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?
Otteray Scribe
You are mistaken because (1) I don’t have the vapors at all; and (2) I never said it is easy to become a doctor, which does not change my opinion that most of us could do it.
There are two points underlying my comments on this post: (1) given that some people think that insurance company executives are paid too much, I asked about whether others, including doctors, are also paid too much; and (2) given that some people are advocating for a single payer system, I wondered what they think the practical realities of that would be. Not surprisingly, no one answered my questions.
leejcarol
OS thought it was so obvious from his comment that the pulled muscle did not require the e/r that he asked if I could read. Apparently you take a different view.
Although later OS indicates that the problem was that the e/r staff performed services that were not medically necessary and that would not have been covered by Medicaid or Medicare. Will the single payer pay for such services? Should private insurance pay for that type of service?
OS:
they should let more people into medical schools. I think the AMA keeps the supply artificially low. There are plenty of people with a 3.25 to 3.5 who could easily handle medical school and become good doctors.
I have met some really stupid doctors but then I have met some brilliant ones as well. As one doctor told me “you dont have to be smart to get into medical school.”
“Yet see nothing wrong when somebody with a third the education, brains or responsibility makes more in one year than the average physician can make in 65 years.”
you could say the same thing about engineering, most people flunk out of engineering and they really dont get paid all that well for what they do and there is huge responsibility. If an engineer screws up, there wont just be one dead person but many. They make a little bit more than a good welder, who I might add also has a huge amount of responsibility but doesnt get compensated to that level. If a welder screws up in a nuke plant or on a gas pipe-line, holy melt-down.
I dont know what mahtso thinks but I say any person should try and make as much as she can [of course legally].
Stephanie Recchi here, the wife of Sean… Although I think M D Anderson was terrible, I really blamed the joke insurance we were sold, Assurant health. They are truly sickening, especially when your young husband turns up terminally ill. They have a strong marketing team pushing their joke company . They need to be put out of business!!
mahtso: It is clear you don’t get it and never will. I am tired of explaining the obvious. If it were that easy to become a doctor and make lots of money, then why is there a doctor shortage? You free enterprise folks who believe in market demand driving prices and wages all of a sudden get the vapors over physician reimbursement. Yet see nothing wrong when somebody with a third the education, brains or responsibility makes more in one year than the average physician can make in 65 years.
leejcaroll: True dat! The bane of emergency rooms is the number of people who have had a minor ailment all week, don’t even try to go to a doctor, and then come in complaining of vague problems on Friday or Saturday night. Those are the nights when big city emergency departments brace for incoming. That is when the “Knife & Gun Club” has its weekly meetings.
raff: Thank you.
Darren and OS,
Thank you for your personal experiences. They added a lot to our discussion.
mahtso wrote:
Do you believe a pulled muscle warrants a trip to the e/r? Should the single payer (i.e., taxpayers) be required to pay for services that are not medically necessary? Is a trip to the e/r medically necessary for a pulled muscle? Was the treatment your grandson received medically necessary?
Maybe it was taking the republican;s asinine advice but as has been writeen here before pain does not necessarily indicate you hurt where you think you hurt, Left shoulder, arm pain may indicate gall bladder or heart or instance.
I used to be a ward clerk for an ER. It was not the person who came in who had injured themselves or had what turned out to be a pulled muscle that tended to be the problem it was the person who had a cold for 2 weeks and waited until the rainy icky day where it seemed they came in because they had nothing better to do. (But you never knew. Sometimes that cold is actually walking pneumonia or worse.)
Having triage nurses now does help to separate the real emergency, the average emergency as it were vs the non emergency. I know it used to be the law that you could not refuse to see anyone. I do not know if that has now changed with triage. The best way to get someone who didn’t need to be there was to keep putting them back to the end of the line. We did that when I was the defacto triage agent (I was working on my BA in psych). It was not done actively but each MI, broken bone, bad pain got seen before the person complaining of ear wax (they did come in to get their ears cleaned) or other ridiculousness..
Back to the subject of residency and physician pay: Since the comments above were entered, I came across two newspaper stories on the subject. The Arizona Republic reported that hospitals spend $150K per resident. According to the second article, which was in the WSJ, Medicare actually pays most of that. In Arizona, to the best of my knowledge, the only school for allopathic medicine is a public university. My assumption is that like at most public universities, the taxpayers are paying for a large portion of the medical students’ education.
All of this brings to mind President Obama’s observation “you didn’t build this.” In determining what a fair rate of pay for a physician is, shouldn’t the public’s underwriting of the cost of the education be an important consideration?
Bron
Thanks for the link; Otteray Scribes’ statement about Medicare and Medicaid audits is to me further proof that not everything is covered in government run health care. I know of no reason that the situation would change if there was one single payer.
