Hello,
It’s not getting much attention in the debate over health care when attention from the left focuses on insurance companies and the public option and the right speaks of government takeover, but providers will have to reduce costs. It was not heartening to learn that the leaders of most of the state’s major hospitals blew off an attempt by the Patrick administration to find out what is driving rising health care costs. It’s obvious that these hospitals and their professionals do a lot of good; it also seems that they throw their weight around and act with impunity. When Tufts tried to create pressure to reduce costs, the response was to threaten to cut off their patients. http://www.boston.com/news/loc…
No one put it in the blunt terms, but the basic threat is if you don’t do what we want, your members won’t get care from us–what a noble defense of the Hippocratic Oath that was.
Health care is costly–at the same time, anyone with even modest experience with the system can tell of patients who receive multiple xrays and other imaging tests for the same injury within a short amount of time.
Good post. I think most well health insured people that visit doctors or know people that do can remember useless tests, multiple tests, unnecessary referrals. We like to think of doctors, hospitals, care givers as a little altruistic. Reality is that it is all business. And the idea is to push profits to the limit. The status quo looks good to them.
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p>Many patients understand that doctors maintain referral deals with other doctors, are beholding to pill pushers for vacations, might just have to pay the rent as you walk in with your super health insurance, but think that the doctor will do what’s right for you. Sure.
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p>We need be a little less Pollyanna and more Marlowe. Interesting take on the healthcare bill in the LA Times last month.
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p>To face facts, politicians, health insurers, drug companies, health professionals are not your friends anymore than your used car salesman.
they do push care that is not needed. It has happened to my family on many occassions. They can do this because they can and will refuse to give prescriptions for simple illnesses until you’ve had their “full battery” of tests.
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p>A prime example is my son’s episode of acne, which his primary care physician insisted had to be treated by a specialist. Not only did it cost a lot more money than it had to, it added to more time away from work to keep the appointments, and time away from school. It could have and should have been treated at the primary care level.
If we got our car muffler repaired at a shop and were told you had to go to a special place to have your transmission repaired you’d question it. (I hope.) How many times have we heard a doctor tell us that tests are needed for ailments at a certain lab the doctor owns outright or has a financial interest in. We all know the way patients lose any monies they accumulate at nursing homes on multiple and duplicate tests. Yet, no one seems to question them.
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p>I’m amazed at how quickly doctors back down from the initial test procedure when they are politely questioned. Maybe because these are people that are surrounded by patients and employees that never question them. After hearing, “Yes, Doctor.”, so often they don’t know how to deal with a “Why?”
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p>I think that we lose sight of the fact that insurance is only a way of spreading risk. The idea is that some people will spend more than necessary to mitigate a financial disaster should fate put them in a bad situation. When we follow the doctors orders without question we only make every insured pay more.
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p>There was proposals for health maintenance accounts some time ago which would require people to save money and take charge of their own health needs. I don’t know if it would work as it would require the public to shoulder responsibility, which nobody seems to want. Too, the government has allowed to economy to collapse.
* How much goes toward capital non-medical (the buildings, the pictures on the walls, the waiting rooms, the IT, etc)?
* How much goes toward capital medical (scan machines, gurneys, scalpels, etc)?
* How much goes toward non-medical salaries (administrators, receptionists, janitors)?
* How much goes toward medical salaries (doctors, nurses, medical technicians)?
* How much goes toward medicine (pills, bandages, heart valves)?
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p>What else am I missing of substance?
1) Medical Malpractice insurance (not an insignificant amount if you include the cost of defensive medicine in this category) – This is one of the reasons that many want some sort of tort reform included in health care.
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p>2) Carry Costs – by this I mean the cost to carry receivables from the insurance companies, governmental organizations and others who owe the hospital / provider money for services rendered. This can be extremely significant as the insurance companies and governmental organizations are slow in making payments for services rendered with the government being by far the slowest of all payers.
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p>3) Paperwork Costs – I think this is in your non-medical overhead costs. The cost to submit forms to all the different payers with all their different requirements has resulted in an explosion in the number of people working solely to fill out paperwork to get the hospital / provider paid.
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p>I am sure that there are many more examples, but your question is a great one – where does the money go? We are attempting to “fix” a system without this information clearly at hand for all to see. Maybe if it was more transparent there would be suggestions from many well-meaning people as to how to reduce costs and improve overall service delivery.
1) I’ve read many folks claim that tort reform won’t change those costs substantially because the malpractice insurance itself is only a percent(ish) of overall costs, and the defensive medicine stuff isn’t really because of tort but rather because of the perverse incentives of being paid more simply to test more. There was a great (Atlantic?) article about medicine in Texas where once city had lots of defensive and the other didn’t — because in the former city the doctors were businessmen, whereas in the latter they were “simply” practitioners of medicine.
