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Author Topic: Outrage du jour...  (Read 317 times)

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Offline ND Martin

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Outrage du jour...
« on: February 21, 2013, 11:51:23 AM »
Karl Denninger, one of my fave libertarian bloggers, can excite outrage like few others.  Today, he targets the outrageously rigged cost of health care...

                
Well Look What We Have Here! (Health Care Scams)
  
I'll be damned.

      
Dozens of midpriced items were embedded with similarly aggressive markups, like $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare, the government health care program for the elderly.

More than a 10x -- that is more than 1,000% -- mark-up.

You'll find dozens of examples in this article.

You'll also find documentation that so-called "non-profit" hospitals make plenty of profit -- they're just prohibited from distributing it to shareholders.  Multi-million dollar salaries, on the other hand, are just fine.

Further, the essential purpose of a non-profit must be to operate for some charitable purpose.  You will find single-digit percentages of operating income that are in fact "donated", including those alleged "compassionate use" claims from pharmaceutical firms.  

While pharmaceutical companies are for-profit companies, the supposed non-profit hospitals and networks are another matter.

Again folks, as I have argued, if your medical bills were 1/10th or 1/5th of what they are charged at today, you could probably pay them in cash.

Further, I wish to quote the following:

      
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

What do you call a practice that is universal among the participants in a given market where the person who is buying not only has the price actively concealed from him or her before the fact but worse is unable to negotiate in many cases due to exigent circumstances (e.g. a perceived or obvious heart attack!)

Of course we have plenty of exceptions and simple refusals to prosecute when it comes to these firms and industries.

It's not an accident.

You're being robbed outright, and now it's in the "mainstream media."

Oh, and Obamacare?  It further institutionalizes these practices by forcing you to participate and have your money stolen.

For how long will you sit back and tolerate this sort of outright theft in an amount that aggregates to nearly three trillion dollars annually, undertaken with the full permission and active participation of the United States Congress, the Administration and the States as well?
                

The devil as always is in the details.  KD links the Time article by Steven Brill, Bitter Pill: Why Medical Bills Are Killing Us which is an infuriating 'must read'.
« Last Edit: February 21, 2013, 12:35:26 PM by ND Martin »

Offline Flight-ER-Doc

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Re: Outrage du jour...
« Reply #1 on: February 21, 2013, 02:16:26 PM »
Sure.  Medicare may pay $20 for the series, which actually costs around $45 (at least at my hospital).  Fully 1/3 of my ED patients don't pay at all, despite programs like medicare.

Guess who makes up the difference?
Yes, I'm a physician.  No, I'm not YOUR physician.  Nothing I say here is medical advice.

Do I treat Glocks like I treat my lawn mowers?  No, I treat them worse.  I treat my defensive weapons like my fire extinguishers and smoke detector - annual maintenance and I expect them to work when needed


Offline 9thInfDivRvrRat

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Re: Outrage du jour...
« Reply #2 on: February 21, 2013, 09:15:58 PM »
"Guess who makes up the difference?"

Uh, the ObamaCare Fairy?

Used to be anotherone.

Offline ND Martin

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Re: Outrage du jour...
« Reply #3 on: February 21, 2013, 11:12:41 PM »
Did you read the linked article, Doc?  Do you think that a buck and a half for an aspirin tablet is a reasonable price?

Those who 'make up the difference' are all too frequently those who can least afford it.

Offline Flight-ER-Doc

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Re: Outrage du jour...
« Reply #4 on: February 22, 2013, 08:33:19 AM »
Did you read the linked article, Doc?  Do you think that a buck and a half for an aspirin tablet is a reasonable price?

Those who 'make up the difference' are all too frequently those who can least afford it.

Those who can least afford it have a plethora of federal and usually state programs to pay.  Thanks to a federal law, EMTALA, they don't have to worry about it at all, though:  Those who are left holding the bag pay.

And yes, I understand why an aspirin tablet can cost $1.50, by the time all the paperwork, insurance, people, stockage, etc are paid for.  If you don't want to pay that, dont buy your aspirin at the hospital.

I ROUTINELY have female patients come in during the wee hours of the morning wanting a pregnancy test - $6 or less at the local Walgreens, but a $500 workup at the hospital.  These irresponsible ...women... come to the ED because it's "Free", and available at 2AM, and care not a bit that people who are actually mature and responsible pay for their actions.

Hospital care is expensive because it is there, 24/7/365.25.  Lab tests that can be run at any hour of the day are pricey, because technicians need to be employed to run the machines - which are expensive too.  Xrays are expensive for the same reason; drugs are expensive not just because the drugs themselves are expensive but because an entire crew of people have to be employed to make certain the right drugs are available in the right places at the right time, 24/7 again. 

