Waste as Income

There is a strong perception in the United States that waste and inefficiencies are partially to blame for rising health care costs.  As with any large complex system, waste is an issue (the fact that 80% of the cost of the health care system is in 20% of the participants is rarely mentioned - any hint of this fact in the cost containment debate sounds like rationing).

Waste is a funny thing in the context of health care reform and cost containment.  One person's "waste" is another person's "income" - - the income of doctors, nurses, hospitals, drug companies, medical-technology makers.  Discussions of health care in the U.S. usually focuses on insurance companies, but, whatever their problems and sins, they're not the main driver of health-care inflation: providers are.  Hospital stays, MRI exams, drugs, and doctor's visits are simply more expensive there than they are elsewhere, and the fee-for-service structure insures that we use more of them, too. 

Engineers should get this - - it's really just math: most of our health-care dollars go, in one way or another, to health-care providers, so if we honestly want to restrain the growth of health-care spending, less will have to go to them.

Remember - - one person's waste is another person's new boat or the fourth bedroom in the second house.