Friday, June 15, 2007

How to Make Good Healthcare Cheaper: STOP MAKING IT FREE

Okay, so this post kind of sounds like an oxymoron. However, the above statement is true. We just need to define who it is getting cheaper for and who is currently getting it for free.

In the current healthcare system, there are 2 ways to get all of your healthcare for free and one more way that makes it kind of pseudo-free. The two ways are the following:

1: Qualify for and sign up for Medicaid
2: Go to an emergency department, shirk your bill, and don't keep enough assets to be worth suing.

What should be painfully obvious about the first two, is that the less productive you are, the more likely it is that you will qualify for free healthcare. The pseudo-free healthcare comes in the form of Medicare. I call it pseudo-free, because most of its recipients have been paying for it for their entire lives. However, it pays regardless of the level of investment on the part of its benificiary, and the citizens who utilize it generally stop paying for it around the time that they qualify to use it.

Generally, Medicaid doesn't pay well enough to cover the cost of seeing the patient. Obviously, someone is losing money when someone shirks the ER bill as well. What does all of this mean? For one, it means that healthcare providers generally lose money by seeing the people who currently receive free healthcare. Where does such a provider make up these losses? With paying patients of course.

I'm going to stick the obvious disclaimer on this post that seems to elude some people. Doctors cannot make money appear. If they are not profitable, they cannot stay in business. Regardless of how ludicrous it is to think that doctors should work for free all the time in the first place, it is even more ridiculous to think that even the most self-effacing physician could continue to treat people without breaking even. As they say in business, "no margin, no mission."

Now, let's take a look at an inner city ER, with a 20-30% collections rate. Consider this, the ER doesn't really care if it collects 20-30% of the bill from every person or 100% of the bill from 20-30% of the people. To them, the result is the same. Consider then, that in that same ER, each individual bill could be reduced to 20-30% of the individual bill if 100% of the people paid, without changing the overall cost structure. This same ideaology could be extrapolated, albeit a bit more complicatedly, to apply to every Primary care doctors office in the country, where they are forced to bill well paying patients against these losses from Medicaid or non-payers in order to stay solvent. These costs are then often pushed up through the insurance companies and come out on the other side as higher premiums.

I'm not advocating eliminating charity care, but it seems pretty obvious that the entrenched system that we have right now is what drives healthcare costs to the outrageous heights that they have achieved. When you have problems paying your own premiums, question whether your anger is well founded when aimed at your doctor or even the insurance executive. Perhaps we should all get a little bit more angry at the people who are abusing the nations ERs and the system that lets the least productive members of society leach the life out of its marginal income members. Many of these people are often forced to lose the very thing that they are being forced to pay for.

14 Comments:

Blogger Doctor Dino said...

Are you out of your mind? Low income individuals need encouragement to get health care and even a $5 copay has been demonstrated to result in lower compliance. That's why they're in the ER in the first place. I think everyone should pay something to demonstrate they value the service they are receiving, but that ought to vary tremendously with income. I mean a $10 copay makes no sense for someone with my income! Try thinking about it from a bigger picture perspective than your own.

8:08 AM  
Blogger MiamiMed said...

I think that I have taken a big picture perspective. You are essentially espousing the ideaology behind all socialized schemes, which originally comes from the Marxist "from each according to his ability to each according to his need." I disagree with this premise. You believe that we should use social resources to encourage people who aren't willing to spend $5 on their health. I say that we shouldn't bankrupt middle income families who are trying to help themselves in order to "encourage" the people who won't spend the $5 to come to the doctor.

Medical costs are a certifiable disaster, but they have become that way largely because of cost shifting. I don't see justice in outpricing the majority of the country in order to cover a small percentage that won't help themselves. I also don't believe that universal healthcare, which will simply hurt other industries unfairly, is the solution to this problem. Basically, if you won't spend $5 on your own health, that is no one's problem but your own.

8:21 AM  
Blogger Someonetc said...

1st off congrats on finishing step 1.

as far as you post, i don't disagree with everyone paying for something, but for some reason people in this country feel that medical care should be free and balk at a $5 copay as dr. dino stated. secondly, the pecentage of collections can be deceiving. it depends on what your actual bill is. on average, medicare rates are around 40-50% can be 60% of your bill; medicaid, on the other hand, may have rates that are less than 20% of your bill. the other thing to understand, (as you probably do) many hospitals do get some reimbursement from the state for taking care of the uninsured and medicaid patients. the question for the physician is how to get a hospital to help the physician who is taking the major financial hit. there are many physicians who have partnered with the hospital to receive a subsidy for running clinics or ER's that are primarily medicaid or uninsured.

3:41 PM  
Blogger Doctor Dino said...

Well, it's not really a matter of choice... it is people who CANNOT pay a $5 copay. As difficult as it may seem to believe, I am talking about low income uninsured where annual incomes typically hover around my cardiologists weekly net.

Nothing should be free, but we have a responsibility to create opportunity. Social resources should be used for the common good, which usually represents something OTHER than one's own pocket.

