How to Bring Down the Cost of Healthcare
Some of you may be old enough to remember the World War II posters “Uncle Sam Needs You.” Well, today there is a war going on over the cost of healthcare and only you, the consumer, can bring that cost down by asking your legislators to get the corporate profit out of healthcare.
Profitability Should Not Drive Healthcare Costs
I wrote a book with Diane Haugen in 1991 called Modern Medicine: What You’re Dying to Know. At that time, we were explaining to consumers some of the reasons for the skyrocketing costs of healthcare and insurance. We were trying to provide consumers with an understanding of what was happening to health care costs—the takeover of healthcare by corporations—so they had an understanding of what corporate profits were doing to healthcare and could discuss with their legislators how to stop this from continuing.
Even before we wrote out book 30 years ago, Dr. Arnold Relman was speaking out that healthcare systems based on the corporate purpose of profits did not belong in healthcare:
Despite Dr. Relman’s warning, the corporate profits from healthcare have continued to go up astronomically.
I recently read an article by Jerome Adams, MD, MPH, a former Surgeon General, in which he describes his $10,000 trip to the emergency room (ER) for three bags of IV fluids, two rounds of blood tests, and an x-ray. He pondered how with all his medical experience, he should have so much difficulty navigating emergency room charges with his insurance company, He eventually managed to whittle the ER bill down to $4,800. He notes, however, that his insurance policy had such a high deductible, he had to pay the entire $4,800 out of his pocket.
When Dr. Adams contested these exorbitant charges, he reports that he was met with the response that these emergency room charges were legally sound and consistent with charges for all their other patients. Time to take a look at Darrell Huff’s oldie but goodie, How to Lie with Statistics.
If you can’t prove what you want to prove, demonstrate something else and pretend that they are the same thing. (p. 76)
In his article, Dr. Adams went on to make six recommendations for addressing this country’s exorbitant medical fees:
enhance transparency in healthcare pricing,
institute arbitration for billing dispute,
advocate for consumer protections,
support legislative efforts to address surprise medical bills,
foster collaboration between providers and insurers, and
improve high deductible health plans.
While these suggestions are laudable, they don’t address the root problems of the U.S. runaway healthcare budgets and healthcare reform. These include the U.S. notion that corporations should turn a profit for providing health care, as described so well by Dr. Relman.
Those legislating health care costs do not understand that the payers decide what and how much to reimburse physicians. Often, the payers bury their choice of what to pay for and how much with little consideration of cheaper alternatives. After all, they are trying to make money. The payment for a loop electrosurgical excision (LEEP) procedure is just one example.
Payers and The Loop Electrosurgical Excision (LEEP) Procedure
A LEEP procedure is a kind of cervical biopsy used to diagnose abnormal Pap smears. Sometimes this procedure is done in the hospital where the bill at that time we wrote our book would have been around $3500. If the procedure were done in an outpatient surgery center, the bill would have been about $1800. If the procedure were performed in my office, the bill would have been $125. The payers would reimburse the procedure done in the hospital and in the surgical center, but they would not pay me the entire $125 to do the procedure in my clinic. Think about it. The payers could have provided 28 office procedures in a clinic for the same amount of money they paid for one hospital visit for the same procedure. Not to mention the added safety of a procedure done in my office where I knew the patient and oversaw the entire procedure and post-operative recovery. Payers could have saved themselves and consumers millions of dollars.
Today, the media often runs stories about many suboptimal pregnancy outcomes, either for mother, baby, or both. In the U.S. we have the dubious honor of being the only developed country on the planet that has a rising maternal mortality rate. As Neel Shah notes:
There have been some media voices indicating the U.S. maternal mortality rate is decreasing, but the results of studies are mixed, and even with lowered maternal mortality rates, the U.S. still has a far higher rate of maternal mortality than other developed countries.
Proliferation of Healthcare Leaders and Their Salaries
We used to call “health care leaders” hospital administrators and there was a time when they were actually pleasant and useful. Today, seven out of 10 of the most highly paid executives are in healthcare. The Senetara CEO is paid $33 million a year. While there is no good reason for salaries like this, the commonly given excuse is that “We have to be competitive.” In other words, since everybody’s salary is too high, this individual’s salary must be equivalent to all the other salaries which are too high. This is old Darrell Huff’s “demonstrate something else and pretend that they are the same thing.”
Such an excuse is not even rational and should not be accepted by any corporate board. A $33 million per year salary is a real good place to start saving profits, especially when these CEOs are cutting back doctor’s salaries by 10, 20, to 30 percent per year and denying access to healthcare to save corporate dollars.
Hospitals Eating Other Hospitals
Many hospitals carry the designation of being non-profits, but many of these corporate entities are wolves in sheep’s clothing. They promote themselves as non-profits, but they that doesn’t mean they cannot make a profit, especially in for-profit subsidiaries. The public needs to understand how these non-profits work. In the first place, the cost of buying the hospital is simply charged back to the consumers. For example, if a private equity company pays 500 million to add a small hospital to their corporation, they expect to recoup the 500 million and make a profit.
Nobody bothers to ask where that $500 million comes from. The answer is, it comes from the consumer by way of the insurance company. In other words, because the corporation acquiring the smaller hospital is in business to make a profit (even if they are designated non-profits), they begin increasing income by increasing the costs of their services, whether it’s the cost of a day in the hospital or some other commodity. Insurance companies don’t seem to make any effort to hold hospitals accountable for increasing their rates. Payers decrease physician reimbursement rates often. It would be nice if there were some transparent indication payers did the same to hospitals.
The other problem with corporations buying small hospitals is they really have no investment in the community. Almost immediately they replace long-term administrators of the small hospital and begin to shut down vital services like obstetrics. Some of these hospitals are purchased for tax write-offs. When they can no longer use the hospitals for write-offs, they close the hospitals.
If state legislators and the Department of Justice (DOJ) were doing their jobs, they would prevent large conglomerate medical businesses from buying up the competition. The DOJ allowed CVS to purchase Aetna for $75 billion because the DOJ thought the merger was so novel. Eh? At least a House Committee is beginning to look more closely at healthcare corporations buying up their competition.
Many years ago Dr. Relman plainly stated profit should not determine access to healthcare. We wrote Modern Medicine: What You’re Dying to Know to help consumers understand what was happening to health care as corporations were beginning to wrest control of medical decisions from physicians and profit from the care corporations provided. The call for the removal of profiteering from access to medical care continues today with Elizabeth Rosenthal in her book An American Sickness. She continues the call for consumers to demand change from their legislators. She believes the only way to get the corporate profiteering out of the healthcare system is for individuals to demand far-reaching reform from their legislators.
I write often about the need for physicians to take back their profession from the corporate control of the practice of medicine. It’s time for patients to let their legislators know that it’s time to take corporate profiteering out of the healthcare system as well.
Dr. Adams and physicians like him need to get behind the movement to remove profiteering from our healthcare system. Some physicians are stepping up to the plate and offering Direct Primary Care. It’s time for physicians in this country to take up the cause and support consumers in putting medical decisions back in the hands of physicians and removing corporate greed from making the U.S. healthcare system inaccessible to many. Every other developed country has universal healthcare. The “healthcare leaders” are always ready to label universal healthcare socialism or dredge up examples of poor care from nationalized insurance. But let’s face it. Some examples of poor healthcare in countries with universal healthcare in no way justify no access at all to healthcare for large segments of the U.S. population.