Comments on: Don’t let doctors’ incomes derail healthcare-cost reform A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: traducere daneza romana Mon, 29 Sep 2014 14:01:48 +0000 I’ve been surfing online greater than three hours these days, but I never found any fascinating article like yours. It’s pretty worth sufficient for me. Personally, if all site owners and bloggers made excellent content material as you probably did, the net can be a lot more useful than ever before.

By: Heartdoc5000 Wed, 27 Feb 2013 03:44:56 +0000 You miss the point entirely. Penny wise and pound foolish, as usual.

1. Doctors SALARIES will not derail healthcare because they make up about 8% of the total annual health bill, and for many procedures, less than that. For a typical pacemaker surgery in the US, the doctor will get paid about 300.00 for the planning, operation, and follow up over the following 30 days. The total cost, depending on the hospital, could be 7-10,000 dollars. Cutting the doctor’s fee by 50% will save you 150 bucks on a 10000 bill. Cutting the cost of pacemaker itself-a device which hasn’t changed in years and costs maybe 1000.00 to make-would save thousands per case. The same medical hardware used in the US is billed at greater 50% less in the EU and abroad. Same goes for durable medical goods and technology.
2. Other doctors in developed countries make less on an absolute basis than US docs but still make in the top 1-2 percentile in their country-with better lifestyle, benefits, less (or no) educational costs, and in many cases, less hassle. The idea that these doctors would fall over themselves to work in the increasingly hostile environment (in many cases driven by an entrenched media) is laughable, for one. And the FMGs which come to the US to practice-far from being untalented-are some of the most successful businessmen and women that I know. It’s astounding to see neocolonialist, Kiplingesque speak from self appointed progressive “reformers.”
3. The US can drop current health costs by 30%-now-simply by not going along with unneeded testing-something which every reasonable doc in the US agrees with. To achieve the same savings using reductions in physician salary one would have to make every physician in the US work for free for 3 years, during which time you other costs would continue to rise unchecked.

By: sesquiculus Tue, 26 Feb 2013 20:54:52 +0000 Physician compensation is only 17% of medical costs. So you could cut doctor-compensation in half and still save only 8-9% of medical care costs. Problem is, typical doctor’s office costs are 50% of billing.

So the docs would effectively be working for free. Which means they would not work at all. Many physicians currently do not take medicare pateints becasue of the low rate of compensation. As for medicaid– forget it.

By: Frwip Tue, 26 Feb 2013 20:24:43 +0000 A simpler idea.

Force hospitals to post their prices and all of their (anonymized) receipts and billings, to charge the same to everybody and prohibit them from serving or receiving kickbacks of any kind to anyone. If an hospital has to change its prices to get the business of such or such insurance, it has to apply the same changes to everybody and treat all patients substantially equally for a given set of medical conditions, no matter who pays the bill. That is, the hospitals can’t bill for itemized acts but only for an all-around service.

Of course, hospitals would try to finesse around. For instance, they would tack all sorts of overpriced and unneeded exams and services on the bill of uninsured patients, the kind that would never fly though the scrutiny of a competent insurer. But that’s what public inspectors and open records are meant for.

The problem of gross over-billing would disappear fairly quickly.

As for Brill’s horror stories, I’m wondering if there isn’t scope for criminal prosecution for at least one or two of them, as they smelled a lot of payments obtained under duress.

By: hearthole Tue, 26 Feb 2013 18:57:00 +0000 Its not the salaary doctors that make up most of heath care cost in this country. In fact the salary of physicians equates to roughly 8.6% of the total health care cost.

You need to look at aspects of health care to find the money!

By: billyblog Tue, 26 Feb 2013 07:42:09 +0000 Out of the mouth of a soi-disant health care non-wonk!

“The basic idea here is that all Americans should have access to Medicare’s discounted rates — either by being eligible for Medicare, or else by signing up for health insurance with an insurer who allows Medicare to negotiate on its behalf. All of this would be voluntary, of course. If you want your insurance to cover the kind of things that Medicare won’t pay for, then you can do that. But if you think that Medicare-quality coverage is good enough, then you should be able to get it, at only a modest premium to what Medicare itself pays.”

