Schizophrenia about High Deductibles
You may remember that when Health Savings Accounts were introduced there was almost universal outrage among liberals about the horrendous burden cost-sharing places on all but “the healthy and wealthy.” A press release issued by the Center for Budget and Policy Priorities (CBPP) within a week of the Ways and Means committee approving an HSA bill in 2003 said –
This legislation would lead many employers to move away from providing low-deductible comprehensive insurance, noted Edwin Park, a senior health policy analyst at the Center and the report’s lead author. Policies with deductibles of $1,000 or more, higher co-payments for medical services, and coverage for a narrower array of health services could well become the norm for employer-sponsored coverage, with employers expecting their workers to pay uncovered costs out of their tax-favored Health Savings Security Accounts, Park stated.
Low- and moderate-income workers, who would benefit little from the tax breaks that the new accounts would provide, and older and sicker workers, who could face large increases in out-of-pocket health care costs as a result of the loss of comprehensive insurance, could be sharply affected, he added.
A few years later, after President Bush proposed expanding HSAs, Jason Furman, then at CBPP and today the Chairman of the White House Council of Economic Advisers, wrote a similar slam on high deductibles in health insurance, especially if accompanied with a savings account.
So it comes as something as a shock that today these exact same people are raving about how wonderful the coverage is in ObamaCare’s insurance exchanges. Organizing for Action, Barack Obama’s official grassroots operation emblazons on its website ― “Better Coverage, Lower Costs!”
Then there are two puzzling pieces in The New England Journal of Medicine. The first article “The ACA and High-Deductible Insurance — Strategies for Sharpening a Blunt Instrument,” is by J. Frank Wharam and others.
The writers observe that 84% of the enrollees in Massachusetts chose a bronze or silver plan with family deductibles of $4,000 to $10,000 and significant cost sharing on top of that. They say that lower income people in the ObamaCare exchanges will have their out-of-pocket costs subsidized as well as their premiums, but, “the resulting protections may be robust only for persons with incomes below 200% of the poverty level.” They add –
Cover Oregon, for example, estimates that cost sharing for Oregon families with incomes between 200% and 399% of the poverty level will include $5,000 deductibles, 30% coinsurance for many services even after reaching the deductible, and out-of-pocket spending maximums of $8,500 to $12,700.
An accompanying chart lists the deductible for a family at 400% of poverty at $12,700. What happened to “better coverage, lower costs?”
The authors of the article, all associated with Harvard University, express none of the hysteria that went along with the roll-out of HSAs, even though HSA deductibles were quite modest compared to ObamaCare deductibles. But they are concerned about the possible consequences.
Unfortunately they are also woefully ignorant and lazy. They say, “Small employers newly required to purchase employees’ insurance may well choose HDHPs (High-Deductible Health Plans) as the least expensive coverage option.” But small employers are not required to purchase insurance and are not penalized for failing to do so.
The authors rue the lack of research on the effect of high deductibles on “vulnerable populations” –
Unfortunately, cost-sharing research over the past three decades has focused almost exclusively on low-level cost sharing (e.g., less than $50 per service). Few studies since the landmark RAND Health Insurance Experiment of the 1970s and 1980s have examined high cost sharing (e.g., deductibles above $1,000 per year) for expensive services, and fewer still have focused on vulnerable populations.
But the authors believe this because they looked at a total of two reports from the Robert Wood Johnson Foundation. They completely missed a RAND report entitled, “How Do Consumer-Directed Health Plans Affect Vulnerable Populations?” written almost two years ago. One would have to be willfully ignorant to miss this report.
The authors also call on employers to “facilitate contributions to health savings accounts (HSAs), especially for vulnerable people,” but it is not clear these mandated plans are eligible for HSAs. If they require first dollar coverage for anything other than preventive services, they are not eligible for an HSA.
The more I read reports from people at Harvard, the less respect I have for the institution. Which brings us to the next article, “Full Disclosure — Out-of-Pocket Costs as Side Effects,” written by a team from Duke University.
These authors recommend that physicians learn how to talk about costs with their patients. They argue that the financial “side effects” of a treatment program can be just as important as the clinical side effects. They acknowledge that it is extremely difficult for a clinician to know what out-of-pocket costs a patient may be exposed to and very often doesn’t know what the charges will be for a given array of services.
Now, the authors rely too much on information about financial burdens from the Center for American Progress (CAP). CAP is famous for including any discussion of costs or payment arrangements as a “burden.” CAP seems to think anything not paid in full at the time of service is a burden on patients (except, of course, for ObamaCare.)
