I was honored to be a contributor once again to the Summer 2024 iPain Living Magazine Edition. My article, found on page 4, discusses why we have soaring healthcare costs. In the Fall, I will discuss what we can do about it.
How to Reduce Soaring Healthcare Costs – Part 1: The Problem
According to the Centers for Medicare and Medicaid (CMS), the United States spent about $4.5 trillion on healthcare in 2022. This amounted to 19.7 percent of the nation’s GDP. Of that $4.5 trillion, about 50% ($2 trillion) is directly or indirectly financed by federal, state and local governments, while households pay about $1 trillion. In other words, the government dedicates nearly 10 percent of the economy toward healthcare. By 2028, these costs will rise to $ 6.2 trillion. Beyond that, healthcare costs are expected to continue to grow and consume an increasing share of the nation’s economic resources.
The U.S. spends more per person on healthcare than comparable countries. Health spending in the U.S. was about $12,500 per person in 2020, 42% higher than Switzerland, the country with the next highest per capita health spending. Nearly all developed economies — including Germany, Norway, Denmark, Netherlands, France, Sweden, and Austria — spend far less, from one-third less to half as much. Let us see how our system got so costly and in part two of this article; a proposal for how we can solve this problem.
The Current Procedural Terminology System
The start of the high cost of American healthcare can be traced back to 1966 when the American Medical Association (AMA) created what became known as CPT® codes to standardize reporting of medical, surgical, and diagnostic services and procedures performed in inpatient and outpatient settings. Since then, qualified healthcare professionals have had to report the professional services they provide to patients so that it can be universally understood by government healthcare payers, private insurance companies, researchers, and other interested parties. The data are used to identify claims for payment and gather statistical healthcare information about various populations. Each year, U.S. healthcare insurers process over 5 billion claims for payment.
To ensure that healthcare data are captured accurately and that claims are processed properly for Medicare, Medicaid, and other health insurance programs, a standardized coding system for medical services and procedures is essential. Given that new procedures and treatments are constantly created and new technology developed for medical instruments and machines, CPT codes must be periodically updated.
The problem is there is no requirement to provide evidence of benefits to patients including how the new or updated procedure improves patient care over past methods. Do patients recuperate faster? Do they live longer? Has their quality of life improved?
This omission is an open invitation for misuse by those who can cleverly use medical terminology, scientific equations, and favorable interpretations of laboratory findings to demand the creation of a new CPT code. This is exactly what happened with Type 2 diabetes — and it is costing the US hundreds of billions of dollars each year. Nearly 10% of all American adults age 18 and over have Type 2 diabetes, and that statistic is expected to increase to 33% in future decades, we must get better control of Type 2 diabetes among the first steps in lowering our enormous healthcare costs. Otherwise, those costs will ultimately bankrupt the US while the population goes into a downward spiral of costly long-term lifestyle conditions that lead to poor quality of life and premature death.
The Costly Mistake of Misunderstanding Type 2 Diabetes
Since the 1920s, it was known that children with Type 1 diabetes have high levels of blood glucose because of the inability of the child’s pancreas to produce insulin. This hormone’s function is to inform cells of the presence of glucose outside the cell wall. Without insulin, the cell nucleus won’t know to send out “transporters” to retrieve the glucose and bring it into the cell where it provides the energy to power the cell’s functions. The discovery and administration of synthetic insulin resulted in a dramatic improvement in diabetic children’s lives and prolonged their lifespan. This justifiably led to the classification of Type 1 diabetes as a hormonal disease.
However, when experiments showed that adults who had elevated blood glucose nevertheless had sufficient levels of insulin, medical scientists conjured up a theory that these adults were “insulin resistant.” This theory allowed them to create a new CPT code and get it approved, without having to prove the hypothesis through the three accepted scientific validation criteria:
● Logic – How can any cell decide to resist just one hormone among 50 in the body?
● Mechanism – How do cells change their process from that of “responding” to “resisting”
insulin?
● Measurement – Does the degree of resistance change from one cell to another? From one
person to another? During the course of the condition?
Since the code for “Type 2 diabetes” was approved, none of these three standards has ever been answered with proper scientific proof. Nevertheless, pharmaceutical companies have had little trouble getting new CPT codes approved for various formulations of insulin, simply by showing that it lowered blood glucose levels but without proving the theory of insulin resistance.
No one has satisfactorily explained how someone who is insulin-resistant is helped by injecting more insulin. Doctors do not increase the dosage of any other medication that patients are resistant to, so why insulin?
In addition, manufacturers of blood glucose monitoring devices have received approval for new CPT codes simply by explaining that their devices help patients control blood glucose. No evidence of significant long-term reductions in diabetes-related complications was required.
The net result is that currently, about $1 out of every $4 in U.S. healthcare costs is spent on caring for people with diabetes.
According to the Centers for Disease Control, the latest figures showed that in 2017, $237 billion was spent on direct medical costs and another $90 billion on reduced productivity. The total economic cost of diabetes rose 60% from 2007 to 2017. People over age 65 account for 61% of diabetes costs, mainly paid by Medicare. If you were to tally the lifetime medical costs for a person with diabetes, 48% to 64% of those costs cover complications related to diabetes, such as heart disease and stroke. It is estimated that if current trends continue, 1 in 3 Americans will develop diabetes sometime in their lifetime.
A Proposal for Reducing Healthcare Costs
I am not suggesting that all CPT codes are unnecessary or wasteful. My point is that there is a lack of periodic reassessment of healthcare costs associated with caring for people with Type 2 diabetes. Such a reassessment would likely find better explanations for what causes high blood sugar and diabetes in adults and better, less costly ways to treat it.
In my next article in the upcoming issue of iPain, I will present my proposal for how we can reduce the costs of healthcare by implementing a system of periodic assessments of CPT codes and costs.
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