Friday, January 23, 2009

A disaster in the making...

My frustration grows by the day. Since leaving the military healthcare system I am reminded daily how big a problem we have with our private-sector system. I recently ordered a routine ultrasound study to evaluate a pain complaint. This patient did not have insurance, so was essentially cash pay. When the study was scheduled, the facility informed us that for a cash pay patient the cost would be $900.

Nine hundred dollars for a test that, in truth, only costs about $400 tops. So what’s going wrong here? I can’t really blame the facility. This is a common trend nationwide, especially in poorer urban areas. Those medical facilities who care for a large amount of indigent patients are often dealing with Medicaid as a primary payer. These particular patients share little of the cost for care, with the rest being reimbursed to the facility by the government program. The problem is that the government does not pay much. So the reimbursement is low, often to the point where the hospital ends up losing money. How is this loss recovered? Through private pay and private insurance. Prices are increased for these patients in order to offset losses elsewhere. Consider the emergency room, where care is often given for free (by law) and you can better appreciate how this can be a big problem. When hospitals lose money in one area, they have to find a way to make up for it elsewhere. And the problem is only getting worse.

Just this week I read that medicare reimbursement to physicians is due to be cut 21% by the end of this year unless Congress intervenes to stop it. If the cut happens, then medicare will be in danger of becoming another Medicaid program, where finding a physician to accept this insurance will be difficult and the losses will have to be recuperated from other patients. The result will be a loss of access to care in the community and patients will be left with going to the local hospital ER for primary care. This will increase costs to hospitals and the price of healthcare will go up for all of us. And since private insurance tends to base their reimbursement on medicare’s trend, the problem will be aggravated further.

One casualty of all this is the private practice physician. These are small businesses and the price of doing business is becoming too much. A friend of mine recently closed his private practice because reimbursement was dropping while costs – like business taxes, payroll taxes, and basic overhead – were going up. Several people lost their jobs and that community lost a good doctor. He now works as an employee of a local hospital, a trend that many doctors are following to avoid the crunch of the small business world.

Why is this bad? Because the private docs are independent. They are their own boss and thus have the freedom to help people who can’t afford to pay. They have the freedom to work out payment plans, discount prices or simply provide free care to people who truly can’t afford to pay. This freedom doesn’t exist for doctors who work for corporate agencies. And the healthcare community is becoming more corporate every day.

Here is an example: concierge medicine. The premise is that a private doctor establishes a contract with a subset of low-income, uninsured patients. For as little as $80 a month, the doctor agrees to provide unlimited care to the patient and family. Drugs, labs and radiology studies aren’t included and it only covers outpatient care, but these poor families at least have access to care outside the emergency room. The physician is able to cover costs, maybe even make a little profit. ER visits drop, alleviating the burden on the hospitals and costs come down for the rest of us. But this practice has been put to a halt in the court system by the insurance lobby who has sued, saying that the doctors in question are essentially providing insurance without a license.

Another example is recent rules among the pharmaceutical industry that prevents them from giving doctors things like free pens, free lunches, etc. I guess lawmakers want to keep the freebees for themselves. So drug reps don’t pay as many visits. Okay, except that often these companies provide doctors with drug samples that can help people offset the cost of their medication.

Come on! A little common sense would be nice.

The point is that there is an answer to our problem within the private sector, and I think if doctor’s had a little more freedom to operate that answer could be realized. Instead, we’re being squeezed out of the equation by the government and private insurance, who are slowly becoming the primary decision makers when it comes to health care.

Some may say that a government-run single payer system is the answer. I assure you all it is not. I just described a number of problems with medicare and Medicaid. Why on earth would we not assume the same problems with a bigger system? Such a system would mean the poor won’t pay for care, with the brunt of the cost absorbed by the middle class and above. Health care could become too expensive for those who weren’t impoverished. I already see it with Medicaid. If you’re not poor enough for Medicaid, then too bad for you. A bigger system would only mean that more Americans would fall into this category. Not only that, but access to care would vanish. The system would be flooded by people getting “free care”. As physician reimbursement drops so will the appeal of the profession, as doctors would essentially become government employees. Medical school enrollment would drop. Perhaps the schools would respond by lowering standards, or bringing in more foreign medical graduates, where education standards may not be ideal. There will be fewer doctors – many educated by lower standards - forced to see more patients, and the quality of care would diminish. Want an appointment to see your doctor? There will be a waiting list. Naturally, the government would respond as all other universal-coverage governments have…by rationing care. And then the real problems would come.

There is no easy answer here. But if we’re going to truly “fix” the problem it will mean some truly tough changes. Government programs created this, so the way I see it the government programs must go. Somehow, someway, medicare and Medicaid have to be phased out, with the private sector taking over. Give doctors more freedom, even to the point of allowing them to practice as private insurers. Eliminate or severely reduce taxes for private physicians. The money freed up from eliminating medicare/Medicaid could even be used to subsidize private charities that help the poor get care. So what if we give tax dollars to a local church if that church works as a non-profit agency helping people get medical care.

