Why is American health care so expensive?

In the recent batch of throw away journals, several articles reported on findings that are at least moderately exciting. The first was from the annual meeting of the Central Surgical Association in Detroit. An analysis of several studies pointed out that many cases of CT scan proven appendicitis can be effectively treated with intravenous antibiotics.  In the past, when I was trained in medicine and surgery, appendicitis was diagnosed entirely on clinical grounds. Exquisite tenderness in the right lower quadrant, fever, elevated white blood cell count and a story of diffuse abdominal pain gradually focusing on the lower abdomen were sufficient evidence to operate on a suspected acute appendicitis. Cases without all of these findings were also operated on, and removing a normal appendix was considered part of the cost of preventing a catastrophic appendix rupture with the associated spillage of fecal matter into the sterile abdominal space. Now classic cases of appendicitis as des...

It is ever more widely accepted that fee for service medicine, that is payment for individual services that medical professionals provide, by patients or by insurers, is a bad idea. If a physician is paid to deliver a specific service, such as seeing a patient in the office, removing his or her gallbladder or doing a colonoscopy, the physician will perform more of these services, regardless of whether this improves the health of the patient. Ethically a doctor may make appropriate choices, but financially the reward will be for quantity of services not quality of care. If a health care provider is paid to take care of a patient, a flat fee per patient per year for instance, the incentive will be to keep that patient as healthy as possible with as little medical intervention as possible and to prevent costly disease. This is known as "capitation" (literally paying by the head.) Capitation has been tried and used in many situations over many years in medicine. Staff model hea...

It is entirely clear that too few medical graduates go into primary care. Although the number of family physicians is increasing modestly, there are very few internal medicine residents becoming primary care doctors. This year there will be only about 200 new internal medicine doctors entering the workforce from training programs, which will not even begin to cover the attrition of older and more efficient physicians, and due to improvements in access with the affordable care act, demand will be increasing significantly.  The main reason that very few physicians are choosing primary care is that specialty fields are just about as rewarding personally and way more rewarding financially. Insurance companies in our present, primarily fee for service, payment system, pay generously for operations and procedures, but much less for complex interactions such as counseling patients on their multiple medical problems, medications, and managing their many diseases. A cataract operation is ...