Friday, May 15, 2015

The State of Health Care - Pay the Nice Doctor

Getting the Maximum Media Value from
"The High Cost Of Health Care"
The hopelessness of the PR "cloud" versus actual "billing rates"

Even before the first "shot was fired" in the Senate Health Care "debate," a single thread had already woven its way through every discussion on the topic. [MeanMesa uses the term, "debate," rather loosely. The "debate" amounted to very little more than a negotiation with the insurance corporations to settle "how far things could go" before a politician was going to be facing one of their Super PACs in a primary election.] Unhappily, that same thread is still, today, becoming even more "threadbare" daily although the ACA is rapidly becoming "settled history."

Even before speaking a single word, absolutely anyone standing before a microphone knew that he had one "freebie" regardless of what else he intended to say. That "freebie" would be a glancing reference to "high health care costs," and it could be seamlessly inserted into his rhetoric whether he was preparing to say that the ACA was going to be the "Stalinist death of America" or "the best thing since sliced bread."

This commenting pundit could be quite confident that every member of the citizen class without a lobbyist, hedge fund or an off shore account had, at some point, faced a health care bill massive enough to knock him to his knees. In far too many cases that bill was also "unexpected," and that "unexpected" part might be the result of mistakenly presuming that a cost was going to covered by insurance or merely face flushing shock at the "unexpectedly" high amount being charged for something he "expected" to be far less.

After the Senatorial fog and feathers of the "debate" had subsided, the "high cost of health care" phrase remained not only very useful as a "thought provoking issue," it became impressively chic politically. In no time a political speech concerning the ACA, the economy, the deficit, the cost of living or practically anything else was simply incomplete without a passing reference to the "high cost of health care."

Predictably, there were a few "news" reports about very small, somewhat innovative changes being made to the industrial health care leviathan in efforts to do something about the "high cost of health care," but we can be certain that these "innovative changes" were:

a. not going to particularly impact the industry's bottom line, and 
b. not particularly change the "out of pocket" drain on Americans attempting to use their insurance coverage.

In fact, both "a." and "b." [above] were exactly what the ACA was designed to do, and in a measure commensurate with how much the ACA is actually doing these things, we understand why the health and insurance industry loathe the whole program.

As a result of this cleverly orchestrated scheme, the "high cost of health care" gradually became quite accepted as "just one of those things ... you know ... like death and taxes," something immutable, unchangeable and inevitable. Even as the ACA's remedial provisions began to "bend the curve" of the constantly rising expense of the "high cost of health care," just a tantalizingly little, tiny bit, the explanation of the success grew too complex for the majority to comprehend it, much less pay it much attention.

The issue really did remain as amorphous as, say, "death and taxes." The "high cost of health care" had become enshrined in a permanent marble sarcophagus guaranteed to preserve its corpse for eternity. We always saw a few irritating details such as the ten dollar aspirin, but the real "nuts and bolts" which were responsible for the "high cost" of the "high cost of health care" remained shrouded in the details of industrial complexity protecting the corporate hospitals-doctors-medicine-insurance investment groups' business plans.

After all, this was the bunch who had "negotiated" the plan with the Senate. And, this was the same bunch who had been "struggling along" and "making ends meet" on their cut of the $6 Tn [$6,000,000,000,000] Americans spend annually on trying to stay well. Speaking of this bunch, their cut amounted to very tasty part of the $6 Tn. And, of course, this was also the same bunch which has been spending $1 Mn per week since the day the Senate "debate" began for propaganda efforts to totally discredit the ACA in public opinion.

 "Lifting the skirt..."  [image]
So, if we were to quite simply -- and passively -- accepting the idea that "the high cost of health care" really is just as ever present and inexorable as "death and taxes," we can begin to "lift the skirt" in search of some serious, concrete facts which might help explain "the high cost of health care." So long as we "subconsciously accept" the idea that "the high cost of health care" is so complex and driven ["justified..."] by so many factors that it simply cannot ever be comprehensible to Americans paying insurance premiums -- and taxes -- we will remain "stuck" with more of what we already have now.

The rest of this post shares a little of what MeanMesa has found under that "skirt."

It shouldn't really surprise anyone that it turns out that although the "girl" who's wearing this "skirt" is neither very pretty nor particularly friendly, she is incredibly rich.

One Thing At A Time
Let's take a closer look at those "billing rates."

The total expenditure for health care in the US runs roughly $6 Tn per year. As was mentioned before, this astronomical total can "disappear" in a tangled jungle of "details" -- at least it can obscure itself in a complex cloud of shadows effectively enough that US voters, each one with plenty of other things needing to be done. won't possibly have the time and information to sift through the monster's "chart of accounts" to size up just exactly what was purchased with those trillions of dollars.

Relax. This little post has no recklessly dreamy aspiration of resolving all the thing's monumental quagmire of conditions and other details.

In fact, the information which is "at the root" of this post was actually revealed almost by accident, and if not entirely "by accident," at least by an interesting coincidence -- in this case a billing coincidence.

