Letter to the editor: More spending doesn’t bring greater value to patients

May 8, 2014

A reader writes that too much healthcare spending is for overhead, and not enough is for patient care.

If society truly wishes to reduce healthcare costs, the first thing to do is to assess where the money spent on healthcare goes. In a physician’s office well over 50%, and sometimes more than 75%, goes to overhead. Many of these costs either provide no benefit to patients or provide benefits far under their costs.

If a physician spends $225,000 to $250,000 doing what it takes to get paid, couldn’t the process be made more efficient and simple? If the International Classification of Diseases-10th revision will cost $83,000, as cited in this journal, probably 15% of a physician’s cash receipts, is patient care improved 15%?

At hospitals I have worked at, a huge amount of money is spent preparing for and dealing with Joint Commission visits, with recommendations of one surveyor frequently changed the next time they come. Couldn’t the Joint Commission be required to make reduction in hospital costs an important part of their mission, and cost neutrality or savings a critical part of their assessment and recommendation?

We seem to conflate price with cost, and forget that long term the price will correlate with the cost outputs or the business will soon cease to exist. Is anyone really looking at the costs of provision of services rather than the number or price of the service provided? Until we examine healthcare from a cost/ benefit perspective there is no hope of containing health expenditures.

Jim Maher, MD

Marshall, Michigan