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Will We Need a Bailout of the Health Care System, Too?

A huge bailout is being planned in Washington to avert a calamity that was brought about, in large measure, by the financial system operating the way financial operators told us it was supposed to function.  The money is needed, we are told, to bail out the financiers who assured us — up until just a couple of weeks ago — that the system they operated was sound and would need no rescue.

What is the likely spill over to health care from the misbehavior of the financial system’s owners, operators, and managers?   I’m going to suggest there are likely to be both direct and indirect effects.  One of the indirect effects is that we may lose faith in doctors, nurses, and hospitals, or at least come to suspect that the practice of their craft and trade is not aligned with their espoused principles of "doing no harm" and acting in our best interests. 

Financially what we have discovered is that the assets of the system
are so rotten in so many places, and in so many institutions, that none
of the leaders in these institutions trust one another any more.  So
now they refuse the risk of doing business with each other without the
federal government — you and me, taxpayers — serving as a backstop
and guarantee.

The entire country, excepting perhaps the perpetrators of this massive
but preventable mess, is rightly suspicious about the most basic
issue:  the motives of those in whom we have put our trust to manage
finance, the banking system, and the credit markets — in short, our
money.   They have steadfastly told us that they were working in our
best interests by rationally investing our savings, our 401Ks, and our
mortgages, in a financial system that efficiently allocates risk with
reward, balancing both in a manner that maximizes the growth and
stability of our nation’s economy, and therefore our money invested in
that economy.

Well, they lied. They weren’t protecting us. They weren’t helping us invest wisely.  They were taking advantage of us, enriching themselves through a myriad of complex premiums, mortgage rate schemes, and derivatives. They told us that markets work best when government interference is the least. But this was self-serving manipulation of our trust. What they were really doing was diverting money ginned up by their schemes into their own pockets.

Any sentient observer of this trickery on such a massive and systematic scale will start to ask questions about who else among our highest paid and most trusted professionals might be lying to us about the well being we place in their hands.   Who else, they will ask, is making money off our trust in them? Who else, they will ask, is skimming money off the top of an inflated and ultimately doomed — because unsustainable — market for complex services? Where is the next bubble that privatizes profits but socializes risk? 

And I think the answer is pretty easy to imagine, and the sector easy to identify.  It’s the health care system, composed of health plan administrators, doctors, nurses, hospitals, pharmacies, device manufacturers, and so on, pledged to protect us and act in a non-profit (or at least financially fair) manner, to do us no harm, help us prevent illness, and treat us with skill and compassion when we are sick. But it’s not happening exactly that way, is it? We trust them to protect and help us, but are they instead using our trust to enrich themselves?

My son, Ian, recently underwent an appendectomy. All went well, and I am grateful to the hospital staff, doctors and nurses who helped him get better quickly. But the bill was over $20,000 even though he spent less than a day in the hospital! He received an expensive MRI although the symptoms and basic tests were absolutely classic, as confirmatory of an appendicitis as I’ve ever witnessed, and his doctors admitted that the MRI was "probably not necessary." After the fact, he received a bewildering set of bills and explanations that took the good will of several experts in the Health 2.0 community to sort out (I want to thank, especially, Christopher Parks of Change:Healthcare for assisting Ian to make sense of this confusion).

This is perhaps not a very dramatic example of what I am suggesting is a profession and industry losing its moorings and escalating prices to serve the pecuniary interests of its own ranks. However, in a very personal way it has caused me to lose trust in the owners and operators of our health care system that they are acting fairly and that they are matching resources with a realistic appraisal of risk. And I know that there are other Americans who feel the same way and share my worries, perhaps millions of them. 

I know that some readers will think that I’m over reaching with my analogy, stretching the fabric of comparison beyond what it can carry. But I would argue that when confidence in a fundamental American institution becomes as shaky as it now is with banks and mortgage lenders, and with the government officials who set fiscal policy and  regulations to prevent the kind of meltdown we are now experiencing, it seems reasonable that people will become suspicious and cautious about others. 

I’m very worried that there is as much excess and greed in health care as there has been exposed in banking and on Wall Street, and that a collapse and bailout is eventually likely, but that we have not reached the crisis point quite yet. But aren’t we getting there? Fifty million people are without health insurance, and at least that many are under insured, while revenues going into the industry continue to increase at double digit rates of increase year after year. Medicare Part A, the portion of the fund that pays for hospital expenses for Medicare beneficiaries, went broke this year. 

The net yearly shrinkage in employees receiving health care benefits from their employers is between 2 and 3 per cent, and disposable personal income spent for health care has now, for the first time, exceeded the costs of housing, groceries, and clothing for the average American. How can this go on much longer?

There is enormous anger at Wall Street among our countrymen and countrywomen, in all walks of life. If a bailout of health care is required, I think we’ll see the same anger towards doctors, hospitals, and health plans. It may well be deserved if we don’t get a grip on things medical.

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Dr Mary ZennettTaraJaneJamesMG Recent comment authors
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Dr Mary Zennett
Guest

It seems long overdue that doctors like us lead the way in looking at all the inefficiencies and greed square in the eye, as well as the disparities, in order to clean it up. We are much closer to a health care “crash” than we may want to believe and it’s going to take all of us working together to avert it. Friends, let’s not wait long.