I don’t expect physicians to double as financial advisers, but I agree that they should be more aware of the costs of the treatments they prescribe. In my own case, my doctor prescribed a blood pressure medication. When I went to fill the prescription I discovered it was enormously expensive. I went back to my Doc to see if there was something more affordable available. No one had ever asked him about that, but when he looked into it, by golly there was a list of 25 different meds with prices ranging 1,000 percent, all equally effective.
That is the effect of an empowered consumer. Ultimately physicians will respond to the demands of their patients and as more of us are paying cash for services, we will insist on cost considerations far beyond what any third party payer could do.
Unfortunately, the ObamaCare approach is far too clumsy to be effective in empowering consumers. The great advantage of funded HSAs is they give patients the means to pay the bill, but also get them to think twice about the costs. It is a carefully balanced approach to growing educated patients. ObamaCare just throws people in the deep end of the pool without any support. It is cruel and mean spirited — just what you might expect from the government.
The RAND Health Insurance Experiment found that medical spending could be cut nearly 30% when individuals are faced with substantial cost-sharing. Many in the pubic health community object to this notion, believing cost-sharing creates barriers to access. However, so does very costly health expenditures. It’s common knowledge that people would reduce their spending. What is often forgotten is the rate of growth would also slow.
Millions of Americans face barriers to care today because of the lack of cost control and cost-sharing beginning decades ago.
Keep in mind there were two exceptions to that general RAND finding – inpatient hospital care, and medical care for children – both of which RAND found to be relatively inelastic.
That said, it is certainly inconsistent for the feds to rail against high private-insurance deductibles, whilst designing their own plans with even higher deductibles.
I guess that’s the price for “affordability” and it turns out that “affordability” is not really free after all.
Maybe RAND was ignorant, too, or didn’t cover enough of a time horizon to notice what happened in the early Eighties when Medicare changed from RCCAC (Relation of charges Medicare patients) to charges (all patients) applied to costs to DRG-Based Charge list. Census dropped from a state average in California of 80& to 50% state-wide in about 3 years. Thousands of employees were laid off, which accelerated the aggressiveness of healthcare unions.
The elasticity of demand has also increased by the advent of hospice care, of pre-admission testing, of low invasive surgical techniques, and by an increase in the effectiveness of treatments, permitting a shorter length of stay. It makes a lot of difference the kind of data one selects for analysis, the time period, the sample, the sample size, and so on. It also helps to do extensive interviewing to test one’s assumptions and findings. Frankly, I don’t see such energetic fact finding coming out of Harvard–you are right.
Wanda J. Jones, President
New Century Healthcare Institute
San Francisco
Time and time again, it has been suggested that patients have direct input on their treatment by having some level of financial responsibility for their care. If Americans of all levels of economic status can make decisions on basic purchases, why can’t they do it for health care?
If we take the approach that less may be better in many aspects of diagnosis and treatment, it is much easier for patients to make informed decisions with the help of their doctor, but also by doing research on their own. This is a buy-in that should go a long way for reasonable consumerism in health care and help curb costs.
Fee-for-service becomes a moot point because the patients will not want to overspend. Addtionally, there is more incentive for trading expensive pharmaceutical treatment for lifestyle changes (which, by the way can be intitiated and monitored by practitioners with less training and cost than physicians). This frees up physicians to focus on treating the sick and will help mitigate any physician shortages.
Greg, in catching up on recent developments in Massachusetts legislation re cost controls (2012) I found one most encouraging piece, which ought to be emulated everywhere. It requires payers (of all stripes), as of Oct. 1, to provide a website and a toll-free phone number for members to be able, in advance, to get the price of any service, drug, device, etc. they are going to get, and the amount of cost sharing involved. And the payer is bound by what they tell the member the cost sharing piece will be. Apparently the roll out of that policy is not going so smoothly, but then we’re all getting accustomed to glitches, and the concept is worth doggedly pursuing. Apparently the State concluded that with all the high deductibles this kind of transparency will be important! Brilliant! Maybe some Harvardites contributed to that very constructive idea.
I would suggest that a web site filled with indecipherable medical terminology and billing code numbers isn’t going to be all that helpful. I prefer what Dr. Robert Berry of Tennessee has done: http://www.patmosemergiclinic.com/Fee_schedule.pdf
Nobody from Harvard needed to come tell him, or any of the other thousands of doctors following similar practices, how to post their prices.
