Waste in health care system demands reform By James D. Veltmeyer, M.D. Dec 15, 2021

$935 billion is a huge amount of money. Taking it in perspective, it is much more

than the United States spends every year on the military. It is about as much as

the entire federal government spent in Ronald Reagan’s fifth year in office, 1985.

Yet, according to a recent study by William Shrank, Teresa Rogstad and Natasha

Parekh, that’s the upper end of the range of waste estimated in the American

health care system.

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This figure includes $266 billion in excessive administrative costs, $240 billion in

inflated pricing, $166 billion in failure of care delivery, and $84 billion in outright

fraud and abuse.

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Simply eliminating that massive amount of waste would enable us to provide

all 330 million Americans with a $3,000 per year ( $250 per month ) basic

catastrophic health insurance policy to cover them in the event of a life-

threatening medical occurrence, such as a heart attack, cancer, or accident which

requires hospitalization.

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Americans today spend more ( $4 trillion per year or $12,000 per person ) on

health care to get less than almost any place in the world. We have fewer doctors

per capita than comparable countries. We no longer enjoy the highest life

expectancy rates and we are shamed by the low infant mortality rates abroad.

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A large part of the waste in the “Health Care Swamp” can be attributed to our

health insurance companies and our hospitals.

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The average surgeon earns $306,000 a year. The average general practitioner

about $185,000. Do you know what the CEO of CVS ( which owns Aetna ) made

in?2019? Over $36 million. Cigna’s David Cordani pulled in $19.3 million while

Molina’s Joseph Zubretsky scooped up $18 million in total compensation.

Humana’s Bruce Broussard raked in $16.7 million and Anthem’s Gail Boudreaux

$15.5 million.

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Now, when you’re on the operating table or in the ER waiting for treatment,

who will be showing up to care for you, the CEO of Anthem, Aetna, or Cigna?

Not likely. It will be your surgeon or doctor, whose compensation pales beside

the likes of the health insurance barons. Talk about misplaced priorities and

misallocation of resources!

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And, please remember that the giant health insurers are protected against

competition by the federal government which grants them an exemption from

the antitrust laws. Members of Congress are rewarded handsomely for this

exemption when it comes time to collect campaign checks from the insurers at

election time.

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The hospitals are another big part of the waste problem. According to a 2019

analysis of the 82 largest “non-profit” hospitals in America?reported in?Forbes,

13 of these hospitals paid their top earner between $5 million and $21.6 million.

61 paid their top executive between $1 million and $5 million. Only 8 paid their

top executive less than $1 million annually. Collectively, almost $300 million

in cash compensation was collected by the top paid executive at each of these

82 hospitals. Consider some specific examples: Banner Health of Phoenix paid

out $34 million to just two executives. The CEO at Houston’s Memorial Hermann

made $18.6 million. Ascension Health in St. Louis paid its chief executive $13.6

million and almost $60 million over four years! These salaries, bonuses, and

stock?options are being paid out while millions of working Americans are buried

in huge?medical debts and physicians are struggling to pay six-figure medical

school debts.

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And, it doesn’t stop there. Some hospitals are marking-up bills by as much as

1000%. A recent report in?Health Affairs?indicated many hospitals are charging

out-of-network and uninsured patients, as well as auto and workers’

compensation insurers,?more than ten times what Medicare charges.?Why

is a CT scan in the United States five times more expensive than in Canada?

Is the CT scan in the U.S. of much better quality? Of course not. Why is?a

teaspoon of Maalox in the hospital $12? That’s more than the entire bottle

costs at Walgreen’s! How about $9,000 for a pair of surgical scissors? Where

are they operating, at Trump Tower?

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Monopolies lead to high prices and poor-quality goods. That’s basic economics

and explains why socialism has never worked ( state monopoly ). Why then do

we tolerate monopolies in health care that lead to a trillion dollars of waste,

fraud and inefficiency? The health insurance companies are shielded from

competition by the politicians in Washington who endorse the back of their

campaign contribution checks. Hospitals are increasingly merging with others

into bigger and bigger behemoths, stifling competition and hiking prices. Big

Pharma stuffs the pockets of our Congress members and Senators so there is

no price competition from importing prescriptions from abroad.

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Just like in our educational monopoly where the money is scooped up by

overpaid administrators and bureaucrats -- not teachers -- our health care

system?operates in the same way. The money isn’t going to the physicians and

surgeons,?it’s going to the health insurance company and hospital CEOs and

their?byzantine bureaucracies of paper-shufflers and billing battalions.

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Isn’t it time for drastic reform now? It’s time for “Health Care by the People,

for the People” based on the direct primary care ( DPC ) model. It’s time that

health care worked for the rest of us.

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Dr. James Veltmeyer is a prominent La Jolla physician and author of “Physician on a Mission: Dr. Veltmeyer’s RX to Save America.” He was voted "Top Doctor" in San Diego?County in 2012, 2014, 2016, 2017, and 2019.?Dr. Veltmeyer can be reached at?[email protected]?and by visiting his website at?drveltmeyer.com