This two page summary outlines the American Health Care System quality and cost issues and offers the only practical business solution.

1. RHS September 21, 2017 Page 1 of 2 www.rogerhstrubemd.com
The American Health Care System
A Crisis of Cost & Quality
Understanding the Components, Facts, Flaws & Fixes
Roger H Strube, MD (retired)
www.rogerhstrubemd.com
Author of “Discovering the Cause and the Cure for America’s Health Care Crisis”
http://www.iuniverse.com/Bookstore/BookDetail.aspx?BookId=SKU-000172326
THE PROBLEMS WITH THE BROKEN AMERICAN HEALTH CARE SYSTEM
Most people can agree that the Health Care System in this country is broken. Recently, Congress has been
attempting to “fix” American Health Care without a basic understanding of the factors that push costs up while
driving quality down. Our legislators are starting from positions primarily driven by mythology and political dogma
rather than a basic understanding of the facts of economic and social realities. To understand the problems that
have developed from the traditional US model of financing and care delivery, it is helpful to compare and contrast
it with the most cost effective, quality driven and fiscally responsible systems in the industrialized world.
Table 1 shows the growth in healthcare costs around the world—at 17.8% (equal to $3.2 trillion), the US has
outpaced all of all the top 11 industrialized democracies by about 5% since 2008. In contrast, the US trails in the
lowest position in overall rankings in quality (Table 2) across a variety of important measures. Why are costs so
high and quality so poor?
The biggest factors that drive up healthcare costs are:
 Actual Access to Health Care: All Americans with health
issues access the system. Even the poor and uninsured get
health care, mostly through expensive ER visits, but they
cannot pay. Health care providers have to shift the cost of
this uncompensated care to those who are able to pay—
people fortunate enough to have insurance and taxpayers
in general.
 Unnecessary Medical Care: Unnecessary care & procedures
(even those that do no real harm) and costs associated with
malpractice drive up the cost of healthcare. Because
malpractice insurance rates have skyrocketed, so too have
insurance premiums to cover those costs. Unnecessary care
alone accounted for $1.3 trillion in 2016.
The biggest issues regarding poor quality healthcare are:
 Inappropriate Medical Services: According to a Rand Corp.
Study (https://www.rand.org/) about 40% of the tests,
treatments, and procedures that physicians order are
inefficient, not medically necessary (meaning not
appropriate or effective), or even harmful (subject to
malpractice).
 Too Much Information: The exponential growth of scientific
medical knowledge blew past the ability of the human mind
to store relevant information decades ago. It is not possible
for physicians to retrieve all the specific medical knowledge
that, in real time, applies to the unique situation of the
patient. The limitations of the human brain and the
physician’s use of memory-based decision making are no
longer sufficient.
Table 1: TOP 11 INDUSTRIALIZED DEMOCRACIES
by HEALTH CARE COST as a PERCENT of GDP
Organization for Economic Co-operation and Development 2017
Country 2000 2004 2008 2012 2016
United States 12.5 14.5 15.3 16.4 17.8
Switzerland 9.3 10.4 9.8 11.1 12.4
Germany 9.8 10.1 10.2 10.8 11.3
Sweden 7.4 8.3 8.3 10.9 11.0
France 9.5 10.1 10.1 10.8 11.0
Netherlands 7.1 8.5 9.5 10.9 10.5
Norway 7.7 8.8 8.0 8.8 10.5
Canada 8.3 9.1 9.5 10.2 10.3
United Kingdom 6.0 7.1 7.7 8.5 9.7
Australia 7.6 8.1 8.3 8.7 9.6
New Zealand 7.5 7.9 9.1 9.7 9.2
Data extracted on 24 Jul 2017 from OECD.Stat
http://www.kff.org/health-costs/https://hub.jhu.edu/2016/05/03/
medical-errors-third-leading-cause-of-death/
Table 2: TOP 11 HEALTH SYSTEMS by HEALTH CARE QUALITY
Commonwealth Fund Mirror, Mirror 2017
Country
CareProcess
Access
Administrative
Efficiency
Equity
HealthCare
Outcomes
Overall
Ranking
United Kingdom 1 3 3 1 10 1
Australia 2 4 1 7 1 2
Netherlands 4 1 9 2 6 3
Norway 10 5 4 5 3 4
New Zealand 3 7 2 8 7 5
Switzerland 7 8 8 4 4 6
Sweden 11 6 5 3 2 7
Germany 8 2 6 6 8 8
Canada 6 10 7 9 9 9
France 9 9 11 10 5 10
United States 5 11 10 11 11 11
Data extracted on 24 Jul 2017 from OECD.Stat
http://stats.oecd.org/Index.aspx?DataSetCode=SHA
http://hdr.undp.org/en/data-explorer
http://www.commonwealthfund.org/interactives/2017/july/mirror-mirror/

2. RHS September 21, 2017 Page 2 of 2 www.rogerhstrubemd.com
Understanding the Components, Facts, Flaws & Fixes
Roger H Strube, MD (retired)
WHAT WON’T WORK TO SOLVE THE HEALTH CARE CRISIS
Healthcare costs increase with our system’s ongoing failures to deliver the elements of quality care efficiently and
effectively for every person living (and sometimes getting sick) in the United States, regardless of ability to pay,
immigration or employment status, or medical history. Making insurance optional reduces the number of people
paying for health care through an orderly, managed system. When a person without adequate health insurance
needs medical care, their cost is shifted to those who can pay, regardless of whether they understand they are
paying or not. Cutting Medicaid benefits would add more people to the ranks of the uninsured, increasing the costs
of healthcare in general and shifting the costs to everyone else in a much less transparent way.
