Respectfully submitted by Lawrence E. Rafferty(rafflaw)-Guest Blogger
If you have had any medical procedures lately, you may already be aware of the enormous prices being charged by hospitals. What you may not be aware of is just how expensive this medical treatment is and how relying on private health care may just be reducing our lifespans. I apologize in advance on the length of the following examples, but they are necessary to understand the enormity of the issue.
“Brill’s article begins with the story of a 42-year-old Ohio man named Sean Recchi, who traveled to MD Anderson Cancer Center in Houston for treatment of non-Hodgkin’s lymphoma. He and his wife Stephanie had paid $469 a month, or about 20% of their income, for insurance that covered $2,000 per day of hospital costs. His financial troubles started when MD Anderson told him, “We don’t take that kind of discount insurance.” But he had to go to the hospital. His wife recalled that he was “sweating and shaking with chills and pains. He had a large mass in his chest that was..growing. He was panicked.”
Stephanie asked her mother to write a check for $48,900. Sean waited for 90 minutes while the hospital confirmed that the check had cleared. He was also required to advance MD Anderson $7,500 from his credit card. The total cost for the initial treatment and chemotherapy was $83,900, including a $15,000 charge for lab tests for which a Medicare patient would have paid a few hundred dollars, $283 for an x-ray that Medicare categorizes as a $20 charge, and $1.50 for a generic version of a Tylenol pill.” CommonDreams
Those charges were just the start of the enormous costs that Mr. and Mrs. Recchi would be subjected to while dealing with his illness. His total bill for the beginning of his treatment for cancer was $83,900! If Mr. Recchi had been treated under Medicare for the same procedures and blood tests his cost would have been much less. “Had Recchi been old enough for Medicare, MD Anderson would have been paid a few hundred dollars for all those tests. By law, Medicare’s payments approximate a hospital’s cost of providing a service, including overhead, equipment and salaries.” Time
The hospital in this example is a non-profit division of the University of Texas, but its profits are enormous. ‘ “The hospital’s hard-nosed approach pays off. Although it is officially a nonprofit unit of the University of Texas, MD Anderson has revenue that exceeds the cost of the world-class care it provides by so much that its operating profit for the fiscal year 2010, the most recent annual report it filed with the U.S. Department of Health and Human Services, was $531 million. That’s a profit margin of 26% on revenue of $2.05 billion, an astounding result for such a service-intensive enterprise.1
The president of MD Anderson is paid like someone running a prosperous business. Ronald DePinho’s total compensation last year was $1,845,000. That does not count outside earnings derived from a much publicized waiver he received from the university that, according to the Houston Chronicle, allows him to maintain unspecified “financial ties with his three principal pharmaceutical companies.” ‘ Time
Not only is this hospital reaping huge financial windfalls on the backs of its patients and their insurance companies, the compensation of the hospital’s CEO, as noted above, is astronomical. And that compensation does not even include the “unspecified financial ties” with pharmaceutical companies. Does that mean that the CEO is allowed to receive kickbacks from some of the companies that his hospital may be using for their medications?
This is just one example, but the Time magazine article linked above delves into other examples of this type of outrageous medical costs charged to patients. If the patients noted in the examples were able to take advantage of a Medicare for all plan, the costs would be a small fraction of what Mr. Recchi was subjected to. It is interesting to note that the Administrator of Medicare for the entire country made a small fraction of what this one hospital CEO took home. “The Medicare administrator made a base salary of approximately $170,000 in 2010.” TheNation
Just what do we get in terms of service and results for these extraordinary charges? “Our private health care system has indeed failed us. We have by far the most expensive system in the developed world. The cost of common surgeries is anywhere from three to ten times higher in the U.S. than in Great Britain, Canada, France, or Germany.” Common Dreams Our expensive private health care system does not even produce better medical results than the results achieved under Medicare.
“We now have a shorter life expectancy than almost all other developed countries. A National Research Council study placed the United States LAST among 17 high-income countries.
It wasn’t always this way. Since 1960 there has been a close parallel between worsening life expectancy and increased health care costs as a percentage of GDP. Most disturbing is our growing infant mortality rate relative to other countries. A UNICEF study places the U.S. 22nd out of 24 OECD countries in “children’s health and well-being.” In startling contrast, Americans covered by Medicare INCREASED their life expectancy by 3.5 years from the 1960s to the turn of the century.” Common Dreams
That last factoid on life expectancy is amazing. We are paying far more than any other country in the world for our private health care system, but we are not getting the world-class results for those high prices. Why do we as a nation continue to allow the medical industry to charge these exorbitant rates? The answer is the lobbying money spent on our politicians in Washington and in state capitals all over this country. We have to take over the for profit health care system and replace it with a Medicare for all type system or we will continue to overpay for less. Will Obamacare help this situation? It may, but we won’t know for a few more years if costs are controlled and results are improved.