Perhaps it would be good to point out some of the reasons for provider resistance to this idea: 1) They may not know the share insurers will pay until they receive their checks, so they can’t give an accurate number to the patient of their obligations. That is why patients get their bills sometimes 3 months after the event. 2) As most providers have contracts with insurers, having a published price can alert insurers to differences among competing hospitals, and alert other hospitals to the price they have to beat. This is capitalism, but it is also behaviors, that if done voluntarily, would raise anti-trust problems. 3) People will be staggered by the actual cost/charges of care, sometimes to the point of not wanting to have it. About a third of the price quoted won’t be for the specific treatment event, it will be for cost-shift from government patients, and for regulation compliance. I kid you not! and 4) When employees/union members see what is charged, they want an increase in their compensation.
This is a proposal that might help the situation: First, have a catastrophic plan for emergencies and tertiary care. Second, have an annual membership arrangement with a chosen provider to cover routine care. It can be the equivalent of a deductible, but just spread over the year. It would work well with concierge medicine, where the doctor is more available and practices without sending individual bills. People are not thinking at their best when sick,so if they want to be relieved of worry, a membership that is determined by their age, will work better. Don’t send the money to an insurer, give it directly to the professional or group that commits to providing your care. I also believe that optional, “lifestyle” expenditures should be paid directly by the customer.
Wanda J. Jones
Here are the basic finding from that Rand Study done just 2 years ago.
The largest-ever assessment of high-deductible health plans finds that while such plans significantly cut health spending, they also prompt patients to cut back on preventive health care, according to a 2011 RAND Corporation study.
Studying more than 800,000 families from across the United States, researchers found that when people shifted into health insurance plans with high deductibles, their health spending dropped an average of 14 percent when compared to families in health
plans with lower deductibles.
Health care spending also was lower among families enrolled in high-deductible plans that had moderate health savings accounts sponsored by employers.
In addition, other recent study show the following:
Aetna reported in 2011 that employers who switched to account-based health plans as their only plan option had saved $21.8 million per 10,000 members over the past five years.
Cigna published a 2012 study concluding that employers can save an average of $9,700 per employee over five years by switching to account-based health plans.
According to Towers Watson and the NBGH, companies that successfully move their employees into account-based health plans can achieve significant savings on their health benefit costs. For example, companies with at least half of their workers enrolled in an account-based health plan report that their per-employee costs are over $1,000 lower than companies without an account-based health plan.
I believe you may be looking at a different RAND study, Ron. I write up this one here — http://healthblog.ncpathinktank.org/new-rand-study-of-consumer-directed-health-plans/ Here are some of the authors’ conclusions —
“Total spending is reduced in high deductible health plans for both vulnerable and non-vulnerable families. High deductible plans paired with HSAs have significantly lower levels of total spending than other high deductible plans for the general population — almost 30 percent lower spending for families with a high deductible and an HSA…”
“There are no statistically significant differences between non-vulnerable families and low-income or high-risk families in terms of dollar reductions in total spending that result from benefit designs and few differences in the components of spending. However, since high-risk families have higher levels of spending, the proportional reductions in total annual spending are generally smaller for those at high risk.”
“As with spending, there are few significant differences between low income and non-vulnerable families regarding the effect of plan design on receipt of the cancer screening. However, there are significant differences for those at high risk. For them, a high deductible is not associated with reductions in receipt of two of the three recommended procedures and the reduction for the third is significantly less than for the non-vulnerable population, though this latter is not significant when we adjust for multiple comparisons.”
The people doing the studies may be aware of the high levels of cost sharing in the ACA’s bronze and silver plans, but I assure you, the people buying these plans are not aware, and I bet you they won’t be aware at the time of the purchase either- all they will see is 60% covered by Bronze and 70% covered by Silver. They won’t learn the meaning of these terms until they get a big bill they didn’t expect from the hospital.
This is so true. All the millions being spent on ACA/exchange soft-focus advertising would be better value if the ads gave examples of care, costs and customer-sharing.
Wanda J. Jones
SF
Good Morning John,
Physicians would love to talk about the costs of health care, but they can’t because there is no cost-based pricing in health care. So physicians do not know what the patient will have to pay. Consequently, whether we move to high deductible or low deductible, subsidies or HSA’s, the absence of rational pricing stands in the way of any sensible solution to health care financing.
