6 Billion Prices

From my Wall Street Journal editorial today:

Medicare has a list of some 7,500 separate tasks it pays physicians to perform. For each task there is a price that varies according to location and other factors. Of the 800,000 practicing physicians in this country, not all are in Medicare and no doctor is going to perform every task on Medicare’s list.

Yet Medicare is potentially setting about 6 billion prices across the country at any one time…. Is there any chance that Medicare can set prices and approve transactions in a way that does not cause serious problems? Not likely.

What happens when Medicare gets it wrong? One result is that doctors face perverse incentives to provide care that is costlier and less appropriate than the care they should be providing. Another result is that the skill set of our nation’s doctors becomes misallocated, as medical students and practicing doctors respond to the fact that Medicare is over-paying for some skills and under-paying for others.

Comments (32)

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  1. Ken says:

    Great editorial. Well done.

  2. Greg says:

    I never realized that Medicare was trying to set 6 billion prices. No wonder everything is so screwed up.

  3. Virginia says:

    I had never done the math on the number of prices that Medicare sets. There’s no way to manage all of those different fees from the 10,000 foot level.

  4. Carol says:

    For budget cuts, I feel you should focus on the unearned and unpaid for billions of dollars in benefits given to illegals and recent immigrants, who have received services including medical (and Medicare) education, welfare, food stamps and use of our jails and hospitals for free, rather than try to dismantle a Medicare system wich was developed over time and has been paid for by lifelong American citizens who worked their whole lives and paid into the system to receive these services. The focus is wrong here and, as a result, the illegals just keep coming, use more services and spend more of our money. Why don’t you tackle this problem?

  5. Joe S. says:

    Great editorial. You are the first person I’ve come across who has said the whole exercise is impossible.

  6. Amanda M. says:

    Great editorial, Dr. Goodman. Thanks for sharing with us.

  7. Derek says:

    Your editorial has a major flaw. I used to work in an ophthalmologist’s office. The PCP gets $111.36 for 25 minutes. In contrast, the ophthalmologist does not get $836.36 for 10-15 minutes.

    Medicare requires post-op care be included. For cataract surgery, this is usually office visits the day after surgery, one week, one month, 3 months so that is four office visits plus surgery. Surgery is not a 50 year old procedure but something from the mid-1990′s. Before that, the procedure was so different that many ophthalmologists had to retire because they could not do the new method. Cataract surgery remains a very unstable surgery unlike appendectomies. One weakness in parts of the eye and the surgery becomes a huge task, one that still pays the same. My previous boss, an ophthalmologist, thought the stress level was far, far higher with surgery.

    Ophthalmologists’ equipment is far more expensive than a PCP. It is not unheard of to cost $500,000 to set up an office. They also have to make far more measurements, not just talk with the patient and listen to the heart/lungs.

    The bottom line is that my former ophthalmologist’s office made more money if the patient did not want cataract surgery and only wanted office visits.

  8. William G Shipman says:

    John:

    A particularly good piece by you in today’s WSJ. I do think, however, it would have been more persuasive if you had acknowledged that the time and opportunity costs required to become a board- certified and practicing ophthalmologist are greater than those for a primary care physician. It’s a reasonable proposition that one who chooses to incur the added costs to become an ophthalmologist would expect, charge and receive a higher fee per hour of services offered. I am not suggesting that the 15 times premium is fully explained by these costs, but some of it surely is. One more point. In many cases, such as an annual physical, one’s life is not materially changed as a function of the visit. This is not so in the case of cataract surgery with implanted lenses. Indeed, my wife had such surgery on both eyes, and her post-op life is manifestly different. She can see. Her ophthalmologist was even more efficient than the example in your op-ed, just 8 minutes. But, he had a large staff that was part of the process, all of which took about 90 minutes from walking in to walking out. Their costs were absorbed in his fee.

    Bill

  9. Paul Petelin MD says:

    Im an Ophthalmologist in private practice. I have seen some irresponsible and blatantly false and misleading editorials on the economics of medicine over the years but this one takes the cake. Dr Goodman is in serious need of a clinical real world education, I don’t care what his academic credentials are.

