I blog about free markets in medical care and transparent pricing.
The release by CMS (Medicare) of hospital charges and Medicare payments this week deserves a response, partly because the figures are wrong. While most of the newspaper reports focused on the gigantic differences between what hospitals charged and what they were paid, the real story is the irrational and nonsensical pricing of the CMS central planners. Also notable is that while this story appears to bash the hospitals to some degree, the true amounts they receive from Medicare are hidden, as the prices released don’t include the uncompensated care kickbacks or the provider tax rebates.
The witholding of these amounts from the final numbers makes the payments to certain hospitals (physician-owned facilities like the McBride Clinic Orthopedic Hospital who don’t accept this money looted from the taxpayer) look high compared to the corporate and not-for-profit hospital payments, as their actual payments for the procedures and diagnoses are much higher than shown. It’s bad enough that the hospitals lie about their income, but to have the federal government join in on the act while posing as the great champions of price transparency is disgusting, although not surprising.
This New York Times article about the CMS “revelation”asks the question, the answer to which followers of this blog now know by heart: ”Why are the hospitals charging so much more than they know they will receive?” If you are drinking the hospital Kool-Aide, you believe that this overcharging is justified to combat the discounts demanded by the insurance carriers. You also believe that hospitals with large amounts of “indigent” care are charging more to offset these “losses.”
But if you think that these giant hospital bills:
1) Provide the “losses” and red ink necessary to maintain the fiction of the not for profit status of these creators-of-personal-bankruptcy
2) Provide larger DSH (disproportionate share hospital), uncompensated care payments to the extent that the hospitals claim they don’t collect on their giant bills
…if you believe these two points, you know the true answer to the question posed by the NYT reporter.
If you understand that the extent to which a hospital claims losses is the extent to which they collect DSH or uncompensated care payments, you also understand whythe patient with no insurance or no money at all, is likely to receive the highest bill of all, in order to maximize the take from the taxpayer!
There is a simple reason that the CMS pricing makes no sense. True prices emerge from a market economy. They are not imposed. I have said many times that I won’t know if my online pricing is “right” or not until someone starts competing with me. Prices send signals to the marketplace, signals indicating relative shortages and surpluses. That the prices for various hospitals in the same community are not even close shows the truly fatal conceit of the CMS central planners.
Here’s the bigger question, though. Why did CMS release this and why now? I think that it is no mistake that the cost of health care was never discussed during the Obamacare debates. Getting everyone “coverage” was the focus. Now that “coverage” is mandated, cost is center stage. Why?
Imagine that you own an insurance company that has a good relationship with Uncle Sam. Imagine that you have been successful in getting your government pals to mandate the purchase of your product (health insurance). This is now a great revenue stream. How do you maximize your profits, now? How do you maximize your net?
You ratchet down the price paid for “care,” ideally to a price where few physicians or facilities will see patients or participate. Presto! You have fewer claims to pay and they are cheap! You are seriously in the money, now. Lots of premiums rolling in, very few claims paid out. Simple math.
This is, of course, how HMO’s and Medicaid work. HMO’s collect premiums, pay so poorly that few physicians will participate and then actually pay some doctors a bonus to the extent that care is denied. This creates huge profits for the home office.
Medicaid vendors are typically paid a price per head. In Arizona, for instance, this number is about $8000/ head. If the physicians are paid a pathetic amount, few will participate and this will result in subtle price rationing where few claims roll in and long lines form. This creates gigantic profits.
This is the whole idea behind Obamacare. Make everyone buy insurance, then use the IPAB (independent payment advisory board) to step in to make sure that prices paid are below the market clearing price, using this low price as a rationing tool. ”Best practices” will also eliminate many of the health care services that people need and want and the “health researchers,” if they want to keep their government grants will find whatever they are paid to find, that mammography or prostate screenings are not necessary for instance. This has already begun. My personal favorite rationing tool is “pay for performance,” where the sickest of patients, those needing the care can’t get near a physician, as doctors increasingly shy away from complicated patients who might damage their “profile.”
You would think that a bankrupt program like Medicare would be looking for the best deals they can find. This revelation by CMS shows the effects of years of lobbying by the hospitals and other connected players: prices all over the place. Hospitals are paid 40% more for physician services than private practice physicians are paid. Wouldn’t you think that in order to save 40% on physician services, Medicare would seek out the private practitioners and shun the hospital employed doctors? Chemotherapy administered by a hospital is paid at a 40% greater rate than at a private physician clinic. Seems like Medicare would save a bundle by keeping patients away from the hospital chemo units. Our online prices are half what the big hospitals are paid by Medicare for the same surgeries. I could go on and on.
These federal programs are not about getting care for the poor and elderly, as much as they are about funneling money to connected cronies in the medical industry. This revelation from CMS reveals just as much about the government as it does about the hospitals. I don’t think that was their intention, though.
G. Keith Smith, M.D.
Check out this article by Reason Magazine’s editor in chief, Nick Gillespie (many thanks to Brandon Dutcher of the Oklahoma Council of Public Affairs for bringing this article to my attention). It turns out that the uninsured folks the Unaffordable Care Act was meant to help, don’t want this help after all. That’s kind of hard to comprehend, isn’t it? Let’s take a closer look.
Why would the federal government shove a national health care scheme down not only the throats of these folks who don’t want it, but disrupt and basically ruin the insurance everyone does have? Premiums are expected to increase by 100% in most markets using conservative estimates. Are they incompetent or just plain evil?
Put yourself in the shoes of the giant insurance company execs. Fewer and fewer folks are buying health insurance. These companies have priced their product increasingly above the market clearing price. They therefore have a surplus of product and not as many buyers. In a healthy marketplace, they would lower their price and deal with their increased “inventory” in this way, luring customers back to the table.
Or….they pick up the phone and call their congressman! ”I want you to fix things so the purchase of my insurance product is mandatory!” Bingo! Inventory goes flying off of the shelves. Stock prices go through the roof. 25 year old healthy people are now paying $2500/month for an insurance product they don’t want, subsidizing the sick and elderly and those otherwise uninsurable folks entering the market with pre-existing conditions. Pretty sweet deal for the insurance execs if you know who in D.C. to call and how much to pay them to get this kind of thing done.
The rest of the phone call looks something like this: “By the way, let’s throw in a Medical Loss Ratio formula that will destroy my smaller competitors giving these folks even fewer buying options. That will more likely funnel them to me. And you guys get your rationing game face on and cover my back with an Independent Payment Advisory Board so I don’t have to pay much on all these claims. In fact, you could price the physician services so low that no docs will see folks for the more expensive conditions and everyone will blame the “greedy” doctors! There’s a budget balancer for ya! You’ll have all the data you’ll need to get all of this done after you mine the Electronic Medical Record Systems you make all of the docs buy.
Obamacare, just like almost any other “law” oozing out of D.C., was meant to line the pockets of those who wrote and promoted it. Prior to this “law” the medical industrial complex had squeezed about as much money as they could out of folks willing to buy insurance from an increasingly consolidated market. The only way to increase their revenue was to enlist the firepower of Uncle Sam, employing the political means (as opposed to the economic means) of obtaining wealth. This “law” turned non-buyers into unwilling buyers and current purchasers were made to pay more. Their next goal is the destruction of the stop loss industry so that those companies that have seceded by self-insurance are thrust involuntarily into this arena. See my blog earlier this week for details on this.
I may start calling Obamacare “BIFOPE,” for “Buy Insurance From Our Pals or Else.” This conveys the true impetus behind this “law,” I think. And you thought they just cared about you.
G. Keith Smith, M.D.
Joseph Stalin and Adolph Hitler weren’t exactly friends, but ideologically they were on the same page about many issues, the right to health care and the right to due process, amongst them. They were proponents of the former and obviously, not so much the latter. Sound familiar?
What they were actually in favor of was control of the healthcare their citizens received. Hitler and his National Socialist Democratic Party actually used this issue of the “right” to healthcare to politically destroy Otto von Bismarck, whose power was already tenuous given the economic devastation intentionally inflicted on the Germans after the First World War, a “crisis” economy that begged for a tyrant like Hitler.
Control over healthcare gave the statists control over the very lives of their citizens, arming the state with the authority to decide who got healthcare and who did not, for many, who lived and who did not. As all totalitarian regimes value individual citizens strictly as a function of their value to the state, and as the citizens began to believe the “we’re all in this together” sort of nationalistic chant, this grant of power over healthcare given to the state therefore had credibility and even seemed to be a necessity to many of the affected citizens.
