The Worst Health Money Can Buy

One of the biggest myths about health care is that more is always better. Perhaps nowhere is this more evident than in the United States, which offers a cautionary tale for other countries seeking health care reform -- including those in Europe looking across the Atlantic for inspiration. The American people spent nearly $2.1 trillion on health care in 2006 -- more than was spent on food -- yet Americans aren't exceptionally healthy or long-lived as a result. They have shorter life expectancies than people in Western Europe, Canada and Japan and are no less hindered by disease than their counterparts in other developed countries.

In spite of all this spending, nearly 47 million Americans have no health insurance, according to the U.S. Census Bureau. And here's another irony: Although insured people often feel they receive too little medical attention, many are actually getting too much in the form of unneeded tests and treatments. This "overtreatment" is at the root of America's health care woes, according to medical journalist Shannon Brownlee, author of the upcoming book Overtreated: Why Too Much Medicine is Making Us Sicker and Poorer. Brownlee contends that up to a third of health care dollars in the U.S are wasted on unnecessary care that doesn't improve people's health -- and may even endanger it.

A study of nearly a million Medicare patients (older Americans who receive government-funded health insurance) provides a compelling example of how too much care can cause harm. Medicare patients treated at hospitals that did the most tests and treatment and spent the most money were up to 6 percent more likely to die than patients at hospitals spending the least. In short, more spending, more hospitalization, more technology and more drugs do not necessarily equal better health care.

Why do doctors and hospitals provide too much care in the first place? They are stuck in a dysfunctional system driven by money. Doctors get paid for how much care they deliver -- not how well they take care of their patients. Meanwhile, hospitals are pressured to recoup the expensive investments they've made in pricey technologies and specialists. This means the more care doctors and hospitals provide, the more money they make.

Much of what doctors do is prescribe medications, some of which help save lives, like insulin for diabetics and cyclosporine for organ-transplant patients. But when it comes to medications, doctors are increasingly under the sway of drug companies. Brownlee observes that the pharmaceutical industry now foots the bill for at least 80 percent of clinical research (formerly funded by the federal government) and underwrites 90 percent of continuing medical education, wielding unprecedented influence over the content of medical journals and what doctors do and don't know about drugs.

When money drives every aspect of health care, from doctors to hospitals to the pushing of dangerous -- and often inadequately tested -- drugs, what can be done? Brownlee finds inspiration and solutions in one of the most unlikely places: the Veteran's Health Administration (VHA). A horrific shambles in the mid-1990s, the VHA has been transformed over the past decade into a model of effective, affordable and humane care. Today the agency, which cares for military veterans -- including many of America's oldest, poorest and sickest patients -- outperforms most other U.S. health-care institutions at a little more than half the cost per person. The VHA's prescription-accuracy rate is 99.9 percent and it has a lower rate of hospital-acquired infections than most other health-care institutions in the U.S.

In 1994, Kenneth W. Kizer took over the VHA as undersecretary for health. He introduced new information technology that helped lower rates of drug error and infections, while reducing unnecessary care. VHA doctors are encouraged to choose drugs carefully, based on scientific evidence rather than slick marketing, a step that has reduced costs and unneeded prescriptions. And patients report a high rate of satisfaction.