Money-Driven Medicine: The Real Reason Health Care Costs So Much (Hardcover)

~ (Author)
Key Phrases: outlier payments, unmanaged competition, medical arms race, New York, Wall Street, United States (more...)

Editorial Reviews

From Publishers Weekly

Mahar, a financial journalist whose previous book (Bull!) tracked the history of the stock market from 1982 to 1999, here applies her keen analytic talents and economic savvy to America's complicated and increasingly dysfunctional health-care system. Mahar's diagnosis: our privately managed yet mainly publicly funded system produces the worst of both worlds—high costs, rampant inefficiencies and intense competition among providers that doesn't benefit patients. She traces how today's market-driven medical system emerged over the past century thanks to trends that gradually stripped power from doctors and gave it to corporations, turning patients into profit centers. No one is spared in Mahar's thoroughly researched and carefully reasoned study: she criticizes frustrated (and increasingly money-minded) physicians, self-serving insurance companies, for-profit hospital chains and pharmaceutical companies driven by inflated Wall Street expectations. Mahar uncovers isolated pockets of good news, including the VA hospital system, which provides excellent care at modest cost thanks largely to its exemption from the pressures of competition. But her goal is not to offer any programmatic solution. Instead, she wants to show why the most common economic assumptions about health care—especially those that extol the magic power of free markets—are false and stand in the way of real reform. (May)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From Booklist

As Americans, we pride ourselves on having the best of everything, but when it comes to health care, compared to other industrialized nations, we pay more for the same services; receive more complex, unnecessary procedures; and leave the most neediest of our population uncared for. That's because a profit-driven health-care system tends to do what's best for shareholders rather than what is in the best interest of the patient. Mahar does an excellent job of explaining how we went from the individual family doctor who made house calls to the bureaucratic, faceless, broken system we have today. As far back as 1970, it was recognized that health care in this country was wasteful and inefficient, so much so that President Nixon actually sided with the Left and proposed a national health-care system in 1974 (it was derailed by Watergate). Whether the fault of drugmakers, insurers, doctors, hospitals, HMOs, big government, or trial lawyers, American health care is careening off a cliff, and Mahar is to be praised for bringing clarity to one of the most complex issues of our times. David Siegfried
Copyright © American Library Association. All rights reserved

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Product Details

• Hardcover: 480 pages
• Publisher: HarperBusiness; 1 edition (May 9, 2006)
• Language: English
• ISBN-10: 006076533X
• ISBN-13: 978-0060765330
• Product Dimensions: 9.2 x 6 x 1.7 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars  See all reviews (22 customer reviews)
• Amazon.com Sales Rank: #10,377 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

46 of 46 people found the following review helpful:

5.0 out of 5 stars Medical Care or Industry., July 10, 2006

By	Edwin Bradley "Physician" (Vacaville, Ca United States) - See all my reviews (REAL NAME)

A straghtforward, credible and comprehensive survey of contempory American medical care. As a physician with many years of experience with our medical system, I can attest to its accuracy. Its major thrust is the elucidation of how our medical system has been taken over by those who seek profit rather than the welfare of the patient. The author explores the methods used by insurance companies, pharmaceutical houses, device manufacturers, hospitals and some physicians to capitalize on the vulnerability of the sick.

She points out the gross inefficiencies that contribute to the high cost of medical care and suggests ways to improve that care.
With information such as this we may be able to change the "Health Care Industry" back to the medical care of the patient.

60 of 63 people found the following review helpful:

5.0 out of 5 stars Excellent!, July 21, 2006

By	Loyd E. Eskildson "Pragmatist" (Phoenix, AZ.) - See all my reviews (TOP 100 REVIEWER)    (REAL NAME)

Mahar begins by reviewing health care trends: In 1970, health care spending was 7.1% of GDP; by 2005 it was 16%, and is predicted to reach 21% by 2020. At the same time, in 2005 nearly 48 million had no health insurance, including about 1 in 3 households earning over $50,000. (A 2002 IOM report concluded that lack of insurance was associated with a 25% greater chance of dying - 18,000/year.) The average premium for a family was $10,880 and only 59% of companies with less than 200 employees offered health benefits - down from 68% five years prior. Even having health insurance is often not enough - in 2005 nearly two-thirds of families struggling to pay medical bills had insurance. Companies are also struggling - in '04 G.M. paid about $1,400/car for health care benefits, vs. profits of $178/car.

Conventional wisdom has it that U.S. costs are so high because we don't ration care - patients in other countries can wait months for elective surgery. However, researchers examined the 15 procedures accounting for most waiting and found they only account for 3% of U.S. spending. Similarly, the U.S. ranks in the bottom quartile of hospital beds/capita and our number of physicians and CT scanners also rank in the lower half. Malpractice litigation is another popular explanation, but payments represent less than 0.5% of spending. (This still leaves the question of it encouraging extra tests, etc.)

