The Health of Nations

October 24, 2004

For years the people in Washington have offered one plan after another that they said would provide health care for all Americans and rein in costs. Each plan has failed. Today more people than ever have inadequate coverage or no insurance at all. And still costs continue to spin out of control.

Notably absent from the rhetoric has been any mention of the existing system's inherent flaw — the inability of market-based, for-profit medicine to deliver on the political promises.

Two decades ago, when Washington embraced the for-profit model to curb escalating charges, health care spending represented 10.5 percent of gross domestic product. Now it is approaching 16 percent. We spend more per capita on health care than any other developed country. Yet on the important yardsticks, like life expectancy measured in healthy years, we don't even rank among the top 20 nations. In fact, according to the World Health Organization, we come in an embarrassing 29th, sandwiched between Slovenia and Portugal.

The explanation for this abysmal record is one that politicians decline to discuss. The market functions wonderfully when we want to sell more cereals, cosmetics, cars, computers or any other consumer product. Unfortunately, it doesn't work in health care, where the goal should hardly be selling more heart bypass operations. Instead, the goal should be to prevent disease and illness. But the money is in the treatment — not prevention — so the market and good health care are at odds. Just how much at odds is seen in the current shortage of flu vaccine, as men and women in their 80's and 90's line up for hours at a time, hoping to get the shot they have been told they need, but may not receive because not nearly enough has been manufactured.

The reason for the shortage is this: Preventing a flu epidemic that could kill thousands is not nearly as profitable as making pills for something like erectile dysfunction, a decidedly non-fatal condition. Viagra, for example, brings in more than $1 billion a year for its maker, Pfizer. The profits to be made from selling flu vaccine are measly in comparison. If selling flu vaccine were as lucrative as marketing Viagra, sports broadcasts and the nightly news would be flooded with commercials warning that "winter is almost here; ask your doctor about flu vaccine" — and it would be available to anyone who wanted it. Instead, while many of those at risk of the flu go without the vaccine, primetime programs are sponsored by the makers of Viagra ("Get back to mischief"), Cialis ("Will you be ready?") and Levitra ("Stay in the game").

To understand what has gone wrong in health care, one need only look at the booming market for prescription drugs. Once upon a time, drugs were a needs-based product. You received a prescription when you were truly ill. Now many drugs are demand-driven, just like Froot Loops and Lucky Charms. Instead of using the cartoon characters that sell cereals, the drug companies employ celebrities.

One of the earliest was Lauren Hutton, the supermodel whose enthusiastic endorsement of Wyeth's hormone replacement therapy helped propel prescriptions for all such drugs from 58 million in 1995 to 90 million in 1999. Ms. Hutton made the rounds of the talk shows, telling her "personal" story. She said her doctor warned her that if she didn't take estrogen, "I was up for colon cancer, eye loss, osteoporosis, shrinkage, lots of things."

More recently, Merck recruited Dorothy Hamill, the Olympic gold medalist, to pitch Vioxx. "This is my favorite time to skate," Ms. Hamill said in a commercial. "I guess it's from all those years of 5 a.m. practices. But it's also the time when the pain and stiffness of osteoarthritis can be at their worst."

As has been the case with so many other drugs, estrogen therapy and Vioxx proved to be a triumph of marketing over science. Not only did the hormone replacement drugs fail to provide the promised protection, studies found they increased the risk for developing cancer and heart disease. Vioxx was withdrawn last month after evidence from clinical trials showed that it increased the risk of heart attacks and strokes.

Since 1997, when the Food and Drug Administration loosened restrictions on television commercials for prescription drugs, the marketing departments of pharmaceutical companies have exercised ever-greater influence on which drugs will be brought to market. That's why we have three drugs to treat erectile dysfunction, a condition that once was called "impotence." The name change was essential for the products to be sold by the likes of Bob Dole or Mike Ditka, the former Chicago Bears coach.

Aggressive marketing and pricing have made pharmaceutical companies America's most profitable industry. On the whole, Americans pay higher prices for prescription drugs than anyone else in the world because the United States is the only industrialized nation that does not exert influence over prices.

What's needed to control the costs and to provide basic health and hospitalization coverage for all Americans is an independent agency that would set national health care policy, collect medical fees, pay claims, reimburse doctors fairly and restrain runaway drug prices — a single-payer system that would eliminate the costly, inefficient bureaucracy generated by thousands of different plans. It's not such a radical idea; a single-payer system already exists for Medicare.

Such an agency would need to be free of politics and could be modeled on the Federal Reserve System, whose members are appointed to terms that do not coincide with the terms of either the president or the Senate. It could be financed through two taxes, a gross-receipts business tax and a flat tax, similar to Medicare, but on all individual income.

Under a single-payer system, never again would you be asked, when calling to make a medical appointment, "What type of insurance do you have?" Never again would doctors need bloated office staffs to track what is and is not covered under thousands of insurance plans. Never again would you have to worry about being bankrupted by a medical emergency. Never again would American business be saddled with the responsibility for providing health insurance.

A unified, single-payer system could do more than pay the bills. It could gather information to more accurately identify the surgical procedures and drugs that work, and those that don't. It could funnel research money to where it will do the most good rather than to those areas with the largest and most vocal constituency, thereby treating the victims of various diseases and conditions more equitably.

It could make possible a centralized computer network to reduce the 100,000 deaths each year from adverse drug reactions — a number of fatalities five times greater than those caused by street drugs like cocaine and heroin. Similarly, a nationwide network could track medical errors across the country to increase accountability and to identify hospitals or surgeons who make repeated mistakes. And it could guarantee supplies of needed medications. In short, over time such a system could transform the practice of medicine and give all Americans the first-class health care they deserve — without breaking the bank.

(Donald L. Barlett and James B. Steele are editors at large at Time and the authors, most recently, of "Critical Condition: How Health Care in America Became Big Business — And Bad Medicine.")