Will Obamacare start us down the road to a single payer system? One can hope, but I am not holding my breath. Does it make sense to cut Medicare services and push back the eligibility age in light of the huge national costs incurred in the private health care system? What do you think?
Mr. DePinho doesn’t care if people die as long as their payments clear the bank first.
Bron,
I’m not worried. And you shouldn’t be worried about private systems. They’ll run in parallel here just like they do in England and probably at about the same usage rate.
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mahtso,
“So if I understand things, people in Quebec who didn’t want to wait 12 to 24 months for health care are whiners.”
Clearly you don’t understand or you wouldn’t have supposed that. There is a shortage of doctors in Canada. Different circumstances create different issues with running any system. The reason for the long waits is a physical shortage, not simply a desire to piss people off or make them suffer needlessly.
“And Medicare is an example of “good” government run health care, but people need supplemental insurance to make it work fully. (Or maybe only the rich whiners need the supplemental insurance.)”
Or maybe you can’t distinguish between a method of payment for a service and the quality of service provided which leads to . . .
“Another aspect of this discussion that is of interest to me is the question: why should I trust the government to run the health care system?”
Another aspect of this discussion you apparently don’t understand is there is a difference between running health care systems and running health care insurance systems. Universal health care does not mean corporations won’t/can’t own hospitals and doctors all work for the government. See what I said to Bron about parallel systems. One system to cover everyone so no one has to go bankrupt to get care or go without it, but if you want to pay extra for “special treatment” because you’re “special”?
Be my guest.
Your whim and egotism shouldn’t force others to die or live in poverty because they had the bad fortune to be ill.
“Not only is this hospital reaping huge financial windfalls on the backs of its patients and their insurance companies,…”
uh, those insurance company CEOs are making way too much money too!
eat more kale!
So if I understand things, people in Quebec who didn’t want to wait 12 to 24 months for health care are whiners. And Medicare is an example of “good” government run health care, but people need supplemental insurance to make it work fully. (Or maybe only the rich whiners need the supplemental insurance.)
Another aspect of this discussion that is of interest to me is the question: why should I trust the government to run the health care system? On this blog I see stories about government screw-up in the schools (e.g., zero tolerance policies run amok), people arguing that hospital officials got jobs based on political patronage, child protective services taking kids from parents because there were photographs of the kids bathing, a city mandating the size of soft drinks, the President asserting the right to kill US citizens, and presumably others that I missed.
There is no gainsaying that insurance company executives, like most executives, are getting fabulous salaries. My questions are: How much is too much? Do we want a government cap on salaries? Will that apply only to insurance executives? Or to all executives? Law professors and lawyers? Doctors?
Doctors’ pay is of interest to me because public records show that doctors are 3 of the 5 highest paid State of Arizona employees (each earning over $200,000/yr); doctors and dentists are 16 of top 20 (all earning over $180,000/yr); and about 25 of the top 30 (of the 5 who are not doctors/dentists, 2 are medical benefits administrators). Is $200,000 too much? $180,000?
[The salary data can be found at azcentral.com (but I believe it is 2 or 3 years old).]
As I wrote in a comment above, I think the Affordable Care Act is can be of great benefit to me. I also think a single payer system would be of great benefit to me. But I don’t think that that is the right way to determine if these programs are “good” or “bad.”
Gene H:
dont you worry about single payer, that is where Obamacare is leading.
And what about students whose parents don’t receive dependent coverage at work, and who can’t afford to pay the additional cost themselves? Many of them used to be able to get coverage through their college. But new rules and regulations under Obamacare are forcing many colleges to discontinue their coverage or to dramatically raise premiums.
For example, Lenoir-Rhyne University of Hickory, N.C., the University of Puget Sound in Tacoma, Wash., and Cornell College in Mount Vernon, Iowa, are all dropping school-sponsored plans starting in the fall. The colleges said that Obamacare’s regulations would have driven up students’ premiums tenfold. And, Bethany College in Lindsborg, Kan., was forced to raise the premium on the plan it offered students from $445 to more than $2,000 to pay for the new level of coverage required by the health-care law.
The Obama administration’s requirement that insurance include contraceptive coverage is also causing Catholic universities to drop student coverage. Already, Franciscan University of Steubenville in Ohio, and Ave Maria University in Florida have recently dropped their student plans.
http://www.cato.org/publications/commentary/obamacare-no-free-lunches
“In 1850, the French economist Frederic Bastiat wrote “That Which Is Seen and That Which Is Not Seen,” in which he noted that, while politicians liked to trumpet the visible benefits of their largess, there were often unseen costs and consequences that resulted from those policies.
