Money-Driven Medicine: The Real Reason Health Care Costs So Much

Hardcover | May 9, 2006

byMaggie Mahar

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Why is medical care in the United States so expensive? For decades, Americans have taken it as a matter of faith that we spend more because we have the best health care system in the world. But as costs levitate, that argument becomes more difficult to make. Today, we spend twice as much as Japan on health care—yet few would argue that our health care system is twice as good.

Instead, startling new evidence suggests that one out of every three of our health care dollars is squandered on unnecessary or redundant tests; unproven, sometimes unwanted procedures; and overpriced drugs and devices that, too often, are no better than the less expensive products they have replaced.

How did this happen? In Money-Driven Medicine, Maggie Mahar takes the reader behind the scenes of a $2 trillion industry to witness how billions of dollars are wasted in a Hobbesian marketplace that pits the industry's players against each other. In remarkably candid interviews, doctors, hospital administrators, patients, health care economists, corporate executives, and Wall Street analysts describe a war of "all against all" that can turn physicians, hospitals, insurers, drugmakers, and device makers into blood rivals. Rather than collaborating, doctors and hospitals compete. Rather than sharing knowledge, drugmakers and device makers divide value. Rather than thinking about long-term collective goals, the imperatives of an impatient marketplace force health care providers to focus on short-term fiscal imperatives. And so investments in untested bleeding-edge medical technologies crowd out investments in information technology that might, in the long run, not only reduce errors but contain costs.

In theory, free market competition should tame health care inflation. In fact, Mahar demonstrates, when it comes to medicine, the traditional laws of supply and demand do not apply. Normally, when supply expands, prices fall. But in the health care industry, as the number and variety of drugs, devices, and treatments multiplies, demand rises to absorb the excess, and prices climb. Meanwhile, the perverse incentives of a fee-for-service system reward health care providers for doing more, not less.

In this superbly written book, Mahar shows why doctors must take responsibility for the future of our health care industry. Today, she observes, "physicians have been stripped of their standing as professionals: Insurers address them as vendors ('Dear Health Care Provider'), drugmakers and device makers see them as customers (someone you might take to lunch or a strip club), while . . . consumers (aka patients) are encouraged to see their doctors as overpaid retailers. . . . Before patients can reclaim their rightful place as the center—and indeed as the raison d'être—of our health care system," Mahar suggests, "we must once again empower doctors . . . to practice patient-centered medicine—based not on corporate imperatives, doctors' druthers, or even patients' demands," but on the best scientific research available.

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From the Publisher

Why is medical care in the United States so expensive? For decades, Americans have taken it as a matter of faith that we spend more because we have the best health care system in the world. But as costs levitate, that argument becomes more difficult to make. Today, we spend twice as much as Japan on health care—yet few would argue that...

Maggie Mahar is the author ofBull! A History of the Boom and Bust, 1982–2004, a book Paul Krugman of theNew York Timessaid "makes a devastating case against the contention that the market is almost perfectly efficient." In his 2003 annual report, Warren Buffett recommendedBull!to Berkshire Hathaway's investors. Before becoming a financ...

other books by Maggie Mahar

Bull!: A History of the Boom and Bust, 1982-2004
Bull!: A History of the Boom and Bust, 1982-2004

Paperback|Oct 12 2004

$16.35 online$21.99list price(save 25%)
Format:HardcoverDimensions:480 pages, 9 × 6 × 1.45 inPublished:May 9, 2006Publisher:HarperCollinsLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:006076533X

ISBN - 13:9780060765330

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“Mahar illuminates the profit motive behind medicine . . . in this savvy, detail-rich book.”