How Can We Fix the Healthcare System in America?

Spine expert Q&A includes 4 steps to help you reduce your health care costs.

Americans cannot keep up with the rising cost of health care and health insurance premiums. While large hospital systems, health insurance companies, and pharmaceutical companies are prospering, Americans are skipping care because of high costs. Lali Sekhon, MD, PhD, FAANS, FRACS, FACS, provides a synopsis by means of our questions based on his 4-part series published on LinkedIn. Dr. Sekhon discusses how we got to this point and how can we fix the US health care problem. Dr. Sekhon is a neurosurgeon at Reno Orthopedic Clinic in Reno, NV, and a SpineUniverse editorial board member.

healthcare under a magnifying glassNeurosurgeon, Dr. Lali Sekhon answers our questions about problems with the healthcare system in America. Photo Source:

Why is our healthcare system so expensive?

Dr. Sekhon: Health care costs nationwide have increased 818% since the 1960s, while wages on average have risen only 16%, as noted in Part 1 of the series.1 It is no surprise that unpaid medical bills are the leading cause of bankruptcy in America.2

There are 3 key players that are driving up health care costs: 1) pharmaceutical companies, 2) health insurance companies, and 3) hospitals. Part 3 of the series describes how these players inflate health care costs.

While pharmaceutical companies say that drug pricing is based on the high costs of research and development, more than 50% of the total spending for many of these companies goes to sales and advertising.3 The profit margins of some of the top drug companies (30% to 43%) are markedly higher than those of other successful companies such as Coca-Cola (21%), which sells a product that is inexpensive to produce.4

Also, drug companies try to prevent generic versions of their drug to become available. Unlike in other countries, drug companies in North America can set whatever price they want, and the federal government cannot negotiate drug prices.

Health insurance companies are making record profits while patients are paying more in premiums. This doesn’t make sense.

Hospitals pay their various layers of administrators (eg, managers, directors, vice presidents, board members) high salaries. In addition, more than 50% of hospitals are not-for-profit (meaning that they get tax breaks in exchange for providing charitable care to the local community) but there are no checks and balances to make sure that a proportionally similar amount of money is put back into the community. Furthermore, hospitals are not transparent about pricing. Patients often don’t know the cost of their surgery until they are billed.

How can we fix the US health care system?

Dr. Sekhon: There are 3 criteria for an ideal health system: an affordable health system that offers access to care and high-quality services. The US has access to care and a quality health system, but we can’t afford the current system. Thus, the first step is that the costs need to come down, as discussed in Part 4 of my series.

Secondly, we need transparency, particularly on pricing. If there are four hospitals near me, I need to know what the cost of a surgery would be at each one. Even the cost of imaging scans can vary widely, with an MRI scan at my local hospital costing $1400 in out of pocket costs after insurance, versus $500 without insurance at a physician-owned orthopaedic group in the same county.

Many hospitals profit by charging high facility fees, which are overhead costs for maintaining the facility and include utilities, supplies, and nonphysician staff. Many physician-owned ambulatory surgery centers (that are not affiliated with hospitals) are already transparent about pricing and offer reduced or no facility fees.

We need the federal government to be able to negotiate drug prices, so that we don’t see tragedies as we did with the cost of insulin in the United States.

Furthermore, we need to learn from other countries with more robust healthcare systems than the US. For example, Australia currently offers a two-tiered Medicare-for-all system plus the option to buy additional private health insurance that is not linked to your job. In Australia, if you have a car accident or a heart attack, you are covered. If you need a knee replacement and don’t want to wait for surgery under universal healthcare, you can purchase private health insurance and have the surgery sooner.

European countries offer a good example of how to cap pharmaceutical costs by making a single statin, for example, covered for all patients, with the option of paying extra for a different statin if the patient desires it, but putting the onus of the extra cost onto the patient. Those countries negotiate the prices of the base medications as volume customers.

What can the average patient do to lower their health care costs, especially for spine surgery?

Dr. Sekhon: There are simple steps that patients can take to lower their health care costs:

  1. Use websites like BlueBook to shop around for the cost of medical procedures and imaging scans (eg, MRIs) in your local area
  2. Avoid hospital facility fees, if possible, for outpatient procedures by going to privately owned ambulatory surgery centers that are not affiliated with a hospital
  3. Review your medical bills and ask questions about charges
  4. Complain to state insurance commissions for unjust denials and charges

I think its egregious that the delivery of health care has become an ATM for corporations to bleed the average American consumer. We are starting to see that the average American can’t afford health insurance. We are at the tipping point. Health care is a right and not a privilege.

Dr. Sekhon is a Consultant for Zimmer Biomet and receives payments for teach from AO Spine North America.

Updated on: 02/12/20
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