He winced in a way that made me feel his discomfort. It wasn’t overly dramatic. It was the response of a man trying to put on a brave face and hide his pain, but—as I gently laid my hands on his belly—failing against his best efforts. This man had real abdominal pain, the kind that is impossible to not immediately empathize with. I got concerned.

“How long has this been going on?” I asked, while my mind began to immediately tick through a differential diagnosis.

“Well it probably started a year ago, but got really bad about four months ago,” this otherwise healthy-appearing, 30-something-year-old man said.

We were in a small curtained-off area in the hectic Emergency Department at San Francisco General Hospital. I was an internal medicine resident in my last year of training. I started to wonder what in the world would possibly cause somebody to wait many months with severe abdominal pain and rectal bleeding before coming to see a doctor.

I asked a few more questions, verifying that he was indeed having bright red blood with his bowel movements, had lost at least 10 pounds over the last few months, and has dealt with nausea and debilitating abdominal pain ever since the end of last year.

So, I pulled out one of my most tried-and-true questions that I had picked up during residency:

The Emergency Department had already put him through the CT scanner prior to calling me to admit him to the hospital, to ensure that he “didn’t have something really bad going on,” which I have to admit that if you had put your hands on his abdomen you would probably think was a reasonable (if not very eloquently phrased) concern.

The CT scan showed inflammation of his colon in a pattern that the radiologist said was very likely Crohn’s disease.

His lab tests returned with severe anemia (hemoglobin of less than seven) and an undetectable iron level, revealing that the bleeding had been going on for a long time. I told him that I thought he needed a blood transfusion and a colonoscopy procedure in the morning by one of our gastroenterologists.

Then he asked me one of my most feared questions:

Now, the thing is that I had actually spent more than the past year working on cost awareness for residents and looking into issues related to costs of care, and even I couldn’t answer this question in a straightforward and truthful manner. This man needed these things done and costs be damned. Sure, but let’s be honest, his concern is very real.

(Christopher Moriates, Costsofcare.org, May, 2012)

It has been well established that in general both patients and physicians do not know how much medical interventions cost their patients or the medical system.^1-5 Patients often experience “sticker shock” at the time they obtain a bill weeks after having received some form of healthcare. Comedian Julian McCullough explained this dreadful situation on an episode of National Public Radio’s “This American Life”⁶: “I found out [about the cost of my hospitalization] when I got a bill in the mail for $45,000—in the mail, with the other mail, like it was just more mail. But it was a bill for $45,000—in a white envelope, like all the other envelopes. That should not come in a white envelope—that should come in a black envelope with a skull-and-crossbones on it, and when you open it a picture of your hopes and dreams falls out and burst into flames, because now you owe the hospital $45,000.”

This chapter introduces how the landscape of cost consciousness in healthcare is rapidly changing, for both clinicians and the public. Despite the burgeoning attention paid to “out-of-control” healthcare costs recently, this is not a new problem. Unaffordable healthcare—on both national and individual levels—is like a cancer that developed decades ago and without adequate treatment has inexorably festered, grown, and metastasized to affect other economic sectors of our society.

Some physicians and ethicists may warn that the separation of medical care and costs is an important, necessary aspect of the medical profession, ensuring a firewall between clinicians’ medical decisions and their financial incentives (see Chapter 6). However, this separation is actually relatively new to the profession of medicine. As previously discussed, prior to the rise of medical insurance, basically all medical care was paid for by out-of-pocket cash payments and/or by bartering (see Chapter 2).⁷ Therefore physicians and patients were often acutely aware of all the costs associated with their medical care and delivery. Even as late as the 1960s, about 50% of healthcare costs in the United States were paid out-of-pocket.⁸

As third-party insurance grew to dominate the market, healthcare costs became less transparent and more difficult for individuals to cover. In 1965, it was recognized that healthcare costs had begun to pose a menacing threat to Americans’ wallets. As he signed Medicare into law, President Lyndon B. Johnson proclaimed: “No longer will illness crush and destroy the savings that [older Americans] have so carefully put away over a lifetime so that they might enjoy dignity in their later years.”⁹ As previously discussed in this book, Medicare has played a critical role in providing healthcare coverage for the elderly, but it has not necessarily fulfilled its promise to avoid damaging personal expenses for patients and their families, particularly during the last few years of life.^9,10

By 1969, President Nixon declared that healthcare costs were a crisis.¹¹ At this time, healthcare represented an “unsustainable” 7.5% of the gross domestic product (GDP). Over the past 45 years, the crisis has not been averted; healthcare spending per capita has relentlessly increased each year since.¹²

Why has this happened?

