I decided against going to a Healthcare Town Hall Meeting with a local Congressman because I knew the outcome before the gavel went down.
There will be a lot of speculative hysteria surrounding potential changes to Obamacare benefits or changes to Medicare.
Let’s relax. Entitlements once granted never go away – they take on a life of their own.
What attendees won’t be told is that Obamacare is collapsing under its own weight – insurers are fleeing in droves unable to sustain the coverage losses they’ve experienced over the last few years.
Nor will they hear the Congressional Budget Office prediction; Medicare Hospital Trust Fund will be bankrupt in 2020 and the larger Medicare Provider Trust Fund will be exhausted in 2028.
But Obamacare and Medicare are not the problem – they are just a symptom.
Medical Bills Are Killing Us
In a seminal piece written for Time Magazine in the summer of 2013 Steven Brill laid out the problem in detail.
Medicine in 21st century America is big business. It’s very profitable for employees and stockholders.
The United States of America spends more on healthcare than the next 10 biggest spenders combined! Based on exhaustive comparative studies of Adult Welling Being the additional $650 billion a year does not result in better outcomes for Americans.
McKinsey Consulting studies have shown that the average private healthcare employer has a net operating margin (profit) of 16.2 percent compared to ExxonMobil’s 8.2 percent.
Spending for healthcare services, drugs, devices and facilities equals 20 percent of total USA Gross Domestic Product (GDP) or about $4 TRILLION a year – every year.
By comparison, the American Association of Civil Engineers estimates the total national backlog of needed infrastructure (airports, trains, highways, energy grids, etc.) will equal only $3 trillion by 2020.
Healthcare Spending is Out of Control
We see the headlines – EPIPEN price increases from $57 to $600 per prescription in a decade.
New York is the financial capital of the world – right? Wrong, of the 18 largest employers in New York four are banks and eight are hospitals.
We have heard for years that employer based (and private) insurer payments to doctors, laboratories and hospitals needed to be increased to cover the losses health care providers experience in serving Medicare patients, Medicaid patients and the uninsured.
If Medicare is “unprofitable” why does every major for-profit healthcare system aggressively pursue those patients? It’s simple. The Medicare payment formula includes a guaranteed percentage of profit!
It stands to reason, then, that if there are 23 million more insured patients the providers’ need to recover “uncompensated care” costs has decreased but medical spending continues to increase dramatically.
While healthcare is something we all need; we’ve come to expect someone else to pay for. On average, the patient pays only about 12 percent of the total bill.
That’s made us insensitive to prices and providers greedier. The escalating greed is reflected in the skyrocketing price of health insurance.
Medicare Cost Data for All
If we want good healthcare coverage with reasonable insurance premiums, Americans must become active consumers. We must advocate for a system without hidden costs.
If we want the impending debate in Congress to conclude with a better outcome than just “Obamacare2.0”, we, the people, are going to have to hold our representatives’ feet to the fire!
We must insist they begin with a comprehensive investigation of the underlying costs of healthcare.
Rather than focusing on perpetuating yet another “entitlement”, Congress’s objective must be to reduce the cost of care for all Americans – not just those who receive government subsidized care.
Brill argues that Medicare can compute the real (true) cost of delivering each health care benefit they cover. They reimburse providers based on cost of service delivery in the provider’s region in the country – i.e. cost of a day in hospital costs more in California than in Idaho.
Then Medicare applies a percentage of profit authorized by Congress to the provider. Cost plus profit is the contracted price Medicare pays to providers – no negotiation.
But Medicare is prohibited by Congress from sharing that cost data.
As consumers we have to start to shop for the best deal even if someone else is going to pay the bill!
As voters we must insist Congress allow Medicare to share their cost data — putting other insurers in a stronger negotiating posture with healthcare providers. The result would be a better deal for both patient and insurance carriers.
Manage Costs or Ration Care
As a nation, we cannot continue to fund a healthcare system that has no self-discipline. To do so would pass an immoral debt onto several generations of Americans not yet born.
If we are going to make the promise universal health care (not single payer health care) an affordable reality for all we must be willing to make changes in the ways we consume and pay for healthcare – that includes Medicare patients.
- A redefinition of what health insurance is and what it pays for.
- A reorganization of how we deliver healthcare to increase efficiency and reduce costs.
- Rapid adoption of technology to both better determine diagnosis and treatment and to manage chronic disease
- Greater transparency so that patients can make smarter decisions about where and how they will receive necessary care.
- Greater transparency around the relationship of drug development costs and drug prices
- Medical malpractice tort reform.
- Identification of realistic funding sources for health insurance subsidies, Medicaid, Medicare and veterans’ health care.
The good news is there is a great marketplace of ideas about how to tackle all of these issues.
The bad news is that all of the good ideas are being drowned out by the political rancor on both sides of the aisles of Congress and the army of special interest lobbyists who feed that rancor.
Over the next few weeks, I’ll explore each of these opportunities with you – so that we can help our fellow citizens understand both their possibilities and possible perils.
It is up to us to engage our elected representatives in “fixing healthcare for all”, not fighting to score political points for the 2018 mid-terms.
Do you have any information on why we are not addressing the cost of hospital business? I am not an expert, but it seems Obama Care focused on the distribution of insurance and tax breaks and not at all on the crazy costs that hopitals incure to run their profit business. A box of tissues can be $40 charge. I had been diagnosed with MS and they wanted me to take a medication that cost $1,000 per month which I decided was not worth the risk to my body. Why is it other countries like Europe do not have the same costs? In fact if medicine were socialized we would eliminate the entire cost of billing and management. Do any of the health care reforms talk about this?
I am researching the cost of hospital business and there will be more to say in coming months.
I think the Senate should start their examination of Obamacare replacement with hearings on the cost of healthcare! That’s the real problem!
Do you have any information on why we are not addressing the cost of running hospital business? I am not an expert, but it seems Obama Care focused on the distribution of insurance and tax breaks and not at all on the crazy costs that hospitals charge to run their profit business. A box of tissues can be $40 charge. I had been diagnosed with MS and they wanted me to take a medication that cost $1,000 per month which I decided was not worth the risk to my body. Why is it other countries like Europe do not have the same costs? In fact if medicine were socialized we would eliminate the entire cost of billing and management. Do any of the health care reforms talk about this?
Rose, you are asking good questions. Some are covered in blogs I have posted over the last year. Some will be covered in a piece I am working on — but the bottom-line is that the health care industry gives more money in political contributions than any other industrial segment in the United States!
That is why talking about the issues is so important! We need to educate people about what the problems are and how they can be resolved.