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Medicare

An Overview of a Sick Health Care System

By Brian L. Grant, MD

This very detailed, long, and comprehensive report from Time  states the obvious to many who have paid attention to the debacle of our health care system.

It is long, but the best summary I have seen making the case for a need to revamp and disrupt the U.S. health care system. The article, “Bitter Pill: Why Medical Bills Are Killing Us,” details how:

“In the U.S., people spend almost 20% of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.”

A response to the article in Slate criticizes the article on giving doctors and their pay a pass.

Obviously this hits close to home for this writer and many readers of MCNTalk. It actually hits home for every American.

It will enlighten and disturb most. Readers may even learn a new word: Chargemaster. Learn what this means and why it is important to you.

What is clear is that virtually every interest group invested in health care stands to lose a lot if the system truly rationalizes itself structurally and functionally in a way that addresses the major dysfunctions in the current U.S. system.

If the 18+ GDP being currently spent in the U.S. were to decrease to a level consistent with other industrialized countries, that means the spend will be less and the income of impacted stakeholders in our present system may decrease.

This article ought to make readers angry and concerned, enough to do their own analyses rather than accept the rhetoric designed to polarize. Simply put, our health care system is indefensively abusive to society.

Any system that charges those who can least afford to pay, the uninsured, many times that charged to Medicare patients and double that paid by private insurers, is wrong.

Any system that costs us as a society one out of five dollars – twice what other countries with systems equal in quality to ours – when it comes to major measures of health is wrong. Any system that abuses its nonprofit status, holds charity balls to cover the 1% or so that it may give away, while ending up with 12% or more of untaxed profits, paying its key executives in the many millions each – is wrong!

The article says little about the unnecessary nature of much of the care received by patients and the excesses in care with respect to labs, medications, therapies and other interventions. There are no health care bills when one does not receive care that is not needed or when one is healthy in the first place. And preventative care should be evidence based, not automatic.

This writer is in the medical business, as a physician, patient, employer, and in a role with a business that every day analyzes and reviews care received or proposed. I know a train wreck in process when I see it.

The political divisiveness and partisanship that surrounds the health care debacle is not accidental. It is carefully calculated and brilliantly executed by political operatives on behalf of those who stand to lose.

How fascinating that many of those who suffer the most in the current system, most revile the president and party who have proposed solutions that might mean a few less folks would need to declare bankruptcy from their medical bills.

At some point in the relatively near future, change will be forced by political will and those who have been tricked into opposing change will see the errors of their ways. Those businesses who are footing ever increasing bills for private insurance will also decide that they are fed up.

Changes will be fought hard, with desperate claims to maintain the status quo. It is in the interest of those most impacted to be part of solution rather than have it be imposed on them.

In the interim, pray that you, your friends, and loved ones never show up at a hospital with none or inadequate insurance. And welcome the day you are eligible for Medicare.

We invite readers’ responses to this article. We would especially like to hear counterpoints to the main points raised in the article.

 

The Rising Need and Cost of Dialysis

The Seattle Times article, “The Dialysis Dilemma: Urgent Need vs. Overtaxed System,” gives an excellent historical account of the development, impact, and moral hazards involved in treatment of kidney failure.

In the early 1960s, dialysis became a long-term treatment option for select few. At $20,000 per patient, the three machines could treat nine patients. But money wasn’t the only issue.

Because of the limited number of machines available, a committee dubbed “The God Committee” or “The Life or Death Committee” was formed to decide who would be treated.

The committee members — a surgeon, a pastor, a lawyer, a banker, a state government official, a labor leader and a “housewife,” plus two physician advisers — were white. All but one were male.

Most patients they picked were well-off, white and male. Patients had to be able to pay for the treatment — $30,000 for three years, about $229,000 in today’s dollars. The committee also considered net worth, number of dependents, education and ‘future potential.’

Patients less than 25 or older than 45 generally weren’t eligible, nor were those with other illnesses.