How to fix it?  Fix the laws.
Yes, I'm a physician.  No, I'm not YOUR physician.  Nothing I say here is medical advice.

Do I treat Glocks like I treat my lawn mowers?  No, I treat them worse.  I treat my defensive weapons like my fire extinguishers and smoke detector - annual maintenance and I expect them to work when needed

Offline ND Martin

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Re: Outrage du jour...
« Reply #5 on: February 22, 2013, 09:05:33 AM »
So essentially your rationale for high prices is labor and administrative cost?  With all due respect, that's BS, Doc.  

Don't get your aspirin at the hospital? ROTFL!!!  Right.  Do you permit patients to self-medicate in any form while under hospital care?  

I'll ask again if you have read Brill's article?  

Yes, the laws must be changed, starting with Obamacare.  Unfortunately, it's gonna get much worse before it even has a chance to get better.
« Last Edit: February 22, 2013, 09:12:54 AM by ND Martin »

Offline Flight-ER-Doc

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Re: Outrage du jour...
« Reply #6 on: February 22, 2013, 09:53:50 AM »
So essentially your rationale for high prices is labor and administrative cost?  With all due respect, that's BS, Doc.  

Don't get your aspirin at the hospital? ROTFL!!!  Right.  Do you permit patients to self-medicate in any form while under hospital care?  

I'll ask again if you have read Brill's article?  

Yes, the laws must be changed, starting with Obamacare.  Unfortunately, it's gonna get much worse before it even has a chance to get better.

BS?  OK, I just work in a hospital, and understand what happens there and how it happens.

Who do you think takes that aspirin tablet out of the bottle, puts it in a pill cup,writes the patients ID on it,  makes certain that it is the right drug, in the right dose, not expired, even on the shelf, moves it to the patient, gives it to the patient?  Your mom?

Not that simple in a hospital...there are maybe 15 or 20 different people involved in that process. We have machines that do it i the ED - someone has to keep the machine stocked, and operate it.  The hospital (and the physicians) can be sued for not having the aspirin there when needed.  At home if the bottle is empty, someone says whoops and buys one the next time they're at the store.  Lawyers are not involved.  The supply chain is quite short and efficient, for the demand and supply.

Yes I read Brills article.  And many others just like it, usually in Time Magazine - it's not original at all, or new.  He's also full of BS.  Medicare isn't the cost of the service, it is set by law at a fraction of the actual cost of the service., and thanks to government inefficiency the cost is based on a several year old baseline. Medicare is based on private (ie non-governmental) payers covering the difference, BY LAW.

BTW, a PA/Lat is not a simple X-ray, it is two different X-rays....back to front and sideways.  And paying X-ray techs to be there at 3 in the morning to do them costs more than having a system where they are scheduled at the imaging center downtown, and we can get you an appointment in 3 months (the system in Canada, for routine images).

And as I mentioned, by law, I have to treat anyone who shows up in the ED, for free.  2/3 of my patients actually pay something, 1/3 do not pay ANYTHING at all - not medicare, not insurance, not cash on the counter. And for those 1/3 who skip payment?  We have to pay for collection agencies to try and recover the fees owed us, and suffer PR backlash for the attempt.....and recover maybe 5% of the money owed.  Show me another business where people don't pay for the services and products they receive, and spare me the snivelling about how expensive an aspirin tablet is.  BTW, the cost of dispensing is equal for a single 325mg aspirin tablet or any other pil, and is factored in equally. 

Are there efficiencies to be had in hospitals?  Sure, starting with anyone with letters (MD, BSRN, MSN) after their name who are wearing dress shoes and suits.  Take away the $1.8 million that MD Anderson's head gets and take care of a couple more catastrophically ill patients (but just a couple more, and only for a year or two).  But the best efficiency is making people pay, up front, for their medical care and then let them get reimbursed by medicare, insurance companies, etc....for whatever the difference is.  People will really decide if they can get by with a 2AM pregnancy test, or wait until 8 when the drugstore opens....and maybe use the money saved for better private insurance.

As far as the typically heart-wrenching story that Brills article starts out with, I am truly sorry for that persons situation (if, indeed, they really exist).  I see stories like that all the time.  They made a choice about how much insurance (another market the feds have trashed, with state help) they were comfortable with:  People make lifestyle economic choices all day long.

But the cause isn't that hospitals charge a lot for the services rendered, its that 50 years of medicare and 80 years of Roosevelts health care insurance not being taxable have totally disrupted the health care market economics and this is the inevitable result.  Either way, fixing the problem or not, will be quite painful and difficult.
Yes, I'm a physician.  No, I'm not YOUR physician.  Nothing I say here is medical advice.

