Why the health care problem will never be solved

[professorchaos]

Having worked in healthcare for years now, first in a managed healthcare network and now in an ambulatory facility, I am saddened to say that your story hardly surprises me.

I do, however, think that we could work our way out of the mess over time. We won't though. Half of the political class would fight tooth and nail against our best hope for fixing the mess. And I am not saying anything more on that subject.

 

[ouch]

Ever try to find out what something costs in healthcare, like having a child or getting a test done? Nigh impossible.

I've told this story before, but I think it's appropriate for this thread. When we had our kid, our ob/gyn office explained the charges to us. I'll make up numbers for the sake of ease, but rest assured they are remarkably accurate within a very small percentage. They said the fees would be "X" amount, of which my insurance would cover "X-$1200". I said fine- let me cut you a check for $1200. They said I couldn't do that and I'd have to do it their way. We would be seeing them 16 times, and I had to pay them $75 each time. I asked them how anything could possibly be easier for them than my paying in full right then, but no, I had to do it their way. So we dliligently wrote them a check every visit. Everything went smoothly, and the Hale-Bopp comet visited Earth to herald the arrival of the princess and future dictator of the planet.

Then, we discovered that our insurance convered a little bit more than they had calculated. A lot more, in fact. We had overpayed them by roughly $1100. Naturally, we called them up, and they said they would look into it. We asked what is there to look up? You have all of the records, and they show that we paid you $1100 more than you're entitled to. We'll get back to you. After a bit of the runaround, I went to their office and explained it thusly- you owe me $1100. You don't have to pay me in 16 equal installments. All you have to do is pay me- all of it, and now. They said they weren't authorized to do it. I told them that if they're authorizied to take my money, they're authorized to give it back. They told me I'd have to have the doctor handle it. Would anyone like to guess what the doctor said?

Spoiler

You'll have to have the office handle it.

Fortunately, I was working on the night shift at the time, so I called the doctor at home at 3:00AM. After getting yelled at for a while at my audacity for calling them at such a late hour, I explained that I would be calling back every night between three and five until the matter was resolved. They paid me the next day.

What bothers me more than the money is how you have to argue until you're blue in the face to get anything done.

 

[Confuzius]

It seems like the insurance/hospital relationship is one of those things that can go wrong in business.

In my industry in my area everyone hears the story about "Purchaser X" and "Salesman Y" who were best buddies and for 20 years Y was selling X Widgets for %500 over market value and X wouldn't go to any other companies for quotes because he was getting %10 of Y's exorbitant commission. No one found out until Purchaser X retired.

It just seems extra tragic that this happens when people's health is concerned and it also appears to raise the prices to ridiculous levels for those who do not have insurance.

Canada's system may be flawed, but at least I won't get bankrupted by a cancer that's also busy killing me.

 

[Obsessed]

Ouch's story about the OB reminds me of what happened when we had our first daughter, and my wife decided it was time for the epidural. They sent over the one and only anesthesiologist on duty in the hospital that night. Of course, as it turned out, he was out of network, and we got a bill for several thousand dollars. Fortunately, my wife's OB is a great guy, was very upset by the situation, and somehow made it go away. Still, it's pretty appalling. (We were lucky that we actually got to speak to the doctor about it directly. If we had to deal with his office staff, it never would have been resolved.)

 

[Dennis]

It seems to me that when countries have universal coverage, it is a decided thing. Their governments and people decided it was the right thing to do and they made it happen. There is no such consensus here in the US. That is why I doubt it will never be solved, and likely any plan will be severely watered down and not affective.

Health care stories? So far I luckily have none. I was seriously surprised at how much 10 days in ICU cost when my son was born though.

 

[mmack66]

I doubt that B&B has enough free server space for a thread about US healthcare horror stories and ridiculousness.

 

[dwestenk]

... Half of the political class would fight tooth and nail against our best hope for fixing the mess.

IMHO, this is true for any number of messes.

... And I am not saying anything more on that subject.

+1

 

[professorchaos]

To further confuse the issue, here is a former insider's perspective. Needless to say, this is a gross simplification. I just worked in IT.

