Sunday, August 05, 2012

The Insanity of HCR

Somehow the “health care reform” discussion has come up again, possibly because of the nicely timed “rebate checks” which insurance companies are issuing at the height of the election season, and which return a small fraction of 1% of the cost of the premiums which people have paid but which are being hailed as some sort of major achievement.

Anyway, someone named Maggie Mahar wrote a piece of hyperventilation about the subject based on her background as an English Professor and a “financial journalist,” which tells us how the cost of health care will soon be plummeting to a mere shadow of its former self. To say that it did not convince me would be an understatement, but John Ballard at Newshoggers loved it. He quoted her piece and I added the emphasis,

The ACA told insurers that they would no longer be able to shun the sick by refusing to cover those suffering from pre-existing conditions. They also won’t be allowed to cap how much they will pay out to an desperately ill patient over the course of a year –or a lifetime. Perhaps most importantly, going forward, insurance companies selling policies to individuals and small companies will have to reimburse for all of the “essential benefits” outlined in the ACA–benefits that are not now covered by most policies. This means that, if they hope to stay in business, they will have to find a way to ”manage” the cost of care–but they won’t be able to do it by denying needed care.

Does no one realize how this defies reason? "The insurance companies must find a way to manage the cost of care." Somehow the responsibility of regulating the cost of treatment lies not with the companies providing the treatment and charging for it, but with the companies who are paying for the treatment. We say to the sellers, “Do anything you want and charge anything you want for it,” and to the buyers we say, “You are responsible for the rising costs, so bring those costs down. Bring down the costs that are being billed to you for procedures that you did not initiate.” In what universe does that make any sense?

John admitted that it was “counter-intuitive” but quoted further from Ms. Mahar to clarify why it all made sense.

As for providers, they, too, will be under pressure. A growing number will no longer be paid “fee for service” that rewards them for “volume”–i.e. “doing more.” Bonuses will depend on better outcomes, and keeping patients out of the hospital–which means doing a better job of managing chronic illnesses. Meanwhile, Medicare will be shaving 1% a year from annual increases in payments to hospitals. If medical centers want to stay in the black, they, too, will have to provide greater “value” for health care dollars– better outcomes at a lower cost.

Well, that just made the whole thing more ridiculous. If a provider is told he will not be paid for service, he will not provide service. To suggest that the provider will pull some magic pony out of his behind to find better and less expensive ways to "compete for the shrinking payment dollars" without reducing the services being rendered is the most wild eyed unicorn-seeking kind of fantasy.

Fee for service is not the curse that it is assumed to be. If the fee is based on diagnosis you are urging the provider to do as little as possible for the patient because the same fee is paid whether one service is rendered or fifty. The less the provider does the more money he makes. That is an utterly ridiculous model.

Would you go to a car mechanic and claim that he should charge one flat fee for any electrical system repair regardless of what he found to be wrong with it, what parts were required, or how long it took him to repair the problem? Of course not, but that is what these opponents of “fee for service” want to do to doctors. They want a doctor to bill a single fee regardless of how many times he sees the patient, how much time he spends each time, and how much time he spends studying reports and reviewing records on that patient’s behalf.

Would you go to your mechanic and ask him to make a repair on your car and tell him that he will not be paid when the repair is made, but only after you have driven the car a certain time and the repair has held up successfully, adding that if you run the car into a tree that’s his tough luck? That’s what these idiots want to do to doctors with this nonsense of “payment based on outcomes,” and “keeping patients out of hospitals.”

And then she adds that “Medicare will be shaving 1% a year from annual increases in payments.” How in the name of all that’s holy does that amount to “reducing the cost of health care” in this universe? If the $10.00 increase is cut to a $9.90 increase, that is still an increase in the cost of care, not a decrease. Only in the mind of an English Professor or an Obamabot could “shaving 1% from the increase” be considered a decrease.

John Ballard says that he “looks for the individual insurance market to blossom with more variants on HSAs and MSAs,” which actually means that he looks for health insurance to disappear altogether. Both of those plans involve money withheld form one’s paycheck and used to pay for health care, so all health care is paid out-of-pocket, but with pre-tax dollars. That’s fine for people who can afford it, but most people can’t.

I have had twelve strokes. Based on the "payment for outcomes model" my neurologist should not be paid for that kind of outcome, but I might very well have been killed by one of those strokes without his treatment. Based on the "payment by diagnosis model" he should be paid the same for treating me as for a person who has had one stroke. In either case, ridiculous.

The problem is not the “model” of payment, or health insurance procedures. The problem is a hospital that charges $5000 for one hour’s use of an operating room that costs it $1000 to run. It’s a surgeon who charges $500,000 for a procedure that takes him 90 minutes to perform. It’s the drug company that charges $500 for a pill that costs it $1.00 to make. It’s a lab that charges $13,000 for an MRI that costs it $1200 to perform. The “health care reform” act does nothing, absolutely nothing to address these issues.

In fact, "health care reform" went out of its way and made deals specifically to avoid dealing with these issues.

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