Interest Groups: Hurtling Us Down the Road to Ruin

A recent New York Times article that focused on colonoscopies highlighted the questionable science, predatory unit pricing, and overutilization that characterize this procedure and much of US healthcare. Patients get routine screenings that, in other industrialized countries, cost one half to one thirtieth of what they do here, then are gobsmacked by bills equivalent to the cost of a good used car. Reporters and healthcare writers have covered this topic in all its intricacies thousands of times.

But Elizabeth Rosenthal, the Times reporter, zeroed in on the root of the crisis, which is how healthcare interests have shaped market and policy forces to their own ends. ”The high price paid for colonoscopies mostly results not from top-notch patient care, according to interviews with health care experts and economists, but from business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees.”

One result is that healthcare’s cost drivers are a multiheaded monster, frustrating simplistic solutions. Many physicians own a financial stake in the care they deliver, rather than being paid to manage the care process well. Pricing is typically unrelated to cost or quality, varies wildly among providers, and often comprises dozens of components that are impossible to understand beforehand. Insurance companies may make a percentage of total cost and so are incentivized to allow healthcare to cost more. Every level of the system is rigged.

The elephant in the room is that US healthcare costs are crushing the larger economy, not because the clinical science demands it, but because corporations and other interest groups have captured both the healthcare marketplace and the regulatory environment that oversees it. We are gridlocked, with no apparent hope of improvement. Last year, Florida Governor and former Hospital Corporation of America CEO Rick Scott observed, “How many businesses do you know that want to cut their revenues in half? That’s why the healthcare industry won’t fix the healthcare industry.”

Following the money, independent of appropriateness, is hardly unique to healthcare. Several recent exposes in the mainstream press have detailed the cleverness of other industries’ market control efforts. Financial services in particular appear to make chumps of us all. Haley Sweetland Edwards described how that lobby gutted the rules governing how the Dodd-Frank reforms would work. Matt Taibbi described the financial sector’s gaming, not only of LIBOR but also of nearly every financial instrument in the global markets.

But lobbying is an opportunity for anyone with the resources, and other industries are coming on strong. Read Julian Assange’s chilling description of the deepening collaboration between technology firms and governments to leverage their control over all our personal lives. These interests are deeply embedded in our regulatory process, and their influence and control are all but intractable. Consider Occupy Wall Street’s inability to mobilize an effective organization that could exert a meaningful impact our political and economic systems, despite striking a common chord among the ranks of America’s youth, disenfranchised and disheartened. It is impossible not to despair after reading these pieces. We’re being propelled by powerful vested interests. Our dearest freedoms are being eroded, our pocketbooks emptied, and the nation’s wealth is relentlessly concentrating into fewer hands.

Large corporations and Congress, through lobbying, are the principal proponents of these threats to our individual, national, and global futures. Their leaders understand that the long-term outcomes will almost certainly not be favorable, but are distracted by short-term benefits. The rest of us are likely to be pawns, consigned to seek the attention of the few influencers who ultimately value the welfare of the many more than that of the few.

One can imagine events that could disrupt these downward spirals. Bursting economic bubbles, a national outcry against corporate control, or market-based offerings that exploit commonplace market vacuums could force the pendulum to swing back toward balance and more of an open, egalitarian society. Unlikely, but possible. We prefer to hope that the marketplace of ideas remains the most powerful driver of enlightened self-interest, and that workable solutions abound.

In healthcare, titanic economic pressures are already creating market opportunities, with many young firms innovating with new approaches that deliver measurably better quality at lower cost. But we also need a new Flexner Report, the 1910 study of medical education that revitalized US medicine,  establishing a drive toward rigor, science, and professional standards. Now, US healthcare is broken in different ways and needs a clear-eyed, comprehensive reassessment of what we know about care and cost, and how it must be transformed to ameliorate its current threat to our national economic security. We need an effort that can be taken seriously by the medical and business communities, and that can provide the traction to drive meaningful change.

This would be in everyone’s interests, except those of healthcare’s profiteers. Perhaps equally important it could be a model to rethink how the United States relates to powerful interest groups that are hurtling us all pell-mell down the road to ruin.