I forwarded to my brother a link to that Guardian article about our politicians being bought and paid for by the medical industry that was diaried here earlier.
His response as a physician has merit in this debate as well:
It's a damn mess..........I've got MD's leaving our group for more guaranteed salaries from the hospitals. This is happening to the Internal Medicine groups as well. We're looking at major decline in revenues which will result in many staff lay offs. Our practice is only one of numerous practices in the city that will have decline in services and availability to our patients. Multiply this across the country and the Democrats will have major problem explaining why services dry up because we can no long afford to offer the services.
Medical reimbursements to doctors are declining and there is no guidance for the costs of procedures going forward. If you lose control of your revenues and cannot plan on the future, how are you to run a business?
Our discussion has progressed from there below:
I responded that Schumer's public option would reimburse at negotiated rates and not at Medicare rates. With increased coverage, he could get more patients who currently lack the means to seek treatment. While he would like to see the volume, the remimbursement rates have him freaked out.
I don't think increased volume will cover the reduction in reimbursement...........but you never know. We're all flying blind now. Just wish we had a fee schedule so we can make the necessary adjustments in our overhead. Too much talk and not enough action!
This morning when I sent him the link to the Guardian article (referenced above), his response was the following:
He's the deal........Obama made a deal with the pharmaceutical companies from the start of the process to keep them quiet and allow them to keep most of their profits. That probably left the insurance companies to go it alone. Obviously they have done a good job of defeating the PO which I wasn't in favor of for obvious reasons because it would have eventually led to socialized medicine.
Now that the insurance companies are getting legislation where they want it. Medicare is trying to markedly reduce the payment schedule to doctors (up to 40%) and insurance payments to doctors are linked to Medicare. It doesn't take a genius to figure out who's getting screwed in the deal. We have no lobby other than the liberal AMA, that only represents 17% of the doctors, and some specialty associations. We don't have the money to send lobbyists to DC. Doctors are not organized as "we are like herding cats". In the end we'll end up with the screw job, the hospitals, insurance companies and drug companies will be the winners. Everyone will feel smug that "healthcare has been reformed" while the tax payers foot the bill for their half assed attempt
He raises some good points about reefing down reimbursement rates to doctors. I do not feel that it is fair to markedly reduce payments to doctors just because doctors have little or no control over the issue. A fair set of reimbursement schedules should be in place for procedures.
His comment about "socialized medicine" (queue the scary music) led me to write the following response:
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I think the term "socialized medicine" is over-used. Nobody has proposed anything approaching the Canadian or UK system where the hospitals are owned and doctors paid on salary by the government. (Updated: Canadian system is single payer but does not pay doctor salaries or own hospitals.)
What we have now is a system where:
On one side consumers and employers are paying spiraling insurance rates but are being rationed care on an increasing basis via 1) standard non-coverage, 2) pre-existing condition covenants, and 3) the odious practice of recission (i.e., kicking out sick clients for any reason possible to avoid paying for any expensive care). As a result, sick folks are going bankrupt at very high rates trying to get care outside of the non-coverage of their paid for insurance, and a ton on uninsured folks get some free care at hospital ER's while the rest of them go untreated and a portion of them die. The free care provided to the uninsured is cost-shifted to paying patient invoices to inflate the cost of an average bill.
On the other side doctors are not being reimbursed by the insurance companies at anything close to the billed rates and payment times are well past 90 days. They paperwork is outrageous as the insurance companies bog the AP process down with bureaucracy to slow down the process and increase capital float times. Due to consumer rationing, medical care is reduced and therefore patient volume.
In the middle is an excellent business model. It is rare for a business to be able to have such control over "top line" revenues as well as expenses but insurance companies can squeeze their customers by increasing rates and revenues because they have near monopoly control over their area of coverage. They reduce their expenses by rationing care to their clients and paying decreasing portions of reimbursement to doctors and hospitals. Their "medical loss ratios" (that portion of insurance rates that actually go for medical care) have decreased over the years from 90% to the high 70% areas now as their profits and executive compensation soars - about 20% of medical insurance rates go to the pockets of shareholders and executives.