1. A managed healthcare network contracts with physicians and facilities. Negotiations may be summed up as the network approaching the provider and saying "for X discount, join our network and your practice can anticipate a Y increase in business. The provider joins since it is in their best interest to be in as many networks as possible. More patients, more profit. ***, PPO, Core and wrap networks are the ones with which I am familiar. Wrap networks can be real cash cows for managed healthcare networks.

2. Insurance companies buy access to the network(s) created in step 1. The types of access can vary dramatically. Can be local, regional or national. Has more to do with the insurance company's business model - who are their core clients.

3. Insurance sell access to these networks, called health insurance, to employers and individuals. Employers are encouraged to subsidize the insurance via tax incentives. Employees buy and use the insurance.

Some examples of how this affects the consumer:

Person A goes to a facility for treatment X. Because he has a particular insurance, that treatment costs him $50 and his insurance company $7500. This fee was negotiated in step one and reflects the discount negotiated in step 1.

Person B goes to the same facility for the same the same treatment X. Yet because he the facility is out of network, he is billed $150 and the first 500. His insurance company covers an additional $10000. For that same treatment. His insurer may also have access to what is known as a wrap network. This typically involves negotiating with the provider to obtain a post treatment discount based on Medicare and historical rates.

Person C goes to the same facility, again for treatment X. This poor sot has no insurance. He gets a bill $15000 which is inflated to cover losses from unpaid claims. Leaves him two options (not germane to the rest of the post).

Interestingly, much of this exists as an unintended consequence of partial regulation.

 

[Brad31]

This is just my opinion and in no way aimed at any particular person or group. But isn't health insurance an oxymoron of sorts. They make money by collecting premiums and denying benefits.....not caring for peoples health.

 

[letterk]

I'd like to get to a state where people appreciate what everything costs so they can make rational decisions about healthcare like they do about other decisions in their life. How come I can get on the web and in about 2 seconds find out what a car costs with the particular options I want, who the most reputable dealer in the area is, and various options for purchase? Ever try to find out what something costs in healthcare, like having a child or getting a test done? Nigh impossible. As long as we keep pretending like we aren't paying for things, we'll never get anywhere. I don't know what the right solution is, but transparency goes a long way in at least starting the dialogue.

No kidding. Recently I was scheduled for an MRI. I asked what my portion of the bill I would be responsible. The imaging center told me I would have to check with my insurance provider. My insurance provider told me I would have to ask the imaging center. All I was trying to find out is if it would be around $500? $5000? $50000? No one could tell me. Both said the easiest way would be to go in and have the test and see what insurance pays afterwards. As this was not a vital test, I really didn't need to do it and wanted to make that decision based on the cost. Eventually I caved and went in.

Here's another one of my complaints. During the first three years of my son's life, he spent an evening in the ER about once a month. EVERY SINGLE bill we received had one error or another. Not once were we charged the correct amount. NOT ONCE! We had to call for every bill and every time either the hospital or insurance copy admitted they did something wrong. And in every case it was bad for us. Had we not caught all these errors, we would have spend many thousands of dollars that were not required. I'm sure this goes on every where but people don't notice. Check your bills!

The whole system is terribly run. Before any party can propose a new solution, they need to take a look at the root causes.

 

[Sullybob]

Have you ever gotten an itemized bill for a hospital stay? Several months after my youngest son was born we received an itemized bill for the birth. I don't remember the exact amounts but one (1) diaper for a new born was nearly $10. When we left the nurse told us to take the rest of the CASE of diapers that were open in the room. I told her that I had diapers at home. She explained that since the case of diapers was opened they had to throw all the unused diapers in the trash. I told here that there were 3 unopened packages of diapers and one opened package of diapers in the case, she said that even the opened package of diapers would go in the trash. I did the only sensible thing, I took all the diapers. Guess how much the baby hair brush cost? I probably could have bought a toilet seat from the army.

 

[adonnellyr]

This thread makes me so happy I benefit from Canada's health care system...I feel for our southern brothers in this regard. Here's to your health!

 

[DunEdinRanger]

I think everyone has horror stories. I have a few but they are too long to tell here.

I was on the bus yesterday and a woman was speaking loudly about how her insurance company had denied her the laxative she needs.

