Saturday, March 11, 2017
By Ned Hickson/Siuslaw News
While watching coverage of the debate over healthcare in our nation’s capitol, I couldn’t help but be struck by the irony of knowing that the same people haggling over what health coverage Americans should have access to are the same people who have complete coverage paid for by taxpayer dollars.
It’s no wonder that the real question that members of Congress should be asking has yet to be raised: Why is healthcare so expensive to begin with?
At $3 trillion a year, the cost of healthcare in the U.S. is nearly twice as much as any other developed country. In fact, according to Consumer Reports, if that $3 trillion healthcare sector was its own country, it would be the fifth-largest economy in the world.
And even though we are outspending other industrialized countries nearly 2-to-1, the World Health Organization (WHO) recently ranked the U.S. a dismal 37th in healthcare systems — with The Commonwealth Fund naming us dead last among the top 11 industrialized countries for overall healthcare dollar-for-dollar.
In preparing this editorial, I spent time researching the reasons behind healthcare’s astronomical costs in this country. While there are many factors, from defensive medicine practices for avoiding lawsuits, to the “branding” of healthcare providers similar to designer clothing (the bigger the name, the more money they can demand from insurance companies), the same two cost factors rise to the top of the list:
Administrative costs.
Drug costs.
WHO studies, Consumer Reports and even health economists like David Cutler at Harvard University agree that those two factors are the driving forces behind skyrocketing healthcare costs.
On average, 25 percent of healthcare dollars go to cover administrative fees. In an interview on the PBS News Hour, Cutler gave the example of Duke University Hospital, which has 1,300 billing clerks and only 900 beds.
The reason?
Billing specialists are needed to determine how to bill the varying requirements of multiple insurers.
Why the need for multiple insurers?
Because more and more, single insurers can’t cover the rising costs of medical procedures and drug prescriptions, particularly at a time when the median age in America is 40.
In most countries, government negotiates drug prices with drug makers, which virtually guarantees lower prices. However, when Congress created Medicare Part D, it specifically denied Medicare the right to negotiate drug prices. At the same time, the Veterans Administration and Medicaid aren’t under the same restriction and pay the lowest drug prices.
According to Congress’s own Budget Office, if Medicare Part D recipients received the same discount as Medicaid recipients, the federal government would save $116 billion over the next 10 years.
Imagine the money American taxpayers would save if those on Medicare could benefit from the same Medicaid-negotiated drug prices?
One has to wonder why Congress is so opposed to weighing in on controlling the cost of prescription drugs and healthcare as a whole, and what — if any — role those who benefit most from that $3 trillion industry play in that decision.
As taxpayers, we are America’s shareholders — and Congress is our board of directors. It’s time we ask why the board of America, Inc., isn’t pursuing a more cost-effective healthcare plan that will guarantee a better return on our investment, which in this case literally puts lives at stake physically and financially.
Rather than bickering over ways to pay for the astronomical costs associated with healthcare and prescription drugs, Congress needs to slow down and address the issue of controlling those costs in the first place.
Establishing affordable healthcare isn’t about how to pay more but about how to pay less.
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Ned Hickson is an author, syndicated columnist with News Media Corporation and editor-in-chief at Siuslaw News. Write to him at nedhickson @icloud.com or at Siuslaw News, P.O. Box 10, Florence, Ore. 97439.
Ned's Blog 
There are so many issues to cover about health care. I come from an interesting relationship with health insurance (in one incarnation I was one of the voices of Healthcare.gov — from the very first ZOMG-Nothing-Works-On-The-Computers! days). Right now I am a biller for a small regional hospital, and because of that I have to question the numbers that Duke has 1300 billing clerks for 900 beds. I’ve never heard of such a thing. Our whole accounts receivable department has about twelve people, and that includes supervisors, the billers for the clinic side, and only three hospital billers. I just don’t believe that the 1300 number is accurate. Hospitals are money grubbing, cost-cutting, lousy pay places. A lot of the billing is automated, even with our antiquated systems. Other than that, I agree with what you are saying. I’m cynical. I don’t believe this congress really cares about making an effective plan. It is all about obliterating Obamacare (but let’s keep the ACA intact?). It is a rush to appear to do something. The ACA wasn’t great, as it too suffered from politics, but it was a start in the right direction. Lawmakers don’t have a clue about insurance. Why should they? They have wonderful BC Fed, gold-plated and handed to them. If poor people just worked hard enough they could get something like that, too (not as good, because the politicians deserve better than the peons). When the questions being asked about healthcare reform are, “Why should men pay for someone to have prenatal care?,” (that was stupid on so, so many levels) I’d say your premise that they are asking the wrong question(s) is correct.
I really appreciate you perspectiuves on this, coming from that side of things. As for the Duke University statistic, that came from a couple of different sources, including that Harvard Universtiy economist. But regardless, I think you’re right on the money about Congress not having a clue about the right questions to ask because healthcare isn’t an issue they have to deal with.
