Reprinted with permission, verbatim:

By JOEL W. HAY

Suppose you went to your local car dealership and they said they had a great deal on a new car model, the "IMRT." Then they told you that the IMRT costs 20 times what the older model costs and probably isn't any better. You'd immediately walk out the door. But if you are a Medicare or Medicaid patient with prostate cancer and the "dealer" is your local urologist, and the IMRT is "intensity-modulated radiation therapy," it sells like hotcakes when it is 20 times more expensive than prostate surgery and provides no better outcomes for a majority of patients.

IMRT is the poster child for what is wrong with American medicine. The 20-fold higher price doesn't matter much to the patient because it's mostly covered by Medicare or other insurance. However, the urologist that prescribes IMRT can get hundreds of times as much from Medicare as they would from the more conservative treatment approach of "watchful waiting" – monitoring disease progress through routine office visits. As UC San Francisco urologist Dr. Cooperberg said, "Doctors do what they're paid to do. If you tell them they can earn $2,000 for surgery or $37,000 for IMRT, what do you think will happen?"

It's actually even worse than that. Some doctors are allegedly skirting the Medicare laws by secretly investing in IMRT facilities and then pocketing additional payments by steering patients to those facilities for useless treatments.

Expensive questionable treatments and expensive treatments used in questionable cases are a dime a dozen in American health care – actually billions and billions of dollars a dozen. It's par for the course for new cancer treatments to cost hundreds of thousands of dollars per patient and add only a few months of survival, often with pain or poor quality of life.

In 1996, the average drug cost for advanced colon cancer was $500 and average patient survival was 11 months. In 2006, the average drug cost for similar patients was $250,000 and average survival increased to 24 months. With genetic testing and gene-specific therapies, it is conceivable that after 2016 colon cancer treatment costs will be millions of dollars per patient. And colon cancer is almost fully preventable with screening tests that cost a few hundred dollars.

Even though a third of American health care is useless or actually harmful, Medicare and other health care payers just can't seem to say no to anything. By federal law Medicare is not allowed to evaluate the cost effectiveness of alternative drug treatments. By federal law, the Obamacare center for outcomes evaluation (PCORI.org) is forbidden from evaluating the costs of alternative health care treatments.

This is why we are facing a $60 trillion unfunded liability for future Medicare costs and why all of the increases in average worker compensation over the past two decades have been sucked away by increased health care costs. Washington is stalemated from doing anything sensible about health care costs with the Democrats screaming that reducing the rate of growth of Medicare spending is "pushing Grandma's wheelchair over the cliff," and Republicans screaming that it is "decisions by Death Panels." Unlike every other advanced democracy, our politicians can't have an adult conversation about meaningful health care cost reductions.

The real answers are complicated. Many health care technologies start out with very high costs and questionable value but improve over time with experience. America is No. 1 in biomedical research and health care technology advances and the rest of the world free rides on our innovative treatments and usually refuses to pay market prices for them. While many expensive cancer drugs only add a few months of life expectancy, the doctor never knows whether the next patient may be one of the lucky few that gains full remission from these treatments. And the cost isn't coming out of the doctor or patient's pocket.

But how many cancer patients and their families would pay $100,000 for a few more months of expected survival if the money were coming out of their pockets? Stopping smoking, exercising and eating a healthy diet will unquestionably add a few months of expected survival for almost anyone, but Medicare, Medicaid and private insurers don't pay $100,000 per patient to get you or me to switch to a healthier lifestyle.

Joel W. Hay is professor of Clinical Pharmacy, Pharmaceutical Economics at USC's School of Pharmacy.