There are many driving factors that have contributed to this current situation. As discussed in the preceding chapters, inflated and irrational medical pricing, lack of cost transparency, clinical inefficiencies, and inappropriate overuse have all played important roles.

“The tragedy of the commons”

There is also a broader behavioral science perspective that may best illustrate our situation. In a 1968 article in “Science,” biology Professor Garrett Hardin described what he referred to as “the tragedy of the commons.”¹³ He noted that much like adults playing a game of “Tic-Tac-Toe,” this dilemma did not have a “technical solution.” He portrayed an open pasture shared by a group of cattle herdsmen. In this scenario, naturally each herdsman will want to keep as many cattle as possible. This will likely work out fine for centuries since conditions such as wars and disease keep the numbers of both men and cattle well below the carrying capacity of the land.

However, social stability is reached one day and “the inherent logic of the commons remorselessly generates tragedy.” The reason is that each herdsman rationally seeks to maximize his own gain. They sense that adding a few more cattle to their herd will directly benefit themselves. On the other hand, a few more cattle will have only a minimal effect on the overall general welfare of the group. In other words, all will share the incremental cost on the land of adding another animal. Of course, as each herdsman behaves rationally in this way, eventually the meadow will become overgrazed resulting in catastrophe that will affect all. Hardin concludes: “Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited.”¹³

“Ruin,” warns Hardin, “is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.”¹³

Much like Hardin’s grazing area, medical resources are also finite. And many patients and clinicians have doubtlessly thought, “Well, what’s one more MRI, even if it might not be necessary?” Over decades, this behavior has eaten away at medical resources, and now the toll is being paid across various sectors of society.

In 1975, Dr Howard Hiatt (then Dean of the Harvard School of Public Health) famously repurposed the “tragedy of the commons” for healthcare, calling on physicians to collaborate with other experts and the public in order to protect the “medical commons.”¹⁴ However, “not only have we failed to rise to his challenge,” University of California, San Francisco (UCSF) Professor Dr. Molly Cooke noted in 2010,¹⁵ “but our overconsumption and waste are now compromising our ability to address other pressing social needs and national priorities.”

Despite election cycles in the early 1970s, 1980s, and 1990s that included public mandates to make healthcare more affordable, progress has occurred in fits and starts. As Drs Andrew Auerbach and Robert M. Wachter from UCSF have put it: “Over the last 30 years, rounds of therapeutic treatments with cost consciousness and cost containment have been administered to the healthcare industry, with generally disappointing clinical response.”¹⁶

Starting back with the Great Depression, more and more people could not afford medical services. This reality led President Franklin D. Roosevelt to propose publicly funded healthcare programs. However, he was met with severe opposition from the medical profession, ultimately forcing him to remove these provisions from the Social Security Act of 1935.¹⁷ Many subsequent policy efforts to reform healthcare have also met staunch opposition by the medical profession. Broadly, President Roosevelt fought claims against “socialism,” President Johnson against outcries of “entitlement,” and President Clinton against vocal arguments in favor of “private markets.” All of these attempts largely suffered from a lack of meaningful physician engagement. By contrast, President Obama’s Affordable Care Act was bolstered by the physician-led Doctors for America, and ultimately was endorsed by the American Medical Association.^18,19 For the first time in US history, most major physician organizations were vocally and formally supportive of policy changes to provide more access to affordable healthcare.

Clinician-led efforts to address healthcare costs

Over the years, individual clinicians have attempted many times in a myriad of ways to implement their own efforts to address healthcare costs. One often-tried method has been clinician-led educational programs. The first published effort to educate medical trainees about the costs of care was undertaken in 1975,²⁰

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