Tag Archives: Hospital Charges

The $8,000 Rip-off That Is Healthcare

Picking up on a theme I presented in two earlier posts this year, Health Care is Not a Market  and The Free Market Utopian Fantasy, Joe Paduda today asks “what would you do with another $8,000?”

Joe’s post outlines how providers, big pharma, device companies, and healthplans make money from a system designed to do so, and not to help you and your family stay healthy and functional. [ Emphasis Joe’s]

He shows us graphically how big health sector profit margins are, how we spend more than any other country, but die younger, and how healthcare premiums and deductibles and out of pocket costs keep climbing, but wages do not.

His one key point, is the following:

Healthcare is not, and cannot ever be, a free market. A free market requires buyers have the ability to make sellers respond to buyers’ needs – yet we all know we consumers have zero ability to make pharma, hospitals, big doctor groups, device companies respond to our needs.

Lastly, Joe asks the question: “If air travel worked like health care?” [Video link]

Would you rely on the airlines with your health care? Would you rely on the health care industry to fly you to your nephew’s wedding in Orlando? Of course, not.

So, why would you continue to defend, support and protect a dysfunctional, broken, wasteful, bloated, health care system that does not work like the free market, but only makes huge profits for the insurance companies, drug companies, device manufacturers, hospitals, investors, stock and shareholders.

And yes, you hanger’s on in consulting and research organizations who constantly attack single payer health care because it, one, puts you out of a job, and two, takes away any profits you and your company makes from advising  on or researching how to squeeze more profit out of the system.

One thing is for certain. I could sure use that $8,000 right now. My health care and other issues have taken a lot more from me than $8,000, but I’d settle for that. Wouldn’t you?

Two Perspectives on Health Care

Dear Readers,

Sorry for the delay in getting back to writing in this new year, I have not seen too many things to write about, and have also been busy with personal issues.

So, the following post from an unknown individual via Joe Paduda, who informs us that this person is a good friend and colleague, shows just how broken and dysfunctional our health care system really is.

This post is followed by one from Don McCanne about the Canadian system, and differentiates their system with what is being proposed in the US under a Medicare for All system advocated by Bernie Sanders, Elizabeth Warren, Dr. McCanne, and the Physicians for a National Health Plan (PNHP), among others.

Joe’s post: The Greatest Healthcare System in the World

Dr. McCanne’s post was written by Caitlin Kelly in The American Prospect on January 8th. Here is her article in full, followed by comments by Don McCanne.

The American Prospect

January 8, 2020

What Medicare for All Really Looks Like

The Canadian system, also called Medicare, guarantees coverage to every resident north of the U.S. border.

By Caitlin Kelly

Canadian health care is publicly funded and privately delivered, approximately the same vision that single-payer enthusiasts have for the American system. It even shares the same name as our largest government-run insurance provider: Medicare. But contrary to persistent American partisan mythmaking, no government officials sit in doctors’ offices or haunt hospital hallways with a checklist of all the services they’ll question and deny. They don’t dictate hands-on care. Canadians face little government interference or oversight of their health care, although, for historical reasons, their doctors retain much more power than patients.

The familiar and dreaded words “co-pay,” “deductible,” “pre-existing condition,” and “out of network” are meaningless here, in English or French, Canada’s two official languages. Patients don’t waste time chasing pre-authorizations or fighting medical bills, while physicians save thousands of administrative hours.

As Americans’ life expectancy is dropping and maternal mortality is ranked shockingly high among other wealthy nations, Canadian health outcomes fare better; Canadian women live two more years than their American counterparts, men three.

But the system is far from perfect. Outpatient care, like physical and occupational therapy or prescription medicine, is paid for out of pocket. In some places, there’s no mandate to use electronic records, so patient information can be difficult to access. And medical care of impoverished and remote First Nation and Inuit communities is openly acknowledged as abysmal.

Canada provides coverage for about 35 million, one-tenth the population of the United States. But how they’ve set up their health care system, and how it evolved over the decades, is instructive, especially given the robust debate during the presidential primary about overhauling our current system. It can inform how U.S. policymakers—and Canadians, for that matter—approach cost control, physician payment, and services for vulnerable communities. Rather than scaring Americans with well-structured narratives about the alleged horrors of Canadian Medicare, we could take the opportunity to learn from it.

