Much of my testimony is drawn from a forthcoming book I co‐authored with Professor Charles Silver of the University of Texas on the American health care system. The book, which is titled Overcharged: Why Americans Pay Too Much for Health Care (forthcoming, 2018), explains how the ways in which we have decided to pay for health care services has predictable consequences on the cost and quality of the resulting goods and services. To put it bluntly, we pay too much, and get too little (in terms of the quality and value). The book also explores how these same features make our public programs extremely vulnerable to fraud, waste, abuse, and overutilization. The book concludes that if we want to address these problems, we must change the incentives that our current health care system creates — for both providers and patients.
None of this should come as a surprise. The HHS OIG and GAO have submitted scores of reports on these matters. Criminal prosecutions and civil enforcement actions have become routine, along with record‐breaking payments from hospitals and pharmaceutical companies. The GAO has long labeled both Medicare and Medicaid as “high risk” programs.1
Today, we are here to focus on the opioid epidemic. I commend the Committee for considering these issues. The opioid epidemic has had a staggering cost — whether framed in terms of lost and destroyed lives, broken families and marriages, medical expenses, or lost productivity. The sources of the epidemic are complex, as are the trade‐offs with the various strategies for addressing it.
Today, my goal is to flag four important issues: (1) the seriousness of the opioid epidemic; (2) the complexity of the causes of the epidemic; (3) the ways in which the design of the Medicare and Medicaid system make them vulnerable to abuse and over‐use of the sort that has fueled the opioid epidemic; and (4) the role that patients have played in health care fraud and overutilization.
Seriousness of the Opioid Epidemic
I suspect Committee members are well aware of the dismal statistics about the opioid epidemic, but it is useful to review some of the figures. The death toll from opioids has climbed dramatically in recent years.2 The CDC’s latest figures (as of January 7, 2018) indicate that there were 66,817 drug overdose deaths in the 12‐month period ending June, 2017, with roughly threequarters of that total attributable to opioids, and 40% attributable to prescription opioids.3
Certain states have been particularly hard hit. According to the CDC, “in 2016, the five states with the highest rates of death due to drug overdose were West Virginia (52.0 per 100,000), Ohio (39.1 per 100,000), New Hampshire (39.0 per 100,000), Pennsylvania (37.9 per 100,000) and Kentucky (33.5 per 100,000).”4
Comparing 2015 and 2016, there were “statistically significant increases in drug overdose death rates [in] Connecticut, Delaware, Florida, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia, and Wisconsin.”5
Finally, the consequences of the opioid epidemic go far beyond the death toll. In 2014, according to the National Survey on Drug Abuse and Health, an estimated 92 million Americans used prescription opioids; 11.5 million misused them; and almost 2 million had a use disorder.6 These figures reflect the substantial degree to which opioids are “widely diverted and improperly used.”7
Complexity of the Causes of the Opioid Epidemic
If we are looking for the root causes of the opioid epidemic, there is plenty of blame to go around. Prescription opioids are a controlled substance, so one needs a prescription from a physician or licensed health care provider to obtain them. Over‐prescribing is an unfortunate reality, with some physicians more overt about this than others. In our book, we describe the behavior of Dr. Alvin Yee, who found practicing in an office setting unduly constraining: