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.