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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.....

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. :)

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.