However as care got more costly Medicare and Medicaid were born in the 1960s to cover segments of the population no insurer wanted to touch. Medicare enrolled 90% of seniors in its first year.
The price of staying well continued on its upward spiral. Medical science improved and seemed to move from a maybe to a more solid definitely in terms of assuring health. So under the Nixon administration in the 1970s HMO legislation passed. It provided seed money to insurers to set up a program of preventive care and office visit payments. It was built on the Kaiser model. The hope: bring down expenses. A framework of providing preventive care and urging people to see their PCP was created. The PCP was to be a gatekeeper for any specialty.
All was fine for a year or two, but then contracts to entice employers led to much deal cutting and an imbalance as to who paid what. To keep market share and attract revenue various services were offered that were redundant and distant from any rational planning. In the meantime hospital care was expensive but the number of hospitals had increased (Thanks to the Hill Burton Act). It could not be sustained and a number of hospital closures ensued in the 1980s and 1990s. With the closings of hospitals, each survivor felt they were fighting for their life.
Adding to these fears was the Balanced Budget Act of 1997. No longer did Medicare pay 130% of cost (but cost) and hospital discounts to insurers ceased.
Elaborate departments were created to negotiate and scour the countryside for new revenue. From 1970 to 2009 the numbers of doctors grew by 200%. Health industry administration during the same period grew a whopping 3000%(From presentation by Steffie Woolhandler MD).
The risk pools were chopped up into various underwriting groups. For those in an unfavorable group the premiums became so costly they went without. Others went on the “government dole.” Medicaid, Disability, the VA, or Medicare.
Negotiations were and are carried out in quasi secret (others eventually find out) and pit one group against another. It was not a better mouse trap but strategies by savvy business types who were up for this ruthless game. Unfortunately the ones who pay the bill had to pay the piper. The paper work and rules to sustain this system are estimated to cost an extra $400 billion a year. Rube Goldberg would have been proud.
Any solutions have to answer these questions: How do we get to a risk pool of proper size so cost for the same services is even and kept individually affordable? How do we get transparency on pricing? What is basic coverage? What should the rules be that assures affordability? How do we stem the medical inflation rate without disrupting valued customs of care? How do we develop an efficient regional care program? Submit your answers please.
Dr. Don Green
lasthorseman says
Don’t tell me to sign a HIPPA statement as to the ultimate profanity that my medical records are private. I have the chart of legal users of my medical records and so does the company you buy life insurance from. Don’t yank my chain here.
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p>Second, ban direct to consumer drug ads.
metoo says
You better save your energy for a different blog. You are far afield from what I have written. By the way if you feel your privacy has been breached, sue them. It’s your constitutional right.
stomv says
Ban direct to consumer prescription drug ads.
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p>It would help. Not only would it reduce the overhead for the drug companies, but it would reduce the frequency by which people go to the doctor and present to get the drug that’s wanted.
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p>How will people know there’s a cure for what ails ’em? Tell ’em. For example: “Are your legs twitchy in the evening? Constantly fidgeting? There may be a diagnosis, and treatment. Talk to your doctor about it.” Voila. No mention of a chemical or brand name.
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p>Too far afield Dr. Don Green? Sorry dude. It does approach part of “How do we stem the medical inflation rate without disrupting valued customs of care?”
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p>Having just been in the ER to get an emergency CT scan to confirm my appendix hadn’t ruptured a few days ago, and having not yet seen the bill, I don’t know. I suspect that billing is a non-trivial source of the problem, and that it’s a major cause of extra work, obfuscation, and error. Frankly, I don’t think it’s fair that there are substantially different prices for identical treatment, depending on if BigInsuranceCompany is paying for it or if JoeNoInsurance is paying for it. Doesn’t make sense, economically nor ethically. Slight variation due to economies of scale makes sense, but not the massive differences the industry uses to charge those without insurance substantially more than those with insurance.
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p>For my money, the best way to drive down health care costs to consumers is to yank up the tax on cigarettes, alcohol, corn syrup, and gasoline, and then use that money to fund an Early Start Medicare program, whereby pregnant women, unborn, and newborn children get Medicare. Not only do you get a reduction of unhealthy behavior, but you also make sure that all kids get off to a healthy start. Finally, you create an ever-growing constituency of people who once had Medicare but then didn’t — and want it back. These folks will push for an expansion of Medicare, moving us toward single payer which is clearly cheaper per person in a long list of other nations.
metoo says
I didn’t supply any solutions. I just laid out the landscape and was hoping for the back and forth to produce some decent ideas. I did not mention any of the instances you cited. Further:
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p>This is an unproven scenario. In countries where health care is good and cheaper this is not used as a strategy. Do you know of any instances where this has worked?
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p>I disagree with targeting groups but I’m with you on single payer. People who are ill or make poor decisions and then become ill are an integral part of the system. No institution of medicine can exist without patients and doctors need to be trained. There is no pay off on the individual treatment side. All you will do is make some people really angry still leaving the status quo.
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p>We will have to make better efforts on the public health side for some of these problems. However you will always be chasing your tail if there isn’t a reliable ongoing source to pay for health expenses and some better arrangement for delivering that care.