MEDICAL-INDUSTRIAL-COMPLEX – WHY ARE MEDICAL CARE COSTS SO HIGH?
Individuals who regularly read my Blogs know that I write about three subjects. First, medical and health issues, and, because I have an MD degree and have been in the trenches for many years, I feel I know something about these subjects. Second, I write about economics, and because I have studied the financial markets and have made and lost millions in the financial markets and having written a book on having lost 3 million in the stock market, I feel I am also knowledgeable about this subject. Third, I write about politics, and I must admit I know very little about politics, but many of my friends, who are in the same boat as I, claim they do and I hang around with them and perhaps some of that knowledge might rub off on me. I write about politics because politicians are very funny people and this gives me an opportunity to inject humor into my writings.
Today, I am combining the three subjects about which I write into one area, the subject of the cost of medical care and how some of the poorest of the poor are discriminated against big time in this area.
Years ago in the 1950's when President Eisenhower coined the term the “Military-Industrial-Complex” (MIC) he suggested that, if we were not very careful this MIC would bankrupt our country. I was in college at the time and remember saying to my friends that it would not be the MIC which would bankrupt the country – it would be the cost of medical and health care --the Medical-Industrial-Complex (MIC2). I was not even in medical school at the time. I was still in college. But, I was beginning to see the handwriting on the wall even at age 20. And so it has come to pass, my prediction is coming true. Thank you, Nostradamus!
But I wish to direct my comments to an area of the costs of medical/health care and that is how the poor, especially those who cannot afford to buy health insurance or do not qualify for Medicare or Medicaid, are being asked to pay more than anyone else for their medical care. I will prove this by citing some figures which we have collected.
At my request my secretary, using her cell phone so the call could not be traced to me – for in this area of stealth, one needs to have a healthy degree of paranoia and be very careful – to call the local Emergency Room to ask what it would cost for a 5 year old child with an ear ache to be seen and treated. The first person with whom she spoke, probably a receptionist, admitted she did not know but would ask someone else. Five minutes later a second person came to the phone and asked what my secretary wanted. It always amazes me that new individuals coming to a phone never are told anything about the caller by the first person. My secretary posed the same question about the 5 year old boy with an ear ache. This second person soon admitted that she did not know but would ask another individual. Five minutes later a third person came to the telephone and asked what my secretary wanted for the first two never told her about what the call was. The third, hemmed and hawed and said she would have to look it up. For God’s sake lady the question is very simple, you are seeing hundreds of people in the ER every day and you do not know what they are being charged? My secretary also told her at this time that she did not have insurance. Finally, the answer was revealed. It would cost $200 to be see in the ER.
But this fee is almost never realized because what really happens in the Emergency Room. A person has a cough the nature of which can easily be determined by performing a good detailed physical examination. But in a hospital a chest x-ray is usually ordered and a complete blood examination. Why. It is very simple. The Emergency Room must support other hospital facilities – the radiology and laboratory departments. A person rarely leaves an Emergency Room without accumulating a bill of greater than 300 to 400 dollars – all because of unnecessary additional tests which are ordered.
Examining the fee schedule provided by insurance vendors, if this 5 year old qualified, the state Medicaid program would pay the ER about $66.80 and if this was another older person who was on Medicare also about $66.80 with an additional payment by the insurance company, if they had an insurance supplemental of $4.00 more. This is give or take a few dollars because different insurance companies have different payment rates, although most are within a similar narrow range.
But, a total of about $71 dollars the ER would receive, if this child were covered by insurance or some government welfare plan. This is far below what we, with no insurance, are being asked to pay – that is $200, 300, or more! – an additional $130 to 230.
We know what the hospital is doing. Although the hospital charges $200, they quite frequently never collect that money. Many people do not pay so the fees are adjusted to take this into account when establishing the fee schedule. But, the person who does pay has to pay almost $130 to 230 more than a counter part with insurance. Is this fair?
