Jim's Journal

Back in October ago I wrote a rant about deadlocked congress and the rising cost of medical bills and how the insurance industry is only half the answer.

I see on EOB’s how much the doctors are charging, and my insurance company reduces that fee, and then pays the rest with the exception of my deductible and co-pay. But my insurance premium for our family of five is more than half of what most people in this country make in income. Would I love to go buy a separate policy for a lot less, of course! In fact there is no way this family uses as much medical services as we pay out an insurance, if all of those bills were less and we paid them directly then the doctors would make more, insurance companies would make less and I would pay less.

That’s why Obamacare or The Affordable Healthcare Act is only a short term solution. It will absolutely solve some of the problems we face as we go to the doctor, he/she orders a blood test that for some unknown reason will cost $1,000, insurance will “write it down” to a reasonable amount from some predetermined rate and then insurance will pay it.  But what happens when its not been pre negotiated, when its a specialist or something new?  That will cost us, the taxpayers more money.  And I expect that at this moment there is a dance going on where Healthcare Providers, Hospitals, Drug Companies and Insurance Companies are finding ways to get around this. The Drug Companies reformulate to get higher prices, The Providers Specialize to create scarcity, The Hospitals acquire other hospitals to create oligopolies and of course, the Insurance companies will put in loop-holes to limit maximum coverage or they will simply raise premiums to cover it. So we pay higher taxes, are required to pay premium rates and everybody loses. In fact in the USA we spend 20% of our GDP on Healthcare!

The sad thing is – we all know that a specialist comes out of medical school with hundreds of thousands of dollars in debt. Then they pay thousands of dollars in insurance to protect them agains malpractice legal trolls. And then when they do establish rates the Insurance companies write them down – so they mark them up to compensate.  So who would blame them for charging the rates they do? There were two recent articles that prompted me to write this.

The first was an article in Time Magazine – Bitter Pill: Why Medical Bills Are Killing Us by Steven Brill. In fact I don’t read Time but saw an interview with Mr. Brill on The Daily Show – expecting it to be funny and to see a bit of the light side, it infuriated me. I could even see it in John Stewart’s face as he interviewed him in the First Part (this was what was on the network, there are two more parts online) – he didn’t want this ugly fact about the health care system to ruin the idea that Obamacare isn’t going to help. I encourage you to watch all three parts of the interview. One, Two, Three. In the second part – John points out that the article should be required reading. How the hospitals lobby to influence congress – spending more than the military does to do the same. The ambulance industry makes more than Hollywood. In part three he points out that Obamacare passed because it did nothing to impinge on these profits and the machine. Even John points out that Obamacare only “picks at the edges” of this problem.   If you want to read it and don’t subscribe to Time let me know and I’ll share it with you.

In fact, even Mr. Brill came out with a second article: Hate Obama, Love Obamacare: How a skeptical Ohio family found plenty to like in health care reform. In fact, Time Magazine has a full digital spread of coverage on the subject. In his second article Mr. Brill points out that the new law and the new insurance requirements actually have been a positive for the family he profiled since they have now been covered. It was almost apologetic, showing you how much pressure there is to want to love this new world order. Even I want to – and appreciate the coverage but I have to say – It really isn’t the long term solution.

If all we can do is provide more of the same and force everyone to jump into the system it will only perpetuate this bad behavior.  I wonder though – if we hadn’t passed this law would Brill have written this article? And if we hadn’t passed this law, what is the solution for families like the ones profiled in this article?  They had insurance – but they didn’t know that the plan they had was essentially worthless. They were a small business, making just above the poverty line (so no Medicaid) and paying over $400/month month for a plan that maxed out at $2,000/day for a hospital stay. The bill came out to over $80,000 and they wouldn’t admit him until he paid them first. Literally  this guy was stuck in the waiting room for 90 minutes waiting for his check to clear and he had cancer.

Did he have a choice? Yes – he could go to a clinic but they wouldn’t be able to treat him with the technology, physicians and medicine that MD Anderson Cancer Center in Houston did. And could he have gone to another cancer center? Yes – but they all charge the same. The article points out what those of us that have been know – a Tylenol pill costs $1.49, a $283 x-ray and every time the nurse drew blood they charged $36 – with some of the blood tests reaching $15,000. And the cancer drug that the drug company charges $4,000 was marked up to $13,702! This isn’t hyperbole – I’ve been there.  I have seen the EOB’s come back for blood tests for my family – a $1,000 blood test written down to $100 and that being part of my deductible – imagine if I didn’t have insurance, or had some sort of catastrophic insurance?

Today I started the day with an article in the NY Times – Patient’s Costs Skyrocket; Specialists’ Incomes Soar: When a Doctor Becomes an Entrepreneur, Small Procedures Offer Big Returns. This just reinforces the point I’m making. The fact is – if your doctor has tried everything to figure out why your kid is sick and he recommends a specialist, you are going to go.  And if that specialists recommends a hospital visit to do a diagnostic procedure, you are going to go. And that whole process will cost you as much as $15,000 for one day! I’m speaking from experience.  I’m incredibly happy that it all worked out and thank God that we did it but really, how can this be?  The articles point it out – little choice, and bandaids on the system, no way out. The Times article has this horrifying example of inflation and the spiral of costs: a simple procedure by a dermatologist to remove a tiny growth below her eye, that spiraled into an eye specialist, a plastic surgeon and a hospital visit.

Her bills included $1,833 for the Mohs surgery, $14,407 for the plastic surgeon, $1,000 for the anesthesiologist, and $8,774 for the hospital charges.

I don’t blame a doctor for specializing and looking to make the incomes doctors used to want to make – pointed out in that while our family doctors income has risen only 10% between 1995 and 2012, specialists have seen incomes rise over 50%. And when you look at our hospital system its appalling. In Brill’s article he shares that MD Anderson is part of the University of Texas system and is a non-profit organization. But the money they make is extraordinary.  It feeds the investments in beautiful glass buildings to attract high-power doctors and to acquire and eliminate competition. It pays the president of the organization Ronald DePinho over $1,800,000 a year not coating outside earnings from three pharmaceutical companies to which he has financial ties. And its the same with Stanford, Duke and Yale – the system is broken, its a gold rush and the health care act does nothing to stop it. In fact it perpetuates it.

The problem is – we really don’t have a choice. I believe in the free market and I believe we should not have the government pay for everything – but the fact is there needs to be regulation and oversight, the same oversight that other industries have. Break up hospital monopolies, take away their “non profit” status. Stop law suits so that doctors don’t order procedures to cover their ass. And here is where I’ll catch heat from my conservative friends – find a way to regulate pharmaceutical companies and medical labs to reduce costs there. As Brill points out:

When Obamacare was being debated, Republicans pushed this kind of commonsense malpractice-tort reform. But the stranglehold that plaintiff’s lawyers have traditionally had on Democrats prevailed, and neither a safe-harbor provision nor any other malpractice reform was included.

So – did you know you could negotiate your hospital bill, doctor bill? Do you feel that its even possible when you are in the moment? Do you expect your insurance company to do it for you? Do you think this is just crazy?  It is – its going to cost us a lot for the feel good solution we have today.  So will you rant on like me and make it an issue?  Will some young kids in college come up with a solution rather than blindly following the system or the demagogues of our time  I sincerely hope so.