As an aside about the Medicare audits: as I understand it, the results are confidential meaning watchdog groups cannot verify the efficacy of the program.
Darren,
Thank you for the kind words. Actually, when stuff likes that happens to me, I don’t take it personally. I can’t take it personally and think clearly about how to deal with it. Now, there are some things I do take personally, but those are different and I handle those stresses in an entirely different way. Regarding that job, when the moral issues are so transparent, it becomes a game, except the other side does not know it. It becomes a matter of who is the hunter and who is the hunted. Often the hunter finds out far to late they were the prey all along. I stuck with the program without getting ulcers because I knew who really had the catbird seat. If you are patient, people like that will inevitably make a mistake, and they did.
Those are truths that every good investigator or intelligence officer knows.
It has been twelve years, and the repercussions are still playing out.
I know what you all are saying about the medical claim denial issue. I can understand where Bron is coming from with regard to the contract issue, namely where someone would want say cancer treatment and would pay extra for the policy. But, consider this: what real choice to employees have over what their employer selects as policy coverages? Very little actually. And as a result of this the patient may or may not receive coverage.
On a personal side, I had this happen. I had excellent medical insurance through my employer. I chose the highest plan offered. I guess this was referred to as the high option plan. Despite this it wasn’t enough.
I had suffered increasingly from sleep apnea and it was coming to the point of being nearly debilitating. I could not adapt to CPAP devices, I had UPPP surgery and surgery on the back of my tongue to try to open the airway and it still was not enough. The problem was that I had mandibular hypoplasia and a very narrow airway. The only surgery that would work, and it was the penultimate straw, was maxilliary-mandibular advancement. Essentially it involves removing the upper and lower jaws, moving them 12 millimeters forward, and then plating them back in which brings the tongue structure and jaws forward to open the airway.
The problem? The surgery was specifically excluded in the policy. In fact, after I appealled the denial the insurance said that “medical necessity was not a consideration.” it would not matter that I was at a high risk of having heart trouble or falling asleep behind the wheel due to the apnea it was a cost/coverage issue.
So what was I to do? Obviously I had to pay it myself because suffering from sleep apnea any longer was nothing I wanted to live with. The hospital/doctor allowed me to pay the same amount they insurance would have been billed if I paid everything up front. So I had to write three checks totalling $18,000.00 to pay for the 5 hour surgery. For my health it was worth it. So I don’t get a new car, and I still drive the same car I had back then. I sleep better and my car has 383,000 miles on it. But luckily I had the money in savings. But it is grossly unfair that a person having the same condition I had who doesn’t have the savings gets to suffer the daily degredation of their health due to a treatable condition.
Is it too much to ask that 5 hours of a hospital’s and doctor’s time is so coveted that an ordinary person cannot have a brighter future, and should that ordinary person be consigned to huge medical bills that for most take years to pay off if they can at all?
I think we as a society can do better than this.
OS
In reading the tumult you had to endure from those suits at your employer for mentioning the problems with the formulary I have to commend you for speaking up for what was right despite the self serving greed that was your opposition. Fighting against tyrants always becomes a personal battle that they make it into. And it is almost always the case you have to fight it on your own because there are so many cowards that will not help you in the end. It does present a dilema. Knowing you will be savaged for standing up to these kinds of people, is it worth the damage it will inflict on you, or is it better to fight on knowing that you will be damaged but perhaps there is a chance society would be better and the future will support fewer of these menaces? I tend to think the answer is more structural, but since the tyrants tend to control those, or are those, who makes the rules it just perpetuates indefinately.
mahtso:
its available for free here:
http://www.theobjectivestandard.com/issues/2007-winter/moral-vs-universal-health-care.asp
mahtso:
see if you can find this article, it is excellent and explains many things.
Moral Health Care vs. “Universal Health Care”
Lin Zinser and Paul Hsieh
mahtso,
To continue the point to both you and Bron. What a lot of people do not know is that doctors are audited frequently by both Medicare and Medicaid. Big insurance companies do not do that. Hospitals are also audited. Penalties are severe for abuse of the system, overbilling, and tests given that do not mesh with the presenting complaint and final diagnosis.
When a Medicare/Medicaid patient comes in, there are strict rules that have to be followed. Additionally, all payments to providers are heavily discounted, far more than regular insurance. If my grandson had whipped out a Medicare or Medicaid card, the attending physician or Nurse Practitioner would have been a bit more judicious. He would have gotten an X-ray and some blood enzyme tests. When those came back negative, he would have been sent home with some Flexaril and told to take ibuprofen. There would have been a bill for several hundred dollars, because it costs a lot more to run an emergency department in a medical center than a walk-in clinic.