No, socialism doesn't work. But the arch conservative approach is nothing more than selfishness in moral guise.

7:08 AM  
Blogger Petri said...

It sounds to me like the issue then is not whether we should or shouldn't charge for medical assistance but the age old issue of poverty itself.

I have observed many low-income families in the ER that seem to have plenty of extra income for their cell phones or other luxury items but balk at the idea of spending money on healthcare. There are also others, mostly homeless, who really do have nothing, no money at all. Why haven't we found a solution to that larger problem first. Let's direct our "social resources" toward eliminating poverty in general, then allow people to choose how to spend their money.

I agree with you Dino, that our tax-payer dollars should be used for the common good. But we should be using them to attack the roots of problems not the consequences. I agree with Miamimed, that healthcare is a service, and if people deem it an unneccessary, unimportant service then I won't force it upon them anymore than I'd force someone to exercise or eat healthier or donate to public radio. I believe in giving people the ability to choose, not in forcing their hand. Let's focus on the greater problem, I think it would help fix many of the issues in healthcare.

8:52 AM  
Blogger MiamiMed said...

Thanks again for the replies.

doctor dino,
I don't think that selfishness is inherintly a flaw, so I see no need to put it in any guise. Down here where unemployment is essentially 0%, having no job is no one's fault but your own. The population that you are talking about is tiny, largely comprised of individuals who have made extremely poor life choices or suffer from mental illness. The VAST majority of people who don't pay, WON'T pay. If you want to smoke crack, I really have no desire to make you stop, but don't expect all of Middle America to pay for the treatment of your 10th ER visit for Prinzmetal's Angina this month.

Charity embodies some of the greatest traits of humanity, but forced cost shifting doesn't fit that bill. Anything that makes someone else suffer for the sake of benefiting another person against the will of the victim isn't just or righteous. THAT's the problem.

Also, I have still failed to figure out the "common good" is always code for taking resources from one person and giving them to another. Roads or defense is common good. Taking money from someone productive and giving it to someone unproductive is good for the less productive individual, but it hardly accomplishes any "common good."

11:22 AM  
Blogger MiamiMed said...

As an aside, I don't really think that eliminating all poverty is ever going to happen. What is common good is creating a set of laws that provide opportunity for people to reap the rewards of their own actions. This allows people to crawl out of poverty. 30 years of the "war on poverty" has done little to eliminate it, since most poverty in the US is based on poor choices or cultural conditioning on the part of the impoverished, which self-perpetuates. The government can't fix that. Hurting the people who have managed to not fall into poverty in the name of impoverished medical care also doesn't fix that. I know too many immigrants down here, who arrived with no money and didn't speak the language, who either themselves or within the next generation were millionaires. The opportunity to provide for one's self is the beauty of America. You can call that selfish if you want.

11:29 AM  
Blogger Bohemian Road Nurse... said...

Dear Miami:

In regard to the universal health vs. the way it is now, per your comments on Panda:

First of all, I never was angry with his opinions. But I was always angry at his rude, ridiculing ways of criticing those whose opinions differ from him. It irked me. That's why I did not refrain from telling him my opinion in an equally rude way.

In regard to your suggestion on Panda that I should put in "OT" and make more money, or else leave Podunk to get a better paying job---or else stop complaining about a martyr-like "sacrificing of myself" to help the "Podunk people that need me:


Here's the answer:

Yeah, been there done that. Made $45 an hour at last my trauma center/ER job. Whoopdeedoo. And no, OT is not an option at my company presently. And as far as "sacrificing"?

Believe me, baby, I will sacrifice heavily when I leave Podunk, which will probably be in the next year, when I reluctantly leave my home to go to the "big city" where I can find better money and the nirvana of insurance.

However, my elderly, sick, widowed mother, who I came here to take care of, won't move with me. You talk to her. If you have any luck, let me know.

You know, it's sooooo easy to criticize when you're sitting in fat city with no problems. But I doubt you will understand that comment. I think the zeal of your opinions has blinded you to the facts of "real" life in this country.

I'd quote a Bible quote to ya about "judging not lest ye be judged" but, somehow, I bet you'd just laugh at it.

And another thing: You shouldn't be so high and mighty. Although you are right in many of your complaints about the system, I personally know ER docs who admit to me repeatedly that ER doc groups GENERATE MORE MONEY from the insured patients by ordering more tests and labs in order to "make up the lost money" they lose with non-paying patients. I saw it myself when I worked with them, heh!

That's wrong and immoral and it's lied about every day in this country.

What say you?

3:58 PM  
Blogger MiamiMed said...

BRN,

With the awkwardness of continuing an argument in this blog that started on another, I'll only take this another step or two.

Here in my "big fat city," I pay $1200/month for a small 2 bedroom house 15 miles away from the hospital (finshing school), I pay $200/month for car insurance, and coverage of my family for basic health with a $2500 deductable is well over $400/month. Perhaps you mistook me as someone who was born into some sort of overwhelming wealth and priveledge. Well, I'm now well over $100k in debt, helping to support a family, and I can assure you that while I was fortunate enough to be raised in middle class comfort, no one is paying my way.