In my business school classes on economics, this is known as "market failure". Markets fail when any one of four things happen:
- Imperfect competition - there is either a monopoly where buyers have little or no choice or a monopsony where sellers have only one buyer.
- Imperfect information - there is an information asymmetry between parties where one market class of participants (e.g., banks & rating agencies) is able to take advantage of another market class of participants (e.g., uneducated homeowners seeking mortgages and overseas investment funds hoping to purchase supposedly AAA rated debt).
- Externalities - instances where companies can offload costs to the public as a whole without paying for it (e.g., coal mountaintop removal extraction and the resulting environmental destruction not built into the cost of coal).
- Public Goods - items where payment by one party for a service would benefit "free riders" who would benefit from the service without paying for it. Examples are national defense, police departments, highway construction, etc.
This health care situation is a poster child for market failure:
- Imperfect competition among regionally concentrated markets? Check.
- Imperfect information with an insurance middleman filtering information between care givers and patients? Check.
- Externalities of insurance companies rationing care and pushing these unfunded costs on hospitals, doctors and patients denied coverage? Check
- Health care as a public good? That is a debatable point depending on your philosophy. Most if not all OECD countries support this viewpoint. As a "first world" country do we aspire to be more like our neighbors or more like third world countries with a small elite class and a large peasant class? What is the national advantage of a populace that is healthy? Does this reduce sick days and increase worker productivity? Does this increase our competitiveness in the global market place? If any of the last three questions can be answered as yes, then there is a public good aspect to health care independent of the moral aspects.
So this current one is a system where any change is a threat to you? You want to maintain this system?
So what is this frightful "socialist" system being threatened? Well for starters, how about an entity with a "medical loss ratio" of 95% since it is a non-profit. You eliminate about 15% of current insurance rates going to "administrative costs" aka advertising costs, lobbying costs, shareholder dividends and high executive compensation. Consumers will be subject to much less rationing -- certainly the practice of "pre-existing condition" and recission is eliminated. Overall coverage would expand to almost 100%. If negotiated rates with doctors and hospitals could be used instead of imposed Medicare rates, then payments for procedures could be standardized without surprises and increased patient volumes could be expected as more folks could receive care currently unavailable.
Look at the following chart of health care funding across the different countries. "Socialized" medicine is what you get in the British Empire countries of UK, Canada and Australia UK only. You get some of that in Brazil and the US. In the US, Medicare, Medicaid, Veterans Administration and insurance for federal workers is already government run. The most successful countries is where "social insurance" is present in large part to blunt the profit motives of private health insurance / "commercial insurance". With the highest percentage of "commercial insurance" this is where our problem in the US comes from.
So all the scare tactics over the dreaded "public option" are not over the threat of "socialized medicine" in the UK model but instead instigated by people paid off and ethically compromised from the "commercial insurance" interests to avoid any growth of "social insurance" at the expense of the private insurance industry. They have a good thing going right now and want to keep on the gravy train. Note that attractive tenants of the public options proposed are not only negotiated rates with doctors and hospitals but also the administration of the public option would have a tenuous connection to the government after getting launched and operational.
It is the influence of the insurance industry and pharmaceutical companies that are responsible for our nation's allocation of 15% of GDP for health care versus the highest other country, France with 11.5% of GDP. There coverage is not only 100% of the population but also all health care metrics (i.e., infant mortalities, median lifespans, etc.) place France at first place.
I find it depressing the amount of disinformation around this subject is getting in the way of such a logical course of action. As always one to think along national competitiveness, that we can't arrive to do the right thing when the facts are clear and excellent models exist in other countries that work, worries me about this country's ability to resolve anything anymore. This is not the only difficult decision we will be faced with over the next two decades where the costs of inaction are pretty stark.