The "interesting" part of this "billing coincidence" arose from some sort of error crediting MeanMesa's HMO account with a co-payment made just prior to a doctor's visit. That error subsequently precipitated an "invoice" which described this error, and it was precisely this otherwise rather innocuous "invoice" which contained the heretofore "hidden," interesting information.

So, instead of wasting any time blathering generalities around about how irritating the entire health care and insurance industries have become, let's focus on one single issue.

Among other things, the "invoice" noted the "billing rates" for three of MeanMesa's HMO doctors.

Dr. E
Primary care physician, [DO], billing for one visit = $161,
Medicare co-pay = $5
Dr. E is a young man [30's], and rather than the more or less normal "MD" credentials, he has a "DO." [Doctor of Osteopathy] MeanMesa assumes that one of the reasons his hourly billing rate is somewhat lower can be explained by his "lack of seniority" among other HMO doctors. The HMO probably likes him because 1. general practitioners are apparently hard to find when so many doctors have chosen to become specialists, and 2. his billing rate and his lack of seniority make him a cost effective staffing statistic.

Dr. E has stepped in to treat one of MeanMesa's medical conditions [diabetes insipidus] which had previously been treated exclusively by the endocrinologist. This has been good.

Dr. K.
Psychiatrist-MD, billing for one visit = $268, 
Medicare co-pay = $50
The main function of Dr. K is prescribing medication. MeanMesa has taken this same medication for years, but it of a class which requires a written prescription. Very recently, an additional regulation has been added which requires an office visit with this doctor every three months. Dr. K is 74 years old and has just retired. Although he has been a very competent doctor, the frequent office visits have always seemed to be a serious under use of his expertise, He was the senior doctor in his department.

Dr. R,
Endocrinologist-MD, billing for one visit = $166, 
Medicare co-pay = $50
Dr. R has been treating MeanMesa's diabetes for a decade. Several years ago she absolutely saved MeanMesa's life when kidney failure had reached a critical stage. However, in recent years conditions have continued to deteriorate. This is what prompted Dr. E to "try his hand at the problem."

As a specialist endocrinologist, an appointment with Dr. R can often only be scheduled months in advance, a factor which may have complicated the decline of the kidneys. There is a tremendous number of HMO patients seeking her treatment, and the HMO has a very limited number of specialists in this field. On the other hand, the much more accessible Dr. E, the primary care doctor, has made some progress.

Industry Costs, Billing Rates and Medicare
Is the health care industry simply working
the health insurance industry [including Medicare]?

All of this is laid out here for a reason. The "billing rate" noted in the case of each of these doctors is the rate at which that doctor's treatment is billed to Medicare [...or other insurance -- in this case it is Medicare]. We can bring this into a clearer view by calculating an approximate annual amount of Medicare billings being generated by each of these three doctors. We'll need to begin with a few assumptions.

Traditionally, US workers work 40 hour weeks which means around 2080 hours per year [including sick leave, vacations and time off -- not nearly all American workers get all of these benefits]. Doctors probably don't work this much, so let's assume that they work around 1900 hours per year.

A typical patient visit to any of these doctors usually runs 10 to 15 minutes. This means that in one hour of working time each of these HMO doctors can see three patients. Of course we have no way of knowing the rate of pay for these doctors, but we can estimate the annual billing generated by their practices which would be sent either to Medicare or any other insurance policy held by their patients.

Dr. E
1900 hours per year seeing patients  X 3 patient visits per hour X $161 for each visit
= $917,700 per year
Dr. K
1900 hours per year seeing patients  X 3 patient visits per hour X $268 for each visit
= $1,527,600 per year
Dr. R
1900 hours per year seeing patients  X 3 patient visits per hour X $166 for each visit
= $946, 200 per year

Right away the "cloud" of "unknowable" billing complexities enters our calculation. For one thing Medicare rates for a doctor visit may have been "negotiated" downward from the "full price" rate being charged to other insurers. Additionally "cloudy" is the aggregate of additional expenses required to support each of these practices. There is insurance, nurses and attendants, buildings to both build and maintain and physician "services" such as electronic medical records, administration, reception and so forth.

Yet, even at reduced Medicare rates these three HMO doctors are generating more than $3 Mn dollars worth of billing per year. MeanMesa's HMO has dozens of clinics and hospitals, hundreds if not thousands of doctors and tens of thousands of other employees. The "billing rate" for each of these doctors represents what is called a "burdened rate" because it also bears the "burden" of all these necessary additional costs.

Interestingly, MeanMesa's HMO, Presbyterian Senior Care, is a  "not for profit" Medicare "supplier." This means that it can charge Medicare around 15% more for Medicare provided services. The HMO "justifies" this extra cost by offering free exercise facilities [The nearest one would be an hour's bus ride for MeanMesa.], useless annual "membership" conferences and a few other things which are also, essentially, equally useless. This "justification" was one of many contentious issues in the debates about ACA provisions.