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p>2) I’m not sold on this one. The thing is, the carry cost is essentially a one time throw away — once you’re in “steady state” the money in equals the money out. What do I mean? Well, lets say it takes six months between billing and receiving, and you open the doors Jan 1 2000. So, January-June 2000 you’ve got no money coming in. But, starting July 1, you get 1 days revenue (Jan 1) for one days cost (Jul 1). During the whole month of July, you get the whole month of January’s bills. So, I’m not suggesting that the cost is zero, but that for a hospital of constant size, the cost effectively becomes a sunk cost that they eat once… but that they can likely borrow against to some extent.
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p>3) Indeed, that’s in non-medical overhead.
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p>So that’s what I’m getting at… where does the money go? I don’t have a problem with paying for medical care; I suspect that our system spends a whole lot more money on non-care than the systems in Canada, UK, France, Ireland, etc etc.
that the whole discussion about health care reform we’ve been listening to this past year is all about insurance reform. I’ve heard nothing about health delivery cost reform. Why are drugs so high? What goes into the $5.00 Tylenol pill that makes it so dear when dispensed in a hospital as opposed to home? Why are health costs so high, and achieving so much less than in many countries around the world. If we are developing new medicines, technologies, and techniques, why is the cost so much greater here?
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p>As far as the numerous health system executives that chose to blow off the Patrick administration and not appear at the hearing to study health costs, could it be that they are acting against a supporter of the health insurance reform moving through Congress? Could it also be that Patrick’s opponent is a member of the fraternity of health industry in insurance executive Charles Baker? Could it be that they see him as a better alternative for their organizations than Patrick, and are aligning behind him?
$91.6M surplus for hospital. UMass system ahead for year. link
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That’s right. Japan does MRI images for $98.
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p>Our MRI work costs ten times as much.
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p>That needs to change.
It’s used quite a bit in examples (including mine above) and I’m not sure if that’s helpful or not.
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p>Here’s what I want to know: how many MRIs were given divided by the number of machines, in Japan and in tUSA.
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p>My bet: Japan gives twice as many MRIs per machine as America. This isn’t based on any evidence, just gut. Does this mean that they’re overprescribing MRIs? On the contrary, it means that they have fewer machines per need. If you have fewer machines, you have to buy fewer machines. Put another way, you use each machine more times over the course of its life, and therefore have more instances to bill — which drives down the cost per use.
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p>If indeed capital costs are a large part of our health care costs (both non-medical and medical capital costs), we’ve got to figure out how to use this capital more efficiently. In many cases, that means not just using it M-F 9-4, but 60 or 80 or 100+ hours per week.
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p>Earlier mornings, later nights, and weekends. It would mean tougher hours for medical staff, but it would also mean more convenient hours for many citizens, for things like MRIs but also things like dentist appointments. The equipment and the buildings are sunk cost — the more patients who are served with that equipment per month, the lower the cost.
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p>All of this is only meaningful if capital costs are a significant portion of the total cost of course.
AND… even if you double the time an MRI is used it doesn’t explain the 10X price delta.
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p>How much do MRI techs get paid in US vs. Japan? How much do Radiologist gets paid?
When I saw the Globe articles on this issue (thanks, Kay Lazar) I sent them, along with a brief intro., to activists and health policy experts around the country. I cc’d AG Coakley and SOC Galvin.
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p>Does anyone know if the State Attorney General or Sec. of State have the legal authority to DO SOMETHING WITH THE FORCE OF LAW TO HOLD THE POWERBROKERS OF THE MEDICAL-INDUSTRIAL COMPLEX ACCOUNTABLE? This situation is long-past ridiculous; who’s running this show, anyway…
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p>Dear Health Reform Supporters,
The 2 articles below provide a cautionary tale for national reform efforts. All that’s needed now is an article about doctors “declining” an official request to share information about their role in our high healthcare costs…(snark intended). To think that almost all of these MA health insurers and hospitals are “public charities”, that they enjoy the legal status of not-for-profit taxpayer-subsidized organizations! It’s enough to make a thinking person quite upset, to say the least. What do we do about it, is the real concern.
Sincerely, Ann Malone, RN, Boston, Massachusetts
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p>[Hospital] Executives snub hearing on rising health care costs
Boston Globe, by Kay Lazar, 1/8/10
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p>And this:
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p>Health insurers mum on practices
Boston Globe, by Kay Lazar, 12/10/09
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p>”Executives from some of the state’s leading health insurance companies, facing an unusual public grilling from state regulators yesterday, refused to answer key questions about why some hospitals and doctors are paid up to three times as much as others for the same services….”
read full articel at http://www.boston.com/business…
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BMG readers who want to dig deeper into what and who is driving up hc costs, take a look at this excellent resource. You’ll want to Bookmark it.