Brilliant! At least in the Queen’s English.

I take it Felix doesn’t realize it, but, with one “slight” tweak he has just proposed that the U.S. convert over to the French health care insurance model which involves the following:

1. Monopsonist (the fancy word for single payer) for basic – but very first class – universal, state/taxpayer coverage, working with private providers, i.e.,. not the UK National Health Care soup to nuts model.

2. With a private insurer tier on top of this as supplementary coverage for those who really need their cosmetic surgery and other not so essential services. The quickest way to understand this supplemental tier is on the model of the highly regulated Medigap policies for Medicare – manifestly NOT the heretofore subsidized bad apple of Medicare Advantage plans. The French supplementary insurance operates in a managed competition environment, which is the situation for Romneycare in Massachusetts and Obamacare when the exchanges come into being next year.

3. And the French have the numero uno health system in the world in terms of the combined parameters of efficiency and qualitative outcomes. Not perfect by a long shot. Just No. 1. pdf

The U.S., of course, is #37 in that same comprehensive survey – and proud of it! b4

The point?

Pace Felix’s half thought through recommendation, Medicare shouldn’t negotiate for the welter of private insurance companies for basic (but again, first class) coverage. It should simply become THE Public Option for everybody, and shove aside the private insurer sharks, who simply pass through all those predatory costs that Brill has written about. public_plan_option.pdf

Let them simply devolve to the second tier and supplementary role that is all they deserve to play. Indeed, they can even constructively play this role by being the laboratory for sorting out genuine and, more often than you’d care to think about, spurious innovation. Again, see Brill on medical devices and the latest and greatest – but non-comparatively tested – prescription drugs.

How scientific Betsey McCaughey wants the industry to be! (See Brill.)

The elephant in the room which stands in the way of realizing all this, the elephant that Steven Brill can’t quite bring himself to explicitly acknowledge, and which newly consciousness-raised Felix has not explicitly mentioned either?

It’s the GOP elephant of course, with the addition of Max Baucus, and whoever is replacing Kent Conrad as the well-lobbied flak for those salt-of-the-earth “not-for-profit” insurance companies run by your neighbors in the Plains States.

Felix might counter:

“Well, I am just trying to be politically realistic. There is no way that the Republicans are going to sit tight for a full-fledged ‘socialist’ French system. That’s politically impossible.”

Which, of course, what Brill couldn’t quite bring himself to say out loud, though it screams out from between the lines of his timid response to the deplorable situation he documents.

But even apart from the fact that bailing out the banks, and paying their execs’ bonuses along the way, is a socialist enterprise, the GOP, and their BIG Hospital, Big Insurance, Big PhRMA, and Big Device Manufacturers constituents and bankrollers, aren’t going to go quietly for even Felix’s modest, or Brill’s even more modest, proposal.


Because they’ll see it as getting on the slippery slope to the French system a step at a time, which is the deep fear they already harbor about Obamacare.

The point here is that health care is going to remain an ideological – and crass money power play – tug-of-war for the foreseeable future. And any attempt to suggest that with Obamacare we will have achieved a workable stasis that will stand up to the revanchists really doesn’t understand health care economics – or politics.

To the extent that we try to sit pat with Obamacare, even as part of a Medicare which continues to be successful in beating back attacks from the Voucheristas – and in this respect, Obama has had more luck as a gift from the intransigent Tea Partiers than brains and spine from his own floated depressingly dilutive policies – the relentless GOP onslaught will try to draw us back in the direction of the myth of “consumer driven” health care.

As Felix is probably aware, this nonsensical idea, which Kenneth Arrow definitively, at least in terms of the scientific literature, dispatched 50 years ago:

was given oxygen in Reuters online itself a few days ago 13/02/20/the-future-of-free-market-healt hcare/

in the form of a completely disingenuous article. Yes, I have considered – and dismissed – the possibility that Avik Roy and Douglas Holtz-Eakin are health care economics ignoramuses and not just political hacks and/or flakkers for medical industry stocks.

Read, for example, Roy’s resumé: roy.htm

which in a world where there were even loose conflict of interest standards, would totally disqualify him from making any policy proposals considered to be objective.