It is a lesson that politicians should heed today.
Take, for example, Obamacare. The president loves to cite the fact that college students are now able to stay on their parents’ policies until age 26. This has undoubtedly made it easier for some students to get or keep insurance coverage. But the additional coverage is not free. In fact, according to the Department of Health and Human Services, the cost of continuing coverage from 18 to 26 could run as high as $3,400 per child per year. Much of that additional cost is passed back to companies that provide insurance coverage to dependents of their employees.
“Politicians often act as though government programs are cost free.”
The predictable result: Companies are dropping dependent coverage altogether. Among them is one of the largest union-administered health-insurance funds in New York, SEIU United Healthcare Workers East, which is now dropping dependent coverage for 30,000 workers. Ironically, the fund had previously covered nearly 6,000 workers’ children, some up to age 23. Those students, along with other spouses and children, are now out of luck.”
http://www.cato.org/publications/commentary/obamacare-no-free-lunches
The SEIU, now that is rich.
http://blog.heritage.org/2013/03/13/obamacare-medicaid-trap/?roi=echo3-14861518551-11803206-6dc0d1d811a4f08519e5b27c65ebd713&utm_source=Newsletter&utm_medium=Email&utm_campaign=Morning%2BBell
“The Medicaid expansion is a crucial part of Obamacare that is supposed reduce the number of uninsured. But adding millions of people onto an already strained program doesn’t help anyone. The Medicaid program is already struggling to provide care to its core obligations—a diverse group of low-income children, disabled people, pregnant women, and seniors. So dumping more people into the program will make matters worse. Research shows that Medicaid enrollees already have worse access and outcomes than privately insured individuals.
But Medicaid already doesn’t cover the costs of many procedures, and expanding the program is only going to stretch the doctors’ even further—while they get paid less. It is unlikely that care providers like Dr. Scherz will be able to keep treating such high numbers of Medicaid patients under this scenario—which means less access to care for children who need it.”
robert collimore,
You may be right about the eligibility age, but I have not read any rumors on reduced benefits. I hope Senators like Bernie Sanders and Congressmen like Alan Grayson keep fighting to preserve Medicare and Social Security.
No, it doesn’t make sense to cut services to medicare or push back the eligibility age from an economic standpoint; neither is it moral. But I’m predicting that’s exactly the compromise the President will make with the Republican sociopaths to get a deal done for resolving the sequester issue.
mahtso,
As rafflaw said, Medicare covers the bulk of my mother’s medical expenses. I have no idea if we’d need supplemental insurance if we went to a single payer. It would depend upon the program that is implemented.
Darren,
Thanks for the chuckle. Dieter was always one of my favorite Myers characters.
Gene, but alas not all Germanic clothing is too hot, some are actually rather cool
That would only work if there is no Lederhosen requirement, Darren. Parts of America are just too hot to wear that kind of gear.
Maybe we should just take the system in Switzerland and port it over to the United States. I understand it works well over there.
Elaine,
my soon to be 90 year old mother has also received excellent care from Medicare and has been hospitalized several times each year in the past few years. She does have a supplement and that is important, but the Medicare coverage handles the bulk of her needs.
OS and Gene,
The numbers that the insurance companies are charging and their CEO’s are being paid is astronomical. Great job in explaining just how the insurance companies deny coverage now and how a single payer system cannot..
mahtso,
I explain it as not saying anything about denying care. Delaying as a matter of triage, certainly. But denying? No. The decision crafts a solution that could potentially allow the dismantling of the Canadian Medicare system (which all agree needs more doctors to lessen waits) but this in unlikely. More than likely the decision will simply be used to craft an exception allowing the wealthy to buy private HC insurance for use at private hospitals if they’re simply too rich to wait like everyone else. And that is fair enough. However, just because some rich whiner doesn’t want to wait doesn’t mean everyone else should be deprived of health care or forced into bankruptcy to get it. Even in England, private HC and HC insurance systems run in parallel to the NHS, but they are only used by a small percentage of the populace (~8%).
mahtso,
If single payer is ever adopted, there will probably be an annual deductible and a co-pay just like Medicare. Medicaid is for the poor, disabled and children without means. Medicaid doesn’t have a deductible and co-pay.
As for Quebec, it is a country within a country, by a rather strange political settlement that kept them from seceding. Don’t judge the rest of Canada by what happens in Quebec. My future grandson-in-law is Canadian, and as a user of their health care system, he gave me quite an earful on how the system works, and doesn’t work, in Canada.