Newsgroups: talk.politics.medicine
Subject: Re: health care industry woes
From: <DGS4@psuvm.psu.edu>
Date: Sun, 22 Nov 1992 17:27:08 EST
Organization: Penn State University

In article <1992Nov18.235629.22435@newstand.syr.edu>, amichiel@rodan.acs.syr.edu
(Allen J Michielsen) says:
>
>In @agate.berkeley.edu> sherw@ocf.berkeley.edu (Gregory Sherwin) writes:
>>Doctors were first against Medicare and Medicaid when it was first introduced
>>years ago, but since then their salaries have skyrocketed.  ...
>
>   This is true in part.  I work in the health insurance industry, & see &
>work with this information daily...  The -din- re: M-care and M-caid has died
>because the market has split.  Doctors which do, and Doctors which don't.
>Doctors which don't are split into 3 generic groups. 1- Those who don't bill,
>but do accept M-x payment (to the patient) as payment in full (very very
>small group) 2- Those who don't M-x bill and don't care (largest group)  3-
>Thos who don't M-x bill, but don't do -hard collections- to -hard luck cases-.

What sort of drugs are your on?? :)  About 70% of doctors accept Medicare
assignment (payment in full).  Depending on the state, between 25-100 per
cent of doctors accept Medicaid patients.  Those data are available from
the Medicare/Mediciad data book, available from HCFA.

