PDF Summary:The Price We Pay, by Marty Makary

Healthcare costs in America are out of control, and many people are drowning in medical debt. In The Price We Pay, surgeon and researcher Marty Makary examines the root causes of the healthcare pricing crisis, revealing how hidden fees, middlemen, and financial incentives drive up costs while encouraging unnecessary and sometimes harmful medical treatments.

Makary explains how pharmacy benefit managers profit from concealed rebates, how overtreatment has fueled public health crises like the opioid epidemic, and why doctors estimate that roughly one-fifth of all healthcare provided is unnecessary. He also discusses potential solutions, including price transparency and measurement systems designed to evaluate whether medical care is appropriate and beneficial. You'll come away understanding the financial mechanisms behind inflated healthcare prices and the systemic issues that prioritize profit over patient care.

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PBMs Under Increased Scrutiny

Since the publication of Makary’s book, PBMs have come under increased scrutiny for their rebate practices and ownership of dispensing pharmacies. In 2022, the Federal Trade Commission launched an investigation into the rebate arrangements between PBMs and drug manufacturers, aiming to determine whether these practices contribute to higher drug prices for consumers. The investigation focuses on whether PBMs’ retention of rebates creates incentives to favor higher-priced drugs over more affordable alternatives. Additionally, several states have introduced legislation to increase transparency in PBM operations, particularly regarding their ownership of pharmacies. These laws aim to prevent potential conflicts of interest and ensure that PBMs prioritize patient care over profit maximization. The increased regulatory attention reflects growing concerns about the impact of PBMs on drug pricing and access to medications.

Incentives for Providing Unnecessary and Excessive Care

Makary argues that financial incentives drive unnecessary care and overtreatment. He defines overtreatment as providing healthcare that's probably more harmful than beneficial.

He notes that doctors think 21% of all healthcare that's provided is unnecessary. This includes 22% of prescribed drugs, a quarter of medical examinations, and 11% of surgeries. Overtreatment is a crisis in public health, causing harm to patients and squandering money. This is not solely about administrative waste; clinical waste is a concern as well.

Makary highlights that the problem of overtreatment extends beyond the United States, affecting public health worldwide. The issue of appropriate medical care exists in the U.S. but could be significantly more severe in some developing nations.

Overtreatment Versus Under-Treatment

Makary’s framing of overtreatment as a public health crisis may not apply to all health systems. In very low-resource settings, the main problem is often under-treatment, not overtreatment. In these contexts, people struggle to access even basic, evidence-based services. The main challenge is providing essential care for common conditions like infections, injuries, and maternal health. While overtreatment is a concern in some middle-income countries, in the poorest settings, the priority is expanding access to proven interventions. Makary’s argument about unnecessary care may not resonate in places where the health system’s main problem is too little care, not too much.

In the following sections, we’ll discuss specific examples of unnecessary medical treatment and ways that measuring appropriateness can help decrease needless procedures.

Specific Instances of Overmedication

Makary cites overprescribing opioids as a significant case of overtreatment. He explains that the opioid epidemic is a problem specific to the U.S. Most doctors worldwide reserve opioids for the classic indications—like terminal cancer, burns, and major surgery. However, in the US, the medical community was misled into believing that opioids lacked addictive properties and encouraged to prescribe them generously. In 2015, US pharmaceutical companies manufactured 14 billion opioid tablets, which is roughly 40 per person in the United States.

Makary notes that now the US government and insurance firms are capping opioid prescriptions, but these caps apply to all individuals regardless of their situations. He argues that guidelines for prescribing opioids should be tailored to specific procedures since every operation varies in how invasive it is and how painful it is.

The Global Opioid Epidemic

While the opioid epidemic is a significant issue in the US, it’s not unique to the country. According to a 2019 study by Louisa Degenhardt et al., opioid dependence is a global problem, with high rates of opioid use and related health issues in countries like Canada, Australia, and parts of Europe. The authors found that in 2016, there were an estimated 26.8 million people worldwide with opioid dependence, and the highest rates of opioid-related health problems were in North America, Australasia, Eastern Europe, and parts of Western Europe, North Africa, and the Middle East. This suggests that harmful patterns of opioid use and their associated health losses are spread across multiple regions, not just concentrated in one country.

The Concept of Appropriateness & Misdirected Efforts

Makary believes that evaluating how suitable care is can help identify and cut down on needless medical procedures. This involves evaluating whether healthcare treatments are necessary and beneficial for those receiving care. This can improve patient outcomes and reduce healthcare costs. He explains that unnecessary healthcare is a significant problem in the US healthcare system. Doctors estimate that 21% of all medical care is unnecessary, including 22% of medications, 25% of tests, and 11% of procedures. Unnecessary care can injure patients and squander healthcare dollars.

(Shortform note: Evaluating how suitable care is can reduce unnecessary care and improve patient outcomes by creating social and professional pressure to provide more appropriate care. When clinicians receive feedback on how often their treatments are necessary and beneficial compared to their peers, they may feel motivated to improve their performance and avoid being seen as providing substandard care. This can lead to a gradual shift in practice patterns, as clinicians strive to align their care with best practices and avoid unnecessary interventions. This approach leverages the power of social norms and professional standards to drive positive change in healthcare delivery.)

Makary highlights the Choosing Wisely program, funded by the Robert Wood Johnson Foundation, which challenged medical specialties to create a list of often unnecessary tests and treatments. This program raised awareness about overtreatment among physicians and those receiving care. The following phase involves developing impactful measurements of quality to minimize needless procedures and decrease healthcare costs. Additionally, the aim is to use data transparency through the Improving Wisely program. The Global Appropriateness Measures consortium helps healthcare organizations assess how appropriate their care is using data. These strategies can assist people seeking care and could enhance quality and reduce healthcare costs.

(Shortform note: Programs like Choosing Wisely and Improving Wisely are part of a larger movement in medicine called quality improvement. This movement began in the 1990s and early 2000s, when the Institute of Medicine published a report called Crossing the Quality Chasm. This report argued that clinical work is a system that can be redesigned to improve outcomes. It also argued that evidence and patients’ priorities should be the criteria for redesigning the system.)

Pathways Toward an Accountable System

Makary argues that transparency in pricing and invoices is essential for holding healthcare accountable. Without it, people receiving care cannot make informed decisions about their care or understand the costs they are incurring.

(Shortform note: Since Makary’s book was published, the US has implemented new rules requiring hospitals and insurers to post detailed price information online. This has led to a flood of raw pricing data, but it’s unclear how useful it is for patients.)