While the Allied nations worked hard to publicly paint Hitler as the monster he was, these same nations quietly and privately embraced his economic fascism. Frederick Hayek’s “Road to Serfdom,” an unintentional best-selling blockbuster in the United States, was written as a warning for the British people, a warning that the fascist corporate state so decried by the British government, had in fact, been embraced by the British government! The proud British paid no attention and quickly adopted what we now know as the National Health Service, a system that is actively and admittedly euthanizing patients in these modern times to make bed space for those in the waiting room.
This could never happen in the United States could it? Only the most naive wouldn’t recognize that we are on the same path as these failed and murderous states. One very sinister activity that is escaping most people’s attention is the move by the federal government designed to promote the hospital employment of physicians. This arrangement erodes the patient-doctor relationship and therefore disenfranchises the patient, as the doctor’s boss is the hospital, not his patient. Physician employees are much easier for tyrants to control. Hospital administrators controlling large groups of doctors and the government controlling a small group of hospital administrators-that is the goal. Private practitioners, those with their patients’ best interest at heart, never mind what the state has to say, must be marginalized if not eliminated completely, for the complete takeover of medicine by the state to succeed. This effort is well on its way.
This article in the Wall Street Journal provides a glimpse into how the productivity of hospital-employed physicians falls, but doesn’t go far enough to show the true devastating effects of this employment arrangement, I think. While patients can appeal to their personal physician for help, their appeals to their employed doctors are more likely to fall on deaf ears, as these employed doctors must follow the old proverb, “whose bread I eat, his song I sing.” These doctors must ultimately advocate for their boss, not their patient in the event their interests are not aligned.
Here are some examples of how the current system is rigged in favor of the physician-as-employee arrangement. Medicare pays hospital-employed doctors 40% more for the same service as non-employees. Physicians must buy prohibitively expensive electronic medical record systems (promoted in the name of “safety”) or face even lower payments from Medicare. Physicians who do not demonstrate “meaningful use” of their electronic medical record systems (if they can afford them at all) will face further cuts from Medicare. “Meaningful use” includes transmission of confidential patient information to Uncle Sam, by the way, without the patient’s consent. One part of Obamacare calls for bundled Medicare payments to hospitals, which then divvy up the money to the doctors, as they see fit. One part of Obamacare prohibits the construction or expansion of physician-owned hospitals, institutions demonstrating better outcomes and lower prices consistently. Recently, the federal government issued regulations providing for profitable administration of chemotherapy only to hospital-based oncology units, not the non-hospital private practitioners, who can only charge a price less than their cost for these drugs. I could go on.
If your doctor isn’t working for you, he or she is working for someone else. It is only a matter of time before this represents a conflict, your interests as a patient suffering as a result. This is a necessary part of the national health care plan, where rationing from the central planners will be used to balance health care budgets.
The response to shortages (invariably the result of state intervention) by the free market and its entrepreneurs, is to look for new and more efficient ways of providing the service, activities that lower prices and improve access for everyone. Entrepreneurs see shortages as opportunities, while central planners, not only cause these shortages, but respond with the usual rationing and price controls. The Independent Payment Advisory Board (IPAB), an integral part of Obamacare will be the price control mechanism, the mission for which will be to price services below their actual market price, ensuring that little supply of these services is available and therefore balancing health budgets with this subtle, behind-the-veil rationing.
This is the compassion of the state, where central planners decide who gets what from a shrinking supply, whereas market players deliver more supply at lower prices. Employed doctors will be much more easily controlled than independent ones when this system is fully operational. Hitler and Stalin understood this. The current regime in the United States does, as well.
G. Keith Smith, M.D.
My father once asked the noted economist Walter Williams at a speech given by Williams if people in Washington were ignorant or evil. Williams laughed and said,”both!” He added “arrogant” to his description. Lew Rockwell once wrote that “on the one hand we have the stupid party. On the other hand, the evil party. Sometimes they get together and do something stupid and evil. And that’s what is called bipartisanship!”