Cheers,
Charlie Bond
Charlie,
That’s true today. However, if more patients began asking questions like “what’s that cost?”, physicians and hospitals and laboratories and radiology clinics would begin posting prices because they would have no other option. Moreover, if self-insured plans began applying pressure on administrators to assist enrollees with finding out what procedures cost, more insurers and TPAs would comply. Having enrollees continually call insurers to inquire about cost would have an impact.
The reason Walmart, Target, Costco, Safeway and all other retail outlets post prices is because they’ve learned that consumers aren’t willing to throw goods into the shopping cart without advanced knowledge of what something costs.
From the December 2013 Health Affairs (published early online):
“Our 2013 survey of the general population in eleven countries — Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States — found that US adults were significantly more likely than their counterparts in other countries to forgo care because of cost, to have difficulty paying for care even when insured, and to encounter time-consuming insurance complexity.”
Yes, this is from policy experts at the Commonwealth Fund, and the approach of HSA/HDHP advocates has been to ignore the facts and condemn the messengers. The facts remain: high deductibles do impair access to essential care, they do prevent patients from filling important prescriptions, and they do create financial hardship for those needing health care. Of those citing medical debt as a contributor to personal bankruptcy, three-fourths were insured but out-of-pocket costs still left them with excessive debt.
The bronze and silver plans of the Affordable Care Act will have the same problem since high deductibles will be essential for them to achieve their low actuarial values – 60% or 70% – and the subsidies are inadequate, especially for middle-income families.
As the nations listed above have shown us, high deductibles are not necessary to control health care costs, and many studies do show that they do have adverse consequences. Many of these other countries do provide first-dollar coverage at a fraction of our spending.
That’s just silly, Don. OECD reports that the U.S. has some of the lowest OOP costs of all its members. As a share of total spending people in the U.S. pay 13% Only 4 countries have lower — France (7%), Luxemburg (7%), Netherlands (8%), and the Czech Republic (11%).
My point was regarding high-deductibles as opposed to first dollar coverage. Costs are less of a barrier to access in those nations that do not have deductibles or coinsurance. It is true that they may still obtain health care services or products that are not covered by their programs, thus their out-of-pocket spending levels are not zero.
Out-of-pocket spending is very low for Medicaid beneficiaries, Medicare patients who have some form of secondary coverage (most of them), patients obtaining care in safety-net institutions, IHS patients, military, and others. This does result in a lower average than would be the case if everyone was covered by a high-deductible health plan. My statement stands.
Is it good to have free or near free access?
It sounds like a tradeoff to me because first dollar care in Medicare causes a lot of wasted dollars. There might be a slight benefit on the front end, but major losses at the other side. That is not a good trade off.
Other countries, as named, spend less because they have less revenue to work with; capital improvements are delayed, equipment is not purchased, staff are too few for the patient load, waiting lists are long, and cleanliness is no better than the average hotel. Americans are blessed, but focus on who to blame. In Canada, few new hospitals are built in any decade, so they slowly decay. Not to mention the salaries paid to our nurses and other health employees. They are, on average, much higher than the average wage of the patients they care for. But the work is hard.
There’s an adage in the health field: “You can have access, quality or time, but only two out of three.”
Frankly, I believe it is inevitable, of Obamacare proceeds, that the public will demand rate regulation in some states. Where it remains in place, having been tried in more than a few stated in previous decades, there are only a few states, Maryland being one, where it is well-administered. Obamacare is destabilizing health plans, which will inevitably destabilize provider organizations. They’ll advocate to have a rate plan that all payers must follow.
Wanda J. Jones
“the approach of HSA/HDHP advocates has been to ignore the facts and condemn the messengers.”
Sheesh, Don look at the link I provided to Ron above — http://healthblog.ncpathinktank.org/new-rand-study-of-consumer-directed-health-plans/
You read this blog enough to know that I do NOT ignore the facts. I delve deeply into the d=facts, as I have done with this NEJM article.
So, tell me, why is it that a $2,500 deductible in the private market is eeeeevil, but a $12,000 Obama deductible is just dandy. Give me a break.
Well, you did slam (albeit softly) CBPP and RWJF with the implication that your selected facts were valid and their selected facts were not. Commonwealth Fund has previously been targeted by John. As we advocate for our respective views on health policy, we do tend to select facts that are supportive of our particular ideologies and ignore those that are not.
Regarding the “$12,000 Obama deductible,” I made the point that the low actuarial plans in the exchanges are inadequate because of their high deductibles.
Also, I had commented at the RAND study link that you provided, which I’ll repeat here:
The closing comment of the abstract of the RAND study states, “However, enrollment in CDHPs also leads to reductions in care that is considered beneficial for all groups, and this may have greater health consequences for lower income and chronically ill people than for others.”
