Healthcare Costs 101

Whenever this topic comes up I find myself trying to explain the issue from another point of view than most of my friends so I wrote a white-paper on it and am working on editing it to submit to the op ed section of the paper. Feel free to offer feedback if you want to read it.

James

P.S.
I don't consider it political but realize that it might get locked. Sorry if this offends anyone. Just trying to open up the discussion. Also, sorry for the formatting. Only way to get it under the size limit.

 

I applaud your thought into the matter. I do not necessarily agree with all of your points (some are just over simplifications of the issues ) and I think it could use some work. That isn't being negatively critical of it, just saying it is a good start and you should refine it some more.

 

Much appreciated. I should have clarified that it is SEVERELY simplified in order to be accessible to a large audience that only has exposure to most of the topics through mass media. Anyone who does research on their own and has an understanding of the issue will likely find parts very simplistic.

If you don't mind, could you let me know which specific points you disagree with or find to be over simplified (here or through PM)? I'd like to make it as complete as I can.

 

I disagree with some points, but others are made well. A few distinctions I'd like to draw:

Analogizing health care to other service industries is difficult for a lot of people to swallow, and they have some valid moral and emotional reasons, if not logical ones.

Let's take your mechanic comparison as an example. Mechanics provide their services in a very different environment than medical professionals. You can remove/replace parts in a car and test for problem resolution. This is not a valid model on human beings...spare parts are not available, and repairs are not always possible (a good example would be cerebral-vascular accidents, better known to the world as a stroke).

Mechanics also have the comparative luxury of diagnosing with a near 100% accuracy rate, and misdiagnoses rarely worsen the problem. In medicine, diagnoses are nowhere remotely near 100% accuracy, and misdiagnosis and treatment based on that diagnosis can kill.

Therefore, we arrive at the human element: Pressure is on medical professionals the likeness of which exists in no other service industry. You must not only get it right the first time (which, due to the maddening complexity of genetics and interaction between pathologies and pharmacology, is not always even possible), but you must choose from a myriad of treatments the correct one. Again, the first time.

In case of mistake, the best case scenario is one of no harm done, forgiveness from the patient, and a second attempt (usually by someone else).

These pressures exist because of the inherent value placed on human life in our society. Reducing health care to a cost-for-service commodity like car repair would essentially require people to make peace with, if not be comfortable with, the idea that human life has a value, and that it is ok for people to die if they lack money or resources to pay. People who can't pay for parts or labor have their cars remain broken to the point of non-function. People who couldn't pay for health care would have their bodies remain ill potentially to the point of death.

Whether or not this is right or wrong is only part of what gums up the issue. It's very easy to have opinions when you're outside the situation. I've been in hospital administrative meetings where decisions were made for patients in dire need of medical care to be discharged home because their bill couldn't be paid. I've seen the family, spouse, kids, whathaveyou in tears and pleading to anyone who will listen. I dare the hardest, weatherbitten sonofabitch on this board to look this guy's daughter in the eye and tell her Dad is going to die because a second mortgage couldn't cover his medical treatment.

You (whoever you may be) wouldn't have the guts. And neither did the people who made the decision. They were in their offices when the *nursing staff*, the frontline caretakers were ordered in to transport this patient to his family's vehicle. The questions and crying were met with shrugs and empathetic claims to be "just doing my job."

So, if I may be permitted a moment of personal bias, generalizations are a poor thing to shape your views around when it comes to health care. There aren't any "general situations".

The second issue is less of a distinction and more of a request. I would really like someone to investigate the way health insurance reimbursement is currently handled in the United States. You flirted with it in your text, but never really grappled with the issue head-on, and I think your write-up would be stronger for it. While much is made in your paper of the pratfalls of the government agencies (medicare/medicaid/VA - though you don't mention the last one), the link to the private sector is left out. All modern major health insurance carriers take their business model and reimbursement amounts from Medicare cues. They pay similarly to what Medicare pays. They refuse to pay similarly to what Medicare refuses.

What they DO do that Medicare does not (cannot) is rescind (read: take away) coverage from people as soon as they obtain a major illness or expensive condition. This, along with poor governmental fiscal management, is why Medicare is quickly becoming an unfunded liability and private insurance companies turn a profit.

The so-called "evils" that worry the current health care reform opposition (to the point, apparently, of screaming and name-calling by theoretically rational adults) are already happening here in the US in the offices of private insurers. Care is denied, or "rationed" if one prefers that term. Review panels, and sometimes even individual adjusters, decide whether care is paid for or not - and sometimes this is care that could save a life. Most facilities will not provide care without payment. "Death panel" isn't the word for it - sometimes it's just "Death person". As for socialism, communism, fascism, and all the other hysterics that are being shouted to drown out any reasonable debate and exchange of ideas on the topic...we're talking about one industry here, not all of them. And we're not even talking about the health care industry. We're talking about the health insurance industry. The health care industry will most assuredly remain a private one.

