Health Care Spending: The Basics; How Much Do We Spend on Hospitals? Bioethics & resource allocation
“I took on the conventional wisdom that an aging population is driving U.S. hospital bills higher. The truth is that a combination of spending on new construction and hi-tech equipment pushed the nation’s hospital bill to $648.2 billion in 2006 —up 7 percent from 2005. The uptick was part of a trend: since 2000, outlays for hospital care have climbed anywhere from 5.2 percent (2000) to 8 percent (2003) each and every year. As a result, by 2006, spending on hospitals represented nearly one-third of the $2.1 trillion we shelled out for health care that year,” stated Maggie Mahar in the blog Health Beat.
In recent years, much new construction has been designed to house new technology or upgrade amenities rather than add to the number of hospital beds. There is just one exception to that rule: the suburbs. “When hospitals do increase inpatient beds,” Paul Ginsburg, the president of the Center for Health System Change notes, “the new construction typically occurs in rapidly growing suburbs, where well-insured patients live.” In its March 2008 report, the Medicare Payment Advisory Commission supports Ginsburg’s observation: “much of the added capacity is located in suburban areas and in particular specialties, raising the possibility that health care costs will increase without significantly improving access to services in lower income areas.”
While having a hospital in every suburb might seem like a convenient idea, the fact is that we cannot afford to duplicate multi-million dollar equipment that is available in a large city 45 minutes away. Here, I am not talking about emergency equipment or trauma centers; I’m talking about positron emission tomography (PET) machines and neo-natal intensive care units.
Redundant equipment can lead to over-treatment that isn’t just expensive, but also hazardous for patients. Research reveals that when ICUs for newborns are installed in suburban hospitals, they are over-used—putting infants at risk.
Other studies suggest that infants who actually need an ICU fare better when transferred to a regional NICU with an average daily census of fifteen infants or more.
Granted, out West, there are states where hospitals are too far apart. But in the Northeast, on the West Coast, and in many areas in the South, research shows that we already have too many hospitals—leading to supply-driven over-spending and over-treatment. (“Build the beds and they will come.”)
Finally, when it comes to complicated surgeries like organ transplants (which suburban hospitals are now doing), we know that outcomes tend to be better at large hospitals where surgical teams do many surgeries every year: practice makes perfect.
Nevertheless, in places like Florida, “even small community hospitals feel compelled to do things to prevent people from going to other cities or towns nearby,” says Steve Gressel, senior vice president of Skanska USA Building of Atlanta. “We see a lot of OR expansions,” Gressel told “Southeast Construction” last month. “Surgery is the lifeblood of a hospital,” Gressel added. “Two-thirds of revenue is generated directly or indirectly by the OR.”
The hard truth, as Ginsburg explains, is that hospitals are eager to expand capacity to house “what they have identified as the most profitable services.” So MedPac’s March 2008 report shows that the number of hospitals with neo-natal intensive care units has been rising—despite the fact that research published in 2004 showed that 97 percent of the U.S. population already lived within a reasonable distance of two or more hospitals with a neo-natal ICU.
And once the units are built, the only way to pay for them is to use them, even though, according to a study published in the New England Journal of Medicine, when “infants with less serious illnesses are admitted to ICUs . . . vulnerable newborns are subjected to more intensive diagnostic and therapeutic measures, with the attendants risks of errors and iatrogenic complications [complications caused by medical care] as well as impaired family-infant bonding.”
The Hospital as Hotel
In 2006, the Washington Post described what sounded like a very nice resort: “Walk past the free valet parking, past the woman at the front door welcoming visitors with an attentive smile and into the light-filled lobby, where soothing tunes waft from a baby grand piano and macchiatos are brewed at the coffee bar.
“All five of Montgomery’s community hospitals are in various stages of expansion,” the Post noted. “As they increasingly compete with each other . . . flat-screen televisions and CD players are standard in many rooms at Montgomery General in Olney.
“’We want [patients] to leave here and then brag about it,’ John Fitzgerald, president of Inova Fair Oaks told the Post. ‘There’s a competitive nature to health care, and we want to be first. And part of that is the service.’
“This trend has its critics,” the Post noted, “including industry consultants who caution hospitals to remember that their primary mission is to treat patients . . . Some hospital administrators, too, are leery of overspending on frills. Brian A. Gragnolati, president of Suburban Hospital in Bethesda, says: ‘I would rather put money into nursing care and staffing and making sure our doctors are there. At the end of the day, it’s about taking care of patients.’”
HealthBeat reader Lisa Lindell, the author of 108 Days, the story of her husband’s struggle to survive an accident which left him severely burned agrees: “When you’re at your darkest hour, ‘good service’ is no longer defined by valet parking, posh suites, waterfalls and gleaming marble. What you care about is staffing ratios.” There is “no legislative mandate with regard to nurse/patient ratios” in U.S. hospitals, Lindell notes.
As it happens, Lindell works as an accountant in the construction industry, and so, in a comment on HealthBeat, she offers an insider’s look at constructions costs: “I live in a city with a major health care industry, quite possibly the largest in the country. It’s nothing short of obscene the amounts of money pouring into the ‘Hospital Building Boom.’ There’s nothing wrong with growth and meeting the needs of the community, and I note how all the press releases boasting of these state-of-the-art works of art always make some reference to ‘serving the community.’
