Guest Post: How To Cut America's Healthcare Spending By 50%

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

How To Cut America's Healthcare Spending By 50%

The current sickcare system is financially unsustainable. Physician correspondent "Ishabaka" proposes practical ways we could cut costs by 50% while improving care.

Since sickcare is fiscally and demographically unsustainable, it will eventually be replaced by something that is sustainable. Our only choice is to either let the current system collapse and then start pondering sustainable alternatives, or begin an honest discussion of sustainable alternatives before sickcare implodes in insolvency.

In the spirit of openly discussing a variety of sustainable, systemic healthcare options, we present this essay by correspondent "Ishabaka" M.D. on how to cut our current (18% of GDP) healthcare spending by 50%. Ishabaka received training in Canada, so he has direct knowledge of the Canadian system from the inside. Having spent decades as a primary-care and emergency room physician in the U.S., he also has deep knowledge of the U.S. sickcare system from the point of view of a care provider to under-served (i.e. uninsured) Americans.

Here is Ishabaka's essay:

Some time ago I told you how I could cut health care costs in half and provide every American with the healthcare they need (not necessarily the healthcare they want!). Here goes. Some of my points might seem drastic, but we are facing a drastic problem.


1. Immediately introduce national healthcare for all Americans ( and ONLY American citizens and H1B visa holders ) which will be paid for by an immediate TAX INCREASE.


2. Like Canada, this will cover all doctor's office, E.R., clinic, hospital etc. visits. Unlike Canada (the biggest mistake Canada made), there WILL BE co-pays for routine office visits and visits to the E.R. that are NOT serious emergencies.


Here is why Canada's no co-pay system is wrong. A family physician friend of mine in London, Ontario had a family in her practice. The little girl got an ear ache, with a low-grade fever on a Saturday. The mother took her to an E.R. and got an antibiotic prescription. On Sunday the girl was feeling better with no fever, but the mother took her to a walk in clinic "Just to make sure everything was all right". The doctor said "Yes". On Monday the mother took her daughter, who was now feeling fine, to my friend's practice "Just to make sure the other doctors knew what they were doing". The ear infection was cured.


That was two totally unnecessarily visits the Canadian tax payers paid for, and the first visit should have been to the walk-in clinic, which is much cheaper than the E.R.


Co-pays have to be meaningful - not too much to dissuade patients from necessary care, but enough to make them think. That should apply to all aspects of healthcare.


Let me give you another example - right now, where I live, a basic ambulance ride (no drugs or treatments) is about $500. I have had a patient come in by ambulance for a TOOTHACHE. The paramedics should be able to say "No" and not worry about being sued.


3. Like Britain, every person will choose a primary care provider, who will provide their primary care. Referral to a specialist will require a request for consultation from the primary care doctor. In the U.S., there are no restrictions on seeing specialists who charge twice as much or more than a primary care doctor. I saw a guy who went to an ear nose and throat doctor to have his ear wax cleaned - a procedure any nurse can do!


4. Immediate tort reform. Not quite sure of the details, but I estimate that probably 50% of the tests done in the U.S. are to C.Y.A. against malpractice suits, and are medically unnecessary. What would probably be best would be a no-fault system. You are injured by the health care system, you are compensated a REASONABLE amount for your injuries, regardless of who was or wasn't at fault. You aren't really injured, you get nothing. This could be handled by arbitration panels which would take the lawyers out of the system.


Right now, it takes on average $50,000 to defend a doctor against a frivolous lawsuit - the doctor wins, but still $50,000 is down the drain. On the other hand I was involved in a suit where a patient died due to real negligence on the part of two doctors and the family lost the lawsuit and got nothing. This would cut malpractice premiums by at least 1/2 and drastically reduce the amount of testing.


5. We spend WAY TOO MUCH money on end of life care. We have to get together as a society and decide what we will and will not provide for end of life patients, and that doesn't just mean cancer patients, it also applies to end of life heart failure patients, emphysema patients, etc.


For example, a reputable study in The New England Journal of Medicine showed 0% survival from treatment of cardiac arrest on kidney failure patients on dialysis. Zero. I have had to do numerous "codes" on kidney failure patients on dialysis - they all died. A code costs thousands of dollars. The first code I ever ran was on a 38 year-old accountant having an acute heart attack. In the old days (1960's) I would have simply pronounced him dead. He lived, and was FINE, no brain damage from loss of oxygen, walked out of the hospital a week later and went back to work. That was money well spent. We don't have infinite money. We need to get the most bang for the buck.