 

[NightLad]

I can't imagine any drug, even with R&D costs figured in, could cost anywhere near $12,000 to produce for a one month supply. That is beyond insane and I'm sure is only one of myriad reasons why the cost of health care is so ridiculously high.

12k is insane!

Prior to that the most expensive medication I’ve heard of is Remicade. It runs about 5k per monthly infusion. It is used for treating Crohn's Disease (among other things), which a good friend of mine has. To take it the patient has to go in to the hospital and get hooked up to an IV for a few hours. But without it, the constant pain is so severe that people have been known to take their own lives.

The alternative is steroid based medication that, while much cheaper, carries a host of side-effects that can often be just as bad (or worse) than the illness. If his spouse didn’t have a good government job...

This thread makes me so happy I benefit from Canada's health care system...I feel for our southern brothers in this regard. Here's to your health!

Eh, our health care system is far from perfect. I have family and friends in the medical field, and the stories they can tell...

 

[senorsignor]

I think one thing that gets overlooked in most debates on health care is the shortage of docs and nurses. This is a very real and present problem. The long waits in ERs is a direct consequence of the shortage. Whatever the solution is, it MUST make the medical fields attractive (financially--what else is there) to those able and willing to provide the service. My father, a retired general surgeon, wanted to continue practice in his place of retirement. If he were to do so, the cost of malpractice insurance + license would have outweighed what he would make--he would have been doing charity. The rural area he resides in is now short one very experienced and very good surgeon. Without the people with the skills, there will be NO health care.

 

[richmondesi]

This thread makes me so happy I benefit from Canada's health care system...I feel for our southern brothers in this regard. Here's to your health!

hmmm. I've heard many many stories of Canadians waiting for months and months to get in to see physician's, even though they were facing life-threatening illnesses. Is there any truth to that (obviously you can't speak for every incident in Canada, but I'm asking anecdotally)

 

[adonnellyr]

hmmm. I've heard many many stories of Canadians waiting for months and months to get in to see physician's, even though they were facing life-threatening illnesses. Is there any truth to that (obviously you can't speak for every incident in Canada, but I'm asking anecdotally)

Hmm, all of my health-related matters have been handled as well as I could hope for. *Knock on wood* I'm not sure about people having to wait, but I wouldn't be surprised--the entire system is sort of mythical to me. I DO know that there aren't enough family doctors and lots of people are forced to go without. The system is far from perfect, I just like knowing that if I'm injured (car crash for example) I will be taken to the hospital and treated, and not have to have the added financial worry on top of an injury that could be very stressful and difficult. It's a small piece of mind I suppose, but I'm happy to have it.

 

[richmondesi]

Hmm, all of my health-related matters have been handled as well as I could hope for. *Knock on wood* I'm not sure about people having to wait, but I wouldn't be surprised--the entire system is sort of mythical to me. I DO know that there aren't enough family doctors and lots of people are forced to go without. The system is far from perfect, I just like knowing that if I'm injured (car crash for example) I will be taken to the hospital and treated, and not have to have the added financial worry on top of an injury that could be very stressful and difficult. It's a small piece of mind I suppose, but I'm happy to have it.

Here's something interesting that I learned as a result of my story earlier and my recent house purchase. Creditors are not allowed to look at claims on our credit for health reasons in order to determine our credit worthiness. So, I have that same piece of mind However, I also have insurance... It isn't as expensive as some would allege

 

[NightLad]

hmmm. I've heard many many stories of Canadians waiting for months and months to get in to see physician's, even though they were facing life-threatening illnesses. Is there any truth to that (obviously you can't speak for every incident in Canada, but I'm asking anecdotally)

I would not doubt that it has happened. Sadly, even the best-oiled machine occasionally breaks down. Paperwork gets misplaced, people fall through the cracks. Similar stories have also been reported even from countries like Britain and France.

But speaking generally, no, I don't believe this is common. I've had a family member with serious health issues and he always received comprehensive medical care. Insurance was a bit of a pain, but aren’t they all?

The one time I faced a serious medical issue the doctor I visited accompanied me to the ER to order me admitted as an in-patient immediately with full battery of tests.

