Critic: Consumers Don't Drive Health Care Prices

The debate over overhauling the nation's health care system has aroused passions around the country. Many say the system is fine the way it is, but David Goldhill says otherwise. Goldhill, the author of an article in the upcoming issue of the Atlantic magazine called How American Health Care Killed my Father, offers his insight.

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STEVE INSKEEP, host:

Even as protesters argue that Congress is going too far, the man we will meet next thinks the proposed health changes do not go far enough.

Mr. DAVID GOLDHILL (Businessman): What we have here is essentially a building with insecure foundations that is collapsing. And what we're arguing about is how many additional stories should we add.

INSKEEP: He thinks we're just tweaking a system that doesn't work. Or as President Obama once said, in a different context, you can put lipstick on a pig, but it's still a pig.

David Goldhill says doctors, hospitals and others constantly collect more of our money whether it helps us or not. Goldhill is a California businessman and you get a clue what drove him to study the health system from the title of his forthcoming article in the Atlantic magazine. It's called "How American Health Care Killed My Father."

Mr. GOLDHILL: What's missing is those things that drive down prices in everything else. And what drives down prices in almost every market we have is consumers.

INSKEEP: I want to understand what you're talking about here. You give an example of what has happened to the price of DVD players and the availability of DVD players and you try to compare it to medical equipment. What are you talking about?

Mr. GOLDHILL: When you back away from the sort of complexity, the quagmire of health care, to looking at how the rest of the world works, the spread of technology throughout almost every element of the consumer and wholesale world has been extraordinary. Almost all of that technology, in fact all of it, as I can think of, puts pressure downward on prices. The DVD player was an example of something that was a premium product only 10 years ago. You can now buy $40 DVD players in gas stations.

INSKEEP: But it's because there's competition because the technology improves because people get better at making it and so the price goes down.

Mr. GOLDHILL: That's part of it. And if you look at those elements of health care that are driven by the consumer, things like cosmetic surgery or Lasik, where there hasn't been a lot of insurance reimbursement available until recently.

INSKEEP: Oh, the eye surgery that can improve your vision permanently.

Mr. GOLDHILL: Yes, Steve, absolutely. And what you see there is a history of not just declining prices but aggressive competition on quality, on price, on service, on performance that you see everywhere else in the economy.

INSKEEP: Let me try to figure out another thing here. I mean, you actually argue that the patient getting health care is not even the customer because somebody else is paying the bill. The insurance company is the one that wants to be satisfied or Medicare is what wants to be satisfied. You argue that we might make better decisions if we really were the customer. If we paid we might end up paying less one way or another.

But if there's a circumstance where, say, I'm a parent and my kid is sick, my inclination is going to be to do everything possible and do what the doctor suggests. I'm not really in a position to be making a bunch of consumer choices, am I?

Mr. GOLDHILL: That's a very fair criticism, and I think the first thing to point out is that with all the discussion about how we finance health care, one of the things we're missing is just the quality. My father was one of a hundred thousand Americans to die of a preventable infection received in a hospital.

INSKEEP: How did it happen?

Mr. GOLDHILL: My father walked into a hospital complaining of pneumonia, which he had, and within I think it was 36 hours contracted sepsis, had a series of secondary infections over the next five weeks that ultimately overwhelmed him. It's a very, very common story. But what's troubling about that, I think, is that we have all taken this type of mistake or bad result as sort of a cost of doing business in our health care system. Imagine what our health care system would look like if the hospital had to give that bill to my mother instead of to Medicare.

INSKEEP: It was a - how much was the bill?

Mr. GOLDHILL: Well, the bill was over $600,000, but in fact…

INSKEEP: $636,687.75. A bill was sent to your mother or really just a copy, because virtually all of that was paid by Medicare.

Mr. GOLDHILL: But imagine if you had to hand that bill to my mother and say your husband died of a preventable hospital death but we want you to pay this money. Well, that's what drives quality in the rest of our economy - that you can't look at a customer and say pay for this when this didn't work. When I was with my dad during those five weeks, I saw some things that just as a businessman I couldn't believe. My father was a couple of times taken for procedures meant for other patients because the record-keeping was so bad.

I mean, my dry cleaner has invested more in tracking shirts than this hospital had invested in tracking patients. I saw tests done on autopilot even when he had hours to live. I had to stop them from doing a blood test because they do a blood test every day and they bill for it and it doesn't matter, he's only got a few hours to live. You see all these things that you think to yourself, I guess I'm just not the customer here.

INSKEEP: David Goldhill is author of an article in the Atlantic called "How American Health Care Killed my Father." Thanks very much.

Mr. GOLDHILL: Steve, thank you for the time.

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