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Networking to Restore Accountability in HealthCare & Medical Practice
Fifth Tuesday, October 29, 2002, HealthPlanUSA
Fifth MedicalTuesday for October
This is the six-month anniversary of MedicalTuesday which currently networks, in most cases, on the second and fourth Tuesday of every month via electronic mail - known as e-letter in the USA or e-zine in Europe and web-zine in Canada for electronic magazine. With an extra Tuesday this month, it is appropriate to take inventory of the current status of health care in the United States - what is happening and where we are going.
HealthPlan Overview - USA
The United States currently has a number of private and public health plans. The working classes generally obtain their health care insurance through an employer-sponsored plan, which may be a Health Maintenance Organization (HMO) policy, a Preferred Provider Organization (PPO), or a fully covered indemnity plan with various fixed or percentage co-pays. Because of continued increases in health insurance premiums, these defined benefit plans may be replaced by a defined contribution plan, in which an employer contributes a certain set amount to the employee’s choice of health insurance with the balance paid by the employee. Having been shielded from any conception of costs, most patients’ lack of understanding of health care financing may be further confused by the defined contribution plan. Their impetus will likely be “somebody, like the government, please help us.” Should that happened, it would be only a short term phenomenon as even more exorbitant costs would exceed any possible tax increases.
Socialized Medicine - USA
The USA has a single-payer system or socialized medicine for the elderly, the disabled and the poor. According to Goodman, this combination has probably given the United States the best social net with the least bureaucratic interference and the highest quality and access of care found any place in the world. Ann Coulter states that the United States is not a third world country and people buy what they wish to purchase, whether homes, cars or vacations, which vary in expense depending on their income and tastes. However, many of the thirty million people that wish to purchase health care without having to purchase health insurance are considered to be under served. The statist left estimates it is more like 40 million while the proponents of individual freedom on the right believe it is more like 20 million. This variation is consistent with the scientific accuracy of many health care estimates.
Oregon’s Human Guinea Pigs
Socialized health care has been a failure in every country in which it has been tried and has now been repackaged as “Single-Payer Medicine” in the United States. Oregon leads the pack. Dr Harvey Frey, an out-of-state activist promoting Oregon’s single-payer initiative on the ballot next week, states “It’s important to know whether such a system will work and the Oregonians are offering themselves up as guinea pigs.” The WSJ editorializes why Dr Frey fails to explain why he thinks Oregonians should fare better than the laboratory human guinea pigs on medical-care waiting lists in single-payer countries such as Canadian Medicare or UK’s NHS. The estimated cost in Oregon will exceed taxes by $3.5 billion in the first year alone with new taxes averaging approximately $5,000 per resident. That is more than gold–plated private health care coverage would cost per person.
Cross Purposes in HealthCare
Unfortunately there currently isn’t a major health plan in the United States that returns health care to the competition and cost savings of the Medical MarketPlace. In all cases, there are many counter productive influences which cause great excesses in the cost of care without improvement in the quality of care. Government involvement has generally revolved around reduced care for cost containment reasons unrelated to the individual patient needs or welfare, which in turn has reduced the quality of care. The HMOs have simply replaced a government bureaucracy with their own bureaucracy. The government and HMOs have instituted measures to restore quality, but they are window dressings for public relations purposes and do not restore the quality which was present prior to their intrusion. Returning health care to the Medical MarketPlace will introduce real competition which reduces costs and increases efficiency, innovation, and quality, along with making care more affordable. It further personalizes the health care to each individual's medical needs, whether real or desired, without imposing on others the huge variation in health care appetites.
Competition Is Always Good News
HealthCare is primarily a personal relationship of patients with their physicians. Patients tell us things about themselves they wouldn’t think of telling their Priest, Minister, Rabbi, or attorney. But as health care became more expensive because of technology and hospital expansion, not controlled by physicians, costs went out of sight. When I was a medical student doing my preceptorship in rural Kansas in 1961, the three local doctors owned their own hospital. I stayed that month in their private room, one for which they charged patients $10 a day, generally paid in cash, which was also covered by Blue Cross/Blue Shield. The semiprivate rooms were $8 for each patient, and the one 5-bed ward was $6. The doctors checked the hospital prices in the neighboring towns and frequently found that the costs were higher. As they considered their cost, they agreed that they were making adequate return on their investment and never raised their rates for ten years. They also bought the latest equipment they felt necessary to provide the care they felt optimal. They told me that some of the nearby hospitals were about 300 percent higher. But competition kept their hospital full at all times, especially as patients from neighboring towns sought them out. Their office calls were $2, and the patients all seemed pleased to be seen. The free market kept health care affordable for all concerned, providing high quality in a very pleasant environment.