    It is wholly inaccurate and wrong to compare an office visit to a surgical procedure. I get paid essentially the same for my time in clinic as the PCP, slightly over $100 for an office visit regardless of length or complexity for the most part. Just as is the case with the PCP

    With respect to us “raking it in” to the tune of $836 for cataract surgery that is also completely inaccurate. Medicare pays slightly over $500 for cataract removal. Im not sure what the good Dr would suggest is proper for a procedure that many do not master fully and in the absolute best hands takes the least amount of time. Blindness is a complication. I could spend hours on the complexities of this surgery and pitfalls but to what avail? I am still learning to this day the challenges of consistent successful surgery. You treat it as if it like wiping someones nose. In Dr. Goodman’s analysis it appears the only element that matters is time spent. Is that meant to suggest that slower surgeons be paid more? there are many surgeons who spend 40 min removing a cataract but you would not want them. Most of my peers feel its a joke being paid only $500 for everything that is involved. Name ten services that routinely come to your home that commonly cost you a minimum of $500. That is how wide the chasm is here.

    Perhaps Dr Goodman or anyone can give me a reasonable explanation for why I need multiple millions of dollars of liability coverage then to provide a surgical service that according to his analysis is worth less than $100 if it were being reimbursed “properly”. Its hard even to take him seriously. There are literally hundreds of surgical interventions that can be listed where the reimbursement is so poor, so out of line with reason and risk, that it is better to avoid it if you are surgeon in the US. Cataract surgery is getting very close to that threshold, many Ophthalmologists are more profitable becoming PCP clinical eye care providers and selling glasses. What a a pathetic and abysmal fact that is.

    This county spends way too much much on healthcare but this article addresses none of the sources and spins it to the provider side, 16% of the total bill.

    Dr Goodman implies at the end of the article that he is a free market capitalist. I would love that system. I know exactly what my patients feel my services are worth, we have studied this and I can tell you in the case of cataract surgery it is closer to $3000 than to $500. See if people would really be willing to spend 1/3 of of our current expenditure in the last 90 days of their life vs having good vision for the last 15 years of their life. I know how I will fair in a system like that and I would embrace it.

    Get your facts straight before writing in the national media and at the very least compare apples to apples. You article is on par with our president saying the vascular surgeons get 50K for an amputation and would rather do that than treat diabetes.

    You are more than welcome to come spend time with me in Arizona in clinic and in the OR for as long as you may need to get your head straight.

  10. Andrew, gastroenterologist says:

    I agree with Derek’s comments. It’s a shame that the esteemed professor so poorly researched the performance requirements and coding of cataract surgery then presented a horribly flawed argument in the WSJ. Thank you Derek for presenting the facts. John Goodman PhD may just want his PCP to try doing the surgery when he develops cataracts….

  11. John R. Graham says:

    With respect to Derek’s and Dr. Petelin’s criticism of Dr. Goodman’s description of cataract surgery, I’d like to bring our attention to an August 3 op-ed in the Toronto Star by William Falk, “Overcharged for Health Care” (ungated at http://tinyurl.com/3t7n8v8).

    Falk also concludes that cataract surgery is significantly overpaid – and this is in the single-payer, government-monopoly health system in the Canadian province of Ontario!

    Falk emphasizes that the improvements in productivity should have resulted in lower costs, but have not. I don’t think either Goodman or Falk would argue that the procedure is not valuable.

    Here’s a theory (really a notion): When specialists compete against each other for their pieces of the pie of government reimbursement, the ones who are the most specialized, i.e. have the fewest number of separate procedures, will beat the ones that do a greater variety procedures. Obviously, the primary-care doc will only get the crumbs.

    Why? The “superspecialists” will invest more in developing arguments for why their one or two or three procedures are extremely valuable, whereas the “generalists” will be spread too thin in developing their arguments through the political process. (I suppose this is an aspect of public-choice theory.)

  12. Bill says:

    John

    I appreciate your thoughts about improving Medicare – especially the conclusion that we should rely upon the market. The only method that has a solid history of long term success.

    I did not like the comparison between the primary care Doc and the Ophthalmologist. This is the simplistic type of stuff that we hear from tour President who repeatedly claimed that I spent part of my career amputating legs because it paid much more than treating the underlying disease.