Folks, medicare is piling up a $50 trillion unobligated debt. This is an unimaginable number, more than three times that of America’s annual GDP. It’s a debt the government simply can’t meet. But instead of privatizing things, we’re talking about increasing the program and extending it to every single American citizen! Unbelievable!

A disaster in the making.

4 comments:

Thomas W. LaGrelius MD said...

Contrary to your statement above, concierge medidine is alive and well and rapidly growing. It is true that in one state, Maryland, the insurance commissioner has rattled his saber a bit, but in others like Washington the priciple of support for concierge medicine has been firmly established and codified. The other states have all done essentially nothing and now a million Americans are cared for in such practices.

As president of SIMPD, the Society for Innovative Medical Practice Design, the professional society open to all concierge and other direct practice doctors I want to confirm that the reason health care is so fragmented and disrupted today is the lack of excellent primary care America once had. That fact in large part results from the devaluation of primary care and its extremely low pay status under the third party and Medicare dominated payment system we now suffer under

The concept of "medical home" is a critical one. Every American needs one, a place they can access top notch primary care immediately and fully like one can access a concerned family member. And they need to buy that home directly, not with other people's money. When they do so the cost can be very low to the patient and the benefits very high to patient, primary care doctor and society.

The only payer willing and able to pay what a medical home will cost is the patient. Interest in concierge medicine is therefore rapidly growing. Starting with the first such practice about twelve years ago in Seattle and growing exponentially, there are now thousands of such practices in the USA, some are associated with franchises though most are independent. No mater what the government does, that is where the action will be in the future as our numbers grow from the current thousands to tens of thousands to hundreds of thousands.

Direct practice doctors and those who wish to adopt the direct practice model can join the society and get many benefits including up to 55% discounts on malpractice insurance, practice marketing help, national care networks and many other services. Our society is rapidly growing its membership. Direct practice doctors have much more time with their patients, make a better living, and virtually never get sued. That is why we get huge malpractice insurance discounts.

Patients can go to SIMPD's web site at http://www.simpd.org for information and to find such a doctor in their own community at the "find a physician" link. This is the ideal way for patients to get personalized, prompt, excellent primary medical care in a unhurried, pleasant setting. Money is actually saved on patient care in such practices because emergency room visits and hospitalizations are drastically reduced due to of the personalized, immediate, detailed care we deliver. The cost of concierge care, which averages about $150 per month, can be as low as $40 per month. This is affordable for most Americans, while the fragmented primary care most are now getting through employers or government third party interference in the doctor patient relationship is penny wise and pound foolish.

SIMPD believes most Americans can eventually be cared for in such direct "medical home" practices resulting in far better care. This will result in lower overall cost and a return of interest in primary care by students who now shun the field as undervalued, underpaid and undesirable compared with other medical specialties which for the same or lower levels of training and effort often pay double and tripple what primary care pays inside the insurance system.

If any of you have further interest please contact me through the SIMPD web site. I answer all emails through that site personally.

Thomas W. LaGrelius, MD, FAAFP President, SIMPD http://www.simpd.org
Owner, SPFC Torrance, CA http://www.skyparkpfc.com

Auntyem said...

John, you said, "Somehow, someway, Medicare and Medicaid have to be phased out, with the private sector taking over. Give doctors more freedom, even to the point of allowing them to practice as private insurers. Eliminate or severely reduce taxes for private physicians. The money freed up from eliminating medicare/Medicaid could even be used to subsidize private charities that help the poor get care. So what if we give tax dollars to a local church if that church works as a non-profit agency helping people get medical care".

Why should doctors not have to pay taxes? I can see if you could prove that you gave a certain amount of free care, you should get a break, but you wouldn't like the regulations and completing forms.

If doctors had more freedom and acted as private insurers there might be abuses there, and at least administrative costs anyway. Also many might want to take only healthy patients without pre-existing conditions, or they would only choose to treat the rich or whites only. Would the docs be able to deliver as promised, and what recourse would the patient have if he didn't get the care he expected as promised?

Why should the government eliminate Medicare and Medicaid and give the money to subsidize private charities instead of providing the money directly to people so they can sign up for a concierge practice to be their health gate-keeper. If people only were mandated to get regular check-ups and eat right and skip the booze and drugs we wouldn't have such problems. However, children, the disabled and the elderly have a right to health care, I think, since they can't work. We don't throw people away here like Hitler did, or like they do in some countries.

You know who would scream the loudest if they eliminated Medicare? Well-off retired people, those with summer and winter homes and who are always on cruises, etc? Yes, I hear them, they brag how they got this or that and that Medicare paid for it. They will pay cash for cars, etc, but they won't want to spend their money on a pre-paid plan that they "might not need". Poor people think that way too, then they don't know what to do when they get sick or hurt. Many would rather spend bucks on beer, ciggies, and bullets, or they give their money to some cult.