The longest I've had to wait for a medical procedure was a few weeks for an MRI, but it wasn't for anything terribly dire. If it was for something serious I'd have been admitted and received it the same day. I didn't mind waiting since it was covered by OHIP. If I had wanted to, I could have used a private clinic and paid myself. Contrary to some belief, we do have that option for most tests and many procedures.

 

[Sluggo]

This is not an invitation for debate as to how we should handle this confounding problem, nor am I looking for opinions regarding root causes or who to blame. It's just a simple story that reflects just how deep the problems go. So if you can't restrain yourself from enlightening us with a detailed explanation as to how this is all George Bush's fault, or how the Democratics are a bunch of commie pinkos, nota bene: you better make it a good one, worthy of it being your last post on the barber shop.

At the end of January, I was involved in a car accident and was taken to Beekman Downtown Hospital in Manhattan. My wife and daughter came to collect me, and when my then 11 year took one look at me, she fainted (I know- this isn't the first time I've had to contend with such behavior from the ladies).

My wife screamed for someone to help her. A few nurses lifted her onto a stretcher that was outside my room, and she was in full view for the entire time. They said that they had to admit her before they could treat her. They took her blood pressure and temperature, and pricked her finger for a blood sugar test while simultaneously filling out the paperwork. They handed her a glass of orange juice, and I shouted to her, "You better sip that drink slowly, sweetheart, because it's going to cost around 100 bucks." Everyone laughed.

My company provides me with pretty good medical benefits, so I wasn't worried. Here is what happened, and you can't make this stuff up. The hospital rendered a bill for roughly $350 for treating her. Who cares? I was only responsible for a $50 copay, so it doesn't matter to me what the charges were. Then my wife noticed that my insurance paid the hospital $850. For those still paying attention, that's $500 more than they asked for. My very detail oriented wife contacted the insurance provider to advise them of the overpayment, because even though it wasn't coming out of my pocket (directly), the very thought of it was anathema to us. We were told-- get this-- that according to their policy, they were contractually obligated to pay a minimum of $850 to the hosptial irrespective of the details of the admission. I told them they had a lot of damned nerve charging me a $50 copay when they were so perfectly willing to throw away half a grand.

This health care mess is so deep, I don't see how we will ever dig our way out of it.

Again, tolerance level for political diatribes for this thread is zero.

So, I will preface my response with some background about me. I am a healthcare "suit", I manage 7 pediatric surgeons, I set the fees for the practice, I am 26 (so not much living history), I have two Master's degrees in Health Administration, and I have this discussion a LOT.

This mess is best answered by a complex visual diagram, but I do not have one of those in B&B so I will try to provide my opinion as best I can.

To understand how we got here let’s take a brief history of how healthcare was delivered and how it was paid for. When my grandparents were growing up the doctor visited the home. The only insight he had to a patient’s illness was his brain/training and a small bag (usually consisting of a stethoscope, and a percussion hammer, and scalpel if needed). That was it. The doctor would provide a diagnosis, prescribe perhaps some compound from a pharmacist, and if needed admit the patient to a hospital which was nothing more than a ward where multiple doctors could observe a patient. There were surgeons at the hospital, but certainly no radiological images so they would cut blind on a limited diagnosis…certainly not the highest standard of care.

Fast forward to the 1960s and 1970s (and maybe early 1980s) this was the golden era of healthcare if you were a provider. Technology had improved to x-rays, sharper surgical instruments, better sterilization, and better medications. Medical education had improved with formal residencies and structured learning. The first 3rd party insurance companies appeared because they could pool individuals together in a broad group that represented a fair amount of medical risk/health. This implied that the healthy would help to off-set the expenses of the sick, which is a fine model if the cost of healthcare is kept in check. In addition to 3rd party insurance appearing, Medicare was introduced which now meant the government was a purchaser of healthcare dollars. As a result, hospitals and physicians were reimbursed for their cost plus a “reasonable and customary” extra…you know, a little something for their hard work (this was especially true for the government). Soon healthcare institutions and providers realized that if they did more work then they got paid more.

