According to a CNN piece reflecting on an article appearing in the Journal of the American Medical Association (JAMA):
“Health care spending in the United States increased by about $933.5 billion between 1996 and 2013.”
They attribute the huge rise, at least half of it, to what they have termed “health care services,” as opposed to medical supplies and equipment.
The study conducted as part of the JAMA research focused on 155 health conditions and six possible treatment categories: inpatient, outpatient (hospital), emergency services, dental care, prescriptions and nursing facilities. The study also analyzed changes in population size, aging, disease incidence, use of services, and service price and what they refer to as “Intensity of Care.”
According to Joseph L. Dieleman the lead researcher at the University of Washington in Seattle, “It’s the difference between a relatively simple X-ray as a compared to more complex MRIs and other forms of diagnostic services.” From his analysis of the 155 health conditions, he found: “Price and the variety and complexity of services is the largest driver of health care spending increases” because the ethics of rising healthcare costs.
How Intense is Intense?
Dieleman stated that with most conditions “price and intensity” increased for most conditions “and especially for inpatient care.”
Diabetes showed a huge increase in spending with most of the money going to pharmaceutical companies. Interestingly, the biggest risk factor for type 2 diabetes is a lifestyle decision: obesity. Other huge increases were seen in spending for low-back and neck pain and high blood pressure and high cholesterol. 
There was also a huge increase in what we see as ambulatory care, including ER and outpatient hospital services.
As Dieleman found, there are huge differences when a procedure is performed at an outpatient hospital center compared with when it is performed in a physician’s office. Hospitals tend to charge much more for these services than a physician’s office
In regard to pharmaceuticals, Robert F. Graboyes at the Mercatus Center at George Mason University found the problem with expensive pharmaceutical costs was regulatory:
“The FDA has a very powerful motive to take things extremely slowly and extremely carefully. Although slow and careful has its virtues when it comes to something as ‘sensitive’ as pharmaceutical drugs.”
Graboyes further noted: “There is a counterweight in the motive that says you also don’t want to be too slow about it. They do tend to get things to market quickly without — as far as I can see — any loss of safety and security.”
Some Ethical Observations
Healthcare costs continue to rise and healthcare insurance has become a nearly impossible to navigate swamp. Even employees with relatively good plans are offered choices involving lower co-pays and higher deductibles or higher co-pays and lower deductibles and in the end, it becomes “a wash.” We cannot really win. We can’t win because the system is broken and all of us, regardless of political affiliation knows it.
However, this study tells us much more than that if we read between the ethical lines. The first are the twin issues of price and intensity.
We see that of healthcare expenditures in this country that pharmaceuticals take a huge chunk. This is not new information. We have seen numerous examples of price gouging and hearings in Washington, D.C. on pharmaceutical company practices.
What may be new information is the FDA’s role in creating higher costs than necessary. In the European model there are several agencies responsible for drug approval. They divide responsibilities along certain areas. In the U.S. it is only the FDA. The labyrinth bureaucracy of the FDA even makes it difficult for “orphan drugs” or widely used European pharmaceuticals to gain faster approval here. Why is that? The medical community sees the flaws, even patients will leave the U.S. to gain access to needed pharmaceuticals, why has the FDA been allowed to completely dominate the process?
Intensity may also be an ethical issue. Why is it that the same procedure done in a small clinic or doctor’s office so much more expensive in an outpatient hospital setting? Also in terms of intensity, are physicians so afraid of being sued that they are intentionally piling on layers of tests and procedures just to cover themselves rather than to diagnostically help the patient? What is the ethical basis for a patient ultimately paying for a test that essentially protects the hospital?
“Lifestyle” is an interesting healthcare aspect, and it is also an ethical argument. Example after example indicates that obesity, smoking, alcohol and street drugs contributory to increased healthcare costs.
There are at least two broad ethical questions. The first, is why do healthier Americans continue to shoulder the burden for unhealthy behaviors? The second, is why is the system so narrow in its treatment options? For example, an insurance provider will pay for an expensive, cholesterol lowering pharmaceutical. What most plans won’t pay for is a health club membership.
The healthcare community will gladly prescribe anti-anxiety drugs for stress, but what about paying for Tai chi, Yoga and meditation? These types of treatment decisions, built deep within the system, are as much ethical as they are medical.
It all leads to a rather difficult to ask, but important query: are healthcare costs rising because the healthcare industry wants them to rise? If so, the ethical debate is more real than we imagine because the ethics of rising healthcare costs.
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