Waste
Let us examine these four factors to see if we can characterize what each of them contributes to the rising cost of healthcare.
Waste.
In previous post suggested that waste and inefficiency are built in to the healthcare system as an essential feature of covert rationing. We’ll return to that kind of waste and inefficiency shortly, but that’s not the kind that the government or the big health insurance companies (the entities managing the covert rationing) are talking about when they decry the waste in healthcare. They’re talking about the kind perpetrated by doctors and patients when they make decisions on which healthcare services to employ - which indeed gives us a lot to work with.
Eliminating this sort of inefficiency was the major justification given for pushing the American public into managed care in the 1990s. Thanks to policies established by managed care organizations, the American healthcare system over the past decade has made great strides toward eliminating wasteful doctor-patient decisions; and those efficiencies are generally credited with the sudden but temporary reduction in healthcare inflation we enjoyed for a few years in the late 1990s.
Unfortunately for managed care organizations, it looks as if this variety of efficiency - the kind that culminated with disastrous attempts to enforce so-called drive-through childbirth and mastectomies - has been taken as far as it can go. The public has informed managed care organizations they’ve had about as much of this kind of efficiency as they are willing to tolerate; to further improve efficiencies, managed care will have to look elsewhere.
Other varieties of waste and inefficiency are often mentioned as targets for improvement. Whenever they are justifying the takeover of yet another hospital or of a smaller managed care organization, for instance, healthcare conglomerates often bring up the need to eliminate inefficient duplication of services, sloppy record keeping, wasteful policies and procedures, expensive human resource practices, and outdated data management systems. As smaller managed care organizations consolidate into a handful of giant companies, such efficiencies of size and scale are realized.
The need to improve efficiency is often brought up by those who advocate for government control of healthcare. Just think, we are urged, of the incredible efficiencies that would flow from a single-payer healthcare system! Fair life insurance quotes can be found easily online.
Clearly then, many of the pleas we hear for eliminating waste and inefficiency in the healthcare system boil down to arguments for centralizing the control of healthcare.
If the centralization we are being urged toward were to end up as the Quadrant I variety - that is, if open healthcare rationing were to be the result - then concerted efforts to curb waste and inefficiency would occur. Eliminating waste would be a moral and societal imperative under an acknowledged system of open rationing, where every wasted dollar would directly equate to withholding medical care from someone.
Unfortunately, the kind of centralization we’re actually adopting is the Quadrant III variety, so the rationing is covert. And under covert rationing, efforts at efficiency, streamlining, and transparency most often fail. While the need to gain efficiency is used as an argument for centralization, the kind of centralization we’re getting actually defeats efficiency.