    In one of my early jobs as a laborer on construction jobs, a super who had taken an interest in me once told me — son, in this world, you are not paid for what you do, but for your ability to do it. This is where your comparison falls short. In general, higher reimbursement rates reflect years of training, an ability to react immediately to unexpected complications, the ability to be solely responsible for decisions and results –and so forth.
    My point here is that it is impossible for any person or committee to understand or fairly evaluate the “value” of the efforts of another person. Once you start down his road, it is inevitable that serious mistakes will be made, and decisions about specialty, procedures recommended, etc. will follow.

    This brings us back to the free market which will allow every Physician the Individual freedom to establish the value of their efforts. ( Individual freedom was the concept that drove our Founding Fathers, and is enshrined in our Constitution). Some will overcharge and some will undercharge, but that is our system. The vast majority will hit a reasonable median. I remember when a committee of our County Medical Society did nothing but review complaints about Physicians and actually mediated fee disputes. Lawyers put a stop to this.

    We must get away from government (or anyone) publishing lists of the value of thousands of procedures. They should pay what they want, but NOT establish the final charge or final value of anything. They will immediately holler and moan that Physicians will overcharge, destroy patients financially, refuse to care for the poor, etc. History again proves that this is ridiculous. Also, to accept this argument, one must assume that our Profession loses its’ ethical basis. If this is true, all is lost anyway, because the unethical will find a way around any rule.( The massive increase in employed Physicians is cause enough for concern – it is usual that such Docs are contractually bound to use the company diagnostics and services even though a competitor may provide a superior product or result. Also, studies suggest that their is significant overuse of expensive diagnostics)

    I have always studied and appreciated your opinions, and am very happy that you are embarking upon this extremely important task. I will try to keep abreast of your progress, and comment.

    Bill

  13. Stephen L. Guillard says:

    John — regarding your wsj piece today, you should be aware that the Medicare program compensates post-acute providers very differently for the same exact patient. For the same type of patient coming out of a hospital, Medicare will pay a skilled nursing facility approximately $500/day; a Long Term Acute Care Hospital (LTACH) $1,800/day; and an Inpatient Rehabilitation Facility $1,200/day. They should perform a uniform patient assessment on every patient and pay for that individual on a site neutral basis — i.e. the same payment regardless of the site of care. This would save billions of dollars. It is a very similar situation to what you allude to in your article today. If you would like more information on this please let me know.

    I enjoy your articles.

    Stephen L. Guillard

  14. Howard R Krauss, MD says:

    Good morning from Los Angeles.

    Generally, I appreciate your positions. While perhaps some of my colleagues are “raking” it in, most Ophthalmologists do much more than “10-15 minutes” of surgery for their “$836.36.”

    Prior to arriving at a decision to proceed with surgery a lengthy counseling and consent process takes place (which is compensated at about $42). Hours are spent by staff (uncompensated, but paid by the Ophthalmologist) to shepherd the patient through surgery scheduling, including arrangements for medical clearance for surgery and verification of receipt of valid pre-operative documents and labwork, which are then reviewed by the Opthalmologist (uncompensated).

    In the operating room, each 10-15 minute surgery is preceded by 15 minutes of reverification of all data and assurance that the proper lens implants have been selected, and is followed by 15 minutes of paperwork, included in the “global fee.”

    Before and after surgery, phone calls and emails are uncompensated.

    After surgery, each patient is typically seen the day after, several days after, and another 2-4 times, for a total of 4-6 15-minute visits, all included in the “$836.36″ global fee.

    Historically, ophthalmologists are derided for making too much money for too little effort because only the tip of the iceberg – the quick surgery – is evident to their colleagues. My observation has been that all physicians and surgeons are underpaid and underappreciated. When phsyicians and surgeons point to their colleagues as being overcompensated they are believed, such that non-surgeons complaining that surgeons earn too much, leads to declining compensation for surgeons, and surgeons complaining that non-surgeons earn too much leads to declining reimbursement for non-surgeons. This is why today physicians are left to fight with each other over the crumbs under the table at which the for-profit insurance companies have been feasting.

    So it goes.

    Please appreciate all doctors.

    Howard

  15. Devon Herrick says:

    @John Graham

    Another aspect of your argument; specialists tend to abandon the procedures that don’t reimburse well and specialize in the ones that are more lucrative.

    @ Stephen Guillard

    When I worked for a long tern acute care hospital 20 years ago we were PPS exempt. Money-losing patients that were in the parent company’s ICU and CCU would be transferred to our facility where we were cost-reimbursed.

  16. Jane Orient says:

    I have a problem wih the proposed solutions, which seem to accept basic flaws in the system.

    All three suggestions spend money and fail to restore freedom. Why not do just one thing: allow seniors to spend their own money any way they want, whenever a Medicare claim is not filed. They could choose a Wal-mart nurse practitioner, a sophisticated imaging facility, state-of-the-art surgery, a concierge physician, a fee-for-service physician, a package deal, or an a la carte price—without Medicare supervision.

    Some seniors would gladly unburden the system in exchange for timely, personalized service or access to items covertly rationed by Medicare. Physicians might forgo the Medicare loot in exchange for relief from costly, demoralizing “compliance”: accountability to their patients, instead of bounty-hunting auditors armed with 100,000 pages of incomprehensible rules.

  17. Donald J. Palmisano MD JD says:

    Keep up the good work, John.

    One comment: the time vs task argument.

    Of course the marketplace should determine value. Willing buyer, willing seller.
    But don’t argue that all episodes of one hour of time automatically should get equal payment. If someone spends an extra 8 years out of medical school learning a skill to transplant a heart, those hours spent doing the procedure surely have a greater value than the hours of an office visit. Of course, in a Free Enterprise system, the true worth and value would be determined by the buyer and seller in the absence of price-controls.

    Thanks.
    Donald

  18. Uwe E. Reinhardt says:

    I am not surprised that the WSJ would publish this, but am astonished that the Atlantic Monthly finds it persuasive.

    First of all, the kind of care that could be priced as you suggests at walk-in clinics is the trivial slice of total Medicare spending. Secondary and tertiary care – especially end of life care – make up the bulk of it. Those clinics don’t handle these cases.

    Second, imagine the administrative apparatus required to monitor your scheme. How would Medicare (or its intermediaries) know whether the price the free standing clinic charges is the posted price it charges all cash-paying patients? After all, you yourself have lamented the high degree of larceny manifest in our culture when it comes to billing (milking) government. It’s true in defense, and it’s true in health care. Why would we assume that these clinics would be honest without being monitored?

    Third, it is not clear how quickly these clinics would refer patients to other PCPs in more serious cases. In other words, they may just be an add-on to Medicare spending, for the most part.

    Finally, I find the concierge part the weirdest. Suppose Medicare endowed each beneficiary with $1,500 to get a concierge doctor. That’s $67 billion or so a year. But the patient (or Medicare) would still have to pay the doctor for each test or procedure the doctor delivers, wouldn’t they? And on what basis should the procedure be paid? Usual, customary and reasonable fees of each individual doctor? What that doctor gets paid by private insurers? Do you know how many different fees a doctor may be paid by different insurers? Would there be no fee schedule at all? No common nomenclature? Just a bill with a $ figure Medicare is to pay? If this is the way you want to go, why not use full-risk capitation?

    I hope your next suggestions will be more practical and significant.

    Best regards,

    Uwe

  19. Carol says:

    Dr. Krauss, I think you did an admirable job of explaining the overall workflow of all physicians, who I believe are not given enough support/credit for their expertise and dedication. Further, although Medicare may cut monies it pays for patients, office and support staff costs remain constant. Thus, according to my Physician Assistant daughter, doctors who are in such fields as Cardiology, which she is, which caters to older, usually Medicare funded patients, must take on more patients to maintain the status quo. With all these Medicare cuts, it is the patient and staff who suffer. The patient gets less time and the staff get an increased workload, to where my daughter regularly works eleven to twelve hour days, while being paid for only eight. There are not only more patients, but labs to order and read, phone calls to make, etc., all of which are included in the one fee charged. The big decision makers don’t apparently consider these factors before they cut the costs to physicians.

