobbying for self-interests. Here are only a few examples:

Get the idea?
Everyone agrees we need healthcare reform. Each organization and each individual is all for it, as long as they are not adversely affected. If we made our decisions based upon the needs of the country as a whole, rather than the wants and desires of the interested parties, we could cover everyone, put money in the bank, and help to improve the status of the dollar internationally. iBi

Crane Gilmore & Associates, Inc. are consultants in healthcare cost containment, health promotion, benefit plan design and workers’ compensation. Visit for more information.