Physicians have been ineffective in pointing out the significant costs of health care that are submerged into medical practices. Patients expect health care as their right. However, where does the right come from and where does it proceed? Patients today receive mostly free care. They pay a small fraction of the cost of being seen, almost none of the cost of the laboratory and x-rays they demand; and this seems to expand the appetite for "more 'n more" courtesies that are not understood as costs. For physicians to even mention them as costs is considered greed on the part of the physician. What are the unappreciated and unrecognized subtleties of excessive health care consumption?

For their own convenience, patients make demands such as having the doctor phone their prescriptions to the pharmacist in order to have ready when they arrived at the pharmacy. Seemingly an obvious small service rendered for their convenience. Any amount of explanation or comment would only be interpreted as insensitive or uncaring. Most patients do not understand the cost of time since they no longer pay for the physician's time. To make the point in terms the patient could most likely understand, after one such request when I was several minutes into the appointment, I placed the call to his pharmacy on the speaker telephone so the patient could hear the menus and the time taken to navigate those menus. While waiting to be transferred to the pharmacist, I completed my examination and explained the diagnosis and the treatment plan. At the conclusion of the 20-minute appointment and also the writing of the prescriptions, I pressed the speaker button to disconnect the phone from the pharmacist waiting list since I knew that 20 minutes is frequently not enough time to phone in a prescription (I was still on hold with the automated voice saying there was only one other customer ahead of me). I got up, gave him the written prescriptions, and led him out the door explaining we were already 10 minutes into the next patient's appointment. As I shook his hand, I pointed out that his HMO pays about half the office call charge; now he could obviously see that to ask for a personalized call-in prescription (as patients frequently do) was like requesting a second full office visit time for half the value of one office visit. Therefore, we would no longer be able to honor phone-in prescription requests; he would have to use the paper prescriptions or the electronic prescriptions available at the time of service. I'm still not sure if the doubling of costs for half the revenue was understood. But it certainly was not appreciated.

In another instance, a patient presented himself at our window during a busy schedule wanting all his prescriptions of the previous week re-written for a mail order pharmacy that allows three-months supply rather than one month at the local pharmacy. So, standing at my counter, after pulling his chart, I rewrote all his prescriptions that had been for a 30-day supply with eleven refills to a 90-day supply and 9 months of refills. I had tried to talk him into using the mail order pharmacy the previous week. This patient again did not comprehend that taking ten minutes or half an appointment was an inordinate cost expected as a courtesy and an affront to the other patients having to wait longer. When unions are rebelling to a 10 percent cut in wages during the current recession, these patients have no realization of the 50 percent cut in the doctor's wages for their 20-minute appointments, now up to 30 minutes.

Last week, a patient wanted his prescriptions on a "fax in" form that others normally bring with them from their mail order pharmacies in order to expedite faxing in their prescriptions. Only this patient did not have the forms. He reminded my front desk manager that she could call his mail order drug plan and request the forms and then I could complete them. It took my office manager 20 minutes to navigate the mail order pharmacy phone menus to finally get the appropriate forms that the patient had left at his home. I had to rewrite the prescriptions on the requested form and my office then faxed them along with his credit card number to his mail order pharmacy. He occupied the check-in/check-out counter at my front desk for about 35 minutes in addition to about 5 minutes of my duplicated work.

Would government medicine be more efficient in the practice situations? Experience to date would not support such a view. Physicians were the most efficient and cost effective when they did their own x-rays, lab work, and other procedures in their offices. These have slowly been driven out by mandates, some of which have actually prevented physicians from doing their own laboratory work and basic x-rays. Most of the arguments have centered on the premise that the physician is incentivised to excessive utilization when in fact they are more efficient in their utilization. Studies have shown that doctors who send their patients to the Lab, X-ray or ECG facility order far more Lab tests, ECGs and CXRs than the internist, cardiologist or the chest physician who do their own Lab, ECG and CXR. Furthermore, the Lab, ECG and X-Ray facilities charge at least twice what a private office charges.

More industries are going through the "lean" revolution these days, some by force of bankruptcy and some by having a culture of "lean manufacturing" or "lean marketing" that are being put through greater challenges during our economic downturn. The most cost-efficient hospitals of the mid-twentieth century were the physician-owned hospitals. During my medical student preceptorship in a rural community where the three physicians owned their own hospital, surgical unit, pharmacy, and office building, they were considerably cheaper than the surrounding community hospitals. When they did their yearly cost analysis, they seldom found a reason to increase any hospital charges to the level of the surrounding community since, in their estimation, they were making adequate profit.

Today, physicians have very little control over hospital, x-ray, lab or pharmaceutical charges. However, in their practice they have little choice but to utilize hospitals, labs, x-ray facilities and pharmacies. Patients still tell me that the physicians control the hospitals. No amount of data will convince most patients otherwise. The only answer will be an integrated health plan outside the arena of government medicine in the open medical market place, which doesn't exist today. If health care could be restored to the open market place, this would be the most ruthless way to reduce charges and all costs. That would also put the patient and his physician in full control. This would require a very disruptive innovation. Almost all of the current players, whether hospitals, physicians, or health insurance plans, would resist and even fight such a change. Stay tuned.

Medical Gluttony thrives in Government and Health Insurance Programs.

Gluttony Disappears with Appropriate Deductibles and Co-payments on Every Service.  

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As of last year's report, Social Security and Medicare had an unfunded liability in excess of $100 trillion (see Table I), about 6 ½ times the size of the entire economy. This is the excess of promises we have made over and above expected taxes and premiums. To avoid draconian benefit cuts or tax increase in future years we would need to have that $100 trillion in the bank, earning interest today. But of course we do not. (Although it is of small comfort, Jagadeesh Gokhale has shown that our European trading partners are in even worse shape.)

These obligations are especially important in light of the enormous increase in unfunded liability and cash flow deficits that are about to be added. Currently, about 100 million people depend on Medicare and Medicaid for their health care. Under President Obama's new health reform plan, an additional 100 million or so could be enrolled in public and quasi-public plans with the entitlement guarantee that their premiums will not exceed 10% of family income.

The $100 trillion figure is based on looking indefinitely into the future. (For reasons we have explained before a shorter time horizon gives misleading estimates.) Yet a different way of accounting is to use the method private companies and state and local governments now have to use. If we halted these programs tomorrow, collecting no more taxes and allowing no more benefit accruals, how much do we owe people for benefits they have already earned? Answer: $52 trillion. Read the entire blog . . .

MedicalTuesday has always recommended that the only way to save Medicare is to index it for longevity as Social Security started to do. Since longevity has increased from 62 years when social security started to 77 years today, this indexing must be gradual over a long time. Social Security has only reached an indexing level of 67 years. Adding an additional 100 million Americans to these benefits, that must be paid for by working Americans, is sheer lunacy. The Big Government advocates are criticizing our Health Care as costing too much at 17 percent of GDP. Why do we want to push it to 25 percent of GDP? Aren't we headed in the wrong direction for fiscal responsibility?

Medical Gluttony thrives in Government and Health Insurance Programs.

Gluttony is controlled with Appropriate Deductibles and Co-payments on Every Service.

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