THE FRAUD investigation was, to say the least, unusual. Thesuspects were elderly, terminally ill and receiving hospice-stylecare at home. The costs were being met by Medicare, the governmentscheme for the elderly. And their crime? They had lived too long.
Beatrice Bates was among the first to receive a letter from thefraud investigators. Aged 89, she was being treated for cancer ofthe uterus, anaemia, gout, high blood pressure and heart disease.Her daughter-in- law, Theresa Bates, described her shock. 'We werequite horrified. Beatrice was totally upset. Medicare's attitudeseemed to be: You are supposed to die, so why don't you?'
This is the dark side of the United States' healthcare system.Under Medicare rules, patients with a terminal diagnosis cared forby a hospice are covered for up to six months. But these patientshad defied the odds and survived, some for several years, duringwhich the hospice had continued to collect the Medicare payment of$88 (pounds 58) a week. Medicare wanted to know why they were stillalive - and its money back.
The investigation, reported in The Washington Post, highlightsthe uncomfortable relationship between health and economics in theUS system. To Americans, health is a commodity to be bought and soldlike holidays and cars. The 44 million who cannot or will not affordhealth insurance must rely on the charity of the public hospitalsand clinics for treatment. And when an insurer faces a loss, even ifit is a government agency, we have the grotesque spectacle of theterminally ill being harassed for the price of a jab of morphine.
John Welch, of healthcare consultants William Mercer inWashington DC, said: 'Healthcare is a business. It is run like abusiness and viewed like a business and you need to understand thateven if the patient doesn't.'
They understand that at the Washington Hospital Centre. With 900beds, it is the largest private hospital in the capital, standing ona 47- acre campus a few miles north of the White House. It has oneof the best heart and cancer programmes in the country andadmissions have risen in recent years while those of its rivals havefallen.
'Cardiac surgery built this place,' said Dr Jim Howard, seniorvice-president for medical affairs - confirming that while allpatients are equal, some are worth more than others.
Those worth the most are treated on the top floor in a newlybuilt suite of 12 rooms called 'the pavilion'. With its swagged pinkcurtains and leather-backed menus, fine art and fine linens, thepavilion offers state- of-the-art medicine in an environment torival any luxury hotel.
Thomas Sullivan, director of the hospital foundation that raised$8m from charity last year, said: 'The reality of life in the UStoday is that many people want to go first class. They are preparedto pay $350 a day for all the amenities.'
That is $350 on top of the normal hospital charges. It is notcovered by insurance.
The fine furniture is not, however, what sets apart theWashington hospital centre from its NHS equivalent. It is the 1,526specialists with admitting rights - including 90 cardiologists -5,000 nurses and support staff and 87 intensive-care beds, more thantwice as many as in a similar sized hospital in Britain.
In the US, for those with insurance, there are negligible waitinglists and few restraints on treatment - although the insurers haveattempted to impose them with managed-care schemes that restrictaccess to selected doctors and hospitals. But the growing ranks ofthe uninsured are what provokes most criticism of the system.
Americans explicitly rejected a global health budget in thedebate seven years ago over the failed healthcare reform proposed byPresident Bill Clinton and there are recent signs of growingdissatisfaction with managed care as patients demand greater choice.
Grace Marie Arnett, president of the health policy think-tank TheGalen Institute, said: 'As they have become wealthier, Americanshave shown that they want to spend their money on things thatenhance their health and their longevity so that getting older doesnot necessarily mean getting sicker. There is a growing awareness inthe US that more spending on healthcare is not necessarily a badthing.'
At the Washington Hospital Centre, you can find evidence of bothprofligacy and cost paring in the same department. In the maternityunit, with its panelled walls and polished wood floor, we are barredfrom one room because the 'shampoo therapist' is busy with apatient. Yet in the delivery suite, Margaret Young, a nurse,confides that few women stay more than 24 hours after the birthbecause of the cost. 'Some insurers will pay for a little longer,'she said.
In 1998, US spending on healthcare reached $1.1 trillion - anaverage of $4,097 per person compared with the United Kingdom figureof just under pounds 1,000 a head for the NHS. More than 14 per centof gross domestic product is spent on healthcare - compared with 6.8per cent in the UK - and this is projected to rise to 16.2 per centin 2008. Last year, health insurance premiums for employer plansincreased by 7.3 per cent, more than three times the rate ofinflation.
While hospitals and insurers are under pressure, doctors do well.Primary- care physicians are the lowest paid at about $100,000 -slightly more than a British GP. For specialists, earnings can beimpressive. A cardiologist averages $300,000 to $500,000 a year 'ifthey are not very good', according to Dr Howard of the WashingtonHospital Center. The best earn at least $1m. Even with highmalpractice premiums - $50,000 to $75,000 a year for obstetricians -doctors are among the better off members of society.
The sheer size of the healthcare industry means attitudes to itare quite different from those in Britain. Health policy analystsjoke that Americans will use as much health care as someone elsewill pay for. With between 1 and 2 per cent of the country's entireeconomy composed of profits from health insurance and medical-careorganisations there is a large segment of society with no interestin curbing costs and every interest in increasing them.
Patients, too, are starting to reject curbs on costs and demandthe freedom to choose their physician. There has been an upsurge incomplaints about the restrictions imposed by managed-care schemesand employers, fed up with the dissatisfaction expressed by staff intheir health plans, are increasingly leaving it to them to choosetheir insurance. However, workers are not entitled to the generoustax subsidies available to employers, unless their premium risesabove 7.5 per cent of salary, which is rare.
Many hospitals are in difficulty because admissions are down asmore is being done as out-patient treatment. There are too many bedsand hence competition to fill them. It is a buyer's market.
Mr Welch tells the story of a man in need of complex cancersurgery at a hospital in Washington for whom the price quoted,including aftercare, was a breathtaking $275,000.
His insurers decided to call the Mayo Clinic in Rochester,Minnesota, one of America's most famous hospitals, for a comparison.They were quoted $130,000 for the same package of care. They did notwant to move the patient but, armed with the Mayo's price, went backto the first hospital - which agreed to do the operation for$210,000.
'It was just like buying an auto,' said Mr Welch. 'The economicsare out there if you want to get into that. Do you want to payretail or wholesale?'
www.independent.co.uk
For a collection of articles highlighting problems faced by theNHS, plus related links, go to: www.independent.co.uk/links/
HOW THE SYSTEM WORKS
THE UNITED States healthcare system is based on privateinsurance, provided by employers for 64 per cent of Americans. Thepoor are covered by Medicaid, which provides free care, and thoseaged 65 and over are covered by Medicare. But 44 million 'nearlypoor' people - one in six - have no cover and are above the cut-offfor Medicaid. They rely on the charity of the public hospitals. Andthe system is the most expensive in the world, consuming 14 per centof GDP (compared with Britain's 6.8 per cent)
Premiums in employer schemes range from $1,200 (pounds 800) ayear for a person aged 20 to $6-7,000 for a 64-year-old, 22 per centpaid by the employee and 78 per cent by the employer.
Americans have traditionally had the freedom to consult generalphysicians or specialists as they wish - there is no GP gatekeepingrole - but in the past decade employers have moved heavily intomanaged care. These are schemes that restrict the choice of doctorand hospital and impose a charge of typically $10 to see a generalphysician, $20 to see a specialist and $10 for a prescription.
Verdict: Excellent healthcare for those who can afford it, buttoo many are excluded and the cost is ruinous.