This lasted until the early 1980s when Diagnosis Related Groups (DRGs) were introduced to hospitals and a Resource Based Relative Value Scale (RBRVS) was introduced to physicians from the government as a way to pay for Medicare & Medicaid. DRGs are a group of procedures that get lumped together, and the hospital gets paid a flat amount irrespective how much the procedure cost the hospital. RBRVS are similar to DRGs, but again only impact the physician reimbursement. Soon after this new mechanism of payment was introduced the 3rd party insurance companies followed suit. Now healthcare providers began the era of doing more with less; because while the reimbursements were decreasing the medical technology (and the cost of that technology) was rapidly increasing. In the 1980s the first CT scan was developed, endoscopes, and laparoscopic surgical instruments all enabled physicians to learn more about their patient’s diseases…while at the same time being less invasive (causing less harm) to the patient…but those things cost money.

Let’s fast forward to the present day and take a look at what I think are three important facts about our society and the cost of healthcare. 1) We like to sue if things don’t go well 2) New cutting edge technology is developed almost daily 3) Those with insurance suffer from a moral hazard.

We all would likely agree that mistakes get made in healthcare, and they have since the dawn of healthcare…there is a reason it is called a “practice”. But what has happened recently is almost every doctor is expected to be flawless in his/her diagnosis or surgical skills 100% of the time and a surgeon is expected to operate and fix the problem the first time. The truth is that this does happen most of the time, but it is that 1% where something does not go according to plan when the attorneys show up. The fear of being sued (which is something that will haunt a physician for his/her entire career) is why defensive medicine (the act of ordering multiple tests, studies, labs, etc) is so pervasive. All of these tests come with a cost.

I will not spend much time on medical technology because we all know that stuff is expensive. Does every hospital need a Di Vinci surgical robot (at a cost of a few million)? No. If you suffer from a condition that you could benefit from having one would you like one to be available? Absolutely.

The last point is a fun one…one that I am guilty of and I am sure you are too and that is a moral hazard. It is a fact that those with insurance will go see a doctor at the drop of a hat if ANYTHING is even slightly wrong. The justification is that “I have insurance I should be able to get this fixed because all I will have to pay is a small deducible or co-pay.” So at the sign of a first cough you drive yourself to the clinic, urgent care, or even worse the ER (don’t get me started on how millions of Americans use the ER as their source of primary care) and you seek treatment. Now you are in the healthcare system and you can go right back up to point number 1 and you are a living example of defensive medicine.

The point behind all of this is that healthcare in the US is conditioned to be very cost and resource intensive, and the only way to pay for these items is to increase the fees. Now let’s talk a moment about fees. I can charge $1,000,000 for a surgery if I wanted to…but that does not mean I would ever get anything close to that in an actual payment. Rather, because of the DRG / RBRVS model I am going to get a fixed reimbursement from any of my payers (both commercial and government alike). The best way I can explain the cost of healthcare from a consumer’s point of view is something I am sure everyone on this forum is familiar with…a bar.

Let’s say an owner of a bar wanted to sell only one type of beer (I am going to make this simple, I think) but he lived in a magical land where all his potential customers had beer insurance. Those beer insurance companies negotiated with the owner regarding exactly how much they would be willing to pay for their clients to have a beer at the owner’s establishment. Some beer insurance companies really value this bar and are willing to reimburse the owner 85% of the fee he charges for that beer. That is a pretty lucrative deal, and I bet the owner wishes he had a whole bunch of that beer insurance’s clients.

But the owner also knows that if he is going to stay in business he has to serve those patients with government beer insurance and the government has a lot of clout. The best deal the owner could work was 15% of the fee of the beer.

The owner knows that the beer he sells costs him $3/bottle buy and that he needs to make a margin to pay for his overhead. Well that owner may have to charge $6 - $7 per bottle just to keep the doors open because he is obligated to serve everyone who walks in his door irrespective of what kind of beer insurance they have.

I know this is kind of a rambling post, but I hope it sheds a little light on how we got here. I don’t know where we are going in terms of government healthcare or socialized medicine, but I do know that it one of the most complex issues this country will face. If there is something that I did not explain fully or a subject on the administrative side of healthcare you would like answered let me know.