Have you visited a MinuteClinic or other retail health clinic? This approach to health care is transparent (prices clearly posted and generally cheaper than physician visits), convenient (located in a pharmacy or other retailer), and customer-friendly (walk-in appointments easy to find).
So why are these clinics, which customers love, struggling?
The answer is surprisingly simple: Medicare (and by proxy, other health insurers) have created a payment system that starves innovators because:
- they can’t charge more for providing better service
- there’s no reward for customers who select a cheaper service
- they can’t even bill customers for innovations that achieve better results and reduce the need for further services
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Was struck today that I have heard very little about the role of Medigap in the current health insurance debate…despite massive discussion of Medicare, Medicare Advantage, payment reform…etc. In addition, it highlights how difficult it is to sort through the tangled web of money and influence…not sure how much I believe it, but its certainly food for thought.
This thought was triggered by Michelle Milkin’s post on AARP’s dependance on royalties from selling sponsored insurance plans:
A Hill source summed it up for me this way: “AARP has endorsed a huge reduction in funding of Medicare Advantage, which touches over 10 million middle-lower income seniors. If Medicare Advantage funding is reduced, and seniors are forced out of the program, they become potential buyers of the heavily-promoted and very profitable Medicare Supplement program sponsored by AARP (MediGap is 70% of AARP’s annual income). Medicare Supplement is a huge source of revenue to AARP. At a minimum, AARP should be required to disclose this every time they discuss Medicare Advantage.
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David Goldhill’s piece highlights a personal journey of disbelief around how health care and hospitals work today in his essay, How American Health Care Killed My Father – The Atlantic (September 2009) .
For those who haven’t seen it, its a terrific read, and highlighted by David Brooks as the first thing he would ask President Obama to do in preparation for his health care speech. An excerpt below:
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Congress overrode Pres. Bush’s veto on the Medicare bill, and so a 10.6% across the board Medicare fee cut is postponed for now. Note, this isn’t an inflation adjusted hold– physicians continue to lose money on Medicare patients as rates aren’t keeping up with inflation, but “budget neutral” requirements (e.g., pay for performance, more paperwork) will continue the need to add expenditures to the declining reimbursement. What this does is add further signal to anyone thinking about caring for our nation’s seniors in a primary care setting to get their head examined:
But Representative Jim McCrery, Republican of Louisiana, said the bill “just kicks the can down the road” and does not fix fundamental flaws in the formula for paying doctors. In 18 months, Mr. McCrery said, doctors will face a 20 percent cut in their Medicare payments.
So, as we stall auction programs to stop overpaying for wheelchairs and medical equipment, our primary care docs get yet another warning that the bleeding continues and at some point the ax will fall.
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Image via WikipediaWhile Medicare is busy guarding the front door, to ensure that no cognitive or primary preventive care is ever billed as useful time, top-down price setting has allowed our “nationalized” system for seniors to pay up to almost 2X the going rate for durable medical goods.
As related in the NYTimes, Congress has been setting the price for goods, and lobbying efforts have ensured that price is significantly higher than can be found elsewhere on the free market.
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The CMS released a staggering estimate for Medicare spending a decade from now– $2Trillion. And yes, on Medicare alone (not counting SCHIP, Medicaid, or any semblance of “universal healthcare”).
Are we willing to sacrifice the solvency of the taxpaying public so that the elderly can eat freely at the “free” table of medical expenditures? In my mind, this figure alone highlights the insanity of a defined benefit for medical care– and knocks any thoughts around expansion of government “insurance” programs out of the water.
Its a paradoxical situation– government control of medical costs per visit (via the RVUs and billing through CPT based claims coding) has systematically swapped out thought-driven primary care for technology driven specialty care. As overall cost increases, government hits cost/ time units harder and harder, incenting physicians to dispense with talking to patients at all, while freely paying for diagnostics and expensive specialty procedures. We’re now at a point where the strong controls on primary care time have made that practice virtually unaffordable and the specialists are driving us faster and faster to bankruptcy.
Is this the system we should bolt all future health expenditures through? Seems the low administrative costs of this pass-through system have allowed the wolves to raid the henhouse. Were it not for taxpayers being forced to pay into the system, it would have been tossed on the scrapheap long before, with something better at managing overall spend (likely through enhanced access to primary care and increased controls on specialty medicine) in its place.
The NYtimes details the newest weapon in the fight against cancer– a $100M+ particle accelerator straight out of Star Trek, which appears to have gargantuan impact– but more to hospital bottom lines than cancer patient survival (to date, the evidence appears, well, as theoretical as the focus of this equipment to date).
Some experts say the push reflects the best and worst of the nation’s market-based health care system, which tends to pursue the latest, most expensive treatments — without much evidence of improved health — even as soaring costs add to the nation’s economic burden.
The machines accelerate protons to nearly the speed of light and shoot them into tumors. Scientists say proton beams are more precise than the X-rays now typically used for radiation therapy, meaning fewer side effects from stray radiation and, possibly, a higher cure rate.
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I was reading some of the letters to the NY times today and am still shaking my head about the faulty metric being used to measure the effectiveness of Medicare: low administrative cost.
Now, setting aside that the way administrative cost is measured still misses significant cost shifted to other parties (namely providers and DOJ), in theory, it still doesn’t make any sense to me.
When a chicken gets its head cut off, it also “benefits” from reduced administrative costs . Lots of activity, with no wasted sugar going up to the brain…is this the “efficiency” we want for our health system?
Similarly, the postal service “wastes” less on profit than Fedex. Yet, when you need your package to actually get there the next day (and know exactly where it is along the way), which one do you use? I thought so…