As a side note, my mother took care of my sick grandmother at home for nearly 7 years (Alzheimer's), and multiple years of those occured when I was in high school. If you think that I don't understand caring for a sick family member, you'd also be mistaken.

Now, all of that being said, IT'S IRRELEVANT in terms of the law. You and I have both made choices. I have not attempted to force anyone else to pay the debts that I took on. Your situation is not as different as you might make it out to be in that respect. I'm sorry that your mother won't move, but the idea that the country should be forced to then support your healthcare at gun point through the force of the Federal Government isn't justified on that account. I don't blame people for doing what they need to do, and I respect your decision to care for your ailing mother, but it isn't a reason to institute a national healthcare system.

As far as ERs overcharging paying patients. Duh!, with the exception being that it really isn't the Docs fault. It's a systemic flaw. If you read the post that you have commented on, you'd find that I wrote the ENTIRE thing on that very subject. However, nationalized healthcare largely just replaces cost shifting with taxes, which really fails to fix the fundamental problem in any way.

I really have no intention of judging you beyond your attempts to impose your will upon me with a national health system. If you want to care for your mother, go ahead. If you want to move to the city, go ahead. Don't however expect to me to pay for your decisions. That's my problem. I only suggested to you a way to solve your own problem, thus taking the burden off of everyone else's shoulders.

8:42 PM  
Blogger Bohemian Road Nurse... said...

I sincerely thank you for your honest, logical, and intelligent reply. You could have ignored me or deleted my comment but you didn't. And I will admit here that I understand and validate the things you said to me--and I agree with them. I also will say that you've given me food for thought, especially about my...temper in replying to people who irk me. (Although...I will also have to admit that I was goaded by some of the harsh things that were said "over there" and replied again...please forgive me....)

1:11 AM  
Blogger MiamiMed said...

BRN,

Think nothing of it.

7:10 AM  
Anonymous Anonymous said...

I am a little confused by your initial post, as in some ways, you have competing themes in it. The first issue you brought up is that health care costs seem to be rising. And then that doctors are being paid less. So which is it? I would think that if doctors were being paid less, health care costs would be decreasing. So, the secret issue is that more of the health care costs, which really translates into revenue from the doctors' perspective, is not going to doctors, but to something else. The real issue is that something is eating away at the reimbursement that we receive, even as we seem to pay out more premiums to insurance, and even as Medicare seems to pay out more each year per member. And I believe the answer to that is that more health care dollars are being diverted to private insurances and pharmaceutical companies, and in return the red tape they throw up is unimaginable, and their services seem to get cut each year. Anybody noticed that insurances are now reimbursing at rates equal to or less than Medicare? Before, Medicare was the lowest indexed payor, and now it's become equal to or better than most. Why's that? Because none of us have the time or temperament to pay attention to that sort of thing. And recently there was a report in the AMA News about the fact that Medicare Part D costs the government 6 times more to pay for the same medication through a private company than plain old Medicare did. Why? Red tape, bureaucracy, shareholder interest, whatever you want to call it. And now, Medicare Advantage plans are coming to the forefront, which cost 120% more than Medicare paying out straight. Ironically, insurance companies demanded that Medicare pay them 120% more than the RVU reimbursement, because they said the payments were too low for them. Why couldn't Congress just pay 120% of the allowed Medicare payment straight to the doctor? So now, that $56 that you used to get from Medicare comes out of the $67 Blue Cross gets paid by Medicare. And who foots the bill? Us, our kids, and our grandkids.Except that instead of just being contracted with Medicare to get a payment, you have to be contracted with both Blue Cross AND Medicare, or you don't get any payment at all, because you're not "in-network," even though the insuurnce companies tell the patients they can see their doctor just the same, as long as the doctor is contracted with Medicare.

2:47 AM  
Anonymous Anonymous said...

I completely agree with your post and website. Doctors should be given freedom and generate money like any other business. Free markets would drive costs down, if they were only given a fighting chance to.

Unfortunately socialist ideology and government is strangling the medical profession, putting the brightest in chains and giving the undeserving services under the pretext of social justice. At whose expense?

The guilty who vote for socialist leadership only need to look into a mirror to realize their crimes.



3:20 AM  
Anonymous Peter Keating said...

Socialists in America are the bearers of death. They won't listen to doctors on the issue of universal health care. If they won't listen to doctors about medicine, who will they listen to?

They don't care about creating value in the world, they only care about taking it away. They don't care about personally achieving success and money, but they sure as hell don't want doctors to. In their world, up is down, right is left, illogic is logic.

I admire your courage to speak up in a nightmare world we now live in under obama.

Make as much money as you can. You deserved it. Stick to your beliefs and vote these socialists bastards out. Its the only way we can get things right again in medicine.

3:41 AM  

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