Health Care Problems, Rising Costs and Hospital Management issues in America

This article written from our research, our industry studies as commercial appraisers, consultants, and also  sources such as the New York Times, Foreign Affairs, and the Wall Street Journal. Our Credit to these sources and other news and internet information sources for publishing information in internet and other venues for public consumption. In addition to that we have personal experiences with the medical industry and hospital companies, that seem to verify the national statistics. Our firm has inspected and done reports on over 200 hospitals and medical facilities over the past decade.


* In 2017 Americans spent an average of $10,224 per person on health care (source Kaiser Family Foundation study).

* Other "wealthy countries spent $5,280 per person.

*In fact, Americans spend about 200% more for health care than Australians, Canadians, Japanese and most Europeans.

*Americans have a lower life expectancy, high prevalence of heart disease, lung disease, infant mortality rates and many other health issues.


Why? With unusually high expenses for administration, inefficiency, fraud,  duplication of services and billings, overcharging, and abuse in insurance claims it is no wonder the American health care system is a bottomless hole of inflated expenses. 


A person who I have close access to information illustrates some of the above. This relatively young healthy woman had chest pains and was sent to "The Heart Hospital" of Albuquerque, New Mexico. There they recommended heart surgery. She didn't want the surgery but finally agreed after repeated pressure from the doctors and nurse assistants.  This is how she looked when she finally got out of surgery. 

They replaced a heart valve, but it is not known what happened during the surgical procedure that caused unexpected bleeding. The unexpected bleeding and a quick repair was made to that heart problem while surgically open. They closed her up, put her in bed in recovery. The next morning she didn't awake normally. A nurse reviewed the monitors and realized that she had been having a stroke for 8 hours, before anyone at the hospital noticed.  

Because of those 8 hours, when that blood clot was finally discovered, and after much pleading by family members to the doctors for an MRI, the hospital finally took this CAT scan, which confirmed brain damage, which probably continued for some time before the hospital noticed or responded.  Most strokes can be treated if noticed within 20 or 30 minutes, "but eight hours is simply too long, the brain damage often too far gone", the doctors said.  

But worse, this is an image of her brain damage, the dark spots show part of the damage.  The damage expanded with time delays of  attention and lack of discovery and response by the hospital.   The impact was paralysis of the right arm, right hand, no use of either,  No use of her right leg, right foot.  Some loss of language and verbal skills.  One doctor told her that it might take 10 years to recover all of her skills but even that was not an assured promise.

She almost 18 months after this surgery, now still has a paralyzed hand, injured arm and a hampered walk.  This lady has gone through a hellish 18 months of therapy and has been looked at by more than a dozen therapists, doctors and experts.  They shake their heads and say: "How could this have happened, in an American quality hospital?"  Perhaps the quality of medical care is lacking or circumstances simply combine to make victims out of patients. Sadly this woman may never dance again, her potential for ever returning to run her company or make a living is, well... just look again at those photos.  Lives of her and her family are damaged, dreams destroyed,  even communication and tasks easy for most people, hindered.  Too often, hospitals and surgeons too often simply walk away, often even without a "sorry".   They leave someone else to try to clean up their "mess", or "mistakes", or "inability to handle surprises".  

This is a perfect example of how mistakes, or unexpected things come up that a hospital, or a surgeon may not be prepared or able to deal with. Sadly, the patients are ruined for much of their lifetime, but financially, the costs are astronomical in money and unbelievable in emotional and quality of life penalties.  This example brings to very direct and personal illustration of how the medical system of some hospitals in America bring the costs double, sometimes even more, than what other modern developed countries have.  Poor or slow, or inadequate service becomes expensive for all concerned.  Imagine the social costs to a family, or a nation, when talented lives are knocked off track by the medical care attempted, or failed by some hospitals. 