Roy Health Care Research indeed!

Roy and Holtz-Eakin’s piece was immediately eviscerated by Krugman:  /21/swiss-myths/  /22/more-swiss-myths/

and Aaron Carroll: ess/i-dont-the-swiss-health-care-system- is-what-they-think-it-is/

By the way, in answer to the rhetorical questions that Carroll raised about Roy and Holtz-Eakin’s actual knowledge of the Swiss Health Care System that they were recommending, i.e., questions the answers to which push it way to the left of Romneycare and even Obamacare in many respects and would make the people over at Heritage and Cato throw up, the answer is:

Of course they knew the answers to these questions and were simply disingenuously cherry picking certain aspects of the Swiss system which they think are consistent with their anti-Obamacare narrative.

Ignoring inconvenient facts is hardly a new tactic for the GOP and their think tank shotgunners.

Again, I would maintain that half-hearted solutions, such as those proposed by Felix and Brill, will only embolden the Voucheristas to press on with their sociopathic agenda.

It is immaterial whether they are subjectively sociopathic (the Voucheristas, that is). Objectively that is the logical playing out of the policies they propose.

Further to Felix’s suggestion that the private insurers let Medicare take over their negotiations.

Well, if one “anecdote” is any guide, Big Insurance is already well on its way to doing this.

How so?

Many bien pensants who still have high quality Employer Sponsored Insurance (ESI) may not have noticed that, as of late, their insurance company is tightening up on compensating out-of-network coverage. In particular, they may have missed the precise way in which Big Insurance is doing this.

This has been a very carefully planned strategy and has unfolded over the past several years in the following stages.

1. The early-mid 90s, post-Hillarycare attempt to force people into an HMO network – not a bad idea from a health economics perspective, but impossible to enforce in a private, fragmented market. This movement ran its course, and in the face of consumer resistance – probably driven heavily by blowback from the wives of the execs at large companies, who made these decisions, who were miffed that they couldn’t go to the cute chiropractor of their choice, most major carriers gave up flogging the HMO as their principal offering and went over to a much looser Preferred Provider Organization, aka PPO network.

2. They continued to provide out-of-network benefits in these PPO networks, though usually with a structure of disincentivizing deductibles and co-pays.

Unfortunately there were all too frequent cases where, for example, you’d be booked for major surgery and then find out after the fact that the cartel of anesthesiologists were not in the PPO of a major insurer, such as Empire BlueCross, at a major hospital, such as Mount Sinai in New York.

What follows is not a narrative “based on a true story.” It IS a true story – with a bit of license for snarks too good to pass up.

Thus, our hero who had this surgery, while recuperating at home, found himself treated to a bill for $4k or so — more than for the actual surgeon, with both bills off the chargemaster’s file and not yet discounted by anyone — from the anesthesiologist saying:

“Sorry, we don’t deal with your minor player BlueCross. So please send your check for $4k – no stamps please – in the non-stamped enclosed envelope, and pronto to avoid getting a call from our affiliate, Medusa Associates.”

At which point our hero went back to BlueCross and said

“WTF! You mean I was supposed to know that, even though the hospital, the surgeon, and seemingly everyone else involved in this process, was in your PPO network, the anesthesiologist tribe that has its own department in the hospital was not?

“Gee, why didn’t someone in the OR tell me this before they put me under, so that I could negotiate a price with the anesthesiologist on the spot, or maybe decide they were too expensive and get on with the surgery anyway? I mean, I don’t have my prostate taken out every day, so I haven’t really had the chance to learn from experience what the goofy rules of the road are.”

After a lot of formally sympathetic cant from the front line person on the phone at BlueCross — right off a script, of course — the conclusion was:

“We understand your concern, sir, but those are the rules.”

“What you’re saying is I should have known, so I’m screwed?”

“Your words, not mine, sir.”

“Get me to a supervisor.”

And since our hero was very atypical in persisting through multiple phone calls and multiple supervisors, and was drop innuendoes about his fictitious brother-in-law, Larry, the ambulance chasing lawyer, he finally got to a supervisor who said:

“Oh, OK, we’ll pay the bill at the ‘usual and customary rate’ for such services. But you’re on the hook for any overages. Next time, be sure to interrupt the procedure before it gets started and ask who’s in and who’s out of the BlueCross PPO network. And put a stick between your teeth and ask for a stiff shot of Jack Daniel’s if you don’t get the answer you want to hear.”