THE SOLUTIONS TO THE PROBLEMS WE FACE IN THE AMERICAN HEALTH CARE SYSTEM TODAY
Believe it or not, the American Health Care System has begun moving in a direction that will eventually drive it
toward reaching the goal of quality care at half the cost. The ACA (with specific requirements for medical records,
billing and reimbursements) is a small start. At this point, we need to decide, as a nation, where we are going and
what will the future Health Care System look like. Two main issues need to be considered: 1) The use of an Artificial
Intelligence (AI) system to augment the memory-based decisions that physicians make and therefore increase
appropriate, efficient, and effective care; and 2) The institution of a financial system that will take all Americans,
regardless of ability to pay, into its calculations.
The AI Fix: Remember Watson, IBM’s Artificial Intelligence system that won on Jeopardy a few years ago? Watson
has grown since then to incorporate most medical knowledge. Several large health care databases are coupling
with Watson. In the most efficient hospitals and clinics, Watson will scan all the medical knowledge available online
seeking relevant information based on specific individuals’ database-driven patient records to offer the most
appropriate, effective and efficient plan to diagnose and treat the individual, unique patient. The physician (captain
of the ship) will determine to either accept Watson’s recommendations or, if there is good reason, modify them.
These AI systems alone, taken to their maximum efficiency, would reduce health cost by 40% ($1.3 trillion/year).
This AI fix is not over the horizon, it is within view.
The Financial Fix: Looking at the options for reforming the American Health Care system though an economic or
business lens, there is only one logical choice – Medicare for all, with Medicare Advantage for those accepting some
limited provider choice to get broader coverage and standard Medicare meeting the needs of those wanting more
independence. Insurance companies would continue to sell Medicare supplemental policies. This system would
need to be funded by the taxpayer and administered through the present state-licensed insurance companies.
Today, government spending already amounts to over 64% of the total payments into the health care system (see
Table 3). Employers subsidize their employees’
healthcare costs, and would doubtless
appreciate the relief if government would take
over that bill. Tying health coverage to the
individual via Medicare would benefit these
businesses and their employees, who would
become more innovative if they were not relying
on a job for their insurance needs.
Enacting these two fixes simultaneously would improve the cost effectiveness of much higher quality care, flipping
the tables (Tables 1 and 2 on Page 1) for a much improved situation for everyone – costs will go down and quality
will go up. Continuing our present health care system or proceeding with Trump Care and its massive cuts to
Medicaid will ultimately lead to an American health care system and economic meltdown. Over a period of years,
Congress and the President must proceed with an orderly transition to Medicare for all by progressively expanding
Medicare coverage until all Americans are covered.
Table 3: Government Health Care Spending as Percent of Overall Health Spending
Medicare
Medicaid & VA
Public Employee
Health Care
Health Care
Tax Subsidies
TOTAL
Percent 47.8% 6.4% 10.1% 64.3%
Dollars $1.5 Trillion $188 Billion $294.9 Billion $2.0 Trillion
American Journal of Public Health 106, no. 3 (March 1, 2016): pp. 449-452
http://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2015.302997