I would agreee that the higher the deductible, the less usage of benefits by the consumer.
Imagine, however, a plan with a zero deductible in which the employee and/or employer makes the decision whether or not not to pay the lower expenses below the deductible.
Imagine that by doing so, one’s premium is reduced as if his deductible was higher. In short, by paying the lower expenses, employees will have higher paid-up benefits underlying a growing “deductble” and lower premium.
This plan will be available from National Prosperity Life and Health to selected large self insured employers in 2014.
Through our patented paid-up benefits rider, for a reasonable fee, premiums can reduce 60-80% over 36 to 60 months.
Don Levit
“Consequently, whether we move to high deductible or low deductible, subsidies or HSA’s, the absence of rational pricing stands in the way of any sensible solution to health care financing.”
Exactly Charlie, but how do we accomplish that? Do we legilsate, or do we allow natural competition to occur? The problem with specific health plans is that they limit to certain networks, so this puts up another barrier to going where costs are less.
And just wait until people start getting hit with their ‘out of network’ bills, as described here: http://theselfpaypatient.com/2013/10/28/webinar-for-medical-bill-mediation-services/
I too have been amused by the caterwauling about the horrors of HSAs and high-deductibles in the past, only to now be hearing basically the same people speak so enthusiastically about the ‘better’ coverage that Americans now have access to thanks to Obamacare.
I am surprised, Greg, that your pharmacist didn’t suggest alternative medications. They are usually very good at this, although regulations are very strict at preventing them actually switching you without physician approval. Would have saved a physician visit!!
Great post! As an agent who has only written HDHP qualified health plans for groups and individuals over the last 11 years, I am also amused that the Obamacare advocates beam about those who were formally uninsured being able to be “covered.” But covered means a $6300 deductible. We should also point out that many clients had a 2500 and 5000 deductible and are being forced into the 6300 deductible for double the premium. See chart that I created at http://www.beverlygossage.com
Greg,
“Schizophrenia” is way too nice of a way to put it. It is politics at its worst, irrespecting the policy or or real-world implications of their actions.
The dream of HSAs will only become a reality when prices are transparent. As of even now, insurance contracts often prohibit providers from charging anyone more or less than is charged the insurance company. Of course, the insurance company then “allows” 20% – 50% of the bill and, if the deductible is not yet met, that’s what you pay. How can anyone base a treatment decision on secret prices? Antitrust laws do not apply in the provider/insurance area. They should.
Several observations, in no particular order:
– the savings quoted by Ron from high deductible plans are not that impressive to me. If the savings were $1,000 a year per enrollee, that is just a few years worth of medical inflation.
— the international rates of out of pocket spending have been puzzling to me for a long time. The USA does have a low percentage, but we seem to have all or almost all of the medical bankruptcies and all of the ugly side of medical debt collections. Maybe we just do not get news stories from other nations. Or maybe our costs are so high that 13% is in fact too much for many Americans to pay.
— I assume that the reasons for high deductibles in the ACA plans was to show low premiums in year one.
Is there any other reason? As you say very well, this is certainly not a left wing result!
–
Savings of $1000 isn’t that impressive? That means for every one million insured there is one billion dollars saved. I don’t think in my entire working life I ever spent $1,000 per year on health care for myself so to me that sounds like a lot of money. More over decrease the over-regulation and let the deductibles climb to their natural limits and in a matter of years that $1,000 will look puny.
Bob, in order –
1. The $1,000 savings is (I believe) first year only. The more important effect is on trend. This shows up in the Cigna numbers Ron cites and in other vendor reports.
2. One explanation may be that because our spending is so much higher than other countries, the dollar amount is higher even though the percentage of total costs may be lower. But you don’t really believe the medical bankruptcy numbers from Himmelstein/Woolhandler, so you? All that has been thoroughly debunked, repeatedly.
3. No doubts they were trying to show a lower premium, but also how else can you get a 60% actuarial value and still cover all the crap Obama requires?
Actuarial value is not required for excepted benefits, of which our paid-up benefits rider is expected to be judged by the Texas Department of Insurance in December.
Therefore, by not taking claims by having the employer and or employee pay the smaller claims, premiums can be lowered 60-80% over 36 to 60 months.
Don Levit
Tpabenefit.com
tHE SAVINGS ARE SUBSTANTIAL OVER THE FIRST $25,000-$50,00000 OF EXPENSES.
wITH A $25,000-450,0000 DEDUCTIBLKE, PREMIUMS ARE REDUCED 60-80%.