The $90,000 chemo drug that extended terminal prostate cancer patients' lives by 6 months should NOT have been paid for by taxpayers' money. Patients who want it should have to pay for it themselves.


6. We have GOT to get the gold-bricks off disability and workmen's comp. If we did, we could put the truly disabled and injured-on-the-job folks in suites in the Ritz Carlton with 24 hour nursing and rehab care! It is mind boggling to see how many gold-bricks there are.


I really liked the system in Ontario, Canada. Any primary care doctor could certify a patient as disabled or off work for up to two months. After that, the patients had to be seen by a panel of specialists paid by the government. They had NO INCENTIVE to either certify the patients as disabled/unable to work or not. To make these specialists truly independent they should be salaried - and the government CANNOT fire them except for the reasons that would cause them to lose their license (sex with a patient, drug addiction, etc.).


7. All advertising immediately banned. We go back to the 70's. No doctor, hospital, clinic, drug company, can advertise to patients. Period.


8. All new drugs have to be compared to existing drugs (if there is a similar existing drug). ONLY if they prove superior to existing drugs should the FDA approve them. Every time a new drug is invented, all the other pharma companies copy it, change a molecule or two, and then study it compared to PLACEBO. We end up with 20 drugs that do the same thing. It's ridiculous.


9. Get rid of fraud and abuse - for real. This means doctors AND patients. You get caught committing health care fraud you pay in fines THREE TIMES what you stole, and spend a minimum of ONE YEAR IN JAIL OR PRISON. This is crucial - fraudsters MUST be made to do time.


Everybody's charges get audited by an independent panel. You charge for patients you didn't see, or wheelchairs you never provided to patients - you go to jail. It must be recognized that nobody is perfect, mistakes happen. A doctor accidentally charges for a patient they didn't see once in five years is not fraud - it's a mistake.


In the same way, patients caught "doctor shopping" for narcotics and selling them pay three times what they made and go to jail for a year. Same for patients selling blood pressure pills (this is a big racket for Medicaid patients) - doctors are usually suspicious of healthy looking patients seeking narcotics, but see a Medicaid patient who is on expensive blood pressure pills, says they ran out and can't contact their doctor - they will usually get a prescription. You can make a nice income on welfare doing this.


10. Eliminate health insurance companies, except for people who want to buy extraordinary coverage like for the $90,000 prostate cancer drugs. Do like we did in Ontario - fee for service with the fees paid by taxpayers via a Department of Health, the fees negotiated annually by either state or national medical associations.


11. Electronic medical records THAT WORK. Right now we are in the "pre-internet" era of EMR. There are a thousand different ones, they are very expensive, doctors pay the full amount, and NONE OF THEM CAN TALK TO EACH OTHER. I worked for a long time in an ER in Florida in an area where elderly people from the north came to winter. They would get sick all the time and come in not knowing their allergies, meds, or medical history. It was a nightmare. If I hear "I'm on a little white pill for blood pressure" one more time I may scream!


With a national standard EMR I could find everything I needed to know with a few mouse clicks. It will be a disaster if this info is stolen or hacked, so the punishment must be severe - TEN YEARS in prison WITHOUT PAROLE, and a hefty fine. No excuses. Set up something with Interpol and the UN so this applies to all countries. And, since EMRs would benefit patients, doctors, and the entire country, doctors and hospitals pay half, the government pays the other half.


12. Get rid of the bad docs/nurses/hospitals/ etc. I'll just speak for the docs here - there are two kinds of bad docs - ones who are bad usually due to lack of knowledge or drugs/alcohol but WANT to be good, and those who are bad and don't care. The second ones are immediately banned from healthcare for life. The first group gets extensive education/rehab, whatever they need. Then close monitoring. In my experience, most of them will turn out to be good docs. A few won't, and get banned from healthcare for life.


13. Finally, immediately outlaw high fructose corn syrup and foods made with trans fats. We know they are poisonous. Again, minimum one year prison for the CEO and board of directors of any company that violates this law, whether it's a mom and pop shop or Kellogs or McDonalds.


That's it, except for a few tweaks. Fifty percent cheaper, everyone gets what they need.

Thank you, Ishabaka. Here is a story Ishabaka sent recently that highlights the consequences of fast-food on human health:

This is an article from the July 2, 2012 issue of Circulation, the journal of The American Heart Association. It shows how frequency of eating fast food per week increases the risk of heart attack - up to 80% if eaten four or more times per week! This is a highly respected medical journal, not some crackpot website.

