Why No One Wants to Crack the Health Care Walnut

American Thinker ^ | March 28, 2007 | Geoffrey P. Hunt

[neverdem]

A few days ago I had dinner with friends from a boutique actuarial services firm. After some chit chat, we soon turned to health care costs, health insurance and, as one would expect in the small talk lexicon of actuaries, mortality tables.

Soon enough we all agreed that the notion of health care insurance these days is both misleading and a misnomer. Because life expectancies are now in the 80s-in fact someone with average health at age 65 can expect to live until age 90-the probability that any one of us will die without having at least one prolonged expensive disease-cancer, heart disease, diabetes, arthritis-is virtually zero.

We are all familiar with the usual insurance underwriting risks-a boiler explosion, a house fire, car accident, crop failure.  Insurance underwriters routinely calculate the probability of an infrequent but potentially catastrophic event to price the reimbursement for the accompanying unwelcome financial loss.   They will even price happy probabilities, such as hole-in-one insurance, paid by a charity golf outing sponsor, for that one chance in a zillion where the proud owner of a lucky stroke could win a new Cadillac.

But as the probability of having an expensive or catastrophic event approaches certainty, the insurance premium quickly approximates the actual financial cost of a claim. This is what has happened to health care cost and why the talk of health care insurance is silly. The economics of health care are no longer a matter of "who"  "if" and "how much". Instead it is about "when" and "who will pay".

Despite all of the attempts at managed care, consumer driven health care, variable usage pricing and other failed schemes-- benefiting only the health care consultants who conjure up such ineffective cures-- costs are still climbing at double digit growth rates, resistant to any and all broad spectrum antibiotics. The health care Don Quixotes still cling to the noble but elusive whim that reducing probabilities through behavior modification can drive down claims and cost.  

Fat chance.  For all of the blathering over tax deductibility, health savings accounts, single payer systems, employer mandates--it's the same chatter: either budgeting the inevitable costs that can't be avoided or shifting the cost burden from one gored ox to another.

Why is this health care walnut so hard to crack? Well, the answer is pretty obvious. We don't want to crack it. Consider the four non-negotiable demands we insist be in place for our health care system:

• 1) Health care is run by a semi-private monopoly where little or no competition is allowed.
• 2) Only a few will modify their personal habits; the rest expect medicine to remedy the pain from their self- indulgences.
• 3) Everyone expects the very best in medical technology and pharmaceuticals, the latest diagnostics and the most expensive and best trained medical practitioners available on the planet, now-all paid by someone else
• 4) No one is denied care, not even illegal immigrants or criminals on death row.

Any chance on the horizon to dismantle at least one of these four health care mandates?  Not before an asteroid parks itself along Hollywood Boulevard. And so we might as well accept the reality that health care has become a de facto right, a public good to be enjoyed by all and should be financed just like every other public entitlement.  Oh, and don't expect health care costs to behave any better either. As P.J. O'Rourke quipped,

If you think health care is expensive now, wait until it's free."

Who has the political muscle and the willpower to take a nutcracker out of the drawer and use it?

Geoffrey P. Hunt is a senior executive in a multinational electronics company.

[Spyder]

I don't think any doctors mow lawns on the side, not because they are not poor but because mowing lawns pays even worse than medicine. Baseline labor is about 200 pesos (US$ 4) a day plus 50 pesos ($1) for lunch.

I meant if you paid them here on the scale of what Filippino doctors earn in their country, they'd be mowing lawns on the side (or they wouldn't have gone into medicine in the first place). Check out their overhead costs, their malpractice insurance costs, not to mention their student loans. Your average GP here isn't rolling in dough. Some of the specialists perhaps, but the doctors I know live in the same quarters on base as others of their rank. A doctor lives on our street, a geriatric specialist. We share the street with a gardener, a lawyer, a flight attendant, a caterer, and a cop (among many others - i.e., it's hardly beachfront property, very middle class). Most homes are in the 1800- 2000 sq. ft. range on 5000 sq ft lots.

So is the doc on our street living high on the hog? How far down in the ghetto do you want him to live?

[daviddennis]

I'm not asking anyone to live in the ghetto.

I am simply saying that I'd rather not pay $100,000 for an operation, and wondering why on earth I should be asked to.

It actually irks me that, despite these outrageous fees, nobody appears to be getting rich off them. Doctors probably got very little of the outrageous fees I paid, nurses don't make that much, and hospitals are going bust. So where is the money going? Who IS getting rich off of these fees?

If the money all goes to lawyers and insurance companies, I'd rather have my care done in another country, where a higher percentage goes to those who actually do the work. In extremis, I could buy my own equipment and set up my own hospital for less than what it takes to do one operation here!

That was my point.

Does that make more sense?