    As a side issue, my husband came home from his dermotologist and skin surgeon yesterday and was very upset that both doctors told them they would be retiring in the next year and a half as they are “tired of working for free.” Of course, he is concerned where he will go next, the theme of which is all too common. We have a huge population and experienced doctors are retiring because of all the regulation. There is something wrong here. Maybe the next round of stimulus monies should be for educating and training physicians. The construction field has certainly received it’s share of monies.

  20. Al says:

    Uwe and others point out some significant points of interest regarding the editorial. I think the end result of all these comments is that the patient must have skin in the game and must have a choice regarding the insurance that covers his needs whether or not the patient is on Medicare. That means an end of third party payer except for those that are or become “wards of the state” totally or incrementally.

  21. Al says:

    Paul P. M.D. and others are making a value judgement regarding the value of an ophthalmologist when compared to an Internist. Why one wishes to fall into that trap is beyond me. There is little doubt that ophthalmologists are on the high end of the specter with regard to Medicare payments even with the most recent cuts. Do you think their work product of cataract surgery is the equivalent to that of the cardiac surgeon who also has to follow his patient under far more difficult circumstances? Cataract surgery is so much cleaner without all the risks of cutting oneself while engaged in operating within a bloody mess.

    I’m not saying that cataract surgery shouldn’t be paid more, rather basing a claim on what another physician is paid is falling into the trap that fees should be controlled by a third party. That is wrong. Patients in the market place should be the ones to decide the value of a physician based upon the patient’s perception of quality. Thus two seemingly identical physicians could command a different price unless one believes that the inexperienced and low quality ophthalmologist should be paid identically to the best.

  22. Devon Herrick says:

    @ Uwe
    I agree that most of the Medicare expenditure is inpatient care. The solution to controlling some of these costs is selective contracting and domestic medical tourism. Why not give seniors an incentive to choose an efficient hospital over an inefficient one?

    Moreover, if seniors controlled more of dollars that paid their incidental medical needs, we wouldn’t have to worry about medical providers bilking Medicare. A retail clinic wouldn’t care whether a customer was on Medicare, BlueCross or uninsured. And seniors could decide which services hold value.

  23. Carol says:

    Devon,

    I have a 95 year old aunt who still has her mental faculties but is not physically able to “shop” for care. By the way she lives on $400 per month social security, so there is no extra change to purchase items for incidental medical needs herself. Many from that generation live on nearly nothing.

    On the other hand, my mother had a stroke three years ago at age 88 and while she was fully functional prior to the stroke, now has dementia and can not shop for services either. She is in better financial shape than my aunt and pays for her care, which I oversee.

    In both cases, others are overseeing their care and they are lucky to have somebody to do so. The concern I have is that any future plan must include services for the people who cannot take care of themselves. There are many other areas in which funds can be cut from the budget which are not life threatening.

  24. Devon Herrick says:

    @ Carol

    I definitely agree. Consumer-directed care is not for everyone. There needs to be choices (such as Medicare Advantage) for those who cannot or do not want to have a say in how their money is spend. But having enough people willing to control a portion of their Medicare dollars in a (HSA-type) personal health account could boost the number of innovative services by creating a market for them. Insurers are not on the lookout for new services to spend money on. Yet, consumers do respond to innovative services if they service a need.

  25. John Goodman says:

    @ everyone who objected to the physician comparison

    I hear you. But I still don’t know how much Medicare should pay either of them. Nor does Medicare. We need markets to settle that question.

    @ Jane Orient

    Agree that patients should manage their own money. Didn’t get into it this time because I have advocated that idea before and I wanted to show there are additional things Medicare could do to free the marketplace

    @ Uwe

    What I meant by a concierge doctor is one who provides all primary care for a fixed monthy fee. I reaqlize their are other arrangements

    As for fraud and abuse and monitoring difficulties, private insurers are beginning to pay for these services (because they save money) and they seem to have few difficulties along these lines.

    As for these services being a small piece of the pie, have patience. I have ten ideas in all I’m going to send your way in the near future.

  26. Al says:

    John G writes: “@ Uwe
    What I meant by a concierge doctor is one who provides all primary care for a fixed monthy fee. I reaqlize their are other arrangements”

    What is the responsibility of the primary care doc? Does it include the EKG? Stress Test? CT Scan? Does it include reading the EKG or cardiology services etc.? This sounds like the IPA quite popular in the past in California. It is scary. How much of the bill is going to be the responsibility of the primary care physician? Do you not believe capitation of primary care physicians can be quite dangerous especially when the money is not coming directly from the patient?