A Difference in Bedrock Philosophies

A fundamental conceptual difference also divides how Canadians and Americans view their relationship to using government-financed or -run services. Classic American insistence on the bedrock values of individualism, self-reliance, and shunning government aid as a sign of moral failure differs radically from that of Canadians, who are more committed politically and economically to health care equity as a collective good.  [Emphasis mine] Consistently receiving free health care and heavily subsidized university and college tuition fees means that Canadians of all ages and income levels experience firsthand a consistent, quantifiable return on their tax dollars.

“One thing I wish Americans would understand is that ‘who’s going to pay?’ is actually a distraction,” says Dr. Danielle Martin, executive vice president and chief medical executive of Women’s College Hospital in Toronto. “It’s ‘how will you organize delivery of it?’ Payment is just the first step on a worthy and interesting journey. The conflation of single-payer and wait times is false. We have wait times because of a million other issues, like we can’t get physicians to work in rural areas.”

Could This Work in the U.S.?

“The Canadian system is good, but underfunded,” says Steffie Woolhandler. “The American system is shitty but over-funded.”

https://prospect.org/health/what-medicare-for-all-really-looks-like/

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Comment by Don McCanne

Our goal is to establish a single payer model of a dramatically improved version of our Medicare program that would ensure affordable, accessible, high quality health care for everyone in our nation. The model that is closest to that vision is the Canadian Medicare program – a series of provincial single payer programs. It is not the same system as what we propose.

It is helpful for us to understand the Canadian system since it has many beneficial features that would help us improve equity and access in our own system. Also it has some deficiencies, and it is important to understand those so that we can avoid them.

The excerpts from The American Prospect article by Caitlin Kelly give you an inkling of what the Canadian system is all about. This fairly long article should be read in its entirety for a few reasons:

*  People need to understand that we are not transporting the Canadian health financing infrastructure to the United States; rather we are building a new, better-than-Canadian Medicare for All.

*  When people reject single payer Medicare for All because of certain undesirable features of the Canadian system, it is important to understand what those features are and how we would guard against them in the United States.

*  When people say that we cannot afford Medicare for All it is important to understand and explain to them how we are already paying enough to fund a better-than-Canadian system, but we need to redirect the spending of the $600 billion in recoverable administrative waste that characterizes our dysfunctional multi-payer system.

*  The most common complaint about the Canadian system is the excessive queues for some non-urgent services. People need to understand that our Medicare for All would have enough funding to ensure adequate capacity in the system through central planning and budgeting of capital improvements, not to mention including adequate funding to improve queue management.

*  Perhaps the most important lesson from Canada: “Classic American insistence on the bedrock values of individualism, self-reliance, and shunning government aid as a sign of moral failure differs radically from that of Canadians, who are more committed politically and economically to health care equity as a collective good. Consistently receiving free health care and heavily subsidized university and college tuition fees means that Canadians of all ages and income levels experience firsthand a consistent, quantifiable return on their tax dollars.”

Notice that McCanne leaves us with the same statement that I emphasized above. That is the real reason we don;t have free medical care and free college. We gained our independence from Britain when the values of individualism, self-reliance, freedom, liberty, and the right to private property were the prevailing values.

Canada, on the other hand, became independent (sort of) during the latter half of the nineteenth century, when modern liberalism emphasized the greatest good for the greatest number. This was in opposition to the classical liberalism of the American experiment begun a century earlier.

Both articles point out just where we are deficient, and where and how we can make improvements, but only if we abandon the profit-making, overly administratively bureaucratic, wasteful, and bloated current system for a more efficient Medicare for All single payer system that guarantees health care for all Americans. Then there will never be any surprise bills or upfront charges required.

How to Negotiate Down Your Hospital Bills – The Atlantic

Negotiate hospital bills? Why not negotiate drug costs, insurance premiums, co-pays, deductables, etc.?

Instead of playing this game, why not Improved Medicare for All. This way, no one will get sick paying for health care that is too damn expensive.

Read on.

Doctors’ bills play a role in 60 percent of personal-bankruptcy filings.

Source: How to Negotiate Down Your Hospital Bills – The Atlantic

Hospital prices, not physicians, drive cost growth, Health Affairs says | Healthcare Dive

Here’s another article about prices from last Tuesday that should be read in conjunction with today’s article on prices.

