Tuesday, November 25, 2014
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On health care waste and fraud, "We all talk a big game until we get sick"

Princeton Prof. Uwe Reinhardt identified a huge part of the problem of controlling health-care costs by eliminating waste and fraud in America when he said at last week's Wharton Economic Summit 2013, "We all talk a big game until we get sick."

On health care waste and fraud, "We all talk a big game until we get sick"

Princeton Prof. Uwe Reinhardt identified a huge part of the problem of controlling health-care costs by eliminating waste and fraud in America when he said at last week's Wharton Economic Summit 2013, "We all talk a big game until we get sick."

At that point, of course, many people would argue that no expense (for someone else) should be spared in curing whatever ails them....or their mother, or grandfather or, yes, their child.

Pharmaceutical and medical device companies play off that idea in arguing for the highest prices possible.

The euphemisms are "rewarding innovation" and "access to care," as in, "If somebody doesn't pay us enough money, we won't make an innovative drug or device in the first place and the patient won't have access to that type of care in the second place."

Johnson & Johnson chief executive officer Alex Gorsky made that point while speaking on the panel.

There are plenty of examples of law-breaking and pharmaceutical companies have most of the largest legal penalties levied against corporations in the United States.

But often, "waste" for one is profit for another.

Another panelist was Bob Kocher, a doctor and partner at the venture capital firm Venrock, which funds medical IT and service companies.

Kocher said for every doctor, there are 15 people following her or him, and only six of the 15 are in the clinic. The other nine are in administrative functions, such as credentialing of doctors, coding of forms, billing through multiple insurers and other tasks involving paperwork.

"Why are the administrative jobs the fastest growing sector?" Kocher asked rhetorically. "It's completely stupid."

But there are also whole companies and industries built around those tasks, with jobs and profits at stake.

People from each sector - and patients - would prefer others sacrifice. They like the part where they get paid or get great care and dislike the part where they pay more or face greater regulation.

That was reflected in the opening session comments by General Electric chief executive officer Jeff Immelt.

Immelt suggested India was a shining of example of healthcare because Americans can get care cheaper in India than in America. (Link here.) But many of India's 1.2 billion people get no health care because of poverty. Others pay huge percentages of their income out of pocket. According to the World Health Organization, 61 of every 1000 children born in India dies before the age of five. In America, which trails many Western nations in infant mortality, the rate is 8 deaths per 1000 births.

 

David Sell
About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at dsell@phillynews.com.

David Sell
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