All this took place back in the halcyon days of PPOs.

3. But BlueCross, and its “competitors” (actually, Big Insurance is a cartel, not a competitive market; just search for a Medigap policy in your area and you’ll see what I mean), have passed to a new stage where they are now trying to push people into their Exclusive Provider Organizations. These EPOs, which are exclusive only in the sense that the ESI employer agrees not to let another insurance company get its nose under the employer’s tent, presumably in exchange for a discount off the chargemaster rates.

4. In the first stage of this development, which, I repeat, has been very carefully and precisely orchestrated over a number of years by BIG Insurance, there was still provision for out-of-network coverage in the EPO, but with an increasingly punitive scale of deductibles and co-insurance.

5. Meanwhile, if you chose to stay in the PPO, and pay a substantially higher premium (which it is strongly advisable for people who travel to other countries), even though the EPO network and the PPO network are, domestically, pretty much the same network, you could do that and get more generous out-of-network benefits based on “usual and customary rates for the region,” and with no deductible and co-insurance, or at least more modest charges than in the EPO environment for out-of-network situations.

6. But now, beginning in 2013, Empire BlueCross, at least, has finally dropped the other shoe. And I’ll bet very few of even the demographic which reads this blog has noticed it.

a. Out-of-network reimbursement for EPO coverage? Zilch, nada, bupkis. Better take to interrupting in the OR to ask if the anesthesiologist takes your insurance. Otherwise, prepare for treatment of apoplexy when you get the anesthesiologist’s bill, or the myriad other “nickel and dime” bills, e.g., for the guy who dumps the excess blood ($300-$400), the guy who sweeps up and gets rid of the parts that the surgeon did not put back in your body ($300-$500), and a lot of other stuff like this that Brill depicts.

b. And to finally get to the point. Out-of-network coverage if you’ve decided to still pay the much higher PPO premium?

No longer the “usual and customary” rate, a deduction, as it were, off the chargemaster rate that Brill talks about.


Voila! The Medicare rate!

In other words, Big Insurance, at least Empire Blue Cross, has formally passed over to letting Medicare do its negotiating for it on the out-of-network rate. But for its benefit not yours!

What do I mean by that?

Well, BlueCross will pay the Medicare charge (in some cases with a derisory supplement) for your out-of-network anesthesiologist. But if your anesthesiologist want a few dollars more for his services?

Hey, you, not BlueCross is on the hook for those additional charges.

Ding Dong. Medusa Bill Collecting Services at the door.

In short, the previous notion of “usual and customary” has been defined down to “what Medicare would pay.” But, again, for the insurer’s benefit, and not yours, even though you’ve been paying all those extra premiums.

This gives a meaning to “taking advantage of Medicare’s negotiating power” that Brill has not quite envisaged. Good for him. He’s probably never needed the services of an anesthesiologist at Mount Sinai.

Remember, this is anecdotal information, or, more precisely, truly recounted and documented information, but based, for the moment, on only one person’s experience. It only applies in terms of its documented evidence to what has happened to our hero, and to the change that Empire BlueCross has just implemented for our hero’s very haute de gamme ESI PPO policy

But who can doubt that one BlueCross, for-profit, insurance organization, operating in a backwater region such as the greater New York Metropolitan area and hiding the Big Insurance corporate behemoth, Wellcome, under the covers, isn’t working off a corporate wide template that the other “gold standard,” warm and cuddly (from generations of previously not-for-profit, branding) BlueCross fronts, operating as parts of the Wellcome Evil Empire, are employing?

And, again, for the demographic which reads this blog, and has ESI from one of the other public spirited carriers, can CIGNA, United, Aetna, et al be far behind?

Brill sometimes seems to be suggesting – though I hope inadvertently – that Big Insurance is somehow a well-meaning but outgunned pawn in the game being plaid by the hospitals and their assault weapon chargemasters. But they are very much complicit in the game, and are really just an (un)necessary link in the chain that perpetuates the uncontrolled gouging of the consumer.