If we keep doing the same things over and over again to make things better, and they don’t work, that is a sure sign we are crazy, so ideas like antitrust enforcement, while a good idea in general business, and the incentivizing of more cost-efficient physician referrals, only scratches the surface.

The real problem is how health care in the US is just another revenue stream for investors and stockholders of insurance companies, pharmaceutical companies, and hospitals and hospital systems, as I reported also today in Hospital Mergers Improve Health? Evidence Shows the Opposite – The New York Times

So here is last Tuesday’s article:

The report suggests measures aimed at cutting healthcare costs focus on issues like antitrust enforcement and incentivizing more cost-efficient physician referrals.

Source: Hospital prices, not physicians, drive cost growth, Health Affairs says | Healthcare Dive

One Implant, Two Prices. It Depends On Who’s Paying. | Kaiser Health News

Here is another example of our broken health care system and the way in which health care has become a cash cow for hospitals, physicians, medical device manufacturers, which includes implant manufacturers, and pharmaceutical companies.

The following article from Kaiser Health News is eerily familiar to a piece I wrote a while back about a man who needed a hip replacement, and went to Belgium to get it, and discovered that the hip they gave him was made near his home in the US, but was considerably cheaper in Belgium than in the US, even though it was the same hip he would have gotten if he had the surgery locally.

That the same implant should come with two different costs, either because it is implanted in the US, or in a foreign country, or in the case below, because of the type of surgeries performed, is illogical and a symptom of a dysfunctional, profit-driven health care system that is out of control.

Here is the article link:

Breast implants — used for both cancer and cosmetic surgeries — give a glimpse into how hospitals mark up prices of medical devices to increase their bottom lines.

Source: One Implant, Two Prices. It Depends On Who’s Paying. | Kaiser Health News

Midterm Mashup

Well, the 2018 Midterm elections are over, and the analysis is beginning as to what this all means.

For those who wanted to send a message to the Russian puppet in Washington, the election meant that the House of Representatives will be controlled for the next two years starting in January by the Democrats.

For the Republicans, it means a greater control of the Senate, with at least one race, the one in my current state of Florida undecided and headed for a recount, as per state law.

However, there were many defeats for the party of Obama, Bill Clinton, Jimmy Carter, LBJ. JFK, Truman and FDR. Andrew Gillum lost to a nobody for governor of Florida who is connected to the Orangutan by an umbilical cord. Beto O’Rourke made a valiant, if futile effort against the worse person to hold a Senate seat, Lyin’ Ted Cruz. And a few Democratic senators lost seats in Indiana, Missouri and North Dakota.

But as far as health care is concerned, the change in the leadership of the House of Representatives means that the ACA is safe for another two years. and Medicare and Medicaid will not be cut, as the Senate Majority Leader has indicated he wanted to do.

Medicaid, in particular, came out of the Midterms a little better than expected before the election, as the following posts from Healthcare Dive, Joe Paduda, and Health Affairs reported this morning.

First up, Healthcare Dive, who reported that Red states say ‘yes’ to Medicaid . Idaho, Utah, and Nebraska said yes to expansion; Montana said no.

Joe Paduda echoed that in his post, “And the big winner of the 2018 Midterms is…Medicaid“. However, Joe stated that results in Montana were not final; yet, they had decided to expand Medicaid two years ago, but the vote was temporary, and yesterday’s vote was to make it permanent.

And lastly, Health Affairs reported in “What the 2018 Midterm Elections Means for Health Care” that besides blocking repeal of the ACA, Democrats may tackle drug prices, preexisting conditions protections, Opioids, Medicare for All, Surprise bills (unexpected charges from a hospital visit). regulatory oversight, extenders such as MACRA, Medicaid Disproportionate Share Hospital (DSH) payments, and Medicaid expansion, especially since gubernatorial wins in Maine, Kansas, and Wisconsin will make expansion more likely in those states.

Cayman Islands Hospital Delivers Lower Cost Care

This morning’s post by fellow blogger, Joe Paduda, contained a small paragraph that linked to an article in the Harvard Business Review (HBR) about a hospital in the Cayman Islands that is delivering excellent care at a fraction of the cost.

Joe’s blog generally focuses on health care and workers’ comp issues, and has never crossed over into my territory. Not that I mind that.

In fact, this post is a shoutout to Joe for understanding what many in health care and workers’ comp have failed to realize — the US health care system, which includes workers’ comp medical care, has failed and failed miserably to keep costs down and to provide excellent care at lower cost.

