[Anecdotes] Bitter Pill

I just finished reading the TIME article by Steven Brill “Bitter Pill” – something which should be required reading for anyone entering the health professions. Let me share some of its salient points.

• Health care “charges” are exorbitant:

“Dozens of midpriced items were embedded with similarly aggressive markups, like $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare, the government health care program for the elderly.”

That simple chest x-ray charge is way more than my hourly wage for seeing patients in the Emergency Room. Maybe I should just open up a hospital instead of working inside one.

“We may be shocked at the $60 billion price tag for cleaning up after Hurricane Sandy. We spent almost that much last week on health care. We spend more every year on artificial knees and hips than what Hollywood collects at the box office.”

Put in perspective, health care costs are crazily high. In the quest for achieving the triple aim – improved quality, better population health, and decreased cost – costs seem like the hardest aspect to grapple.

• The marketplace for health care does not function like the marketplace for iPods or Coca-cola or Honda Civics [*disclaimer: I own stock in all three companies whose products were just mentioned…so go out, by one, and help out my retirement account please].

“Unlike those of almost any other area we can think of, the dynamics of the medical marketplace seem to be such that the advance of technology has made medical care more expensive, not less. First, it appears to encourage more procedures and treatment by making them easier and more convenient. (This is especially true for procedures like arthroscopic surgery.) Second, there is little patient pushback against higher costs because it seems to (and often does) result in safer, better care and because the customer getting the treatment is either not going to pay for it or not going to know the price until after the fact.”

The thing that irks me most about market-oriented people is that they do not understand that health care is not a market. You don’t walk into the doctor’s office or the emergency room and ask for an appendectomy. You state your complaint – right lower abdominal pain, fever, and vomiting – and we use our $200,000 educations to figure out what you want to “buy” in terms of health care services. Medicine isn’t Burger King; you can’t have it your way.

• Insurance as it is currently designed fails at protecting patients from what it is supposed to do…preventing the risk of financial calamity as a result of a medical calamity.

“People, especially relatively wealthy people, always think they have good insurance until they see they don’t,” says Palmer. “Most of my clients are middle- or upper-middle-class people with insurance.”

This statement scared me to death. A single catastrophic illness can send ripples through a family’s financial stature such that there may be no chance for recovery. I really have to update my life insurance and disability policies now.

• Medicare is surprisingly efficient, inexpensive, and -although few realize it – is already quite ‘privatized’.

“The process is fast, accurate, customer-friendly and impressively high-tech. And it’s all done quietly by a team of nonpolitical civil servants in close partnership with the private sector. In fact, despite calls to privatize Medicare by creating a voucher system under which the Medicare population would get money from the government to buy insurance from private companies, the current Medicare system is staffed with more people employed by private contractors (8,500) than government workers (700).”

Many people advocate for a Medicare-for-all approach to fixing our national health care problem. I am not opposed to this even though I would prefer a 50-payer system where each state serves as its own insurer. Barring that, a private multi-payer system such as is currently employed in Switzerland could work too.

• People have to pay something for their health care otherwise they are destined to over-utilize.

“Another pattern emerged from a look at these bills: some seniors apparently visit doctors almost weekly or even daily, for all varieties of ailments. Sure, as patients age they are increasingly in need of medical care. But at least some of the time, the fact that they pay almost nothing to spend their days in doctors’ offices must also be a factor, especially if they have the supplemental insurance that covers most of the 20% not covered by Medicare…

…because his insurance company tallied it for him in a year-end statement — was that his total out-of-pocket expense was $1,139, or less than 0.2% of his overall medical bills. Those bills included what seemed to be 33 visits in one year to 11 doctors who had nothing to do with his recovery from the heart attack or his cancer. In all cases, he was routinely asked to pay almost nothing: $2.20 for a check of a sinus problem, $1.70 for an eye exam, 33¢ to deal with a bunion. When he showed me those bills he chuckled.”

I recently re-read portions of the RAND health insurance experiment which clearly laid out the concept that, among insured individuals, those facing cost sharing reduced utilization by 30-40%. The uninsured would spend about 50% of what someone with completely free care would spend on health. The only group of people at risk for harm from cost sharing would be the sick-poor. Even if we decided to do Medicare-for-all, cost charing has to remain an important force to reduce over-utilization of care while somehow protecting the poor and the chronically ill.

• Brill’s solutions to reducing health care costs…

“[W]e should tax hospital profits at 75% and have a tax surcharge on all nondoctor hospital salaries that exceed, say, $750,000…

…We should outlaw the chargemaster. Everyone involved, except a patient who gets a bill based on one (or worse, gets sued on the basis of one), shrugs off chargemasters as a fiction…
…embarrass Democrats into stopping their fight against medical-malpractice reform and instead provide safe-harbor defenses for doctors so they don’t have to order a CT scan whenever, as one hospital administrator put it, someone in the emergency room says the word head.”

Brill has several other ideas, some radical and some not-so-much. But ultimately, America spends too much for care because the charges start out high, the prices actually paid remain high, and the system has created profit centers. At each step along the way, health costs are incrementally marked-up.

“Over the past few decades, we’ve enriched the labs, drug companies, medical device makers, hospital administrators and purveyors of CT scans, MRIs, canes and wheelchairs. Meanwhile, we’ve squeezed the doctors who don’t own their own clinics, don’t work as drug or device consultants or don’t otherwise game a system that is so gameable. And of course, we’ve squeezed everyone outside the system who gets stuck with the bills.”

Read more: http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/#ixzz2MUNXZwxp