>In all three of these cases, they don't basically care, they write off the
>uncollectables as either charity donations or business loses.  M-x providers
>are the very small minority.  In short, mass numbers of providers are NOT
>getting rich from the M-x system.  The reasons are simple, M-x require M-x
>specific billing systems, which are updated basically quarterly.  The cheapest
>M-x billing systems I have seen, is $ 10,000 up front and $ 10,000 a year.
>These systems are quantity based, and a typical hospital fee is probably about
>$ 200,000 upfront, and $ 200,000 a year.  The -life- is about 4 years, so the
>per year cost is 200,000 + (200,000 / 4) or 250,000.  A simple procedure
>code mistake, typo, or error is a automatic $ 50,000 per occurance.  The vast
>majority of providers are up front with M-x patients, they see them, but the
>patient must do M-x reimbursement  (which means the patient pays, then gets
>what they can back from M-x).
>
>>The health insurance industry sets our costs without any real consideration
>>for supply and demand economics.  Doctor X comes up with a new procedure --
>>how much to charge for it?  Doctors work with the insurance industry to
>>set some relatively arbitrary value to it - ie. what the insurance company
>>will pay for it - and therefore doctors and hospitals charge that amount.
>
>   New procedures are very supply and demand.  Procedures must generally be
>widely available, and generally accepted before ANY insurance payment is
>made.  Else the procedure is rated as experimental  (and it may be done with
>waiting lists at 30 major hospitals and some insurance companies are still
>classifying it as experimental).  In most cases, new procedures save time
>(are faster), and save the insurance company money because it results in
>less side charges  (examples, avoiding surgery, shorter hospital stays,
>simplier post procedure care & treatment).  So, even -inflated- prices save
>money by avoiding other costs for the insurance.  However, it also makes it
>easier for the provider to perform more procedures, and make more money.
>
>>In an independent study comparing a Canadian hospital with an American...
>>For handling just insurance FORMS, the Canadian hospital
>>had an office with 4 full-time staff members.  In the U.S. hospital ...
>>with 300 full-time employees to just paper pushing for ....(insurace)...
>
>   This is true at several levels.  Example, my University required me to now
>provide proof of innoculation.  They had the records, and lost them, in the
>retirement of my family Dr, his records were -shrunk-, my H.S graduation was
>in 1978 and those records were long gone as well. This meant a trip back to my
>-new- family Dr. for a simple, single MMR (Measles, Mumps Reubella) shot.
>The bill to my insurance company was $ 492, my Co-Payment was $5. My insurance
>company paid $ 384.  My family Dr. Got $ 389 and I was in the office less than
>20 minutes, spending less than 10 minutes with a nurse, less than 5 minutes
>with a Physicians Assistant, and _NEVER_ seeing a Dr.  This is in the U.S.
>   A friends sister is covered by the Canadian plan.  Her family has a history
>of breast cancer, (mother died, sister died, granmother died...) and she has
>a good history of religious Mammograms on a 6 month interval.  Her Canadian
>health care provider either did not read the films, or misread the films as
>clean while they were not, 3 times in a row.  Finally the problem was caught
>on the 4th set (still unknown to her) and she was informed.  However, the
>Canadian system went back and has disallowed all coverage for treatment. The
>cancer was so big, she is being punished for not getting earlier treatment.
>The hospital says they told her about the 3 earlier lumps, but there is no
>mention of it in her files, just a reference to the films being taken, and
>followup call to patient.  Nobody in Toronto wants to treat her, the
>government
>won't pay, and she doesn't have other insurance...
>
>   In short, neither system is perfect.  The canadian system is much simplier
>for insurance overhead, but the difference only amounts to about 15% of the
>cost differential.  The holes in the canadian system are being partly plugged
>by the american M-x system. Sick canadians near the borders come over in
>droves
>for american treatment. Usually for reasons similiar to the story above.  I
>don't have _any_ idea what percentage of the difference this result in.  I do
>know that this canadian -overflow- is _nothing_ like the mexican overflow.
>Let's say that in total, this is about 10 or 15% of the difference.  This is
>nothing like the problem I had in my personal $400 MMR shot story  (which the
>public health clinic would have done for $ 18 total, but my insurance company
>would NOT pay the public health clinic, and $ 5 out of my pocket was less than
>$ 18 out of my pocket, besides I saw my Dr (well Physicians Assistant
>actually)
>in his suburban office at 7:30 am, not missing a minute of work or -dealing-
>with panhandlers and the Health Clinic is downtown on wednesday during work
>hours and loaded with panhandlers, etc...).  My Dr. -felt- he was justified to
>charge $ 400 ($ 500 actually) because he had to cover his butt from my ability
>to sue him.  So, he did a full blood workup to be sure I wasn't going to be
>sick from the MMR, and to provide a baseline for his liability in case I get
>sick anyway...  In short, it was a liability or Malpractice problem.  My
>insurance company was forced to pay, because the procedures and charges were
>performed, and justified by normal procedures (aka Liability).  This is the
>lions share of the difference between the 2 systems.
>   President Bush was completely correct in his assessment that Dr. need
>coverage from frivilous malpractice claims and outrageous jury awards.
>   Clinton is also completely correct in his completely different assessment
>(if you pick out of his totally general ideas and create a actual plan).
>The US Health care system must be standardized on a single national billing
>system  (not unlike the M-x system), so all providers have a single billing
>system to buy, run, operate, and maintain.  Further, the updates to the
>system should be annual not quarterly.  Cherry picking must be eliminated.
>Cherry picking is the following...  When policy pricing is experience rated
>(your next year rates are based on your this years expenses), and the group
>is insured by a non-profit agency which is required to absorb community rated
>loses  (the next year rates are based on overall expenses, not just your own),
>it is very easy for profit companies to move in and cherry pick out the groups
>which are doing the best to control their expenses.  You wouldn't believe the
>difference.   Everybody who chooses a insurance company, or works for a
>company
>which chooses a insurance company that is a for profit company, is part of
>this problem in most states.  A few states are slowly moving to require that
>all companies provide -state- community rated groups at -state- set rates.
>(not unlike the automotive risk pool or unemployment insurance or workmens
>comp pools).  This approach should be pushed ahead quickly. So, in all 50
>states, a minimum major medical policy is available from anybody selling
>health insurance in your state, at rates set by the state, which are the same
>for all companies.  This negates the problems with employers _not_ supplying
>or supporting health insurance to a large degree, as it provides everybody in
>the state equal rate negioation ability and insulation to small employer peaks
>(A small employer may well see a 600% increase in rates from one period to the
>next when doing a experience based rating, just from the birth of one baby in
>the year... Large scale community rating puts the experience base of a large
>group of people together to help average this bubble out.  The overall cost is
>higher because it provides more coverager to more sick people.  However these
>sick people are more often than not on the M-x system, using the tax dollars
>of these same working people.  The difference is if you see the deduction as
>fica, state, & federal withholding or as Health Ins witholding (either
>employer
>based or employee based).  The insurance companies need the power to be able
>to tell the Drs, in better and generic terms what they will NOT pay for,
>$ 400 in backup tests for a $ 20 shot....   The insured needs to be protected
>from this.  This is the power of the insurance companies having their own
>participating providers.   The participating providers are not allowed to
>go back to the insured for more payment....
>
>   There is little or no collusion between insurance companies and health care
>providers.  As insurance companies are forced to raise the rates, groups
>(employers generally) are forced to shop around comparing rates.  This hoping
>provides less coverage for the insured.  This trickles back down to fewer
>insured, and more taxes.  Most insurance companies are pretty good about
>trying
>to recover problems, mistakes from the providers to re-coop this.  This
>appears to be the major hole in clintons outline.  The general prices and
>rates should be pushed down.  Control of malpractice is only one piece.
>Med school loans should be collected one way or another, either as community
>service (like northern exposure) or as cash and interest.  The loses to of
>the educational program is staggering (a minority of med school promises are
>satisfied).
>
>al
Newsgroups: talk.politics.medicine