Though our nation has seen significant progress in treating end-stage kidney disease since the “The Life or Death Committee, ” roughly 600,000 U.S. patients are affected by the disease and the costs are high.

In 2010, for each patient with end-stage renal disease on hemodialysis — the most common dialysis method — Medicare paid $87,561 on average, counting medications and other medical expenses. For those who dialyze at home, it was $66,751 per year, and for those who received a transplant, $32,914. Read more…

This once fatal disease has become survivable with dialysis and transplants. But the costs are high for society and the human lives involved very real.

Hospital & Doctors Fined for Overtreatment

An Ohio hospital and group of physicians settled an agreement with the U.S. Justice Department last Friday over accusations that some of the procedures were costly and medically unnecessary.

What is likely remarkable about this medical group being investigated, charged, and fined is not the overtreatment –  but that they got caught and held to account.

The New York Times article quotes a U.S. attorney on the matter:

“…Besides the cost to Medicare, “performing medically unnecessary cardiac procedures puts patients’ lives at risk,” said Steven M. Dettelbach, the United States attorney for the Northern District of Ohio, which was involved in the investigation.

“Patient health and taxpayer dollars have to come before greed,” he said.

The few facts presented here are certainly egregious in the falsification of complaints. Also, a statistical analysis demonstrated a significantly higher incidence of angioplasties, at four times the national average. But it should raise the question about how often unnecessary procedures are performed based upon the economic self-interests of the system, not the genuine health of patients?

Our fee for service system handsomely rewards treatment over watching and waiting, or conservative care. The hospital’s minimizing notwithstanding, each patient subjected to a procedure without medical necessity was subject to anxiety, pain, and some medical risk, without a corresponding benefit. This is wrong!

The message to all is, follow the money – how does your doctor and hospital get paid? Are they driven by mission and ethics first and foremost, or are they driven by maximizing cash flow and profit?

And consider a second opinion from someone unrelated to those recommending a specific procedure or intervention. Consider the benefits of systems of care, such as integrated organizations, where physicians do not have an incentive to treat. Research the recommended procedure for indications and degree of debate on necessity, and ask a lot of questions.

Follow the Money: Hospitals and Doctors Put Profits over Care

Brian L. Grant, MD

I went to dinner the other night. I knew that the restaurant wanted to sell me food and I was hungry. I looked over the menu and selected the fish special based upon description and price.

I was perfectly fine with the server offering the dessert menu. The sweets looked delicious and the price was predictably high, but affordable if I were craving it. I declined that night. I went in knowing what I was going to get and aware of the price for value. I left satisfied.

I once hired an architect for a job. They did a fine job of designing the project. The plans produced were submitted to several contractors for a bid and we selected based upon price and reputation. All three knew they were competing so I assume that they sharpened their pencils in hopes of getting the job. Once the contractor was selected, the architect monitored performance. I knew the architect was acting in my interests. They were paid for their design work and had no economic stake in the contractor.

Now we come to health care. We have no menu and no price list. We buy based upon ignorance and often, someone else is paying the bill so our economic interest in the price of the item is often absent or minimal.  The providers and facilities have no reason to price reasonably since the customer gets whatever they offer without paying the real cost (which is borne by the rest of us who pay for the health care dinner of the next guy via our taxes and insurance premiums).

In the past, as with the architect, a doctor was ethically and financially independent from hospitals, medications and testing facilities. Now, as illustrated in this article from The New York Times, doctors in some cases have sold their practices to hospitals for an upfront payout and are now employees, expected to do as they are told by their new owners and managers. Sometimes this means admitting patients who don’t need admission, referring patients to doctors based upon criteria other than quality, over-testing, and over-treating. And these hospitals in many cases have jacked up their fees via decreased competition and other maneuvers. The buyers made a financial investment by their act and expect their purchase to maximize profit.

