The obstructionist party, GOP, being flushed out? Healthcare

[coyotewindsurf]

[mac]

An interesting article from a centrist perspective:

http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

[pueno]

[coboardhead]

[mac]

CB--I've now made me way through the article. It is gratifying to see that such a detailed analysis was published in Time Magazine, and the story was covered by PBS. It is equally disheartening that the debate over health care costs was not part of adult discussion when health care reform was being debated--and that the Republican's most important concern was handing Obama a policy defeat.

One of the telling facts in the article, from my perspective, was that the CEO of the Sutter Group, the large corporation that runs hospitals in the East Bay, makes over $5 million a year. There are very high salaries throughout management. My wife works as a volunteer at one of their hospitals, and they are at war with their nurses (http://www.sfgate.com/health/article/Nurses-to-strike-Bay-Area-hospitals-again-4048916.php)

If I had to boil down what I learned, and why the right's talking points about the market system are wrong, is that there actually isn't a market. There are a few reasons for this. First, hospitals are large enough institutions, especially in small communities, that they violate the idea of anti-trust protections. There is no actual competition for patients in most markets. Second, most hospitals, and those with the highest costs noted in the article, are non-profits that actually run at great profits. The average is nearly 12%--nothing else in the United States is making that kind of money. They have plowed the excess fees beyond that reported profit rate into very high salaries for executives. Third, where Congress has intervened, most notably in the control language when Medicaire added drug coverage, that intervention has prevented cost control rather than encouraged it. The article includes some cogent criticisms of Obamacare's shortcomings in this respect.

The traditional concerns of conservatives are relevant to how we got here in the first place. It seem clear that the large role of government in the health care system over the last thirty years has encouraged and accelerated the increased size of health institutions. Larger institutions are better able to lobby, and, I think implicit in the presence of highly paid CEO's at the top, game the system to increase their profitability. The hospitals spend much more on lobbying than gun and oil lobbies, spread it in a more bi-partisan manner, and have protected themselves well. The result has been a gravitation to increased procedures using expensive equipment and expensive drugs that qualify for coverage and have high profit margins.

The surprise in the article was the efficiency of Medicaire, and its effectiveness where Congress has not tied its hands. The administrative overhead per claim is about 1/4 of the private sector. Rather remarkable.

[coboardhead]

Mac...

I too was surprised that Medicare processes claims at such a low cost. However, it has been more expensive for the provider to bill Medicare, so that may be part of the reason.

Hospitals are playing hardball right now. Even the rural hospital in my area is buying up physician practices and then firing half the physicians. Their goal seems to be to control the health care market.

The hospitals will not publish lab or procedure fees etc. I know of no other industry where folks buy a product without knowing the costs up front.

Medicare is no saint in cost containment. Right now, if a patient has excellent supplemental insurance an MRI can be had on a whim. An 89 year old relative of mine had an MRI because his leg was numb. He had been in bed due to an arm injury for several days. Anyone would have a numb leg!

When I wrecked my bike, I decided not to enter the $10000 world of potentially unnecessary tests even though a simple xray would probably have been a good idea. It is too easy to have the control of one's treatment taken over by the hospital's billing machine.

[mac]

Good points. One thing I forgot to mention is that fear of malpractice lawsuits leads to overtesting. MRI's rather than X-rays. So we have a pull for monetary reasons, in that the profit margins for expensive machines are very high once they are paid for, and a fear factor. Sensible tort reform seems to make sense in this construct.

One has to wonder about the value added of the vast system of billing. When my wife and I were in a head-on car crash nearly 11 years ago, they broke everything that happened into a billable chunk. I love my care at Kaiser, but they were a nightmare as an insurance agent for an out-of-state accident. There were over 100 claims and rejection of claims letters from the hospital that were sent to me, until my lawyer took over. Most of the letters they sent denying claims were form letters--and about half were factually wrong. I'm certain the clerks at the hospital--in diverse departments like nursing, radiology, the orthopedics group, etc., made errors in coding. We found out that they are very poorly paid, and generally don't know a lot about medicine. But I still wonder, a single-payer system with the kind of cost control that Medicare seems to have, would eliminate a lot of this clerical work that doesn't add to the treatment, but tries to get, or dodge, payment. Kind of like Congress these days...