Western-Style Fast Food Intake and Cardio-Metabolic Risk in an Eastern (Asian) Country.

Conclusion: "Western-style fast food intake is associated with increased risk of developing type 2 diabetes and of chronic heart disease (CHD) mortality in an eastern (Asian) population."


* * *

And this from Zero Hedge - want to live to 100? Here's how:

The Centenarian Diet

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Matt's picture

I think you misunderstand the above post. the plan does not profit corporations enough, so it will not be implemented. In fact, most of the proposals are anti-corporate/special interest; corn farmers, big pharma, fast food, etc.

I'm in Canada and where I am it's $50 for an ambulance ride and $25 to get a doctor's note (to prove to employer you were actually sick from work). Having a small fee for most services seems a good way to prevent abuses.

Rather than outright banning certain substances, an alternative would be feebates, to charge an extra tax on unhealthy foods, drinks, cigarettes, etc. and subsidize the price of healthier foods, as well as put towards healthcare since we know smokers cost $5000 per year more than non-smokers and morbidly obese people cost $8000 per year more.

Although there is no way this would get implemented with so many older people around, I think a system of declining government health subsidy as you get older would be a more fair way to allocate health resources. 100% free from conception to 18 years, 75% from 18 to 35, 50% from 35 to 50, 25% from 50 to 65, and 0% from 65+. I don't think we should spend an infinite amount of money extending some people's lives; if you want to get knee replacements and hip replacements and live to 100, do it on your own dime, you had 40+ years to save up for it.

northerngirl's picture

Why not just keep the government out of health care?  I could care less if you smoke, drink too much, or are over weight.  I'm not the one having to live with the choices of a bad diet, smoking,etc., however, I do have to live with an over reaching government.  If you want to eat too much, smoke, or drink that is a personal choice.  Government health care is nothing more than an excuse for a bunch of people sitting around deciding what you can and cannot do with your life.  Get a hobby!  The less government involvement the greater the decrease in the cost of health care.



GoldenTool's picture

+100 on this.  


When will people realize the system is the problem, but lets keep making it bigger.


"Do unto others."

Matt's picture

Without government, corporations would not have to disclose what is in the food you eat, so how could you make an informed choice? How would you know which loaves of bread are loaded with HFCS, how much salt is in it, etc? Are you planning on doing checmical analysis on everything you purchase and do your own studies to determine if it is toxic or not?

object_orient's picture

If there is consumer demand for food product labels, they will be provided in a free market. You'd pay more for them, right? As it is, the FDA interferes with informed choice. Food isn't allowed to be labeled non-GMO, for example, because it might stigmatize Monsanto frankenfood. Still think the FDA is on your side?

James_Cole's picture

Not to defend the FDA. But on the issue of free markets:

"If there is consumer demand for food product labels, they will be provided in a free market. You'd pay more for them, right?"

Why do people think in such simple terms.........

One of the paramount features of making money in a free market capitalist system is OBVIOUSLY secrecy / deception.

If the key to your products success is misleading the public about it, then there will never be a point at which the benefit of labelling your product would outweight the cost. 

I'm not advocating a gov solution, just pointing out the obvious. 

StychoKiller's picture

Unlimited Liability and "Loser Pays" would fix a lot of civil problems...

GoldenTool's picture

Strawman much?

Gee, I think I'd start a bread company and advertise how healthy my bread is, there by advertising what is in it.  Much better then our competitors, see we did a chemical analysis of their bread and these are their ingredients.  So eat the goldentool brand bread.  Try it I dare you...


Then people make decisions.  Gee do I go cheaper and eat crap or do I try and eat healthy.  But hey if you know someone else will pay for it who cares.  Guess what someone else pays for my health care also so who cares.  Doesn't matter what I do right the system has my back...  For the people that want to eat healthy bread not so much, now they are paying for your decision and someone else's.


The owners sit back and laugh, because really, all the costs get passed off to those that do the work, pay the rent, and pay the taxes.  That's right keep chugging slaves and make sure you argue among yourselves a lot, as a matter of fact fight it out for this handout...


Now that being said, I am for a certain level of socialism, because at this point machines do the majority of work, a basic standard of living really should be an entitlement.  How this is used should be up to the individual.  This cleans the board of excuses and makes for an even playing field.  Everyone knows you have the "money" and the ability to keep your house painted and put food on the table or go buy iphones and eat those instead, your hunger is not my problems. If you want the perks do the work. What we have is a system of privileges to the few and hand outs to the many with no financial equality in between.  Those who control the flow of money truly do control the system, from the top to the bottom, and in between.


