Too Much Health Care?

Of all the issues facing today’s imaging executives and radiologists, none sounds more cacophonous than the nearly universal cry that the United States spends too much on its health care. We do, indeed, allocate quite a bit more to health care, at 16% or so of the gross domestic product (GDP), than other nations do. By way of comparison, Japan, a country in the top three economies in the world, spends about 8% of its GDP on health care. How do we know, however, that 16% is too much? One author suggests that health care is being unfairly singled out, citing the 20% of our GDP allocated to manufacturing as an interesting example of a segment of society where the benefit has been more clearly delineated, understood, and accepted. In a recent issue of Wall Street Journal, author Craig S. Karpel¹ made the case quite persuasively that our national health care spending could be right in line; in fact, we might not be spending enough on health care. Now, that is an interesting argument that I don’t hear enough about these days. Indeed, I have often thought that far too much attention is paid in Washington, D.C., to the one segment of the economy that is doing fairly well, despite the dramatic downturn in our financial systems and the resulting recession. As we try to unpack the hidden messages in the current call for health reform—and there is no doubt that much needs reforming, mostly on the insurance side of the equation—it will be important to reflect upon some of the counterarguments that Karpel makes in his thesis. Among them is this gem: “A little noticed feature of the current recession is the role of the health care industry as a resilient driver of the general economy. Health care now accounts for 10.4% of non-farm employment. Health care employment grew by 19,600 jobs in July, 2009, on par with the average monthly gain for the first half of 2009, which was down from an average monthly increase of 30,000 in 2008. Remarkably, these gains occurred in a period during which total employment shrank by 6.7 million. The US health care economy should be viewed not as a burden but as an engine of growth.” Most of us who write about health care issues have long accepted the conventional wisdom that the annual growth in consumption of health care resources, as reflected in the continuing rise in the percentage of the GDP allocated to this segment of our goods and services, is unsustainable. This view has been rehashed each year as the new Medicare and Medicaid numbers are released, and CMS does its ritual squeezing of the financial balloon to reallocate the dollars based on where the agency thinks that they would be more effectively spent. Karpel’s thesis, though, is akin to Maslow’s hierarchy of needs, and it makes a lot of sense. Our quest for the basic human needs of food, shelter, and clothing having been met, we quite naturally turn our attention, as a society, toward better health, and we allocate resources there. This thought could turn the so-called conventional wisdom on its ear. Karpel says, “Once these material needs are substantially met, desire for health care—without which there can be no enjoyment of food, clothing, or shelter—becomes a significant, perhaps a principal driver of the economy.” He later adds, “We need to ask ourselves whether there is truly anything more valuable to us than our loved ones and our own health and longevity.” Following this logic to its next point, one needs to ask why imaging is getting so much heat for the percentage of health care spending attributed to supposedly expensive high-tech imaging. Certainly, there are data to show that self-referral contributes to spikes in utilization that might not be seen when (and if) completely unbiased referral patterns are studied in comparison. That notwithstanding, it seems clear that medical imaging can create—and has demonstrated—real savings to the health system, and that there is much more to this story than the current debate over costs has dared to include. Medical imaging is on the defensive, and might even be said to be on the ropes, so it seems to me that it is time to build a better offensive strategy—one that gets away from defensive arguments such as the no-win argument against self-referral. Radiology’s argument in Washington appears to be something like this: "Sure, those of us in medical imaging spend too much money, but it is really the fault of those office-based physicians who are spiking utilization because of their financial interests.” Guess which part of that sentence is sticking in the ears of the legislators. By admitting that too much is being spent on imaging, we help these legislators and regulators make their case that we are the problem. They most certainly are not going to tackle the politically thorny issue of dividing up the turf, deciding who should (and should not) be doing an imaging study. I just don’t think that’s going to happen, and on this point, I am in some pretty influential company. Rather, we need to make the case that maybe we aren’t spending enough on imaging. Given all that this marvelous technology can do—and given the fact that a great many costs and interventional procedures can be, and are being, avoided due to the precision of today’s diagnostic imaging technology and subspecialty radiologist expertise—we have a great story to tell, but it is one that appears to have been drowned out, so far. As Karpel notes, one person’s expenditure is another person’s income, and the $2.2 trillion that our country spends annually on health care means that a major portion of our society is driving a strong economic segment, fueling employment and a stable financial system. This is absolutely the case in medical imaging as well. Our radiology practices, imaging centers, and hospital departments employ vast numbers of people. They contribute to local economies. They contribute to local, state, and federal tax bases. In short, these enterprises are just as important to the economy as manufacturing plants, but when layoffs happen in medical imaging due to the DRA or other cuts in reimbursement, there is virtually no notice given in the local press. The time is long past due for telling the incredible story that is medical imaging. It is incumbent on each person in this profession to speak out about what we contribute to society: the economic benefits to our system, the financial offset of performing fewer interventional procedures, the saved lives, the contribution to local economies and tax bases, and the long list of ways that this profession makes a difference. We need to win this battle one heart and mind at a time. Curtis Kauffman-Pickelle is a strategic business consultant to more than 30 imaging centers and radiology practices, and is CEO of The Imaging Center Institute, Tustin, California. He welcomes your comments at ckp@imagingbiz.com.