MYTHS AND FACTS OF HIGH COSTS HEALTH CARE.

I have deviated from my posting on the Health Care Bills by becoming "bogged" down in the wheres and whys of the costs to the individual and not continuing on to the employer/ employee responsibilities, We will get back to that later. Meanwhile to return to the real or demonized causes for our out of control health costs.

THE CULPRITS:

A-THE MEDICAL PROFESSION

Various elements of the Health Care continuum have been blamed for the high cost of US health care. A few I believe have been falsely made scape goats. Others have contributed and could be reasonably altered. One of the largest factor has been ignored.

As a long retired physician who has lived through the shift in medical practices from patient orientation to case treatment, I am aware that much of the blame leveled at the profession is nonsense. Yes, I am aware that many zealot's will dispute that statement. Please however hear me out.

Over the past few decades, although physician dollar reimbursement under Medicare has increased it has not kept pace with the cost of living. At the same time the actual value for many services has been lowered. Marshall Ackerman, a Washington DC orthopedist wrote in an OP ED article for the Times on August23 "In 1971 I was paid $1,000.00 for a total hip replacement. Today(2009) I would be paid $1,600.00 for the same service." With Surgery that is an all inclusive fee including all the necessary post operation visits. The surgeons do not and can not pad the bill, although in some contracts the wording only includes a normal post operative visit.

Likewise, the primary physician doesn't own CT or MRI scanners. His reimbursement for ECGs or Chest X-rays -which fewer are doing now because only the doctor or a licensed technician can operate the equipment- or Lab studies is so low that they are not economically worth the time or equipment, therefore it is outsourced. The cost for a physician to operate an office due to the need to have a large staff to keep up with the required paper work, communicating with the insurance carrier by phone or fax for approval for referrals or ordering diagnostic studies is unconscionable.

The role of doctor ownership of radiology or surgical facilities as a factor in increasing the costs has been overblown. Indeed present laws make unnecessary procedures at facilities in which an interest is held difficult and subject to legal action . The free standing surgical facilities must be licensed by the state. and subject to similar standards of a hospital facility. Indeed, if the doctor has a financial interest in the facility to which you have been referred, he is obligated to inform you. They can operate at lower costs probably due to better efficiency.

An example is the Surgery Center at the Watchung Circle. The hospital lost money operating it, even though patients and doctors found it preferable to go there than through the hospital rigmarole for same day surgery. The charges for similar procedures were much lower at the Center than in the Hospital. When the hospital sold it to the physicians who were using their in house facility as well as the Center it became profitable. The physician ownership result in a savings in cost to the patient and/or to the 3rd party payer.

Many of you may have already experienced the latest requirement for all doctors to have on record a photo ID of all patients"to cut down on insurance fraud". That include Medicare. The doctor may have treated the patient for 30 years but that patient must be treated in the same manner as one making his first visit. To fail to do so would subject the office to large fines if discovered during an unannounced survey visit. yes there is a threat of a police state.

There is little justification to place a major blame upon the physicians for the increase in heath care costs in as much as their operating expenses have increase at a rate greater than Medicare reimbursement. Yet Rep. Pete Stark would have the government reduce Medicare rates which are the standard used by the Insurance providers, to the equivalent of 'Bread and Water".

B-THE HOSPITALS ( EXCLUDING THE ER)

Although most patients enter the hospital via the Emergency Room (ER), an integral part of the hospital complex, I will treat it separately towards the end of this series.

Reimbursement for patient stay in hospitals is limited to case formula days. Every hospital admission is given a disease code base on the triage determination. The case code can be altered by the interpolation of modifying facts. That case code determine number of patient days allocated and what would b e the usual diagnostic procedures required. The reimbursement the hospital will receive is determined the moment the patient steps foot in the door.

To make sure that the regulations are adhere too, hospitals employ staffs of nurses and doctors who sole duty is to see that the standards are being followed, and if possible expedite discharge of the Patient as early as possible . Only by assuring that a patient doe not exceed his allotted hospital stay can the hospital survive. It could can gain if the patient leaves earlier, an unlikely occurrence, since the fee received is procedure or disease oriented. Thus under normal circumstances the hospital should not be a source of cost drain.

The hospital receives no further reimbursement if the patient becomes an outlier and exceeds that formula number of days. In most cases diagnostic studies are factored in the formula. This plus the under payment for Medicaid patients and bad insurance company contracts have contributed to the hospital's financial woes.

To counteract that loss the hospitals tend to increase markedly their stated charges to the uninsured. They developed a multi-tiered system. One fee accepted from the government. higher negotiated fees from various insurance carriers, and that charged to the individual which often was astronomically higher. The later charges must be adjusted in the future to equate with the usual and common fee paid the insurers.

I have not considered the constant need to upgrade diagnostic tools with expensive state of teh art equipment.

Hospitals are notoriously poor in understanding their operational costs. They bear part of the blame. On the other hand with their "contracts" with the third party payers negotiated under the threat of boycotting the hospital from the insurer's policy holders, the hospitals are an insignificant player.

We will continue with a look at; Pharmaceuticals, Insurance, Medical Supplies, the hospital emergency room, and Medicare operating controls as cost factors in health care.