In any event the "shroud" provided by both Medicare and the insurance companies which pay these "burdened rates" for doctors is suspiciously effective. Most recipients of care -- care provided by compensation from either Medicare or other insurance -- have no idea about the "billing rates" and, hence, the actual cost [price] of their insured medical care.

This is one of the places where the "true face" of the $6 Tn annual price tag successfully avoids the "light of day." Predictably, political discussions of the matter very clearly prefer discussing, debating and lamenting the various, amorphous threads of the "cloud" much more than specifics.

Even the heretofore "happily insured" might take pause if they were aware of "billing rates" as high as these.

Is It A "Single Payer" Issue?
This beast has "two horns."

Not really. The "universal coverage/single payer" arguments focus on one of the two primary horns of the beast -- the cost and difficulties of getting for-profit, private insurance to actually pay for health care. This post is about the "other horn" -- the astronomically high cost of health care buried beneath the "cloud" of myriad reasons we've heard plenty about already.

The ACA took the first steps in resolving the "first horn" problems, but the bizarre complexity of the industry's $6 Tn "business model" has made making any real progress on the "raw cost" issue significantly more challenging.

The "first horn's question" is all about who will pay for this doctor's visit, but the "second horn's question" is a little tougher. "Why does it cost $150 to see a doctor for fifteen minutes?"

Another entire post could be written about this last question. Naturally, more questions rush in to join the list right away.

"Why are other developed countries apparently able to price a similar doctor's visit at a substantially lower cost?"

"Why are health outcomes better in those places even though operating their nationalized medical industry is less expensive?"

"Did we get so involved with the 'first horn' -- paying for medical care -- that we, more or less, have thrown up our hands at the prospect of really addressing the 'second horn' -- the incredible cost?"

If we wish to make further progress with this, we will probably need to approach the "two horned beast" more patiently than we might wish. It will take years for the ACA's provisions to finally reign in the insurance industry, but it will take even longer for any kind of a rational re-organization of the industry costs. While the pain from trying to make the unquestionably clunky insurance scam actually work has served to instigate these "reform questions," it is the outrageous cost which has been quietly "driving the effort."

As this work continues, "kissing the girl friend" will amount to finally addressing the cost problem. Considering the amount of perfidy, bribery, greed and episodes of the "maudlin drama of the wounded" we have observed in our dealings with the beast's "first horn," we should steel ourselves for an even bigger scrap as we deal with the "second."

A Final Note
"Bringing it home..."

MeanMesa has taken some "serious hits" inflicted by the present system, although -- in stark comparison -- not nearly as serious as some of the "hits" taken by thousands or millions of others. Beyond the examples already presented in this post, a great majority of US "Medicare seniors" have faced the budget wrecking necessities of eye glasses and dental work on their own. The policy provides basically no coverage for these types of expenses.

Hmmm. Perhaps it was simply an oversight. Why in the world would any Congressional policy makers ever consider that old people might need glasses or dental work? MeanMesa scrounged up enough money to purchase a wonderful crown a couple of months back.

The price was higher than a month's rent. However, that crown makes all the difference in the world! Chewing such challenging things as a stalk of celery or a slice of a fresh apple has become a divine experience!

Likewise, last month's cataract surgery -- MeanMesa can actually see better without the old trifocals than with them! The cost controlled "Medicare package" at the local eye clinic required a $300 co-payment. There was a carefully scripted conversation with the "insurance lady" emphasizing the difference between the insurance coverage for eye glasses -- none -- and the insurance coverage for cataract surgery -- Medicare, Part B.

Including the co-payment MeanMesa's surgery cost $5,000. The new eye glasses will be paid for from next month's Social Security check, a check which has already had MeanMesa's monthly Medicare premium deducted.

Interestingly, the wife of one of MeanMesa's acquaintances here in Albuquerque had similar cataract surgery at the same facility a month previously. Because she was covered with Medicaid instead of Medicare, she was not required to make a co-payment. Her rather expensive post surgery eye drops were also fully covered. Filling MeanMesa's prescription cost around $50, and the refill [fewer prescriptions] was still around $30.

It is curiously ironic that the famously opportunistic ophthalmologist and "free marketeer," Rand Paul [Rand got his "eye doctoring" education from something akin to a "Mechanics Illustrated" learn by mail courses before he received his remarkably high "National Board of Ophthalmology" ranking. Of course Rand founded the NBO and is currently one of its few members. Read more here.], hasn't concocted a means to legislatively extract eye care from Medicare. Rand has long been obsessed with the prospect of privatizing the entire Medicare program but especially "privatizing" the $2.5 Tn Social Security Trust which finances it.

There is also a "lost story" which might be added here. During the Senate's "debate" on the ACA, Senator Bernie Sanders [I-Vt -- Yes, the same one who just announced his bid for the Democratic Party Presidential nomination.] proposed an $11 Bn addition designed to create Federally subsidized Community Health Clinics. This would have been enough to build such clinics in most of the US states where they were needed, [Read more  here.]

This hasn't always been a mysterious "lost story," but it rapidly became one when the Republicans and their corporate health insurance masters were through with it. Happily, this common sense guy is now campaigning for President.

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