Time to give the politicians a break, though. Let’s rather turn our thoughts to Paul Krugman, a lessor economist, if you can even call him that and someone the Austrian economists think less of than Lew Rockwell thinks of most politicians. Mr. Krugman (he has a Ph.D. from MIT but as Walter Block has said, if recalls were ever in order this qualifies) has written a piece in the hopefully soon to be bankrupt New York Times on health care. He exhibits in the piece the same disregard for facts that have characterized his other writings. Here are some of his claims:
1) Uninsured people avoid the emergency rooms for fear of large bills and so they die. If the poor are avoiding the emergency rooms, why was health care for the poor in the emergency rooms bankrupting hospitals? This, of course, is also a lie. Otherwise, why is there a building crane in front of every big city emergency room I’ve ever seen?
2)Expansion of Medicaid saves lives. Oops. Wrong again. Makes you wonder if he’s wrong intentionally. This has been proven false by Professor June O’Neill, former director of the Congressional Budget Office, in her study.
3) “And surely the fact that the United States is the only major advanced nation without some form of universal health care is at least part of the reason life expectancy is much lower in America than in Canada or Western Europe.” Yes he really wrote this. This is actually a myth the advocates of “universal coverage” love to promote. Even if you believed this, could there be other variables at work?!
4) “So there’s no real question that lack of insurance is responsible for thousands, and probably tens of thousands, of excess deaths of Americans each year.” You’re beginning to get an idea of what a great economic “scientist” he is, aren’t you? Actually this has been studied by Richard Kronick recently and this entire idea has been completely debunked. You can read the abstract of his study here. His conclusion: ”The Institute of Medicine’s (a government-funded institute) estimate that lack of insurance leads to 18,000 excess deaths each year is almost certainly incorrect. It is not possible to draw firm causal inferences from the results of observational analyses, but there is little evidence to suggest that extending insurance coverage to all adults would have a large effect on the number of deaths in the United States.”
Now keep in mind that Mr. Krugman is the poster child for Keynesian economics, the economic thought that holds that an individual or a government can borrow its way to prosperity. It is this economic thought that has prevailed in this country for a long time, primarily because statists (like those in control of the government) love to spend the wealth belonging to future wage earners, as the future voter’s wrath represents no threat to them. Krugman, as a mouthpiece for this bankrupting insanity, bears a lot of responsibility, but instead of having lost all credibility, he is a liberal media darling. The central bank and deficit spending have no greater advocate than our dear Mr. Krugman (yes…I’m not calling him Dr. on purpose).
Here are some facts. A Medicaid card, rather than kept in a patient’s wallet, might as well be worn around their neck, a scarlet letter that precludes entrance into most physician’s offices. This card gives many, just like our Canadian brethren to the north, only a right to hope for care. Many physicians are curtailing their exposure to Medicare patients, as well, due to payment and regulatory hassles, threats of stiff penalties (including jail time for miscoded claims), and artificially low price controls. Physician “opting out” of Medicare is at an all time high. To put it rather bluntly and as Dr. Jane Orient has wisely said, “coverage doesn’t mean care.”
Think about it. If you have “insurance” coverage (whatever that means) and your insurance company decides that they don’t want to pay for a bone marrow transplant, or they set the payment for one so low that no one will do it (one and the same thing), you are not going to get a bone marrow transplant. Period. If the IPAB (Independent Payment Advisory Board) decides that the payment to a physician for an open heart surgery is less than anyone is willing to do it for, guess how many open heart surgeries will be done? Folks like Krugman will be in charge of deciding what these types of procedures are worth, not the market. Even more government involvement in health care is what he is advocating.
As I blogged the other day, 1.5 million individuals declare bankruptcy every year, 62% of which are for medical bills. 78% of those filing for medical bill reasons had insurance. These folks have “coverage.” Is this the security Mr. Krugman would bring to us all?
The brilliant Bob Murphy has challenged Krugman to a debate, an event Walter Block would characterize as the intellectual equivalent of taking candy from a baby. The equally brilliant economist William Anderson likens Krugman’s receipt of the Nobel prize as “an intellectual event matched only by the sacking of Constantinople in 1453.” His Nobel prize has afforded him a pulpit from which to spew his leftist vitriol, one the New York Times has been all too happy to provide, as their printing of this opinion piece would indicate. Maybe he’ll go away when The NY Times does.