D

[William Terrell]

She hasn't got an itemized statement.

[goodnesswins]

Sorry, I misunderstood what you meant by "doc in the box" - I consider my "doc in the box" the doctor I go to, if I absolutely HAVE to go for a referral, or generic medication, or something to get non-specialist advice on, i.e. ear infection.....I do NOT go to her for other major issues....she's useless.

[Fairview]

She hasn't got an itemized statement.

OK, now I'm really confused. I never heard of anyone not on Medicaid, or a member of an HMO, who went to the hospital and didn't get an itemized billing statement. Are you saying that a representative of the hospital's business office just said to her at discharge, "You owe us $11000," without specifying in writing what she owes it for? She needs to get a properly itemized statement (which will run to many pages) before she writes any checks. And believe me, her insurance carrier will have an itemized statement before it processes any claims.

[speekinout]

Hospitals have to charge ins. cos. and those who can pay enough so they can cover expenses for the ones who can't pay. Those and malpractice ins. costs are most of what you paid for.

Why didn't you go to a walk-in clinic? I know those aren't available everywhere, but they are a good deal where they are. I wouldn't use one for a serious illness, but I do use them for routine problems. They're cheap, for sure.

[speekinout]

Emergency rooms and hospitals are an expensive way to treat people. Many areas of the country have low cost clinics. I'd prefer to subsidize the low cost clinics than to treat people in expensive facilities. The co-pays in the clinics are usually low so that people who need treatment for minor illnesses can get it, but it's not free, so people who have flu aren't tempted to seek medical care.

Anything short of making people responsible for their own health is going to be too expensive.

[goodnesswins]

Because it was Sunday and it was closed.....and my husband was driving, I was hurting and trying to keep from gushing blood.....minor little details.

[William Terrell]

Hell, I don't know. She asked the insurance carrier how much the total cost was. She hasn't gotten a itmeized bill to date. What can I tell you?

[cookcounty]

"The reason it's cheaper in India,....." There's the answer, right there. Medical tourism. A new form of competition. In 25 years, most big procedures will be done overseas.

[cookcounty]

"You got out in an hour? Wow! They must not have been that busy that day. Nonetheless, they had to have sufficient staff available to cover an onslaught of 5 or 10 patients at the same time (or more, depending on the ER).

Wow, 10 patients simultaneously at $1100/hour = $11,000/hour X 24 = $254,000/day X 365 = $95 Million a year PLUS all the community and taxpayer donations buying the building and lots of equipment, Just for the ER!

[cookcounty]

"OK, now I'm really confused. I never heard of anyone not on Medicaid, or a member of an HMO, who went to the hospital and didn't get an itemized billing statement. "

But much of the "itemization" is often in code or language unfamiliar to a non-professional. I did not understand at all what most of the "tems" were.

I'm sure I made them very PO'd, but if they haven't the time to write a paragraph explaining why I was charged $300 for this or #450 for that, then I haven't the time to bother writing them a check.

[Dave Olson]

Healthcare delivered through private enterprise would fix the problem.

Consider LASIK eye surgery. That is a medical prodecure that is handled somewhat through the market place. Since it's been done that way, it's become routine, the quality has improved, and the prices have fallen.

If that can be done for eye surgery, there's no reason it can't be done for knee surgery or heart surgery or any other medical prodecure -- other than people, who have a disdain for the marketplace, standing in the way of it.

[Fairview]

Very good point. Most bills have a code plus a few words describing the procedure done, and some of it is easy to understand--"99254, inpatient consult"--but others are incomprehensible to the lay person, to wit: "80061, hepatic function panel." On a long statement for an inpatient stay that may run to many pages even in its abbreviated form, there couldn't possibly be space to explain just why the doctor ordered a particular test and what its purpose might be. And that's why it's necessary to be very attentive in reading any medical bill you have to pay. Your insurance carrier reads them pretty carefully and determines if the codes are appropriate for your disease.

I've seen some bills that were very humane and easy to understand, and on the backs of many ER bills there are clear explanations of what was done and why.

[Mr. Jeeves]

It is not fair to require the haves to pay for the have-nots' health care, but the alternative is to allow the have-nots and their kids to die in the streets, and we have decided that isn't going to be allowed to happen here in the U.S.

For a supposedly "Christian" nation, we sure spend a lot of money upholding the atheist principle that the death of the body is the end of existence. The health-care crisis is as much a symbol of spiritual lack as anything else.

For what it's worth, Chinese herbal medicine and meditation techniques work about as well as all of the expensive Western technology, at a much lower cost. Neither will stave off death, in the end, but spending millions in an attempt to avoid the inevitable is the mark of an irrational society.

[FreeKeys]

other than people, who have a disdain for the marketplace, standing in the way of it.