Monday, May 11, 2009

Health care "savings"

They call it unprecedented. Private groups are pledging to cut health care costs by up to $2 trillion over 5 years, translating into a savings of $2500 for a family of 4 over that time, assuming that all the savings leaks back into the private sector.

This sounds great, except for a few things. First, I’d like to know how. That’s a lot of money and there are no specifics on how the insurance companies plan to save this kind of money. So while we wait for an answer, I’ll leave a brief list of reasons why health care is expensive today:

1) Added personnel. Doctors don’t have time to fight with insurance companies. As a general rule, it seems that all claims (or at least a large percentage of them) submitted by private physicians are immediately denied for one reason or another. This requires time to resubmit, or make phone calls, or do any number of things to get paid. Most doctors have to hire additional personnel since this can be a full-time job in itself. That means higher overhead, which means increased cost.
2) Tort Reform. Lawsuits drive up malpractice insurance cost, which drives up overhead. Additionally, the “fear” of being sued leads many doctors to practice defensive medicine, which means unnecessary tests are ordered, which means care is more expensive.
3) Declining reimbursement. Doctors are getting paid less for their time. So a basic clinic visit yields fewer dollars, while overhead costs are going up. This means more appointments must be added to cover the cost, which means less time with the doctor. Ultimately, basic problems that could be addressed if more time were available aren’t getting addressed, and those basic problems grow into bigger, more expensive problems.
4) Prevention. Screening for chronic disease may be more expensive in the short run, but the diseases that can be potentially prevented cost much more in the long run

If these things aren’t changed, then costs can’t be reduced. It’s as simple as that. Otherwise, the only way to reduce costs would be to ration care, which is not something we want.


Auntyem said...

Ration care!? Oooh, we don't want to do that. Without medical care for prevention and treatment more people will become a burden on society when they can't get back to work or end up in rehab hospitals or nursing homes, etc.

But the insurers have to do something to offset what the government plans to take away from them by offering cheaper plans.

My husband and I pay thousands every year for medical premiums, $5000 alone for long-term care insurance (if one of us gets a broken neck or a stroke, I don't want to have to sell our home and end up in a second rate facility). We can still afford to go to the most elite practices available here, but so many others can't, and for them I won't mind paying taxes to provide for them. Anything less would be too selfish; by the grace of God we don't find ourselves there.

I was just reading an article in the local paper about our local hospital on this island finally being hit by the harsh economy. Visits to the ER for basic care has increased by 17% over the past year. They had planned to expand, but now the write-offs for charity care has eaten into those plans.

Some people are rationing their own care: they can't afford the doctor's visit to get prescriptions and if they can get in to see a doctor, they can't afford the prescription, as one of our fishermen, only 39, who developed heart disease has found. Another case was a former 911 dispatcher laid off and forced to take a job elsewhere with no medical benefits.

Then there is the returning military, who find that many doctors and groups won't take the government's military TRICARE plan. You see military officers at the local community "poor people's clinic" sitting next to a homeless person because even our military hospital at the Naval Yard won't take TRICARE. That shouldn't be.

At that "free" clinic (it might be free to patients who have to go there, but not free to society due to the grants obtained from the government), you have a lot of turn-around in medical staff: new physicians work there a few years in a deal to have the government help them pay off their education loans, and other doctors are from foreign countries earning the right to stay here after serving in the clinic for a few years.

Then there was the case of the doctor who just finished medical school at the age of 54. I wish they had told more about his story. He has no illusions. He said that he always intended to serve the non-insured, under-insured and underserved and never thought to get rich. God bless him.

I pray somebody works this all out to the satisfaction of doctors and patients and not the intermediaries in between. Premiums shouldn't be so high, they should cut down on the red-tape, and medicines shouldn't cost so much. Patients too should educate themselves in how to maintain good health and not end up needing care when they can't afford it.

Port Orchard, WA

John Washburn said...

Em, some good points. I urge you to watch this carefully. If the points that I made are not addressed, then health care costs will not be reduced without short-changing the patient. Right now, all the industry big-wigs are promising to cut costs, but no details have been given. And the lawmakers haven't mentioned anything about tort reform.

Watch this closely. These points must be addressed to properly control costs.

Anonymous said...

Good points except about Tort reform. I think that some doctors do order unnecessary tests, but you know and I know that the real evil SOBs are the insurance coimpanies as yopu pointed out.

Doctors' overheads are increased b/c thery need at least one full time employee to handle insurance claims.

Once upon a time I dated a lovely young woman from CT who worked for an insurance company that provided medical benefits. She advised that personnel who paid claims were on the bottom of the company ladder. If they showed any appitude or ability, they were promoted out of that department.