Kudos to these smart businessmen and women! They know how to extract money from society, get a good return on their investment, while generally doing nothing to enhance quality of care, and in some cases diminish care quality, while driving up costs. The person who should be most interested in preventing this – the patient –doesn’t feel qualified to refuse their doctor’s recommendation, and is not in a position to outsmart their doctor, whom they thought was working in their best interest, not on behalf of the hospitals and investors who own them.

Some of the doctors quoted in the article assume the patina of victimhood upon becoming employed. But each of them made a choice when they took a payout for the sale of their practice or chose to work for such systems under such conditions. They knew or should have known that selling their practice comes with strings. Fortunately, at least for now, most doctors still have choices – though exercising them may mean risk, including being fired or needing to work in another place. Nobody ever said doing the right thing is easy or pays the most.

Those who manage claims should be wary and aware of these trends. These new financial models are driving some of the care that they are being asked to pay for, and it is driving up the premiums for all insurance payers. And when employers refuse to play along with these increases, patients end up with higher deductibles and co-pays, as well as constricting networks they may obtain care from.

Patients need to know that a recommended admission or test may be for the health of the doctor or facility, not theirs. And they should know that when they don’t seek a competitive bid for care, they may be paying much more for the same procedure than they would be charged in a facility down the street or in a nearby city.  As reported earlier in MCNTalk, if the doctor’s office located in a hospital-based office facility, patients are often being charged an expensive and non-sensical facility fee, though no hospital services are needed or used.

Since patients seem to care little about these matters until it hits their pocketbook, it would seem that the only logical way to combat these abuses is for patients, doctors and facilities to be told by the payers that regardless of the fee charged, payment will be made at an externally imposed fee schedule, with the patient being responsible for the difference, or the facility being required to write-off the difference. And patients need to be told in advance whenever possible in no uncertain terms the reality of their financial risk and the alternatives available to them. Payers need to fight and win the PR battle that it is not them being unreasonable and cheap when they question a bill, but rather it is they who are looking out for the interests of patients and society by setting limits on financial misbehavior and exploitation.

Another course, off the table it would seem in the U.S., is a single-payer system such as Medicare from birth. as practiced in any number of industrialized nations with excellent health metrics. But political reality and/or lack of political courage has made this option not subject to serious discussion. Significant entrenched interests would be impacted, and the matter has been manipulated by a well-oiled and financed industry into a political and partisan football. Paradoxically, fiscally prudent and conservative reforms are labeled by those who claim to be conservative, as left-leaning and liberal.

So this writer will have no end of opportunity to point out ongoing abuses borne of a system that is guaranteed to escalate in its abuses due to the structural realities of a lack of market dynamics, under-informed or intimidated patients, and decreased competition via consolidation. Doctors are alternately necessary pawns in this process or willing and enthusiastic participants in the degradation of care and their profession.

Rational Care Includes Economic Analysis of Value

By Brian L. Grant MD

The New York Times article “In Cancer Care, Cost Matters,” is written by oncologists who are attempting to engage in rational discourse about the cost-benefit of chemotherapy drugs. They note:

“Physician guideline-setting organizations likewise focus on whether or not a treatment is effective, and rarely factor in cost in their determinations. Ignoring the cost of care, though, is no longer tenable. Soaring spending has presented the medical community with a new obligation. When choosing treatments for a patient, we have to consider the financial strains they may cause alongside the benefits they might deliver.”

In the case of Medicare beneficiaries, they do share in the cost of medications, but generally insured individuals are frightfully blind to the cost of their care. Thus it falls upon payers and physicians to make rational decisions on behalf of patients, and the cost should be part of the equation. The cost may be relative to doing nothing, or as stated in this article, to an alternative treatment.

To suggest that price should not be part of the decision process in health care is naïve. A life is priceless, but the cost of maintaining life in a world of finite resources must include a realistic assessment of the impact of the intervention and the price associated with it. To do otherwise diverts these resources from other uses, that might include more impactful treatments for individuals and society.

And if and when companies devising such treatments understand that standards and judgment are being imposed, they may modify and adjust the costs of their products to gain more acceptance and access to the market. Read More…