Someone gave us this photo, as they observed this ironic billboard advertised on a highway just 5 minutes from the hospital in question. Many American hospitals talk the talk, but in actuality they do not disclose the mistakes, failures or lives impacted negatively to patients while under their care.  Perhaps this is why they delay or don't have systems in place to easily share medical records (which technically are the property of the patient) promptly. Perhaps, they hope people will just "go away", if they delay and hold back actual records, or some have suggested that it has been suspected in some cases that delay could give some persons opportunity to change or omit some records.  Sadly some hospitals spend more money on marketing, and advertising, lobbying and attorneys, than they do in attention to financial compensation to their "victims" of hospital or surgical damage to patients. 

We had no idea that the American hospital industry had such things to happen, and hoped surely not in this case...but these things do happen. We searched nationally and found case after case where hospitals "do harm" by providing inadequate patient care, and many of these cases when litigated go against hospitals.  Sadly, injured and sick patients just do not have the will or energy to litigate...the are too busy trying to survive.  Apparently a lot of injured parties to manage to file legal actions, if news accounts from cases around the nation are any indication.  Just consider the financial and liability considerations for hospitals in America, all of the "mistakes", medical errors, violation of standards of care, and damage to some patients. 

A central common ethic in the medical profession is:  DO NO HARM.   

We see cases where doctors and hospitals do harm, more than the general public in America might think.  This accounts for part of the massive hospital costs in America. 

In this case and upon further research we were told that insurance and others were billed for hospital, rehabilitation, therapy,  and other medical costs relating to this person were  near $1,000,000, and still rising.  The poor woman is still struggling, requiring care, therapy and medical help.  We checked and at the time of this writing, she couldn't even get out to go to a grocery store, or a beauty shop, without help.  One day a vibrant, happy, woman with a promising career, the next day partially crippled needing help, therapy,  every day just to cope. 

As an additional cost factor, for 18 months, the patient, her family, even her attorneys have been delayed, seemingly obstructed by the hospital and it's affiliates.

"I cannot get her medical records from the hospital!"

The attorney representing her recently said: "I cannot get her medical records!" He has been trying for months  just to get what is a basic right of any patient, the medical records on her case, some 18 months earlier.   Think how hard it is to get other opinions, good medical advice, or a path to recovery, when a hospital system, or affiliate procedure  makes "delivery of patient records" difficult.

In one letter the hospitals records representative refused to send records because: "The patient signature is hard to read and not like the one on file". The family was outraged, and said: "Don't they know she suffered brain damage and her writing ability was damaged while she was under your hospital's treatment and care".

Circumstances like this increase costs, delays, may hinder treatment, and increase external costs such as research and attorney fees.   In our research we have found complaints at other hospitals, coast to coast,  creating additional expense, time and labor for all concerned. 

Plus, hospitals in America have lobbied and gotten laws that protect them from legal suits, even if they may have caused harm to patients. So they get legislatures to "Cap" or "limit" the amount that harmed patients can expect to get to recover costs and damages.

It would seem that there is less financial incentive for higher quality, higher care, higher responsibility for the medical services that hospitals provide.  One would think that full disclosure of mortality rates, legal actions and public disclosures of the "good doctors" vs the "ones with high surgical mistakes or failures", so that the public could have some information to make decisions of what doctors or hospitals deliver the highest of care. 

From 2007 to 2014, inpatient hospital prices grew twice as fast (42 percent increase over the period) as physician prices (18 percent increase over the period). For outpatient services, hospital prices rose more than four times faster than physician prices—25 percent and 6 percent increases, respectively. 


It adds up to big numbers in terms of hospital spending in the USA. Look at these numbers: 

This rise in spending will be driven largely by higher overall health care prices, CMS said. In the report, CMS estimated that prices for medical goods and services would grow at an average annual rate of 2.4% from 2019 to 2028 and would account for 43% of total projected growth in personal health care spending during that time.  CMS also estimated that Medicare spending reached $800.7 billion in 2019 and will increase to $858.5 billion in 2020. Average Medicare spending is expected to grow at an average annual rate of 7.6% from 2019 to 2028. Meanwhile, Medicaid is projected to rise by 4.5% in 2020 and then reach an average of 5.7% from 2021 to 2023, and 5.8% from 2024 to 2028.