Tara
Guest
Tara

I would like to know when the presidential candidates are going to address the people who cannot get health insurance because of preexisting conditions. Because 12 years ago I was treated and “cured” of leukemia, no health insurance company will give me an insurance plan. McCain says he’ll give a $5000 credit. I already get $300 monthly from my employer. It does me no good however since I cannot get a plan. When are they going to address this??

David C. Kibbe, MD MBA
Guest

Dear Jane: I think the health care system is closer to “crashing and burning” than most of us realize. Read my next blog entry, and let me know what you think. DCK

Jane
Guest
Jane

Here’s my story: I have been repeatedly billed for a $1,300 path lab item. When I got the original bill, I contacted the health insurance company and was told that under their contract the provider could not bill me for that item. That was about three years (and, given that most companies change their health insurance companies regularly, about four healthcare systems) ago. Since then, I have been repeatedly assured that the file had been closed, only to receive another bill six months along. So from what I can see, the provider is simply never closing out the amount, but… Read more »

David C. Kibbe, MD MBA
Guest

Dear Peter: Yes, debtor’s prison seems the next logical step to collusion between hospitals and state taxing authority: it certainly relieves any pressure the health system has to be sensitive to consumers’ concerns about price gouging and predatory collection practices. It also would seem to give them a cushion to increase their charges.
I have wondered what prevents people working in these institutions from raising their voices, when they know their neighbors are at risk of suffering financially from these practices. Thanks for your comments. DCK

Peter
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Peter

rbar, no I’m not a doc but I do take medical decisions very seriously. Even when in Canada with no direct bills I tried to justify the treatment and only used the system when absolutly necessary. Mr. Kibbe, I see that your experience in NC was most likely with UNC hospital. I have had my fill of UNCH and will not go there again. Your experience with the AG’s office was like my wife’s when she was disputing a charge. She got a very threatening form letter from the AG – pay or else. I think if NC had debtors… Read more »

James
Guest
James

My wife just got bill for $2,600 dollars for a piece of medical equipment from almost 2 years ago. The company involved INSISTS they sent numerous prior invoices. They didn’t. This was a case where they agreed at the time to waive any charges above what her insurer would cover. Now, two years later, they want to demand the balance. My wife spent last night rummaging around old files to locate the card for the product rep so he could get it straightened out. She was told this “happens all the time.” Nor is this billing screw-up an isolated case.… Read more »

David C. Kibbe, MD MBA
Guest

Good comments, all. I want to relate a conversation I had with a colleague last week, a family doctor who like many sold his practice to a hospital system and who is now part of a very large group practice. His position is fairly typical, I believe. A good doctor, with lots of clinical experience, and a leader in his area in terms of use of EMRs, he is judged on his “productivity” in terms of referrals to subspecialists, image centers, procedures that he orders, and hospital admissions. He has been told that he is a part of a “cost… Read more »

rbar
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rbar

Deron, I am one of the very few here who think that you do have a point … although it doesn’t really pertain to this discussion, as more visits and more scans should make each individual service cheaper and bring astronomical bills down (I have argued before that healthcare cannot be streamlined since it is too complex and individualized; certain components, such as MRIs, certainly can). Peter, I think you are a physician, too. Have you made the same experience as I did, namely when you mention cost aspects of any treatment or test I recommend (or don’t): some people… Read more »

Peter
Guest
Peter

“However, I find it unrealistic to expect from doctors that they personally review all their bills for accuracy,” I find this to be the case with most health professionals – not knowing what their services cost and not really wanting to be involved in day-to-day financial information. Ask your dentist what the charge will be and he will refer you to his office manager, ask your pet’s Vet what the charge will be and they will refer you to their office manager. In a way I understand this as docs want to concentrate on the care of the patient and… Read more »

MG
Guest
MG

Dr. Kibbe – It is refreshing to hear that you think individual physicians need to own up to their share of the healthcare morass too. Until everyone in the healthcare food chain is willing to give a little (and this includes rank-and-file docs too), no meaningful and lasting healthcare reform is going to be possible.

Deron S.
Guest

Peter and rbar – I just want someone to acknowledge that patients are playing a role in our healthcare woes. It’s becoming cliche to blame everything on “greedy CEOs” and “greedy insurance companies” and “greedy physicians” etc. Do I think those are all problems? Absolutely! But I can promise you this: If the ultimate solution(s) to our crisis does not address the role that patients play (i.e. not going to the doctor until they’re sick, not taking of proper care themselves, etc.), I can assure you that we will not get ourselves completely out of this mess.

rbar
Guest
rbar

I did not in any way condone the large, often inappropriate sums that are billed – in fact, I specifically wrote that I feel that “US doctors, esp. proceduralists, are relatively overpaid”, and I did not exclude myself (however, one also has to take other professional’s earnings into account, and the high cost of medical education). However, I find it unrealistic to expect from doctors that they personally review all their bills for accuracy, or to adjust every claim based on the patient’s income (although I do bill patients lower codes when I know that they have no insurance, or… Read more »

Peter
Guest
Peter

Deron, blaming patients is like blaming borrowers for the mortgage mess or Bush blaming the mess on falling home values. How about it’s the trees waving that create the wind. Patients react to the system in place -fix the system and patients will respond accordingly. Trying to rely on patients is the way conservatives don’t want anything done that will cost them money, “let the market work”. Before public health agencies came into exisitence the “public” didn’t take it on itself to stop disease transmission, at least in any scientific or organized way.

Deron S.
Guest

All this talk about who’s to blame and not one of you mentioned patients…