From Brill’s account – though, again, in fairness he does not go into this particular issue in any depth – you might guess that insurance companies are having their profits squeezed by the consolidation of Big Medicine.

Au contraire mon frère. They are simply passing on the cost from Big Medicine – and continuing to plug in an even more inflated mark-up. Read about it here in dispassionate wonkish prose: public_plan_option.pdf

And then there is the rape and pillaging, unfortunately aided and abetted by the Obama administration, and the compliant work of the Center for American Progress, that is going on with Big PhRMA and Medicare Part D Prescription Drugs. This particular highway robbery – estimated by Brill at $25 billion a year for Medicare Part D alone — will continue to go on until when and if Obama gets some concessions from the GOP crazies in the House – and from Max Baucus on the Senate Finance.

And Max has recently shown no signs of subordinating the interests of Big PhRMA, and their record breaking contributions to his campaign war chest, to the public weal. icare-pricing-delay-is-political-win-for -amgen-drug-maker.html?pagewanted=all

But this is a subject for another day.

By: Derrida Tue, 26 Feb 2013 06:49:18 +0000 First, Medicare is usually the last insurance doctors drop on the way to cash only. Billing to Medicare is a simple process compared to billing to private insurance. The reason why private insurance pays a spread to Medicare is that taking private insurance means that you need 2-3 admin people per primary care doc just to deal with insurance.

Second, any provider that takes Medicare can not charge different rates based on patient. The way that hospitals and insurance co’s get around this is the negotiated write-offs described in the article- you bill $500, knowing that you’ll only get paid $125 and that you can only code within the insurer limits. Uninsured or health savings acct folks pay the stated rate, receive the BS coding, and are stuck with this bill. This arrangement creates a thicket of administration on both the provider side and insurer side, as billing to each insurer needs to be treated differently. It creates perverse incentives for both providers and insurers to monopolize markets (like in Pittsburgh), trying to get a negotiating edge, without actually competing on price.

A simple way to end this and reduce admin costs would be to ban negotiated write-offs and coding – i.e. make the billing and payments payer blind. Or, alternatively, make negotiated write-offs part of the insurance co’s taxable revenue, as it would be for an individual payer.

By: Eericsonjr Mon, 25 Feb 2013 21:39:21 +0000 Goes to show, it is very hard to build a sensible argument in favor of anything other than a single-payer system. You really have to take the position that legions of insurance employees–many of them medically-trained and thus capable of dispensing care–are more fruitfully employed in the process of weeding out bad risks, denying claims, etc.

This does, of course, remove them from the pool of medical practitioners, which does tend to increase practitioners’ salaries at the margin.

By: willderwent2010 Mon, 25 Feb 2013 02:44:08 +0000 I don’t know about in the States, but in Australia, we have limited training places for Doctors. In fact, the number of vacant places is managed through discussions between the commonwealth, the states, and the Australian Medical Association (AMA, the doctors union; they just don’t like calling it a union). The number of training places is explicitly targeted to ensure that the number of doctors trained matches forecast requirements (ie; no trained doctor should be out of work), but this creates other issues: doctors can be incompetent and rude and it’s effectively impossible to fire them and replace them with someone else (because you cant find someone else). And unsurprisingly, when wage claims come up, the AMA has a pretty strong bargaining position.

By: Kaleberg Mon, 25 Feb 2013 01:42:22 +0000 To Brill’s credit, his primary focus was on high hospital profits, not doctor’s salaries, though he does mention them. His argument is that the hospitals are immensely profitable, profitable to the point of having to hide their profitability by burying some of it in high executive salaries and constant expansion. Even then, they show immense profits.

I know he mentions some big numbers billed by doctors, but the really big numbers are the numbers billed by the hospitals. More and more doctors, are salaried employees of the hospital, with their continued employment contingent on their billings, just like lawyers at a big law firm or engineers at a consulting firm. The bill for services may be $600 or $1,500, but most of that money goes to the hospital.

Maybe I read a different article, but I never got the sense Brill’s big concern was about doctors’ earnings.