In 2002 drug companies paid about $30 billion for promotion - about one-seventh of revenues, and considerably greater than the $19 billion for R&D (often for "me-too" drugs).

Insurance companies spend multiples of the amount government spends for administrative overhead - marketing, enrollment, and profits are the reason. By contrast, pure Medicare and Medicaid avoid marketing costs, and enrollment is usually a one-time cost. (Medicare HMOs have also been found to game the reimbursement system - instituting high co-pays, refusing to cover select situations, etc. to discourage certain high-cost patients - thus, raising administrative costs overall.) In addition, private companies have less incentive for preventive care because those enrolled are likely to migrate to another plan (or no plan at all) before the benefits are realized.

A "Health Affairs" 2004 survey concluded that the most important barrier to addressing medical errors in hospitals is the endemic culture of secrecy and protectionism putting self-interest over patient-interests. Researchers also report strong physician opposition to more research on clinical trials to evaluate various treatments - resulting in congressional pressure to cut such funding. Autopsies reveal major misdianoses in about 40% of cases, and that in about one-third of those the patient would have lived if properly treated; even more surprising is the finding that the error-rate has not changed since 1938, despite greatly improved tests and equipment. A 2003 California Nurses Association commissioned study of the 100 most expensive hospitals in the U.S. found that high profits, not high quality or efficiency was the primary cause. Ninety-five belonged to chains. As hospitals bulk up their negotiating power by merging, so do insurers - in 2005 the ten largest insurers controlled 48% of the insured population, up from 27% in 1995.

John Wennberg has studied variations in health care for decades, and concluded that up to one-third of health care dollars are wasted on ineffective, sometimes unwarranted, and often unproven procedures. Worse yet - excess care can be hazardous to your health, via medical errors, exposure to superbugs, etc. Similarly, a 2004 JAMA report concluded that overall, increased Medicare spending was associated with poorer care - eg. vaccines recommended for certain patients were less likely to be given. Don Berwick, another leading quality-improvement figure, has concluded that 50% of healthcare spending is wasted - "What we lack is not social resources; it is honesty."

In 2000, 90% of physicians in Sweden, 58% in Great Britain, and 48% in Germany were using electronic medical records, vs. 20% in the U.S. in 2005. Benefits include reduced medication errors, ability to provide computerized "best-practice" suggestions for individual patients, improved ability to evaluate new treatments and drugs. The VA hospital system has been a leader in this area, and its costs are estimated to be 20% below Medicare reimbursements. Costs of IT/patient in the VA are estimated at about $76/patient/year, and $40 at Kaiser (also recognized for its electronic medical records).

"Money-Driven Medicine" provides excellent information about the U.S. health system. Where Mahar falls down, however, is her emphatic recommendation for increasing physician autonomy at the end - despite physician resistance to adherence to "best practice" protocols, incentive payments for quality, resistance to research on best practice, involvement with conflict-of-interest recommendations supporting various drugs and devices, etc. The unfortunate reality is that physicians are a major contributor to America's money-driven medicine problem.

32 of 33 people found the following review helpful:

5.0 out of 5 stars Clear and often gripping, July 7, 2006

By	Paul Gross "family doctor" (New Rochelle, NY) - See all my reviews (REAL NAME)

As a family physician who has seen the shortcomings of our health care system from both ends--as a doctor and as a patient--I found Money-Driven Medicine to be a terrific read.

If you've ever tried to decipher a hospital bill, had an insurance claim denied or wrangled with a managed care company over the phone, you know how hard it is to talk about our medical system without becoming overwrought. By keeping a reporter's eye on a very simple question--Why does US health care cost so much?--Maggie Mahar manages to avoid that trap, producing a book that is instructive, well reasoned and engaging.

Ms. Mahar is to be commended for (a) doing her homework (the text is followed by 80 pages of footnotes), (b) focusing on the economics that drive health care delivery, and (c) taking a non-ideological approach that lets the facts speak for themselves. The writing is clear, and often gripping.

Asking where the money goes is a good way of learning why our health system doesn't seem designed for the good of patients--or primary care doctors, for that matter. Having now taken a stroll down the money trail, I now feel more attuned to the lavish excesses we underwrite, why there's no money left for uninsured and underinsured patients, and why so many patients end up overtreated and less healthy.

We all have a stake in our ailing medical system. This book gives insight into the cause of the disease and the extent of the malady; it also points in the direction of a cure.

Highly recommended.