I’m going to look into the articles further, because they sound interesting and healthcare and insurance is of extreme interest to me. (I’ve had “red carpet” coverage in my life, and poor and no coverage, I’ve had Medicaid, I lost a business in healthcare due to the inequalities of health insurance billing and the politics and lobbyists who influence things, I’ve worked as a biller, I’ve worked at Healthcare.gov. I have never worked for an actual insurance company because that would be pretty much like working for the devil on steroids, having to contact insurance companies daily is enough misery.) I did, however, do a pretty quick Google on some statistics. Duke Health is a *huge* network of between 16,000 and 17,000 employees, of which the critical care 900+ bed hospital is but a part. So, they very well may have 1300 people associated with billing, but my guess that is for the extended network, not just the hospital side. Probably there are a couple of billers for each clinic or x-number of doctors. That may or may not include the medical *coders* which is a whole nuther kettle of fish. 1300 is still a lot, and yes, it does add to costs. Hospitals rarely have dedicated billers for each specific insurance. Debbie doesn’t just bill Aetna, while Julie bills Cigna, etc. In larger facilities you do get specializations, like a few people working Medicare only, Blue Cross only, and Medicaids only. The statements that every insurance company has different rules is very true, and it is just one way they use obfuscation to avoid paying claims, which is their true business goal — pay as few claims as possible at the least cost. Patient health has zero to do with it. Being fair to the doctors has zero to do with it. I believe you mentioned “defensive billing” and that is one reason for that. Some insurances pay so little that it actually costs doctors to see patients under those policies. The whole system is screwed up. I’ve been a single-payer advocate for decades.
I once sliced my finger and had to get stitches. Five stitches cost just slightly over $500 because I didn’t have insurance. I couldn’t get insurance because of a pre-existing condition. Being effectively punished because of a pre-existing condition and being poor is nuts.
Let me know next time, Calahan, and I’ll stitch you up in exchange for some thick-cut bacon.
And you’re right. But we all know you can’t make money on people who don’t have money to give, or who might actually need the service they are paying for.
To save a few bucks, I removed the stitches myself because it was kind of like removing a patch from my jacket.
Ok, let’s make a deal. I’ll do your stitch work if you’ll sew on my patches.
Deal.
The ACA, the not quite ACA, the totally different from the ACA but with highly coincidental similarities. It’s been said that a camel is merely a horse that has been designed by a committee.
If health care is a right of the people and if the government is to be involved in health care then go all the way, a single payer system based on that which is given our lawmakers.
Absolutely. But currently, too many wealthy individuals benefit from the multi-payer system because it allows costs to be astronomical — and paid for by taxpayers. Until that comes to light and proponents of the current system have their feet held to the fire, a single-payer system won’t come to pass.
I totally agree. On a related note, I recently had a discussion with my auto insurance agent about state mandated liability insurance. I have four vehicles and my wife has all but given up the habit of driving. This means that three vehicles are parked whenever I venture out. My question was why could the mandated liability insurance not be a function of having a driver’s license thereby making whatever vehicle you happened to be driving covered for liability. He had several reasons, none of which made sense, but all led to the simple fact that my approach would cut into his bottom line. I even pointed out that whenever I rented a vehicle it was automatically covered by my liability insurance. He claimed that to be “apples and oranges,” I call it a “legal scam.”
Man, are you RIGHT!
Unfortunately, the USA has been run by wealthy corporations, and wealthy people (of all political parties) for too long, and Congress is mostly full of people who represent lobbyists rather than constituents. I’ve never in my life been ashamed to be an American, in general, but I am specifically ashamed that we have elected people who have elected Paul Ryan to be Speaker of the House. He is the personification of evil and of all that is wrong in politics today. His main premise is that if you are poor you are a drain on society and are not worthy of life. I truly, honestly desire that one day Karma causes him to lay in his own filth in a hospital bed due to some breakdown of the healthcare system, brought upon largely by him.
Did you ever see “The Omen III,” where Damien moves into politics? Yeah, I think it’s happening…
(And I promptly replied–haha): Satanic movies creep me out, so I haven’t seen that, but I’d have to agree, that we have the Antichrist trying to run things in Washington, except that maybe he wouldn’t be as inept as these buffoons.
I had a cartoon idea that, in the first panel, showed Trump getting a hair cut. In panel two, the barber notices 666 on his scalp. In panel three, Trump says “It’s 999.”
Consumers don’t have a prayer in a system that’s byzantine and obscure. Here’s one of countless examples — some of the costs are driven by the type of facility, rather than the actual illness or treatment. If you slipped and broke your leg, a local ER will x-ray and patch you up. For the uninsured, it will be more expensive than you can imagine.