That the medical-industrial complex and their political lackeys refuse to see this is a crime against the rights of Americans to get the best care possible at the lowest cost.

As I have pointed out in previous posts, the average medical cost for lost-time claims in workers’ comp has been rising for more than twenty years, even if from year to year there has been a modest decrease, the trend line has always been on the upward slope, as seen in this chart from this year’s NCCI State of the Line Report.

The authors of the HBR article asked this question: What if you could provide excellent care at ultra-low prices at a location close to the US?

Narayana Health (NH) did exactly that in 2014 when they opened a hospital in the Cayman Islands — Health City Cayman Islands (HCCI). It was close to the US, but outside its regulatory ambit.

The founder of Narayana Health, Dr. Devi Shetty, wanted to disrupt the US health care system with this venture, and established a partnership with the largest American not-for-profit hospital network, Ascension.

According to Dr. Shetty, “For the world to change, American has to change…So it is important that American policy makers and American think-tanks can look at a model that costs a fraction of what they pay and see that it has similarly good outcomes.”

Narayana Health imported innovative practices they honed in India to offer first-rate care for 25-40% of US prices. Prices in India, the authors state, were 2-5% of US prices, but are still 60-75% cheaper than US prices, and at those prices can be extremely profitable as patient volume picked up.

In 2017, HCCI had seen about 30,000 outpatients and over 3,500 inpatients. They performed almost 2,000 procedures, including 759 cath-lab procedures.

HCCI’s outcomes were excellent with a mortality rate of zero — true value-based care. [Emphasis mine]

HCCI is accredited by the JCI, Joint Commission International.

Patient testimonials were glowing, especially from a vascular surgeon from Massachusetts vacationing in the Caymans who underwent open-heart surgery at HCCI following a heart attack. “I see plenty of patients post cardiac surgery. My care and recovery (at HCCI) is as good or better than what I have seen. The model here is what the US health-care system is striving to get to.

A ringing endorsement from a practicing US physician about a medical travel facility and the level of care they provide.

HCCI achieved these ultra-low prices by adopting many of the frugal practices from India:

  • Hospital was built at a cost of $700,00 per bed, versus $2 million per bed in the US. Building has large windows to take advantage of natural light, cutting down on air-conditioning costs. Has open-bay intensive care unit to optimize physical space and required fewer nurses on duty.
  • NH leverage relations with its suppliers in India to get similar discounts at HCCI. All FDA approved medicines were purchased at one-tenth the cost for the same medicines in the US. They bought equipment for one-third or half as much it would cost in the US.
  • They outsourced back-office operations to low-cost but high skilled employees in India.
  • High-performing physicians were transferred from India to HCCI. They were full-time employees on fixed salary with no perverse incentives to perform unnecessary tests or procedures. Physicians at HCCI received about 70% of US salary levels.
  • HCCI saved on costs through intelligent make-versus-buy decisions. Ex., making their own medical oxygen rather than importing it from the US. HCCI saved 40% on energy by building its own 1.2 megawatt solar farm.

And here is the key takeaway:

The HCCI model is potentially very disruptive to US health care. Even with zero copays and deductibles and free travel for the patient and a chaperone for 1-2 weeks, insurers would save a lot of money. [Emphasis mine]

US insurers have watched HCCI with interest, but so far has not offered it as an option to their patients. A team of US doctors came away with this warning: “The Cayman Health City might be one of the disruptors that finally pushes the overly expensive US system to innovate.”

The authors conclude by stating that US health care providers can afford to ignore experiments like HCCI at their own peril.

The attitude towards medical travel among Americans can be summed up by the following from Robert Pearl, CEO of Permanante Medical Group and a clinical professor of surgery at Stanford: “Ask most Americans about obtaining their health care outside the United States, and they respond with disdain and negativity. In their mind, the quality and medical expertise available elsewhere is second-rate, Of course, that’s exactly what Yellow Cab thought about Uber. Kodak thought about digital photography, General Motors thought about Toyota, and Borders thought about Amazon.”

Until this attitude changes, and Americans drop their jingoistic American Exceptionalism, they will continue to pay higher costs for less excellent care in US hospitals. More facilities like HCCI in places like Mexico, Costa Rica, the Caymans, and elsewhere in the region need to step up like HCCI and Narayana Health have. Then the medical-industrial complex will have to change.