G. Keith Smith, M.D.
P.S. Many thanks to the National Center for Policy Analysis for the links to the above refuting studies. You can read their review of Krugman’s piece here.
Ludwig von Mises adopted as his life motto a verse from Virgil: Tu ne cede malis, sed contra audentior ito. The translation is: Do not give in to evil, but proceed ever more boldly against it. His writings and his life reflect the extent to which he truly adopted this wisdom. His refusal to compromise, while closing many doors to him (and nearly costing him his life, as he was forced to flee Nazi Germany), has inspired some of the greatest thinking about economics and its relationship to human behavior. Lew Rockwell’s dream of an institute dedicated to the field popularly called “Austrian” economics, is named after Mises, no doubt signaling to all that compromise of principle would simply never be entertained.
I’ve always liked Mises’ motto, wondering what a world would be like where more people adopted this way of thinking. I ran into another saying this past weekend at the annual meeting of the Association of American Physicians and Surgeons (AAPS) that I wanted to share with you, no less powerful in my opinion, than Mises’ favorite quote from Virgil.
Principiis Obsta, Finem Respice. The translation is: Resist the beginnings, consider the ends. Interestingly the author, Publius Ovidius Naso, known as Ovid in the English world, was, like Virgil, a poet of Latin literature. This quote was revealed at the AAPS meeting as used by a former Nazi to describe the sequence of events in Germany that led to their fascistic insanity. Very small steps, unnoticed by most, led to the totalitarian regime we all now know well.
I think these two quotes have affected me because they are unfortunately applicable in our time. Bob Dole of Kansas was asked in a debate once if there was an issue over which he was willing to lose an election. His opponent was making the case for an absence of principle in Dole’s career. Dole simply did not know what to say. He, like almost anyone in politics or with power, chose victory and the maintenance or growth of their power and influence, over principle. It seems like people will say anything these days to gain power, knowing their future actions bear no resemblance to prior pledges and promises.
So what does any of this have to do with health care? Universal health care was the issue that eventually brought power to the Nazis. This is an extremely inconvenient fact for those promoting it. Countries that have embraced this insanity have wholeheartedly embraced rationing of care to the sick and euthanasia, as an individual’s health, rather than staying an issue for that individual, became a matter for the “state.” In Great Britain (a country Hayek warned in his Nobel prize winning “Road to Serfdom, was embracing the very economic policies of the Nazis they were fighting!) euthanasia has morphed into murder, as their Liverpool Care Pathway is used to “free up” hospital beds.
“But that can’t happen here,” you say! The Independent Payment Advisory Board screams otherwise. The data mining through electronic medical record systems screams otherwise. ”Meaningful use” and “best practices” cookbook medical approaches scream otherwise. Accountable Care Organizations, HMO’s by another name, scream otherwise. I think none of these small steps would have occurred had we heeded the advise from Virgil and Ovid.
G. Keith Smith, M.D.
I just returned from the annual meeting of the Association of American Physicians and Surgeons. One of the highlights of the meeting was a presentation by Dr. Robert Emmons, a Vermont psychiatrist. In opposition to the single payer push in Vermont he produced this two minute video, one which applies just as well to the Unaffordable Care Act. Enjoy.
G. Keith Smith, M.D.
I received an interview request from a local television station recently, asking for my response to this article. The article from the Associated Press deserves some comment. First I must mention that the report, issued by the “Institute of Medicine,” an arm of the “National Academy of Sciences” is reported as an independent organization that advises the government. I guess they’re independent unless you call 85% federal funding an impediment to their independence. Virtually all of the rest comes from state governments.
Remember “whose bread I eat his song I’ll sing.” This report lays the groundwork for physician pay cuts, in line with what the current administration has in mind with their Independent (there’s that word again!) Payment Advisory Board (IPAB). At the top of the list of waste were “unnecessary services.” Also on the list were “inflated prices” “prevention failures” and “fraud.” Any or all of these claims could be used against physicians and will be, I predict. After all, who is going to challenge the “National Academy of Sciences,” this “independent” bunch of objective “scientists?”
This group, by the way, has been paid well by the federal government to find that global warming should allow governments to tax us more. Shocking.