The health care world is currently ruled by a for-profit bureaucracy in the form of a private-insurance cartel. Major health carriers are actually few in number...Blue Cross, Aetna, Humana, and Kaiser-Permanente own the bulk of the other "names" you see in the industry. Often, it's a general behind men in the trenches.

Most of the proposals on the table in Washington right now propose creating a non-profit government bureaucracy to compete with the one currently in place. Note that the consumer is given a choice between these options.

Despite the hysteria shouted at "town halls" and floated across the airwaves by a laughably inept media (and I mean all of them - FOX, CBS, NBC, CNN...no one is doing a good job), what Americans are really looking at is a choice between two evils. Which one is the lesser, they can decide for themselves.

 

I tried to keep it apolitical and just provide information. Consider this an early plea to keep it that way - apolitical and informative. I like where this thread could go.

 

You obviously have thought about this more than most individuals but I would like to offer up a few rebuttals.

While you make a case based on an individual who is forced out due to lack of ability to pay I would offer up that the hospital must make these kind of decisions in order to stay in business, distasteful as they may be. No business can maintain negative margins over time and that would be detrimental to the community as a whole. As you mention, the issue becomes emotionally charged and unavoidably someone will mention a friend, family member, neighbor, etc that had an experience like you mentioned. I do not think these individuals' experience, sad as it is, constitutes an acceptable reason for policy change. Many have offered that I am a cold-hearted person that does not care for people but that is not so. I just like to think out the long term impact and understand the effect on the larger group rather than accept that a change which helps one person is valuable.

Your second point is the one that I tried to hint at but will most certainly revise my paper to make more prominent. There is some misconception about insurance companies and how they make payments, negotiate rates, etc. They certainly take their cues from Medicare but their rates are nowhere near as dangerous to providers (read provide some profit). Medicare does not pay rates that cover the cost incurred to provide the service for over 80% of providers. A government option will certainly be more cost effective for the consumer but will pay something much closer to the negative profit rates of medicare than to the rates of private insurance companies. Very shortly many providers will either be forced to close or stop accepting insurance. It happened in '96 and absolutely can happen again.

I have to get ready for work but have a few more points to put out for debate later today. Thanks for keeping the intent of this thread going. Debate around the issue without the name-calling and possibly arriving at a better understanding by both sides of the issue.

 

And that's an extremely valid point. I'm a health care professional myself, in a small independent company, and I'm acutely aware of the inability of health care as a business to continue to give away services (and the attendant product costs as well). It is not fair to ask the medical professional to sacrifice their livelihood to ensure the livelihood of others.

My point with the personal example is simply this: It's easy to look at statistics. But when your spouse or child falls ill with something life-threatening, people tend to change their position very quickly. Personal interest, I think, plays a larger role than most people would like to admit. When a loved one becomes sick, suddenly that's 100% of the statistics right there.

The situation I think people are uncomfortable formally recognizing is that human life in a private health care system WILL have a dollar figure attached to it, regardless of the insurance system. The only type of entity capable of running deficits of the quantity needed to provide needed/wanted care to every individual is the government. However, in that situation you run the attendant risks of health care either provided by or reimbursed by the government.

I feel people should educate themselves as to what the downsides of such a system would be, and decide how they feel about that versus the current system for themselves.

Glad to hear you'll look at the subject more in depth.

Whether or not reimbursement rates provide some profit generally depends on how large a network the insurance company is contracted with. This is one of many reasons consolidation continues at a steady pace in the health care business. Larger business entities with more leverage can usually negotiate rates more favorable to a private business model.

FWIW in my company our reimbursement rates fluctuate on a yearly basis...some go up, others go down, and things end up roughly even when the dust settles. Unfortunately, this forces us to revise our billing practices on a yearly basis, which is certainly inefficient for us.

The third option being that people actually pay their bills (the difference), but we all know the challenges involved there...even if Medicare is covering 80% of the cost, 20% of an expensive surgery can clean the clock of an elderly couple on a fixed income.

Something I think people in the United States undervalue is the maintenance of health. People work hard learning to maintain their cars, and their homes, and other items in order to save money. With health care being one of the largest expenses in existence for US citizens, it boggles my mind that people do not educate themselves about nutrition, exercise, and other preventative maintenance for the body.

I firmly believe that if people took saving on health care as seriously as they do saving on car or home care that health care costs in this country would drop significantly.

Likewise. Look forward to continuing the discussion.