“But nobody in my community cried out for a 90 million dollar vascular institute. Nobody in my community displayed a desperate need for custom imported marble. I made a comment to a co-worker of mine with regard to part of one large-scale project. I said: ‘You know, you and I are paying for this.’ He said: ‘Oh, this isn’t even any part of the patient areas, this is the faculty room.’”
Lindell is right: much of the spending on amenities has nothing to do with promoting healing. And the costs are passed on to you and me in the form of higher insurance premiums and higher Medicare co-payments.
If patients in some part of New Jersey or Westchester County, New York want valet parking or very spacious private rooms, should taxpayers in Iowa pay for it? Iowa’s citizens shell out the same percentage of their paychecks for Medicare, yet Medicare spends half of much, per capita, on Iowans as it spends in regions where health care is more intensive, more lavish—and far more expensive. (Medicare spending is adjusted for differences in local prices, the overall health of the population in different states, race and age.)
While hospitals that vie for the most affluent patients raise the price on every pill and every pillow in order to cover the cost of the mahogany, the marble, the waterfalls and the spacious rooms, patients in less affluent areas suffer. “As some of the Washington area’s hospitals expand at record levels and add amenities,” the Post observed, “others don’t have that luxury. They are buckling under the burden of caring for the uninsured, raising concerns about widening disparities in health-care facilities.”
Lindell sees this happening in her city: “My local news did a story this week airing the stark contradiction right here in our community. The mega-health care organizations have major construction projects happening all over the city. Yet in the low income areas, they featured one hospital that had gone into bankruptcy and there are no bulldozers and cranes underfoot. The physicians working there took it over and struggle to keep it open. One problem is they don’t have the buying power of the big boys, they have to pay more and get reimbursed less, and they are the one’s serving the community.” http://www.healthbeatblog.org/2008/04/health-care-s-1.html
Although there is much to talk on the issue and idea that has gained access as finding in the book of ethics and theory, but requisite criteria to debate on issue with no info on the setup and ground realities, at my end, is a restriction that will curtail or contradict sagacious flowing of ideas.
Dear I have a feeling which is my perception of thoughts that you are too courteous on the subject of medical professionalist and subject ethics .although manners demand such act ,but when we litigate issues on the criteria of criticism ,flowing of ideas ,realities ,and dissemination should be on the ground of maximum observation and truth without the element of ,courtesy ,favoritism, influence and preferences.
Please grant me permission to express my vision on subject conclusion as I have strict reservation which will not second you on the issue partially. Although not much familiar to your system but being a trained surgeon and by virtue of my 20 years of experience in medical field I reserve my comment on the issue. With your permission I will pledge to start the discussion by commenting that advancement, technology and inventions can not be curtailed so to budget the threat of bills and medical care. Technology is a continuous piston of bearing that that’s works on the principle of auto evolution.
One of the main pistons to these new visions in technology is the health care personnel themselves.
Continuous expertise over the available mode and method, and self deviation from authorize criteria in the name of expertise and skill , with ever changing pattern of presentation of family pf patient and diseases , is the main stay of requirement and essentiality that again initiate more advancing necessity so to ease and remedy what can be presented as a incidental and a typical finding thus covering all issue at one sitting.
This in turn creates a vicious cycle of steady motion of technology and repeated models of subject equipment in the name of advancement and up gradation. you see its all interrelated subject ,enhancing each other involuntary and as symbiosis.
However it is this level of .interest that has irreversibly caused the disaster to take patient to the fate that can only be achieved at the cost of heavy financial strain and expense
It is this point where ethics and modesty of the professionals enters into the field of professionalism .it is here, that ethics and oath demands individual to act and provide service so to restrict criminal practice and benefit the ailing humanity.
This is the turning point of turmoil that results and diversify the thinking of clinician thus if not practiced as realm of honor and prestige, sabotages the ego ,moral ,attitude ,service and his award rep of the god.
This is the same point where corruption gains entry and access, between the two relationship partner as product and end user, culminating if derailed, in the form of massive bills, irrational investigations, deliberate misdiagnosis, and award of business to the inventor and business holder so to achieve their business target at their end whereas in the mayhem of incentives and criminal awards at clinician end.
Jen ,it is that cash point where if norms , ethics and oath could not curtail the individual, or if his personal conflicts in the form of reservations ,necessity ,strains ,motives, lust for money and attitude are engaging the thoughts ,can result in such behavioral deviations ,that you have already considered as one of the cause of expensive medical expenditure.
Where as, at this point if skills and expertise cannot be transformed in to next successor in the form of essential transfer to the progeny of similar upcoming siblings results in indulgence of self sighted benefit and creation of nuisance in the form of skill and expertise in the field again opening the era of relationship between doctor and health care provider, once again the patient, being the bearer of expenditure.
Most of the clinician acquire and resides at this plat form so to enjoy the lack of knowledge of the patient and their attendant and on behalf and at the cost of their expertise, as the only end user technical person, with the knowledge and exposure of the recent advancement. Dear I have too much to discuss with relation to the subject topic and soon I will be floating my ideas at my site, it is requested to send subject info on the topic so to help me out and float my version on the issue