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Saturday, February 1, 2014

A Healthcare Rant

I deliberately try not to get too political on this blog.  And I know full well that I'm getting ready to open an industrial-sized can of worms, especially with an international readership.  However, this is something that really gets my hackles raised.  A friend posted the following picture on their Facebook timeline (and this is a friend that I actually do like).


Here's what I posed in response.....

[Rant]
You can NEVER take into account only the price a business pays for something.  In the veterinary business a rabies vaccine might cost less than a dollar to purchase, yet we may charge $15 to administer.  Sounds unfair, right?  But in that markup you have to account for the pay of all staff and doctors, liability insurance, health insurance and other benefits, rent, utilities, equipment maintenance, time to inventory and manage the supplies, medical waste disposal fees, simple cleaning items (paper towels, floor and surface cleaner, laundry detergent, etc.), depreciation on equipment, etc., etc., etc.  If you only charge enough to break even the business will never gain enough profits to invest in newer and better equipment, more staff, expanded services or facilities, and so on.  There is a LOT more built into these prices that people think!!!!
 
Human hospitals also have the dilemma of being legally required to treat people regardless of their ability to pay, and many of those people end up defaulting on the charges, forcing the hospital to eat the costs.  If the hospital didn't somehow recoup those costs they would quickly go bankrupt and close their doors.  How much help would they then be able to give people?  What good is a hospital that can't pay its own bills?  So hospitals have to account not only for many of the costs listed above, but they also have to cover unpaid bills.  How much are those unpaid bills?  Oh, somewhere around $45 BILLION DOLLARS annually in the US!!!!!  There is no way in the world that hospitals could cover that much debt without passing along the costs.

And let's not get into malpractice insurance.  Because of our sue-happy society and the often outrageous judgments in malpractice suits, insurance costs for doctors are really high, and that gets passed along.  An average physician pays $3,000-4,000 annually for malpractice insurance.  If you're an ER doctor it's around $10,000-15,000.  Surgeons pay closer to $20,000.  OB/GYN premiums can run $40,000 or more per year.  How many people reading this would be happy making around $40k per year?  Now imagine you having to PAY an extra $40k per year just to be able to work!!!!

Suddenly $800 for a bag of fluids doesn't seem so unreasonable, does it?

And on the issue of for-profit healthcare.  Why is anyone against this?  Do you not realize the incentive this gives?  What if you would make $50,000 annually no matter what you did?  You could do a great job and really rise to the top of your profession, but you'd still only make $50k.  You could slack off and do the bare minimum to not be fired and you'd make $50k.  In a system like that, do you think the average person would really have the drive and motivation to be at the top?  Now what if you could make an extra $10k per year if you did extra work and really pushed yourself?  Would you consider doing that?  This principle is true in any business.  If all healthcare companies and systems didn't have the ability to make a profit, why would they ever want to do more than the minimum?  What would the incentive be for them to streamline their systems, create new technology, and be innovative?

Don't believe this principle is true?  Look at closed highly communist societies like the old Soviet Union and modern-day North Korea.  Their technology and care was significantly behind the rest of the world because there was no profit or upward mobility for the majority of people.  There was no incentive to do better.

Now I'm not saying that our system isn't broken.  It absolutely is.  When hospitals HAVE to charge this much just to stay open, we have a problem with insurance, lawsuits, taxes, and a whole host of other problems.  Why don't we try and fix the whole system and not just get mad at what a hospital charges?  Let's look at WHY they are charging that.  And Obamacare is NOT going to make it better.  Just wait and see (you can hold me to this...feel free to remind me again in about 4 years and see which of us has changed their opinion).

This is a much more complicated issue than paying $800 for something that cost the business $1.  And if you don't understand that, YOU are part of the problem!

Yes, this issue gets me a bit heated and frustrated.  I really hate when people just pass along a meme as a knee-jerk reaction and don't really pay attention to what they're really trying to say, or the validity of the meme's message.

And thanks for taking the time to read this far. :)
[/Rant]

Okay, let the heated responses and flame war begin.  But remember that if there is any foul language, personal insults, or direct attacks I will delete the offending post.  This is true no matter who it is from or to whom it is directed.

4 comments:

  1. Excellent commentary. Great points.

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  2. Perhaps they would like real saltwater through a large bore trochar pipe intra peritoneally sitting in the carpark with no one monitoring it? Could be done for a $10 fee....

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  3. I am a veterinarian, working in private industry (not a non-profit, BTW), and you have just insulted me and many other people I know who work on salary. No, I don't make any more money for doing more than an adequate job, but every day I go to work and try to do an excellent job. Doubtful? Some people say veterinarians (and physicians) whose salaries are tied to production pad bills and recommend unnecessary procedures.

    You could say that because I'm a veterinarian, I'm far from average. Do you really want a physician who will only put forth his best effort when motivated primarily by salary? Sad to say, if you believe what many physicians write all over the Internet, that's exactly who is practicing medicine. Having shared four years of pre-med classes with a bunch of now-physicians, I believe it.

    And now I will tell you a story about an uninsured person who could not pay his medical bills, back in the early 2000s.

    My friend was self-employed for most of his career, as was his wife. Nice Christian family who home-schooled their five kids, quiet and family-oriented. They had no health insurance, but paid all of their medical bills out-of-pocket, including the births of three of their children (they had employer-sponsored insurance for the first two). In general, they were healthy, active people, non-smokers who didn't drink more than an occasional beer. They worked hard, earned a comfortable living, owned a home and their vehicles, which was all they wanted from life. Their kids were expected to pay for college themselves, which two of them have done using the GI Bill. Sounds like a terrific family, maybe even friends of yours, right? They were good friends to me, a lot of fun, not at all pious or goody-goody. You would have liked them.

    My friend died of pancreatic cancer at the age of 52. By the time he was diagnosed, which took a while, the family had exhausted almost all of their savings on medical and household bills. After a certain point he could not work and he could not drive to doctor's appointments. The community held fundraisers for them. Several months in, my friend began to call me in agony, because the oncologist continued to prescribe powerful opioids that were no longer working but would not refer him to a pain management specialist. The one thing I could do was make a phone call to a friend (not a physician) who had connections. Thanks to her, my friend finally got his pain management consult, which helped, mostly in decreasing his enormous level of anxiety. Nothing can touch the pain of end-stage pancreatic cancer. It's an awful way to die. Finally, my friend was approved for Medicaid, seven or eight months into his illness, maybe two months before he died. The family's finances had already been devastated, which I suppose you might think is fair, because it was their mistake to believe they didn't need health insurance, and to be self-employed with only a modest income besides. After my friend died, his wife tried to rebuild the business that is now hers alone, while continuing to home-school the youngest children, and grieve. I don't think she will ever pay off his medical debt.

    You're correct in saying the ACA is NOT the answer. In fact, if you look at its history, the ACA is a compromise. Romney and other conservatives wanted to preserve the role of insurance companies in our healthcare system. So, if the U.S. can no longer pay the prices hospitals and physicians want to be paid, insurance companies are a huge part of the problem, and responsible people cannot pay for healthcare out-of-pocket, what, exactly, is the solution here?

    BTW, I'm sure the Soviet Union and North Korea have terrible healthcare systems. I, however, lived in Canada for half a dozen years, and received excellent care when I lived there. Right here in the U.S., despite my employer-paid medical insurance, I've received excellent, fair, and poor medical care, because IME price is no guarantee of quality.

    ReplyDelete

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