THROUGH OUR PATENTTED PAID-UP BENEFITS RIDER, WE PROVIDE THE UNDERLYING COVERAGE WHICH GROWS FASTER THAN CASH FOR 2 REASONS – IT IS NOT LIQUID, AND THEREFORE, CANNOT BE USED FOR ANY EXPENSES. AND, SECONDLY THROUGH THE POOLING MECHANISM OF INSURANCE, DEPENDENTS CAN ACCUMULATE SIMILAR BENEFITS FOR 20% OF THE EMPLOYEE’S COST.
Don Levit
Tpabenefit.com
Insurance leads to complacency and complacency leads to the inappropriate use of pharmaceuticals by class, dosage and by price. How many people are on Nexium 40mg. that could be on OC Prilosec 20mg.X2? How many people on Nexium only need Prilosec 20mg? How many only need generic Zantac or Pepcid which costs pennies?
you can keep your doctor, your insurance plan, and now keep your deductible??????
The public will have to learn about cost-shifting. They already know about non-insurance.
If uninsured go to emergency rooms, the hospitals must raise prices to private and government payers.
With government insurance, the public and private taxpayers still pay plus they get the added costs of massive government bureaucracies.
This brings up a broader observation; there is galloping ignorance in our field, on all levels. Consumers don’t know prices; well, providers don’t know their input expenses–they can’t predict whether they will have 100 Medicare patients per month or 30, or 600 ER visits, or 200. Policy-makers don’t know the aging profile of the population they are ostensibly setting policy for; they also do not know the literacy level, the degree of addictions, the urban violence situation, etc. These policies are written as though all the beneficiaries are Sunday School-trained kids from the ‘burbs, when we are about to see the largest wave of fraud ever–in enrollment, in scams, and in charges. So widen your concerns and perspectives and even consider an alternative to all this futzing around with health plans and charges–let’s shore up the safety net by accelerating the development of Community Health centers and health facilities in the communities where the need is strong, but where providers are willing to live and work. (Remember the Medical school and hospital built by LA County in Watts after the watts riots? There was so much urban violence that the County shut it down in the Nineties. No kind of health plan will work under those conditions, not to mention forgetting having the local population take responsibility for $12,000 deductibles. Get real.
Wanda Jones
SF
Note to L Brody —
even if every single uninsured person was somehow covered, I do not think that hospitals would lower their prices by a nickel. The majority of hospitals are over built, over equipped, and over staffed, and they know it. Revenue is king to them.
Not a huge point, but I do try and raise this when I can.
Bob:
“Hospitals are over-built, over-equipped and over-staffed, and they know it.”
Over-built: Bulit for an earlier era when demand was higher. can’t shave off 30% of a hospital.
Over-equipped. Guilty: Higher end ewuipment attract doctors which helps build census. Higher census means the overhead is covered by more people at lower costs per person.
Over-staffed. Guilty. Staffing is a product of state political agreement to requess for new health professional licensure, to limit job competition, Fewer people in the pool raises salaries needed to meet staffing requirements, and staffing is often a tad higher than needed today to off-set turnover. California mandates the nurse staffing ratio. When a new regulatory procss is passed, new staff is hired to monitor compliance.
When doctors want to have maximum time in their officers to off-et reimbursement cuts, hospitals hire “hospitaliste” to oversee their patients.
It would help everybody if we all took a good breath and broke down causes of high cots, so we could then figure out how to bring them down without the mindless trick of cutting 10% ACROSS THE BOARD, as the government does.
And, all the economists enamoued with cost-saving experiments, should recall that savings in only one patient category does not make costs go away, it just means that other patients must absorb them. All solutions should address the organization as a whole, or there will be little net savings.
Wanda Jones
(Forgive the verboseness in this excellent discussion, which is so important.)
Thanks Wanda. You give an excellent description of how hospitals have become such a money pit in America.
The less we need hospitals for medical care, thanks to drugs and new outpatient procedures, the more stratagems they come up with to keep the revenue flowing.
I would love to see medical tourism — both domestic and int’l — cut some of them down to size. We would also need a national fee schedule for ER care.
It is actually rather easy to design systems that limit hospital greed.
What scares me is this: if hospitals downsize, where will good jobs come from?
Hospitals do not outsource or automate, therefore a huge percentage of new family wage jobs are created by them. Go onto Monster.com for 5 minutes to confirm.