This Medscape article may not address every reason for skyrocketing costs, but it certainly gets the conversation started. Some of the experiences they report are quite stunning.
Aside from malpractice reform, which has been extensively discussed in the public debate on reform, most of the other points will come as news to many readers.
1. The Building of Shrines for Hospital Administrators. We have both witnessed the building of expensive and unneeded new healthcare facilities to satisfy the desire of an institution to provide a monument to a hospital executive who is nearing the end of his or her career. In one case, architecturally spectacular new hospital buildings costing billions of dollars were erected within a few hundred yards of similar facilities belonging to a competing institution. In another case, a specialty hospital was constructed despite the fact that 2 other similar specialty facilities existed within a few miles. In both instances, as large as the costs of the new buildings may have been, they were dwarfed by the costs of the duplicative staffs required for the new facilities. Moreover, to keep both new facilities acceptably occupied, substantial additional monies continue to be spent on advertising and public relations campaigns.
2. Unnecessary Duplication of Services. One large city had 3 excellent transplant programs, each associated with a different university hospital. Administrators at a fourth university hospital decided they also wanted a transplant program to enhance their institutional image and prestige. When the relevant state agency determined that there was no need for a fourth transplant program in the city, there was a rumor that a top officer at the medical center interceded personally with a high-ranking elected state official. Whatever the truth of the rumor, the unneeded fourth program was quickly approved. The costs for the complex and extensive additional staffing and equipment for the extra program were borne by our healthcare system. Because the number of organ transplants in the area is totally dependent on the number of donor organs and not on the number of programs, no increase in quality or number of patients treated could accrue — only an increase in the overall cost. The sole purpose served by the additional program was gratification of the egos who served the institution.
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