  27. Aaron Ginn says:

    @al @Uwe

    Per questions:
    http://www.qliance.com/
    http://www.medlion.com/

    I think a lot of Uwe questions get to the heart of the problem: government tries to watch every corner, under every couch… the problem is that if a private company can’t do it, can the government? Think SEC, Credit Rating agencies, CMS Fraud, even the defense department is not that good at monitoring every aspect of a contract.

    whack-a-mole.

  28. Bob Kramer says:

    John;

    For many Medicare is a blessing. I am not sure that its appeal is “getting something for nothing” or truly beneficial. If things get any worse with medicare reimbursement, you will see a mass exodus of physicians from the program. Don’t the folks writing the rules understand this?

    Dr Bob Kramer

  29. Kenneth A. Fisher, M.D. says:

    John,
    I personally would like to see something like this.
    The Issues that must be addressed when developing an American health care system that provides universal coverage at a cost that this nation can afford.
    1. Price fixing and central planning has repeatedly been a failure throughout the world; market forces must determine the value of each aspect of medical care. Trying to fix Medicare/Medicaid is like building a castle in quicksand, it is doomed to fail.
    2. 2. Health Savings Accounts (HSA), accumulating tax free starting at an early age, funded in large part by a tax credit for those paying income tax and a reverse tax for those not paying income taxes; the unused portion of those who paid with tax credits can be passed on to their heirs after being taxed. Expensive items would be covered by high deductable insurance that would be federally subsidized for the poor. This would meet the need for every generation to pay for its own benefits. Market forces and professional peer review would control costs, insure quality and protect against legal action. This would replace Medicare & Medicaid after an appropriate run in period.
    3. The patient-physician relationship, the keystone of any medical system, would be reimbursed at market rates so that there is ample time for discussion and learning. Health information technology must be designed to facilitate this interaction.
    4. Patient autonomy must be respected with the right to refuse any or all care, but the years of schooling and experience by the physician must come into play when discussing the medically feasible options.
    5. Advanced directives must be completed at each hospital admission denoting the medically feasible options for that particular patient at that time. A medical peer review team must be available to resolve conflicts and minimize the risk of adverse legal action.
    6. New medical products must be prospectively proven to yield better results than what is already being used, the testing to be overseen by an independent body, i.e. The NIH.
    7. Post graduate medical training and hospital reimbursement must become independent.
    8. State funds now dedicated to Medicaid must be reallocated to education so that all our children will learn the necessary skills to be productive in a complex worldwide economy.
    These issues must be addressed when enacting health care legislation so that this nation would be able to provide universal coverage at about 15% of gross domestic product which would promote American economic growth and curtail government deficit spending.

    Regards Kenneth A. Fisher, M.D.

  30. Paul Petelin MD says:

    Many great points in follow up. I agree with Bill on many points. One in particular is the fact that policy makers need to change how they view providers. Stop vilifying them and instead view them as a critical part of the solution. You hardly hear a discussion these days that trusts providers with the moral hazard of being paid for services, let alone suggest they innovate to find solutions.

    Case in point: Dr Goodman (in his editorial), mocks the “assembly line” feel that is common in the best run most efficient outpatient surgery centers. I am not sure how to interpret this. It would seem to me no matter what your point view, efficiency would be a goal. I am part owner in a very well run physician owned eye only outpatient surgery center that is extremely good at providing surgical eye care. It was one of the first in the US. I profit from this relationship. Knee jerk simpletons will immediately imagine that this is part of the problem. They will point to outlier scams, crooked docs, supply side demand arguments and claim there is no way this does not add to the cost. The underlying implication is that providers are incapable of behaving well when they are too involved in the delivery of care. Better left to the MBA’s, publicly traded for profit corporations, and even “non-profit” hospitals. If this is the consensus view then as Bill said, we are all “doomed”.

