I’ve been reading some of the comments coming out AARP’s Medicare Forum, and they got me thinking.
I wrote my thesis on improving an estimated average cost function for acute care, and I learned a couple of things: it probably can’t be done, and never get two economists on a thesis committee.
Here’s one thing: say I buy a state-of-the-art camera and memory card for $100. What’s the cost of a picture? It depends almost entirely on how many pictures I take with that camera and memory card over its lifetime, not to mention the cost of the photographer. If I only take one picture before I drop it into the canyon, that picture cost me $100 (and it’s on the card at the bottom of the canyon).
What if a much, much better camera comes out while the old camera is still functional, and no one wants a picture taken with the old camera anymore? Do I get the new camera? The photographer across the street is getting a new camera.
I won’t get into the need for a building to house the camera or the need to co-locate it with the subjects or disposal of its hazardous waste by-products or its life-saving implications.
Let’s talk about outcome measures. Want to compare mortality rates? A lot of people do.
If that’s important to you then you probably won’t want an emergency department or to partner with a nursing home, because emergency departments bring ambulances and uninsured people who lack preventive services. Can you guess why you don’t want to partner with a nursing home?
I did an internship in the Quality Management Department of a small community hospital where the Director tasked me with developing outcome measures so that the hospital administration could compare the morbidity rates of the medical staff against state, regional, and national outcomes. I actually told her that I was pretty sure that a few people might not want her to have that; and, after I was done, some of the doctors bought the hospital, and terminated my internship and most of her department. Just saying…
Still, we ought to be able to figure out what an average discharge costs a hospital (or doctor or other provider) in terms of resources, yes? Perhaps. I worked for a doctor who was pretty cutting edge in technology and mastered laparoscopic surgery. She certainly saved her patients at least a few days in hospital, and insurance companies the cost of those days; but she was only paid a fraction of what she’d have received if she’s just cut the patient and it took her substantially longer to perform each procedure through a “keyhole.” How does that make sense?
Then there’s the whole insurance thing. I don’t have an axe to grind with insurance companies, but they don’t deliver health care. I get that they take premiums and invest them and make money with them, and that paying for my health care is a tsuris.
They come in with data on what their average payout is to my hospital for a tonsillectomy, and they offer me like 90% of that and stop nit-picking every single detail of every bill and pay me within a month of discharge. Maybe I can make it up in the business office.
The next thing I know all of the insurances companies have made me (coincidentally, I’m sure) the exact same offer. FYI, most hospitals operate with a profit-margin of less than 5%.
We used to kid one another (they probably still do) about “billed charges” and “cash patients;” but the reality was that the people who could pay us were going to pay us what they wanted to, and the people who couldn’t wouldn’t. Hospitals know what their costs-per-discharge are, and aspirin don’t cost $25 apiece, but the object of the exercise is to try to balance expenses with income; i.e. keeping the doors open. I’m not going to say that there are no bad apples in the healthcare delivery system, but I haven’t met very many people who weren’t at least committed to – if not passionate about – quality care.
If the American public wants to entrust their health to corporations with a vested interest in not paying for it, that’s their business. I’m old.
If consumer activists want to nickel and dime their doctors, they can do that. Seems short-sighted to me, but it’s their call. If you want your health care from the lowest bidder, go for it.
I spent twenty years getting (and providing) health care in a federally-operated managed care system, and I haven’t run into too many shipmates who were dissatisfied. Plus, I’m pretty satisfied with Medicare. I don’t see the problem with it.