One of the important factors of hospital spending and costs are mistakes, errors, and medical events and issues that are unexpected by the doctors and medical professionals.  The way they respond, if ineffective, or if a cause for significant medical damage to a patient is apparent, suggests that the Doctor or the Hospital has some liability and must take responsibility.  Thus the level that hospitals can prevent "mistakes" on operating tables or in treatment rooms, impacts the financial success and cost of operation the facility.  But, ultimately the impact on patient lives and alterations to a human being and quality of life, is a factor where costs can be evaluated by a jury.   The question one might consider:  "How much is the use of a leg, a foot, an arm, a hand, brain function, the ability to speak and communicate, the ability to make a living."  All of these factors have a value, and a cost. 

But when hospitals and doctors feel the financial risk and pain, that if they make a mistake or error in treatment judgement, they are more likely to be more careful, and proactive at monitoring and treating a patient.  An attempt to hide facts, or records, or events, simply makes the hospital more vulnerable to accusations of compromising  "standards of care".   That ultimately adds to hospital and doctor costs or spending in the USA. 


What Kind of Healthcare System Should Americans Consider:

A look at Germany, Great Britain, Canada, Taiwan, reflects excellent health care at a fraction of the cost of America. These nations have a "single pay" system, are do not see a plethora of insurance companies fighting for patient premiums.  Programs offer a patient "choice" of doctors.  Take Canada for example, citizens there spent $4.974 per person per year on health care.  Administrative expenses there of 6 to 8% of overall spending, because there is one set of rules and procedures for filing claims.  Fraud abuse is will, because there is a national comprehensive data-collection system so that every provider is monitored. Life expectancy in Canada at 82 years is higher than the USA (79 years, infant mortality at 4.5 deaths per 1,000 births is lower than America.  

Taiwan established universal health insurance in 1995. /Their single-payer system, allows people to choose their providers, it encourages clinics and hospitals to compete on quality and efficiency. the program is centrally administered.  Patients pay a small co-payment to deter overuse of services.  Taiwan earmarked taxes, insulating the system from changes in political leadership. Taiwan actually used the USA "Medicare program" as a model to assure long term sustainability. Taiwan has innovative data systems  to monitor patient care and to detect abuse, incompetency, or fraud abuse in billings.   In 2016 Taiwan spent $1,430 per person on health care, and only 5-6% on administrative costs.    

Germany has a model that was started by German Chancellor Otto von Bismarck, in 1883.  He   had different industries create guilds or cooperatives to form non profit health insurance programs.  There are 115 of them in Germany.  There is a single set of claim procedures and a uniform payment rate for physician services.  All hospitals have a uniform set of rules, procedures and rates. In 2017 Germany only spent $5,728 per person per year. Life expectancy there is lower than in the USA and infant mortality rates lower.  

Robert Pollin, national research expert did a definitive study in 2018, and his team of researchers concluded that a single pay system in the USA would see a "net reduction" in overall health expenditures.  That report concluded that the USA could save over $250 billion annually by setting up a single pay system. 



My work as a consultant and one that does studies and research has brought me to the conclusion that many of our hospitals, and medical service providers, including the doctors, medical staff and administrators could do much better.  The financial conclusion is that their practices, are not "top of the charts" and increase overall costs of the American medical industry. 

Often hospitals, administrators, and billings for that "high technology"  are vastly inflated, with one level of "reported billings and expenses" for everyday consumers, and another level for insurance companies, and even another level for those who seem to be uninsured.  It is a corrupted system. It is suspected that some doctors are overpaid, do not have enough experience, or lack "in depth" judgement.  But on the other hand f they are exceptionally good at saving lives and quality of life, they should be rewarded.   Some simply "run for the hills and clam up" when a mistake is made or a medical surgical procedure goes bad. Attorneys, tell doctors not to say anything.  Making a fair settlement harder for all. Even that increases cost of medical treatment to all Americans.   In these days it seems that money, big settlements, lawyers and insurance companies would like to dominate basic medical ethics and standards of care.  Perhaps that toxic combination of attorneys, insurance companies, hospitals trying to make a profit, is the secret to why medical costs in the USA are so much higher than in other developed countries.  They have, like a cancer eroded the very heart of care for people and give humans a better quality of life. 


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