How Economic Incentives have Created our Dysfunctional US Medical Market

Real life examples from patients (and readers!) that inspired my list of 10 Economic Rules

In my new book “An American Sickness: How Healthcare Became Big Business and How You Can Take it Back,” I began with a list of 10 Economic Rules that seem to govern the Dysfunctional U.S. Medical Market. Some readers reacted with disbelief: How could such seemingly callous and absurd-sounding principles form the underpinning of something as precious as our healthcare? So here, I’ve illustrated each of the 10 rules with some real-life examples from the book to show you how they do, indeed, come into play. What you’ll see is that the economic forces and incentives that motivate our health system often lead to medical practices that are not especially good for our health — or our wallets.

What you’ll see is that the economic forces and incentives that motivate our health system often lead to medical practices that are not especially good for our health — or our wallets.

  1. More treatment is always better. Default to the most expensive option. The most expensive treatment for the most common benign type of skin cancer is a complex technique called Mohs surgery, in which skin is sliced off sequentially and analyzed after each cut. It is frequently followed by plastic surgery with resulting total charges often in the tens of thousands. Mohs can be highly useful in delicate areas like an eyelid, but it is now far more widely deployed. In most body locations such basal cell carcinomas can be cured with a host of cheap and quick treatments: burning, cautery, simple excision or applying a caustic cream. Nonetheless, the rate of using the expensive techniques rose 700 percent among Medicare beneficiaries between 1992 and 2009. The decision to use MOHs often likely reflects “the economic advantage to the provider rather than a substantial clinical advantage for the patient,” one prominent dermatologist told me. (Patients: If a doctor recommends Mohs, ask instead about the cheaper treatments!)

These are only some of the many stories that I’ve heard directly from patients all over the U.S. that happen every day. And they will continue to. My hope in giving your stories a platform and calling out the perverse economic incentives that have created this dysfunctional system is to educate and become a rallying point for better and more affordable health care. Join me and the revolution at www.wethepatients.us!

My hope in giving your stories a platform and calling out the perverse economic incentives that have created this dysfunctional system is to educate and become a rallying point for better and more affordable health care.

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Elisabeth Rosenthal

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Editor-in-Chief Kaiser Health News. Past NYTimes. New book NYT Bestseller! An American Sickness: How Healthcare became Big Business and How You Can Take it Back