Should we blame overdiagnosis for rising health costs?
Should we blame overdiagnosis for rising health costs?
How to fix health policy.
July 22 2009 11:56 AM

Nobody's Normal Anymore

Should we blame overdiagnosis for rising health costs?

Peter Orszag. Click image to expand.
Peter Orszag

Healthy people, goes the popular doctors' joke, are simply those who haven't gone through enough medical testing. Excessive diagnostic evaluations with fancy body scans or blood tests will always find something amiss. Call these searches what you like—defensive medicine to ward off lawsuits, useless procedures to line doctors' pockets, patient-initiated testing from the worried—but observers like Peter Orszag, director of the Office of Management and Budget, estimate they contribute a good chunk to the estimated $700 billion in wasted annual health costs.

Taken another way, however, the joke hints at the nature of illness in the modern world. In 2006, Harvard economist and Obama adviser David Cutler calculated what we get in return for our health care spending. Over the past 50 years, we've increased per-person lifetime health care costs by roughly $70,000, and the average lifespan has jumped seven years. The trends show that it's getting harder to save lives; in the 1970s, we got an extra year of life for only $7,400, but by the 1990s, each ran more than $36,000 (in inflation-adjusted 2002 dollars). That makes sense, since we've picked all the low-hanging fruit, so to speak. And though it's getting more expensive to buy life, Cutler puts the money in context. "According to virtually any commonly cited value of a year oflife," the economist writes, "the increased spending has,on average, been worth it."


Policymakers tend to speak glibly about the oceans of cash depleted by wasteful spending. But there's another way to frame the explosion of medical costs: We now recognize and treat problems that were previously hidden or never diagnosed—which is a good thing. Consider these sample statistics, all from generally reliable federal agencies: One percent of the population has celiac disease, causing anemia and other problems, one in 150 children tests positive for autism spectrum disorders, 2 percent to 5 percent of adults have an eating disorder, 20 percent of children are overweight, one in 22 pregnancies is complicated by a minor or major birth defect, and 10 percent of people have asthma. The list goes on. In the past, people just lived with these problems. Today, for better or worse, we do not simply let them go—and that costs more and more money.

It's tempting to complain that Americans today are wussy hypochondriacs, overmedicated and overtreated for all kinds of imagined disorders. Some of them no doubt are. But, to take my personal experience as an example, many aren't.

As a child, I coughed myself to sleep for years and slept with my head up on two pillows; today, it's clear I have allergic asthma. Growing up in New Jersey in the 1970s, I saw that all Indian grandmothers, like generations before them, stooped over from what we'd now call osteoporosis. For years, as a child, my wife suffered from chronic fatigue, later diagnosed as autoimmune hypothyroidism; when she was later anemic for more than a decade, an astute physician realized she has celiac disease. When my older son's speech was mildly delayed, some of my older relatives dismissed it as nothing; he later failed routine development screening, got formal speech therapy from the state, and normalized. A former radiologist who became forgetful, my father-in-law was told he was developing Alzheimer's disease. After he died, I requested an autopsy of his brain and was startled to get a call from federal lab concluding he had Creutzfeldt–Jakobcondition, possibly a variant of mad cow disease. When my younger toddler developed chronic belly pain and weight loss, he was tested for celiac disease, lead poisoning, and other unusual conditions; he was soon diagnosed with severe, chronic constipation likely related to milk intolerance (present in 2 percent of toddlers), which improved drastically with proper laxative use.

My family's overall health history—a collection of common problems punctuated by some rare ones—is fairly normal. And almost none of these conditions was widely diagnosed or treated a few decades ago; instead, many older women remained stooped, children grew up with delayed speech and chronic constipation, young mothers were told they were just tired and needed to stress less, some men were written off as senile, and many others lived sleeplessly and breathlessly.

One must hesitate from drawing larger conclusions from one's experience; after all, the plural of anecdote is not data. And one surely can argue there is a downside to modern health care. In an essay criticizing the "medicalization of everyday life," several Dartmouth-based doctors pointed to an "epidemic of diagnoses" advanced by special-interest groups, which must be stopped. The typical solution to such medical waste (most recently described in a New York Times Magazine article by utilitarian ethicist Peter Singer) is to ration health care spending, often with dubious mathematical formulae—in short, to starve the beast.

Unfortunately, these arguments rarely go beyond the broadest generalities. As I've argued, doctors certainly oversell the importance of some issues, like high cholesterol. But like many critics of modern medical care, the Dartmouth doctors see overdiagnosis everywhere they look and don't reliably separate the wheat from the chaff. They derisively state that coughing children are too often labeled asthmatic; "twitchy legs" and "impaired sex drive" are inexplicably considered medical problems; those who can't read are for some reason called dyslexic; those who are just sad are instead said to be depressed; and people with joint pain are termed arthritic. The subtext of their comments is, There's nothing wrong with these people.Yet they're still patients who can't sleep, breathe, read, or enjoy sexual relations. They seek help, and it's wrong to ignore them.

More importantly, that's not even where the savings may be found. The highest yield and most reliable way of cutting health costs are obvious to most health economists. For example, David Cutler's spending analysis clearly found that it costs far more to prolong the lives of the elderly ($145,000 per year gained) than the young ($31,600), and the rate of spending on the oldest Americans has grown the fastest.

To be serious about cutting costs, then, we must forget about separating worthwhile from worthless diagnoses—a red herring. Instead, we need to bring down the health costs of the elderly, who are the budget busters of our health care system. This is precisely the hardest political battle to fight. (Consider the recent battles over the Bush administration's resistance to expand the State Children's Health Insurance Program, which concerned an amount of money that's literally a decimal point rounding error of the Medicare budget.)

Every major health care bill in Congress focuses on expanding insurance. None realistically addresses the extraordinary health costs of our oldest citizens, which means we're just putting off the day of fiscal reckoning. In the meantime, at least, let's not blame people with dyslexia, erectile dysfunction, or restless leg syndrome for the mess.

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