But if an ambulance happens to cart you off, by availability and pure chance, to a “Level I Trauma Center” because it’s closest, the same care will be astronomically higher. Because that Level I facility has to maintain an entire array of specialists 24/7, the hospital is allowed a huge markup compared to, say, an urgent care center or basic ER, and there’s not much you can do about it.
The hospital only needs to provide you with an itemization of charges, but there’s no requirement for them to defend or justify 300% markups. If this was a hardware store, jacking up the price of generators during an emergency after a big storm, we’d prosecute them for price-gouging. But when there’s a medical emergency, there’s no such protection. Depending on where you’re taken, the costs for the same injury and treatment may leave you wishing you’d broken your neck, instead.
That’s very true, and one of the points I didn’t include in my editorial, along with number of unnecessary procedures done each year. For example, Ontario, Canada, has 60 hospitals that can perform open-heart surgery. Pennsylvania, which has about the same population, has three times as many hospitals capable of performing the same survey — and as a result, three times as many open-heart surgeries are performed after heart attacks. Yet when you compare the statistics of the one-year mortality rate for people after having a heart attack, there is no difference between Ontario and Pennsylvania, even though three times as many surgeries are being performed each year here in the U.S.
Who pays for that? Ultimately, the taxpayers.
Thank you for this post. You are absolutely right. And it makes me so angry that Obamacare didn’t fulfill its promise of bringing down health care costs through collective negotiation. I don’t know nearly as much about this as you seem to, but I think it must at least have something to do with the fact that there is no public option. I really wish he hadn’t given in on that so easily.
And the Medicare prescription drug thing–ugh. Of course the government is forbidden from negotiating drug prices. Otherwise, pharmaceutical CEOs might only be able to buy 2 private islands instead of 10.
Aye, and there’s the rub, Nicole
Wow, Ned, a well researched, thought out and written piece. Thank-you so much. Another reason for me to be disgusted with our government!
The list seems to be growing, eh?
Have you ever seen this blog? https://doctorly.wordpress.com/
She’s a Dr. in the US and her blog is very interesting. It’s named “Behind the White Coat.” It’s interesting to have a Dr.’s perspective on things. I just thought that it might interest you.
Thanks, Gibber! I’ll check it out. Interestingly, four doctors have shared the link to this post I put on Facebook.
That’s great! I told her about your blog too.
Excellent points. This was first brought to my attention about 4 years ago in a youtube video by John Green of the vlogbrothers. He made many of the same points, but pushed even further on the negotiated price angle, going beyond just drugs and into negotiated treatments in general.
It does seem odd that as obvious as this is, it doesn’t get the attention the ACA gets. Maybe because it’s a complex problem and doesn’t lend itself to demagogic sound bites. And of course, the politicians don’t want to bite the hand that funds them…
Thanks, Dave. I’ll have to check out that video. And yes, it goes much deeper than I could go into in the space I had, like the cost associated with too many unnecessary procedures as well.
I would like to see Medicare to negotiate lower drug prices, but I wouldn’t expect much to change: whatever profits drug companies lose on Medicare deals, they’ll make up by rising the drug prices for the rest of us. Ever heard of a guy called Martin Shkreli? Or Epipen prices?
These are extreme cases, but in most other cases the Americans still pay much more than that rest of the world for the same drugs.
As for billing, you need 1300 billing clerks to figure out how you can bill each procedure to the max with creative use of billing codes.
Exactly. It’s going to be very hard to switch to a smaller trough to feed the same number of hogs eating from it.
I would like to see a very simple change to the way the FDA approves drugs. If the drug is approved in the EU, England or Canada, it should not have to go through the approval process here.
That’s an excellent idea — or maybe a multinational center of approval, with the world’s best researchers that approve for all countries — especially since most drugs are sold world-wide anyway!
Don’t get me started. 3 words – Ned for president. 🙂
Make America Bacon Again!
Lollllllllll 🙂
Reblogged this on Art by Rob Goldstein and commented:
from Ned Hickson
Thank you for sharing, my friend
It’s a needed POV. 🙂
You asked the question I’ve been asking for decades–look at the itemized costs when you go to an ER or something. A dose of children’s tylenol can be $10, an ACE bandage for a sprain can be $40. Seriously? I’d love an investigation into healthcare practices, why so many billing agents are needed and why certain things cost so much. I get if you’re going under the knife and need a sterilized surgical room, the doctors, the nurses, the equipment, etc. is gonna be a pretty penny. That’s a given. Otherwise, there’s so much price gouging it makes no sense. I bet if you had an experiment where two people go into the hospital–same age, gender, health insurance plan, general overall health–and gave them to the same doctor for the same diagnosis, the bills would still be different. And I’m sure if you asked three different billing agents why, they wouldn’t be able to give the same answer.
I think you’re probably right. Although I’m guessing they’d charge more for the chewable aspirin.
The answer to every nation’s health care woes is obvious: Robot bodies.
What aren’t I running the world?