‘Overutilization’ is the culprit in high healthcare costs, say my doctor friends

By Robert Pembroke

Years ago, I went to my doctor for my annual physical. He sent me across the street to the hospital to have blood tests performed. He later reported to me the results of 12 tests. That fall, Medicare capped the fees on some of the procedures that they paid for. The next spring when I went for my annual physical, the doctor now had his own lab and ordered 23 tests. That is what I call “overutilization.”

Again, the Republicans are going to try and repeal ObamaCare. They are acting like Don Quixote tilting at windmills. There will be a lot of bluster and expended effort, but in the end, ObamaCare will still be standing. 

For eons, my two doctor friends at our Saturday morning “Breakfast Club” have pushed for universal healthcare. One of the doctors had practiced medicine in Germany and extolled the virtues of its universal healthcare system. 

During the conversation, I told the doctors of an experience I had while floating down the Danube River. Sitting in front of me while on a side excursion in a bus, was a German doctor. I asked him where he practiced. Shockingly, he said, “London.” I replied, “Good gracious, why?” He replied, “I get paid more.” 

I then told my very good doctor friends that I would man the barricades for universal healthcare if it would cut costs in the U.S. by 50 percent. I have read and heard that our healthcare costs are twice as much as other developed countries. I have also read that we rank 11th in the quality of healthcare in the developed world. This is not a very good scorecard.

If you want to put your liberal friends to sleep, just try to explain to them what America’s current healthcare system looks like when it comes to the patients.

First, 157 million Americans are covered by their private employers. Second, 112 million Americans are covered by government-operated healthcare plans such as Medicare, Medicaid and CHIP and 23 million can afford their own policies. Here is the key point: That leaves only 7 million plus the 30 million uninsured that really need a plan like ObamaCare. 

So, my question to you, my liberal friends, is, “Why throw the baby out with the bathwater when it comes to healthcare?” What America really needs is to just tweak the system that we have and focus on lowering the cost. 

At the end of the breakfast — after all the fights were broken up — I asked the doctors what could be done to lower Americans’ healthcare costs. In unison, they replied, “Reduce overutilization.” Wow!

I then got an extended tutorial on overutilization. One segment was on the treatment of appendicitis. They said it used to take 15 minutes to perform the slash in your tummy, administer a good dose of antibiotics and give you a pat on the head. But now the doc must decide among treatment options, including the old standard surgical appendectomy or maybe a laparotomy or laparoscopy.

In a 2014, CBS posted a report titled “Costs of an Appendectomy.” It said that a user of the social news aggregation site Reddit had posted his bill for an appendectomy — a whopping $55,000. The story quoted a study that showed that appendix removals around the U.S. can range from $1,500 all the way up to $180,000. Now that’s a lot of silver and gold.

A few years back, I thought I had a pretty good idea: What if we get a group of small businesses to band together, build a clinic and hire their own doctors? I failed at this endeavor for myriad reasons, one of which was that I am very old. But recently, I was vindicated in my thought process. This headline appeared in the Los Angeles Times earlier this year: “Amazon, JPMorgan and Berkshire-Hathaway Team Up to Lower Healthcare Costs for their Employees — and Maybe Everyone,” 

Everyone says that if you want to have better healthcare and lower costs, you need to educate the public. I don’t agree with that position. In order to have better healthcare and lower costs, you need to educate the owners of businesses. Just look at the upside: higher wages for employees, better equipment to raise productivity and more profits for shareholders. Now that’s a win-win proposition.

Robert Pembroke is the former chairman and CEO of Pembroke’s Inc. in Salt Lake City.