The reason he went to the ER in the first place was because his other grandmother believed the advice given by Mitt Romney: “…just go to the emergency room.”
Bron,
Regarding doctors and payments. The main reason my son quit private practice in family medicine was that he was spending almost as much time arguing with some insurance clerk about whether a patient could get some needed service than he was seeing patients. Some person with an Associate’s or Bachelor’s degree was literally telling him how to practice medicine. Often it was an argument over whether he could prescribe an effective medication or one that was known to be less effective (or even ineffective), but cheaper. The reason a lot, if not most, medications are not on the formulary is because they cost more than the company is willing to pay. Never mind that it’s the only effective medication for the condition. Cost is more important than the patient being treated.
Time spent on the phone with a know-nothing clerk was time he was not seeing patients.
In 1996, I decided to quit running my own small corporation and go to work on salary. We had a company sponsored health care insurance plan. Shortly after I started to work I asked for a copy of their medication formulary. There were a number of medications missing from the formulary that should have been there. However, the one that fairly leaped off the page and smacked me across the face was a notation they would not cover any orally administered cancer medication. I know quite a bit about cancer, and knew the ONLY chemotherapy drugs effective for breast cancer at that time were administered orally.
During an employees meeting, I stood up and confronted the CEO and CFO of the company. I asked them if it was the official policy of the company to be anti-woman, because the only effective treatment for breast cancer was administered orally. I never got an answer, although the CEO turned beet red and I thought he was going to have a stroke. Although no one said anything to me personally, it was obvious to me that I came very close to being fired over that. From that day on, the administration tried to make my life so miserable I would quit. I did quit later. After an escalating campaign of harassment trying to get me to quit, a manager sent me a memo asking me to lie in a report to a Judge. Big mistake. My resignation letter pointed out the request was subornation of perjury, and I would not lie for them or anyone else. I went public with both the memo and my resignation letter.
BTW, the only doctors the big insurance companies really look out for are those who work in their own company administrations.
Oterray Scribe
Maybe I cannot read, but what about my questions? Or is your position that it is better to be nasty to me than to explore what will happen if the single payer comes into effect. (And actually, the reason I asked the first question (does a pulled muscle justify the e/r) was that your comment was not explicit and I did not want to be accused of putting words in your mouth.)
I’ll ask again: should the single payer (i.e., taxpayers) be required to pay for services that are not medically necessary?
“But why dont employers offer policies which have unlimited payout?”
Because insurance companies are allowed to offer polices that put their profit over your health, i.e. health care insurance that isn’t really health care insurance. The bottom line with for profit health care insurance is the same as with any other kind of for profit insurance: it isn’t in the insurance company’s best interest to look out for your best interests. They are not in the payout business, they are in the premium collection business.
If the market is not willing to make not for profit full coverage options available?
Then what other choice do you have but to treat health care insurance as a publicly owned, not for profit enterprise?
None. Well, you can let people keep dying because some managerial jackass wants to meet his quarterly expectations, but that venal and inhumane to the extreme. Sadly, it’s also business as usual in the for profit health care insurance industry.
Health care insurance should be about maximizing patient care, not maximized profits for insurance companies and ridiculous salaries for people essentially practicing medicine without training or license.
OS:
the profit also goes to the share holders as dividends.
We have had some of those bills as well, although not that much.
OS:
“IMHO, “policy limits” is immoral in the extreme. Poor people are far more likely to either go without insurance or buy the cheapest policy possible, while praying they or their family members don’t get sick. As for policy limits, try to find any private insurance carrier who does not impose some kind of policy limits.”
I agree with you, that is messed up. But why dont employers offer policies which have unlimited payout? But there has got to be a better way to handle it than to take an entire industry and make it public.
The whole industry was in cahoots with doctors to raise the doctors salaries. Had people been responsible for their health care, I am betting it would be cheaper and better. When employers started offering it, the sky was the limit [kind of].
Oh yeah, that co-pay thing. When my daughter was in the medical center, the hospital computer calculated a co-pay by mistake and I kept getting increasingly large bills. Several calls to the billing department did no good. I still have one of those invoices around here somewhere. It is well in excess of $250,000 and they threatened to turn me over to collections if I did not pay it immediately.
After figuring out phone calls were doing no good, I wrote a letter to the head of the hospital billing department, sending it by certified mail. I cc the letter and a copy of the invoice to the Medicaid/Medicare Commission. I could not have gotten a more rapid and panicked response from the hospital if I had mailed them a live hand grenade. The last thing they wanted was for me to notify the Medicaid people; however, they could not say they weren’t warned. To say that I got an apology from hospital top management is an understatement.