IMHO,I can't see how government has increase standard of living in the last 100 years.  You could maybe make that case for infrastructure projects, but that's it.  Even then the states could have and probably would have done the work, if the population of the state wanted it .  At least then when you disagree with policy you move to a different state where people share similar opinion.

ceedub's picture

Have fun fighting giant mega corp insurance company to get them to pay what they owe with no government help.

"we'll vote with our dollars and go elsewhere!" have fun when they're the only game in town like it basically is now.

Anusocracy's picture

Thanks God!

Only you can know that they'll "be the only game in town".

I sure wish I knew everything like you do.

Miffed Microbiologist's picture

I agree with you northerngirl in spirit but since I'm here working in the trenches so to speak I have a question. A 52 year old man weighing 460 lbs came in to my hospital last month. He was sitting on the couch watching TV and 3 vertebrae in his back broke spontaneously under his weight. They brought him to the ER in agony. The drs cannot operate because of his weight and other numerous complications (diabetes, heart disease, kidney disease, hypertension, hypercholestrol) and is on 25 different meds. He has a MRSA infected toe which is now gone into his blood. He's been in intensive care for about a month and will most likely die there. I'd be surprised if the final cost of his care is under $500,000. So how do we prevent or fix this? Obviously it's too late for this guy but he represents many patients I see everyday. I'm willing to bet he didn't get in this state of affairs eating celery sticks. So do we regulate his food so this never happens? I think most here say no, he has a right to do this to himself. Okay now what?Would everyone here on ZH contribute a dollar to his care? I bet many would say " not my problem". Well, guess what, you and I are paying whether we like it or not. It's easy to be an arm chair critic when these issues are presented in a blog for debate, it's another to watch it happen to real people every day and see the suffering. The choices we must make before healthcare collapses will be difficult and painful for all but the 1%.


Matt's picture

Triage. You sir, are not going to make it, so we are going to allocate our resources towards saving the lives we can. Sometimes, there is no solution that makes everyone happy.

Miffed Microbiologist's picture

Yeah Matt, that unfortunately will probably be the outcome of this scenario eventually. It was really telling to read the end of this guy's chart where the dr wrote " it is difficult for this patient and his family to grasp the severity of this situation". This guy really probably thought he was going to get fixed up and go home to sit in his chair, once again enjoying his junk food and TV. Are we really so deluded in this country now?


Anusocracy's picture

I don't feel sorry for him.

I feel sorry for the million or so people killed by the US government over the last twenty years.

spastic_colon's picture

and those that live healthier lifestyles should enjoy the health care savings, unfortunately, obamacare won't allow this to happen

Beam Me Up Scotty's picture

If you are fat, smoke, eat poorly and don't exercise you should pay double or triple or more the healthcare premiums that a healthy person pays. There is no financial incentive at all to be healthy. The more healthcare you use the more you should pay.

Spastica Rex's picture

And tax the living fuck out of those sugar death trap Super Big-Gulps. And turn all fat people into food for the thin, fit, fair supermen. FORCE EVERYBODY TO DO THE RIGHT THING OR KILL THEM.

spastic_colon's picture

theres the are still penalizing choice, the manufacturers of those "sugar death trap Super Big-Gulps" are merely supplying demand

ceedub's picture

Supplying demand with huge government subsidies for corn and other things.



Joe Sixpack's picture

Sorry, Spas, Bloomberg already beat you this one (at least the big-gulp part; though no one would suproised of the soylent green part was proposed).

Spastica Rex's picture


It's a cookbook!

Different sci-fi, I know. Similar sentiment.

dogbreath's picture



You're such a comedian, lol

Matt's picture

It would be easier and more granular to apply the taxes at point of sale of the unhealthy goods, rather than to screen people all the time and try to get the money through larger premiums, I think.

KK Tipton's picture

Yeah! Sneak it in. That's the ticket!

GoldenTool's picture

Yes because more tax is always the best answer to any problem.


O yes don't forget all taxes must be paid in frn.




Let people opt in or out of this "system."

Matt's picture

I believe that property taxes, and specifically the ability to take away someone's home if they cannot pay, is wrong.

I'm talking about a usage fee; if you choose to consume goods that are going to make you sick, you prepay towards the inevitable medical treatment the consumption of said goods is going to cause.