Actually, the report is partially correct. While the report claims that 30 cents of every dollar is wasted, I believe this is probably too low. We perform surgeries for 1/6 to 1/10 that charged across town at a “not for profit” hospital. The fees we have listed on our website are half what Medicare pays the same hospital across town for the same surgery. You are being told that Medicare is going broke while surgical care at half the amount Medicare is paying is present in the same city! That’s 50% savings not 30% using my math.
Guess what they don’t mention in their report? Claims repricing and the disproportionate share hospital program, better known to readers of this blog as the uncompensated care scheme. While they do mention “excess administrative costs,” I don’t think they are targeting the multi-million dollar hospital administrators here.
They do mention unnecessary colonoscopies. At $600 each, how do you think this compares to the multi billion dollar repricing scheme? Or the uncompensated care scheme, the continuance of which is certain, even after everyone has been mandated to have insurance!
The report stresses “leveraging technology” and “improving coordination.” This is a justification for the swindle the Health Information Technology industry has pulled off in this country, basically giving them cover. There is a limited market for electronic medical record technology, but the government shoved it down everyone’s throat, threatening anyone who didn’t buy this technology with severe Medicare pay cuts. How would you like to produce a product the purchase of which was mandated by the federal government? Sound like a money maker?
The most ominous part of their report, however, is “payment reforms to reward quality results.” This “pay for performance” guarantees that the sickest patients, those most likely to have poor outcomes in spite of the best care, will be shunned by medical professionals, operating under the threat of pay cuts if these patients don’t do well. You naysayers out there are screaming, “there will be adjustments for severity of illness!” You keep thinking that. Keep believing that and all the other promises made to physicians by government bureaucrats.
There is a solution. We must, however, first recognize the problem. Wherever government exists, the free market is crowded out if not completely eliminated. Government operations are characterized by waste, fraud and corruption. Health care, to the extent the free market has been shoved aside by Uncle Sam, is characterized by waste, fraud and corruption. The idea that the government has any solution to health care other than to remove itself from the equation is ludicrous in my opinion. The report from the Institute for Medicine simply gives cover to even more government intrusion. We shouldn’t be surprised by their findings and recommendations when we think about the source of the report’s funding.
G. Keith Smith, M.D.
Check out this letter to the editor from the Washington Times. He almost has it right. When you consider that the purpose of the IPAB (Independent Payment Advisory Board) will limit the price paid for medical care for the elderly below the market rate, you realize that the exposure of the “supplemental” insurance plans leeching on to Medicare is very limited. Let me see….more people scared in to buying these policies….paying out lower amounts for claims….sounds like a money-maker to me!
The AARP, like the AMA, receives a majority of its funding from Uncle Sam. Their endorsement of Obamacare couldn’t have been affected by this relationship.
G. Keith Smith, M.D.
What is insurance, after all? You see, big insurance companies walk a tight rope. They don’t just want to not pay claims. They actually set physician reimbursement at a level below the market clearing price. Remember that price controls cause shortages. This approach by the insurance companies guarantees access to a physician’s office is limited. No access to the physician means no access to the really expensive goodies like surgery and MRI’s. Oh yeah. All the while the insurance companies are collecting premiums! See how it works? Now they have to be careful that this doesn’t get out of control or they will lose business to competitors. So, many of us pay insurance premiums, an action which guarantees difficulty with physician access! Isn’t insurance- for-everyone a great idea!!
In anticipation of getting more serious about the care denial business, the insurance industry lobbied hard for and received the Medical Loss Ratio provision in the Unaffordable Care Act, a provision that will drive their smaller competitors out of business. Now, with the rationing abuses unchecked by competitive pressures, there’s nowhere for us to run. The insurance tightrope becomes a boardwalk. See how it works? Thank you Obamacare.
Remember “coverage doesn’t mean care?” This is the purpose of the “Independent Payment Advisory Board.” Not to keep the cost down by keeping bills low. To lower physician payment to levels that no one wants to see patients! If you don’t get through the doctor’s door, the rest of the wonderful care available is unavailable. The beauty of this is that the physicians will be made out to be the bad guys.