    Nothing really could be farther from the truth in my world. We have a center that has been in existence for 25 years, has solid ethical hard working provider owners across all generations helping each other and sharing ideas. We have exceptional feedback and patient safety data, and we constantly are looking to be better. My practice volume ebbs and flows with the seasons just like it normally would. I just now have a place that I control surgically, and that my patients enjoy and appreciate. I know my outcomes are better because of it. Tonight I will spend 5-6 hrs away from my family at a monthly board meeting devoted solely to this entity and making it better. Who is better to do this? I know business, I know eye surgery, I know patient care. Anyone else would be less qualified.

    What is notable is that this is all accomplished at significant savings to Medicare and third party payors. To perform these same services one mile away at a hospital based OR costs more than twice as much. Why? If you want to write something meaningful in the WSJ do an oped listing about 1000 outpatient services that should never ever again be performed in a Hospital setting unless there were absolutely no alternatives. Give one valid reason a hospital should receive 2-3x right under our noses to provide the exact same service. To say they have higher expenses is to admit the obvious: Hospital centric care is a 1950′s dinosaur and is killing us as an expense. We have a 20 year cost savings experiment that has been wildly successful, was initiated by physicians and is staring us in the face and we continue allowing the more costly alternative. 1/3 of our healthcare dollars go to hospitals, another 1/3 for supportive care at the end of life (largely in hospital settings).

    enough rambling……..good discussion

  31. Martha Lewis says:

    John -

    Very good. Here is a comment on concierge physicians, as well as some supplements to your example of inconsistency in payments. The latter comes from a letter (my second) which I sent tothe CEO of the hospital where I was, for eleven days, last winter. If more people would examine their bills (or their relatives’), we might begin to make headway in educating the public regarding the issue of healthcare. We certainly cannot count on the press!

    1. The concierge concept is fine, when it works. However, some of my friends who have “signed up”, find it difficult to reach the physician. The same-or-next-day appointment feature works sometimes. My physician (not on the concierge plan), if I have a problem, will always squeeze me in the same or next day. Of course, she cannot take onany more patients.

    2. (from letter #2 to hospital CEO; this was introduced by a thank-you to the employee who attempted to answer my questions)
    “However, my concerns have not been alleviated. Your organization’s idea of the “resolution” of a “protest” is to read what some employee wrote on a piece of paper or a computer terminal. This is NOT an “investigation.” I want to know why I (or Medicare) should pay for incompetence. Why were two people sent to evaluate me, one contradicting the other, necessitating two additional days of hospitalization? I also want to know why a surgeon, with at least thirteen years of education after high school, is paid so little in comparison to a therapist with only a few, perhaps in addition to college, perhaps not. I do not know. Furthermore, the surgeon operated on an EMERGENCY basis on SUNDAY. If the therapists worked on Sundays, I would have been out of the hospital two days earlier, for a savings of $1804.80. (There! I just saved 160% of my deductible through efficiency!)
    By my rough calculation, the surgeon is paid about $240 per hour, and the therapists, about $298 per hour. The anesthesiologist, who has the patient’s life in his hands, is paid $192.30!!
    WHAT IS WRONG WITH THIS PICTURE?
    Additionally, the operating room is paid $1694.40 per hour!!! including supplies, the figure is $2797.27.

    In addition, I have learned, in the course of MANY conversations, how ill-trained your employees are. For example, in reviewing my bill, she recited that my room charge, per day, was $824.00. I assured her that I understood, and that it, of course, included the cost of the nurses, aides, et al, on the floor. “No”, she protested, “only the room.” When I asked who paid the nurses, she replied, “The hospital”. This exchange was repeated twice more, until I gave up.
    Is that what you teach your employees….that the “hospital” has a funnel from somewhere, which pumps money into it which is used to pay the staff? This is truly shocking.”

  32. Al says:

    Aaron G. Writes: “government tries to watch every corner, under every couch.”

    You are right. A singular entity can only do so much. We have a great country with a government that for the most part has been good and wants to do even more good. The problem is that even well run companies sometimes have to spin off smaller companies because they have become too big to function appropriately. I am sure Uwe recognizes that fact so I am surprised he seems so unwilling to transfer some of the responsibility down the line to the states, communities and individuals. After all I might be able to type faster then my secretary but does that mean I should do the typing instead of those things I do best?