Yesterday, a waitress with no insurance came to my office with her five year old boy with bilateral middle ear infections. She was new to the area and she does not make too much money working as a waitress in a Waffle House. I charged her $30 for the visit. She was very grateful because she knew that the ER would have cost her considerably more – something like $170 more! Some day when my practice is larger, I might be able to do this completely pro bono
. I now routinely charge $40.00 per visit to someone who does not have health insurance. Believe it or not this does not pay for the office overhead. I do believe if more physicians do similarly, more could afford to see a physician.
Can this problem be solved? I do not know. The usual ER is bloated with personnel. The last time I visited there with my son, even being a physician, I had to wait 2 hours to be seen. When I finally entered a cubicle I noticed more doctors and nurses chatting about insignificant social matters while there were empty cubicles to be filled. If I were running that office, I would have kicked all the loitering physicians and nurses in their respective butts telling them to get back to work. They had more personnel falling over each other while patients waited two hours in the waiting room. There is no supervisor in the ER controlling the work flow. When the final bill is calculated, they have little difficulty putting it together. My secretary had to wait 20 minutes to get her final answer on what were the charges.
The usual doctor’s office is similarly bloated with too many personnel. If an office is very busy, extra personnel are required just to fill out the complicated paper work required by government regulations and insurance companies. Forty five years ago to become an insurance company Provider, I completed a one to 3 page application. Just recently returning to the private practice of medicine, the application was 43 pages long. The answers to each question had to be verified by the insurance companies and it took 60 -90 days for the approval mechanism to be completed, after which you would receive a contract for signature. This would take an additional 45 days. We are talking here of about 6 months to obtain final approval. And this you do with each insurance provider and there are many of them. Before you begin this process you have to purchase malpractice insurance which is considerable.
What a scam. The malpractice liability insurance companies sell you insurance knowing full well that for 6 months you are not able to examine many patients because you are not a Provider. You are paying a rate for insurance based on how many patients you will eventually be seeing when your practice is going full steam ahead. Not bad, if you can get away with it! Sad to say they are getting away with it.
The government-required paper work has increased so much during the past 35 years that it takes extra personnel to complete it. You have to buy sophisticated computer software to run an office and the cost of these are high, not to speak of the monthly maintenance fees for these programs.
You are asked to abide by the HIPAA (Health Insurance Portability and Accountability Act) to insure that the privacy of each patient is respected. Google “HIPAA” to learn more. The only ones who can get access to your medical records are the insurance companies, many of whom sell your informational data. The whole thing is a sham. I am a simple man. I do not share my patients records with anyone else except a referring physician who needs to know some information in order to handle the referral and the patient is completely aware of this when I do it. Other than that the patient owns the records. I do not. I share the record only with the patient. What they do with their records is their business, not mine. Simple isn’t it? I can make this rule a simple one page document not the 50 + page document of the HIPAA Regulations.
The government politicians who all claim to be environmentalists kill so many trees with their increased paper work. In Washington why would you want to say something in a 500 page document when you can do it in a 1,000 page one?
I believe that we are able to run more financially efficient medical practices when we consider becoming more lean in our office management. I learned how to manage a business during the years when I owned a Four-Star Italian restaurant. I learned about managing not only the type and competency but also the numbers of personnel working for you. The largest expenditure of expenses come from salaries. Having one too many $85,000/year nurse in a four doctor office can translate to an additional $20,000/year profit for each doctor. Not requiring a software program costing $500/month can boost the doctor’s salary an additional $1,500/year. The math is very simple. Deflating the bloat in an ER or physician’s office can translate to decreased costs, more profit, and financial breaks can be extended to paying patients which will improve one’s competitiveness in the market place.
But let us not sock it to the poor patient for our own poor business practices.
Soon I will Blog about “Doctors and their Machines” and how this practice contributes to the high cost of medical care and medical insurance.
nicola michael c. Tauraso, M.D.
Director, Tauraso Medical Clinic
7051 Poole Jones Road
Frederick, MD 21702
Web site: www.drtauraso.com
Blog site: http://www.drtauraso.com/blog/index.htm
Labels: Medical care costs, Medical-Industrial-Complex, You Don't Have Medical Insurance