I’ve decided that the model adopted by many smart companies, self insurance, is the way to go. For individuals. We should all become our own third party administrators. Rather than pay premiums, the payment of which virtually guarantees denial to care, we should use this money to buy care. When a month goes by that no medical purchases are needed, stow the money away for a rainy day.
This is exactly what self-funded companies do. They have access to “re-insurance,” so that very expensive claims can be paid, but they pay for virtually everything else “out of pocket.” These plans also have a history of seeking out the best physicians, as this decision alone, can determine the plan’s solvency. Self-funded plans then are the opposite of third party plans like the giant insurance companies, seeking and finding the higher quality providers, cost-conscious all the while.
Scary to be self-insured, isn’t it? What if you need heart surgery or a total hip replacement? In Oklahoma City, you can receive open heart surgery for under $25,000 and hip replacement for about the same amount of money. This isn’t cheap, but it is as cheap as it gets. Keep in mind this is two year’s premiums if you are paying $1000/month.
Cancer? Cancer-only coverage is available if you want to protect against this risk. Very soon in Oklahoma City, affordable cancer treatment will be available, removing the worry of bankruptcy associated with this diagnosis. If you guessed that getting this treatment out of the hospitals was the key to reducing the cost, you go to the head of the class. They typically mark up the price of chemotherapy drugs by 10 times. 10 times! It’s amazing the lengths to which these folks will go to avoid making a profit.
Could you be self-insured? What do you think would happen to the price of care if vast numbers of people rejected insurance altogether and paid their own medical bills? This lowering of prices, the result of all those more well-off and risk tolerant becoming self-insured, would bring the purchase of health services within the reach of those not as well-off. This deflationary snowball would continue and more and more people would actually be able to afford to pay for their care, rather than purchase insurance out of fear of bankruptcy only to be denied care. Very few people would have health needs they found unaffordable, fewer than we have today for sure.
I don’t know about you, but I’d prefer to buy medical care than to buy a worthless piece of paper guaranteeing me only a place in line.
G. Keith Smith, M.D.
I anesthetized a 208 pound, eleven-year-old female recently. Her parent’s combined weight was well over 700 pounds. Both parents were smokers. It occurred to me that the Unaffordable Care Act (UCA) guarantees that they will never be turned down for insurance. What does that mean for you and me?
If you think that including folks who engage in this level of self-abuse on your insurance plan will drive your premiums through the roof, you go to the head of the class. If you believe that health care is a right and that these folks have a right to health care, you may think differently when their “right” to health insurance causes your premiums to skyrocket and you can no longer afford or obtain care. What would happen to life insurance rates if skydiving and previous suicide attempts could not be considered for exclusion?
“But wait!” “These folks are going to get care anyway and the hospitals charge us more now (because they don’t have insurance) to cover them!” Right? If you believe that the hospitals plan to lower their charges after implementation of the UCA, you go to the back of the class.
Actually, community, not for profit hospitals made a deal years ago to deal with the charitable care issue. These hospitals, having been required to care for the indigent, were relieved of any tax liability. “Not for profit” really means “don’t pay tax.” The value of this “tax free” condition is never discussed as this excessive number would make Donald Trump blush. Not satisfied with this loot, the hospital lobby has successfully saddled us with the uncompensated care scam and convinced us all that “cost shifting” was necessary to avoid bankruptcy.
What does the UCA do to address this? Pour gas on the fire. Anticipating the unmanageable increase in demand for the now “free” medical services, the authors of the UCA birthed the IPAB (independent payment advisory board), which puts price controls on….ready?….physicians. In this stealthy way, physicians will become the de facto ration police of health care by avoiding patients whose care is intentionally “underpriced” by the IPAB.
$15 payment to the physician for an evaluation of a morbidly obese, hypertensive diabetic with obstructive sleep apnea and coronary artery disease with a history of foot ulcers, is a price that will cause lines to form and doors to close. If $15 dollars doesn’t close the doors, the IPAB will try $10. These unfortunate patients will be armed with a worthless insurance card, one that ironically denies them access, like never before when they were uninsured. Premiums will skyrocket to allow for inclusion of these patients who will be denied care, and more and more people will surrender to the ultimate goal of the state: to control your health care with a single payer system. To control your health is to control your life. While the current system is a government-created mess, most people I know would rather be bankrupt than dead.
G. Keith Smith, M.D.