Connecting The Dots of Healthcare

If it’s back in the news, it must be close to an election year. Healthcare is about 14% of the GDP and anything between “tinkering” and “an overhaul” is bound to have huge ripple effects. The Dems peanut gallery chimes in. Edwards and Obama want all children covered and all businesses to either offer health benefits or to help pay for them. Clinton (H.), will make healthcare less expensive while expanding children’s health insurance. “Less expensive?” Like Medicare has been “less expensive?” Like Medicare part D has been “less expensive?” Like any healthcare initiative has been “less expensive?”

Everyone seems to want more if someone else is paying for it. And the people who are paying for it want to pay less but ensure high quality. We bemoan the … what is it now… the 40? 42? 45?.. do I hear 46.6 million “uninsured”. Do we want the same people who brought us Medicare running everyone’s healthcare? “Less expensive?” ha Ha! HA!! Less expensive for whom?

Who’s paying for what? When a hot appendix arrives in the ER, as a surgeon, I’d take it out and fix the patient. I’d wonder if I’d ever get paid because “uninsured” usually translated into “no-pay.” If a patient is uninsured, and unable to pay, you can’t squeeze blood from a turnip. (Technically, turnips don’t naturally have blood in ‘em…) “But you get to write off the expense,” I’ve had uninformed, otherwise educated friends say. NO… we don’t get to “write off” anything other than bad debt. And that’s NOT tax deductible… it’s simply time and effort we spend that we’re not compensated for. It once was that it all seemed to balance out… we’d be paid well by an insurer, enough to compensate for those who could/would not pay. But reimbursement is down from insurers… because people get tired of paying for other people’s healthcare.

Healthcare is expensive. There are a million reasons it’s expensive. Great healthcare is really expensive. Providers, (physicians, hospitals, etc.), continue to pay for unfunded mandates by the biggest and baddest healthcare insurer around, the federal government, in the face of reimbursement cuts. Quality initiatives, satisfaction improvement, accessibility programs are all “necessities” in “improving” healthcare… but when hospitals, physicians, and other businesses of healthcare are not able to set prices in a free market environment to maintain profitability, corners are and will continue to be cut, lip service will continue to be given to “quality” and “service” to simply jump through hoops set up by CMS. 

 (see Medicare’s search tools grading nursing homes, homecare, hospitals, (and soon… physicians and physician practices), on “quality” and check out the HCAHPS information on “customer service.”)

When you hear any politician, Democrat, Republican, or Independent say they can improve healthcare AND reduce cost…. Hold on to your wallet! The fact is that great healthcare is very expensive. Think about this in terms of a restaurant. I’ve noticed a number of restaurants I go to on a regular basis over the years have been shrinking serving sizes. Price stays the same. If the prices go up, the margin improves and the size may stay the same for a while. If the price increases too much, or the serving size gets skimpy… I’m free to go elsewhere.

OK… I know “healthcare isn’t that simple,” BUT… it does illustrate a point. You get what you pay for. If you want a luxury car to drive to work, you’ll pay more than you would for a Ford Taurus. And if you want to save even more money, take the subway. They all will get you to work… but you get what you pay for.  

“Other nations can hold down healthcare costs” … true… and I had the opportunity to do some healthcare consulting in India, China, and

Singapore to check this out. I discovered, generally, the standards of care are similar for all patients in a given hospital. (Some of the public hospitals I would avoid, but many of the private hospitals are on par with US standards… but the standards of care are pretty much the same for patients in any single hospital.) But if you want a private room… you pay extra. You want a TV… you pay extra. If you want anything beyond standard… it costs the patient more. If you want a TV and don’t have the money, maybe you can read your roommate’s book when they are asleep.   

In our country, we are moving to a private room utopia with all the trimmings because hospitals compete with other hospitals because we are still working under the belief that we are in a free market healthcare environment. The public, and its elected representatives, appear to think “profit” in healthcare is an abhorrence and not part of the “mission” of healthcare. But if there’s not money, there’s no mission. As a physician, with most of my income deriving from treating Medicare patients, I began to think I was a government employee. Only I didn’t get a government retirement program, vacation time, educational expenses, or Veterans or Memorial Day off.  

Who wants to choose a double room over a private room if it’s “free?” If you had to pay for the private room do you think demand for the double rooms would increase? Fact is, someone is paying for both rooms… but we all want someone else to pay for it. To lower healthcare costs we will “pay” in someway. Is it worth the “cost” or do we decide to reduce the serving size? Or do we decide we want a bigger serving size and it’s worth paying extra for? Or do we eliminate some of the expenses “healthcare” must pay for to keep the cost the same, or perhaps lower, so we can maintain the current serving size? Medicare tells a hospital how much they can charge to replace a hip, but the folks that sell the hospital the hip replacement, (that is paid for out of the money Medicare has decided to pay the hospital), determine how much to charge for the hip hardware based on free market forces competing with other hip hardware businesses.  

It requires a sacrifice anyway you slice it. So beware the politician who uses a 20 second sound bite to tell you they’ll give you more for less. Healthcare, LIKE ANY BUSINESS, needs to be profitable to remain in business. “Belt tightening” alone to increase “efficiencies” in healthcare will result in smaller serving sizes. Pin down politicians not only on “how” this or that plan will “save money,” but rather “why do you believe this will actually cost less in the face of what all our other collective experiences have been in creating programs to “save money?” If they only take another 20 seconds to do this… they’re lying!

 

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