Do I treat Glocks like I treat my lawn mowers?  No, I treat them worse.  I treat my defensive weapons like my fire extinguishers and smoke detector - annual maintenance and I expect them to work when needed

Offline ND Martin

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Re: Outrage du jour...
« Reply #7 on: February 22, 2013, 10:35:22 AM »
...But the best efficiency is making people pay, up front, for their medical care and then let them get reimbursed by medicare, insurance companies, etc....for whatever the difference is. People will really decide if they can get by with a 2AM pregnancy test, or wait until 8 when the drugstore opens....and maybe use the money saved for better private insurance.
...
But the cause isn't that hospitals charge a lot for the services rendered, its that 50 years of medicare and 80 years of Roosevelts health care insurance not being taxable have totally disrupted the health care market economics and this is the inevitable result. Either way, fixing the problem or not, will be quite painful and difficult.

I knew that if I drew a real response from you that we would essentially agree, Doc.  

I don't entirely agree with your rationale for the cost of meds, but that's really an accounting technicality and a symptom of the larger issues.  (I can understand that the $1.50 for a single aspirin is basically the minimum cost for dispensing any oral meds where the real cost of the drug itself is less than a nickel, so the test would be to look at the charge for meds with similar real costs.  The cost of procuring/dispensing a medication that costs a nickel is the same as a drug that costs $5, so if your model holds, the price of a medication that costs $5 retail per dose should be no more than $6.50.  If  you have access to price information where you work it would be interesting to see.)

Yes.  Brill's piece is filled with hyperbole and logical fallacies; his conclusions are (as expected in any mainstream publication) somewhat left of center, but it's useful as a broad starting point for discussion.

I long for a return to a world we'll not likely see again--where I pay for medical services directly as needed and carry what used to be called a 'major medical' insurance policy for catastrophic expense.
« Last Edit: February 22, 2013, 10:55:26 AM by ND Martin »

Offline lpdbw

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Re: Outrage du jour...
« Reply #8 on: February 22, 2013, 11:52:35 AM »
Quote
I don't entirely agree with your rationale for the cost of meds,

There's more, since an ER doc doesn't see everything that goes on.

CMS (Medicare) requires every healthcare system to implement an Electronic Medical Records system by 2016, or you don't get paid at all.  Most of the projects I've worked on cost $9 million and up, not counting the fact that you're completely changing the way you do your business.

Lawfare contributes more hidden costs than direct ones.  My current client is a small, regional hospital.  Their HIM (medical records) department is understaffed with only 20-some employees.  Similarly for their Quality and Compliance organizations.

IT has over 60 people, many of them consultants, just doing software.  Systems and desktop support (for about 500 computers) adds a bunch to that.  24 hours a day.

There are so many city, county, state, and federal organizations with "oversight" that I could be kept busy full time just answering their data queries.  Coupled, of course, with the fact that if I answer them wrong, I've committed a felony under HIPAA.

Imagine running a business where you have to provide the service, using credentialed professionals, for anyone who walked in the door.  For every one of those professionals, you have 10 or more administrative and support people.  When you're done, you have an expensive pre-billing process, also involving certified people, and then you send bills out.  To Medicare, who will maybe pay 25 cents on the dollar, or to commercial insurance companies, who also have a multitude of people looking for reasons NOT to pay, or to the patients, who can and often do ignore them.

At the end of the day, you consider it a success to collect 20 cents on the dollar overall.  This is how you have to develop you pricing model.  That 1.50 aspirin is 5 doses hand-delivered by a Registered Nurse to bedsides, for which they get paid once.

No I didn't read the article.  I live this.  I don't need to get any "facts" from Time.  Ever.

I trust the crazy guy on the corner more.

Offline lpdbw

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Re: Outrage du jour...
« Reply #9 on: February 22, 2013, 12:06:51 PM »
Oh, and the part you quoted from the Doc nailed it.

I'm only in this biz because it's where the money is.

I'd rather go back to building Avionics software for the aerospace industry, or mission support software for the military, or any commercial software, but those industries have been hurt bad by the Reid/Pelosi/Obama depression.

On the other hand, they've been dangling stimulus money in front of healthcare just like a child-molester uses candy.  So even though I feel a bit dirty, I do the work.

Offline ND Martin

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Re: Outrage du jour...
« Reply #10 on: February 23, 2013, 01:16:39 AM »
Anticipating a collection rate of 20%, the prices are bumped 500% to compensate.  Self-perpetuating madness.  Everyone suffers except (by design) those at the top collecting the big salaries.

If I think about it too much, I find myself hoping for a big coronal mass ejection that will knock us back a century so we can try to do it right next go round.  Or maybe a time machine so someone can go back and take out Woodrow Wilson and FDR.


 


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