I am not for a single-payer plan for everybody like Hillary was, and I am glad that Obama isn't for that either. I think people without insurance should have a special savings account while they are working, and give up some luxuries, but too many won't do that. Then they have to cash in their retirements, max out their credit cards, or sell their homes when disaster strikes.

I think we have lots of fee-for-service places already, for those who can afford to pay on the spot. When I was working at the hospital I talked to a young Vietnamese that was about to get his license to practice in this country, and I asked him what kind of practice he was planning on, and he told me frankly, "Oh, I am only going to see my people, and I will only take cash." My mother had a family practice doc for 50 years that in the beginning made house calls, and she would always ask him, "How much do I owe you?", and she would write him a check on the spot after each visit at home or office. Same with her dentist.

There also are already those "executive health plans" where CEOs get all the diagnostics that exist at the Mayo Clinic, and movie stars have always glommed onto star-struck docs like Elvis did; private doc was at his beck and call and flew everywhere with him in his private plane.

I agree with you that medicine is looking less and less attractive to young people, and yes, many foreigners coming here are unscrupulous or poorly trained---those South Americans who specialize in plastic surgery and they turn out to be butchers, and some from India that have no ethics, such as the one in Las Vegas whose service almost gave my sister a horrible disease. You know what they were doing? Did you hear? They were reusing syringes, not the needles, but the syringes. Geez Loooeeze, syringes don't cost that much, but he was cutting every corner he could. He was making money hand over fist, up to the time they arrested him while he was having a multi-million dollar house built with all his "savings". Bet now he just caters to the rich as their private (now unlicensed?) practitioner.

Emilie
Port Orchard, WA

Auntyem said...

Oh, another thing, John,

I looked up the concierge docs listed for my area, and I found only half a dozen all on the other side of the Sound where most people in Washington State are crowded into, and there are none on this island or the surrounding ones. There didn't seem to be any in the larger part of the state east of the Cascades where it is rural. Docs don't want to practice out in the boonies.

People in the local HMO Group Health are often sent to Seattle or Tacoma, etc for specialty care and diagnostics. I luckily belong to a PPO group that doesn't take Medicaid, but they do take cash, credit cards, Medicare, and private insurance, and they have all the services anyone could want all right here on this island. Lucky me.

Oh, we'll see what the hospital says though. My husband recently had prostate cancer surgery, his first ever major surgery that they did with the DaVinci robot, and his one night in the hospital cost $17,000!! I am going to ask for an itemized bill. Wonder how much they charge for a swab or the stuff they gave me when I picked him up since they insisted I take it all because I had "paid for it" and they would have to throw it away. I had to throw most of it away later. Arrrrggh.

Emilie
Port Orchard, WA

John Washburn said...

Emilie,

I enjoyed your comment, and first let me extend my best wishes to you and your husband. I hope all is well.

You mentioned that we need to protect the children and the poor, and not “throw them away”. I assure you they are getting tossed aside already. It’s a daily struggle for us. You have someone whose only insurance is Medicaid and they are in need of a specialist. Finding someone who will accept Medicaid is a struggle. A practice can only accept so many of these patients because each one essentially results in a net loss. So, many patients end up on a waiting list, not getting the immediate care that they need. This will only get worse as the government immerses itself more into the health care system. This is what happens when the government is responsible for health care.

Then take a look at St Jude’s hospital in Memphis. If you have a sick child, this is the place to go. The care is by far the best in the nation. And more remarkable is that no one is turned away for lack of funds or insurance. It operates on private donations. This is the difference I see in public vs private health care. It can be done. There is no reason why we can’t have more St. Jude’s across the country operating free from government interference, providing outstanding care.

You mentioned giving people money so they can purchase concierge medical care. Sounds wonderful. I call it a tax cut, and the cut can be substantial if the taxpayers are no longer burdened by medicare/Medicaid. True, many people wouldn’t be responsible enough to use that money for healthcare, so perhaps we could structure the tax cut so that the money is designated to individual health savings accounts, or even require a portion to be designated to the taxpayer’s charity clinic/hospital of choice. As for the poor? The burden would shift to local communities. Yes, the medical community would have to step up to help these people, as will private charities. Allowing government subsidies to charitable organizations who help provide indigent care is another idea. The object would be to take the money out of Washington, where it often disappears into bureaucrat pockets. A doctor’s visit for a basic ear infection can be accomplished with roughly $50 or less. Bureaucrats waste that much in one hour on office supplies. Give it to the local church and you’ll find better results. And, yes, I think you’ll find that if doctors aren’t hamstringed by insurance companies and government programs they would be much more willing to provide free care for the poor. I know I would.

I don't suggest doctors not pay taxes, I simply think it would help to alleviate corporate/business taxes on medical clinics. And I understand that allowing docs more freedom opens the door to abuses, but I don't see how that could be worse than the abuse we see from private insurance companies and government programs.