Without public healthcare, if people were using health insurance from a private company, that company would want you to pay for unhealthy choices the same as a public healthcare system should. Most life insurance companies either do not insure smokers or charge quite a bit more.

A system with niether public healthcare nor private insurance, where everyone had to pay in full at the time they recieve the service from the doctor, would work far more for the wealthy.

Freedom In Your Lifetime's picture

While I can't say this with any certainty, I'm fairly confident what you suggest would be the outcome of completely removing government from the healthcare picture.

BeanusCountus's picture

This is such bs.  Long-term cost of healthcare has little to do with anyone's habits.  Vast majority of EVERYONE'S lifetime expenses occur in the last few months of life.  Everyone dies.  Bottom line is the longer you live the more you cost.

johnQpublic's picture

i smoke


i support your suggestion, but i shouldnt have to pay so much tax on a pack of smokes


kaiserhoff's picture

Depends on what you smoke;)

vast-dom's picture

i'm on the healthy beyond okinawa diet and have zero health issues. high fructose corn syrup is only ONE molecule different from BOOZE. People are cracked out on their poisonous diets. I'm all for legalizing ALL drugs so I can't say ban toxic sugar water and twizzlers, but i can say that there should be labels on coke and corn flakes akin to cigarettes. i also believe we should follow Canada with healthcare for all and not this bullshit ObamaCare taxation nonsense. The problem is special interests and corporations will not agree to this and they are the masters.

tmosley's picture

How about we give them treatment based on their contributions to society.  If they have contributed greatly, they get better care, whereas if they have contributed nothing, then they get less.  We could even distribute little tokens or coupons of some sort that could be used for medical care based on the amount and quality of goods and services provided to others.  These tokens or coupons could be traded to others in exchange for goods and services as desired, so that the drain on society from their consumption reduces the amount of medical service they can get.


Matt's picture

Too easily corruptable. Join The Party and get "Best Contributor to Society" stamps, comrade!

CharlieSDT's picture

I think he means money. 

BeanusCountus's picture

This is such bs.  Long-term cost of healthcare has little to do with anyone's habits.  Vast majority of EVERYONE'S lifetime expenses occur in the last few months of life.  Everyone dies.  Bottom line is the longer you live the more you cost.

Hohum's picture


It's good that bad spelling and grammar will not kill you.

hedgeless_horseman's picture



"No mention of EMTALA and the anti-trust exemptions for the health care industry within? Then no solution," said Chuck Bone. 

Exactly, and holding providers to anti-trust standards, but not the insurers, makes no sense.  Unfortunately, exactly zero of our politicians truly understand any of this.  The law, just like HIPAA, was written by the health insurance lobby.

Healthcare and health insurance are not the same thing, despite what our corprotocracy and captured media tell you.

In the mean time, grow your own, raise your own, drink your own, and eat at home. 


Dr. Engali's picture

I prefer to hunt my own protein, but I do like to grill it at home.

francis_sawyer's picture

Love those pics HH!... love 'em... I'm not greedy ~ I'll take 'either one' of the NY strip sides, or the fillet sides of that... My only question is... Milk?... I'd take a Lone Star to go w/that... Looks like the side is zucchini & tomatoes mostly, correct?

Edit: oops ~ didn't see below

kengland's picture

Exactly. My grass fed Highlander's have more omega-3s than the fish the Okanawan's eat. The key is stop eating the shat coming from the factories. Go see how the beef, pork, birds you eat are raised. Eat fresh produce for two of your meals. It's that simple

TWSceptic's picture

How come some members have picture posting rights and others don't? I'm not envious, just like to know.

lunaticfringe's picture

You have not taken the secret oath of allegiance. Nor do you know the password. No ticky no laundry.

Ying-Yang's picture

The Tylers have to grant permission.

If you are witty and wise you may get to as well.... smile!

fuu's picture

Article contributors can post pictures. Somewhere along the line HH had an article posted.

hedgeless_horseman's picture early and often, just like voting in Chicago.

Piranhanoia's picture

Your picture is the doctor's description of death by food

hedgeless_horseman's picture



Home-grown grass-fed grilled beef, fresh stir-fried vegetables from the garden, and fresh raw milk from our cow is a doctor's prescription for death by food?  I wonder what this doctor eats for dinner? 

memyselfiu's picture

He's read the China Study donchanow? Meat is poison! LOL

A little redder for me, please. And my 90 year old grandfather who used to make the real 'pork rinds' from the fat backs and chew on them constantly....liked it red as well

_SILENCER's picture

That's good eatin, right there