Another Research Article from Pravda by Steven Vaughn MD PhD


Get ready for your mind to be boggled before your second cup of morning coffee. I haven’t had the time recently to look at the world of American medical care, and honestly, it doesn’t cheer me up. But I can’t pass this one by.
This article’s in Health Affairs, by Sherry Glied, Dean of New York University’s Graduate School of Public Service. And it’s a marvel of public service, if you concede that these words “public service” demand a different concept than one might imagine from their individual meanings.

Sherry Glied appears to be the ambassador for the problem. “She had previously served as Senior Economist for health care and labor market policy on the President’s Council of Economic Advisers in 1992-1993, under Presidents Bush and Clinton, and participated in the Clinton Health Care Task Force. She has been elected to the Institute of Medicine of the National Academy of Sciences, the National Academy of Social Insurance, and the Board Academy Health, and has been a member of the Congressional Budget Office’s Panel of Health Advisers.” from her biography.

In spite of all the diligent attention paid by economists to the healthcare “problem” since 1992 and before, they let it go all anoodle. In Where The Money Goes: The Evolving Expenses Of The US Health Care System (Health Aff
July 2016 35:71197-1203);

It’s telling that the journal “Health Affairs” is a publication of Project Hope, an altruistic US challenge founded in 1958. “Project HOPE delivers essential medicines and supplies, health expertise and medical training to respond to disaster, prevent disease, promote wellness and save lives around the globe.” It used to send a hospital ship to care for people whose medical system was overwhelmed by natural disasters. Now, it saves lives by thinking and publishing. It is now a captive property of thinkers thinking thoughts about how to reform healthcare. Apparently, for the last twenty years, the thinkers went in the wrong direction.


Medpage offers the following review of her work in the August 13 e-publication:

“A recent study in Health Affairs shows that purchased goods and services in healthcare, followed by nurse and physician compensation, were the principal drivers of overall increases in U.S. healthcare spending that reached 72%
from 1997 to 2012. In contrast, according to data compiled by Sherry Glied, PhD, and colleagues from New York University in New York City, spending on administrative costs had the slowest growth among these three major
components of overall healthcare spending.

Costs for management, and IT compensation increased from $152 billion to $205 billion — a 35.3% increase, less than for the other two sectors. Closer inspection of the data revealed variation. While the number of IT jobs increased by 67.0%, the number of administrative and managerial positions increased only by 13.4%.

Purchased goods and services — which include medical supplies, services purchased externally, and other operating costs — increased 118.3%, from $226 billion to $492 billion, according to Glied and colleagues.

Physician and nurse compensation, meanwhile, increased by 80.5% from $177 billion to $319 billion, more than for other healthcare practitioners and support, which increased 68.9% from $96 billion to $161 billion. Part of the
increased labor cost came from increased per-worker pay and part from increased numbers of workers in healthcare.”

Administrative costs seem to have risen TOO SLOWLY, as well as IT costs lagging behind, if measured by the Department of Labor’s numbers. I regret that I haven’t spent enough time to piece these articles apart and review it
in detail, but it sure doesn’t pass the sniff test.

The toughest part of capitalism is that value in a product is driven by what people seem to want. They don’t want what’s good for them, or what’s proper according to the Wise. That’s why there’s no articles in economics journals
extolling the value and price at Wal-Mart. Only consumers like Wal-Mart. Those who know what’s best for them, don’t like it so much.

Since the publication of “To Err Is Human,” the medical leadership notices that the salaries and numbers of physicians has exploded. However, the “error rate” has also exploded. It is now at the point where the journals claim that medical error is the number 3 killer of Americans due to natural causes. What, with all those overpaid, bored physicians standing around with less and less to do? Really, they should double-check each others’ work, you think?

These are the symptoms that the “movement” towards control of the academic press in all fields, has been a smashing success. They now use scientific inquiry and modern analytical methods to unveil the pre-determined truth.

The party line of “one-payer insurance” and “socialized medicine” has not been driven by the nobler concepts of easier and freer access to care by the average Joe. The SS Hope used to be all about that stuff – needy people in Third World countries getting emergency help. That’s what American liberalism used to be all about. But now it’s about control, fear,mrestrictions and delays. That’s a different thing altogether – that’s tyranny.

If “Dr.” Glied was correct, wouldn’t we be seeing an outbreak of Direct Medical Administrators, contracting to individuals, to handle the void in manpower left by the shortage of competent hospital administrators? Or an outbreak of Direct EMR Shops in the mall, to catch individual consumers up with their critical medical IT needs? Where there’s an opportunity, there’s usually someone to step in and make a buck off of it.

But instead, we have too many doctors – too many OVERPAID doctors, which everyone knows is from the iron grip, the fearsome power of the AMA. (Personally, the difference between the AMA and a werewolf is that there’s a slight chance I’ve seen a werewolf within the last ten years. But I don’t really believe in either.) Cut the salaries, get rid of the excess doctors, that’s the ticket to happiness. And sprinkle a little terror on those arrogant white-coats!

It seems that every time someone changes the healthcare system, it’s never in alliance with the consumer. Ask them, and for twenty years they’ve been kvetching that they CAN’T get in to see their doctor in a timely way, and that they CAN’T estimate beforehand the cost of medical treatment or products or hospitalizations. If you can’t estimate a risk, that’s what insurance is for – that’s how Lloyd’s of London started the underwriting business, trading cash for risk. Insuring things makes the standard operating costs go up, but the risk of loss go down. How come the medical cost underwriting market is STILL broken even WORSE than it was twenty years ago?

But the Academic Leadership sees progress being made – except in situations where Sherry Glied noted, and uncontrolled forces have hit the ship by surprise. Who could have expected that doctors would continue to be overpaid, and in excess, for 20 years? Not the Health Affairs folks.

By the way, the SS Hope went out of service and was scrapped in 1974. Too much trouble and expense. Clearly, future needs were elsewhere. Now the project floats among tasteful gardened acreage in a National HistoricLandmark, Carter Hall in Virginia. Unlike the open ocean, the acres of manicured lawns never kick up a swell to make one queasy. The mission has improved.