Reverse Competition is Always Bad For Patients
Two developments changed the personal relationship patients had with their doctors. The government took over health care of the elderly and, in order for payment, the diagnosis had to be reported to Medicare and Medicaid - an intrusion of the confidential doctor/patient relationship and patient privacy. Hospital Physicians-in-Chief were being replaced by facility administrators. Money was coming in from the taxpayers faster than doctors, administrators and hospitals could spend. There was reverse competition, with hospitals trying to be the most expensive. Departments in one hospital conferred with their counterparts in adjacent hospitals, and the one charging the lowest fees would raise them to the highest, rather than the reverse. This reversal of competition resulted in obtaining the highest possible revenue not balanced by competition, because there wasn’t any.
When I was Director of Respiratory Therapy in one hospital, I controlled the costs, or so I thought. My department was always the lowest in the city but still received the highest revenue over cost of any department. One day my Technical Director informed me that he had discovered that the price of oxygen had risen from 25 cents an hour to three dollars an hour. The administrator could make this change because my therapists only recorded the hours per day each patient received oxygen. The business office made the calculation of charges. When we determined that the actual hospital cost of oxygen was 25 cents an hour, we went to the administrator in charge of our department for an explanation. He could not understand our concern. He looked at me very sternly and said, “Isn’t getting the money in the name of the game? We still have not found the maximum that Medicare, Medicaid, Blue Cross & Blue Shield will pay. In fact, I have already authorized the next increase to $3.50 an hour since they are paying the current rate.” He did not see this as price gouging or as unethical. This sort of practice primarily occurred because patients were removed from the financing and thus the hospital did not have to account to them for any fees. Bringing back accountability in health care is our primary goal.
The response to MedicalTuesday has been rather phenomenal. From an initial address book of a few dozen, now including thousands, it reaches into 25 states and 18 countries on 5 continents. We have an unknown quantity of secondary mailings. A number of physicians have stated that they have forwarded the messages to their entire physician list. The secondary lists are the most important for our growth in changing the face of health care, not only in the United States but also globally, currently reaching Canada, UK, Europe, Asia, Australia and South Africa. This week we have focused only on the United States. But from the email I receive from over a dozen countries, the world is watching us as we solve our health care dilemma. Many have vocalized their support in the hope that they can use our success to restore the Medical MarketPlace in their countries. If you agree with the message, you are encouraged to forward it to your business friends and professional colleagues. Feel free to send a copy to Info@MedicalTuesday.net to facilitate adding them to our list and to keep record of our growth.
Stay Tuned to the MedicalTuesday.Network
This week we welcome the Mercatus Center at George Mason University which hosted an evening in Sacramento last Thursday. The speaker, the Hon Maurice McTigue, QSO, discussed how he restored accountability in New Zealand by reducing the cost of Government from nearly half the GDP to about one-fourth the GDP. The Mercatus Center’s goal is to similarly restore accountability in the United States. We heard of the significant inroads they are making (www.mercatus.org). Each individual on our mailing list is either personally known, has requested to be placed on our mailing list, or was recommended as someone interested in our cause of making HealthCare affordable and accountable. If this is the case with you, please consider opening a folder in your inbox labeled MedicalTuesday or placing the e-letters in your template folder so that they are available to be reformatted as new and forwarded when the occasion arises. If this is not the case, or you are not interested in or sympathetic to a Private Personal Accountable HealthCare System, email me DelMeyer@MedicalTuesday.net, and your name will be sorrowfully removed.
Del Meyer, MD, CEO & Founder
Del Meyer, MD, CEO & Founder