I think I’ve mentioned it before but in my reading I typically just sort of “read around” the parts that I think are nonsense or at best mistaken but sometimes I find something I just can’t get past. That was true when I read John Micklethwait’s and Adrian Wooldridge’s piece at Bloomberg arguing that we need a chimera of Abraham Lincoln and William Gladstone to save us. More on that later. Here’s the bit I couldn’t get past:
But don’t be fooled: China is not to blame for America’s failings, many of which are structural. And Trump did not invent a health-care system that is skewed toward elective surgery for rich patients, nor did police start becoming brutal on his watch. America’s schools have underperformed for years. Trust in government (like the nation’s roads and bridges) has been crumbling for decades.
The emphasis is mine. The bolded claim is wrong or, at least, an exaggeration. Total U. S. health care spending is something like $3.6 trillion. Of that 60% or more comes from federal, state, and local government spending, i.e. tax revenues or borrowing. Medicare $650 billion, federal Medicaid $600 billion, Tricare $55 billion, other federal health care programs, federal employees’ health care, state Medicaid spending, health care for state and local government employees, and various other state and local government health care spending—the array of individual line items is practically endless. Most of the rest of the spending comes from employers and individuals (most medium and large companies self-insure their employee health care plans, i.e. they don’t carry insurance). Construing that as “elective surgery for rich patients” is a stretch. To the extent that our health care system is skewed, I’d say it’s skewed towards what the federal government will pay for which is just about the opposite of that.
I won’t go through their proposals seriatim. All I will say is that both Lincoln and Gladstone were pragmatists. We don’t need heroes to save us. We need to eschew ideological solutions and embrace pragmatic ones. We need to root out government corruption which is now so pervasive and commonplace neither elected officials nor we look on it as corruption anymore. Suffice it to say that when, after 30 or 40 years in elected office, an individual emerges rich, it’s corrupt. Period.
If the 2020 elections were a “throw the bums out” election it couldn’t come too soon. It’s far more likely that most of the bums will be re-elected, will continue enriching themselves, their families, and their friends, and continue to pursue non-functional ideological solutions because that gets them votes and campaign contributions.
He is more correct than you think. You are obsessing over where the money comes from. This is a statement about how health care systems decide how to function. So lets add in not only surgery but procedures in general. Stuff like GI, IR, OB and Cath lab. All done in OR like settings for the most part. If you include these, the surgeries themselves, the testing beforehand and the rehab after, that is where a lot of the profit in a hospital comes from. Most of the profit in a lot of hospitals. It was the cutbacks in elective surgery that lead to most of the financial loss in hospitals during Covid. That, plus prolonged ICU stays are always money losers.
Hospitals need to provide care for pneumonia, CHF, diabetes and lots of other acute and chronic illnesses but they generally break even or lose a bit on those. So the profit making parts get a lot of emphasis. If you dont generate profit, you dont generate the capital for maintenance and buying new stuff. You can quibble over the rich term. What really counts is that they have private insurance and most of those people are not rich.
Steve
How should I square “elective surgery for rich patients” with most spending is related to care in the > 55 age group?
Like at one level it is true that >55 are generally the richest in the population, and the care could be termed “elective” in the amount of years added to life related to health care is not that much…..
But I don’t think that’s what anyone means by “elective surgery for rich patients”. So what does that mean?
I’m not obsessing over anything. Medicare spending is by and large for the elderly without regard to income or wealth. Medicaid beneficiaries are the poor. Tricare beneficiaries are military dependents. And so on. Additionally, medical care is either emergent or elective.
“Elective surgery for rich patients” sounds like tummy tucks for billionaires. Unless you’re characterizing the top 10% of income earners as “the rich” most of those with employer-provided or -supported health insurance don’t qualify. Hip replacements are elective surgery. So is most heart surgery.
A more honest assessment would be that the health care systems of Germany, France, the U. S., Japan, and the U. K. are all skewed by “elective care for rich patients” because most care is elective and we’re all rich countries.
You are still obsessing over where the money comes from. I am telling you how hospitals decide what care to emphasize and how they budget. How can you not be aware of hospitals and not realize how much they were driven by cardiac surgery 15-20 years ago? Now it is IR, Cath Lab, Gyn Onco surgery, OB, Ortho and outpatient surgery in general.
““Elective surgery for rich patients†sounds like tummy tucks for billionaires. ”
Ok, so I already this, but Ido forget most people only dabble in health care.
“You can quibble over the rich term. What really counts is that they have private insurance and most of those people are not rich.”
Hospitals tend to break even, make a little bit of money or lose a bit on Medicare and Medicaid. In order to make money they want those pts under 65 not on Medicaid having surgery. So as I noted most of those people arent rich so he is engaging in a bit of hyperbole. The fact remains that we have a chain of events here. For many reasons our care is not now centered around hospitals which have for the most parts merge into networks. The profit to make this system work comes largely from private insurance patients having procedures.
So note that what I said was his pint was more true than you seem to think, I didnt say it was absolute truth. It is not because it is not just rich people. However, the broader point that our system is overly centered around elective procedures for patients with private insurance is incredibly true.
“How should I square “elective surgery for rich patients†with most spending is related to care in the > 55 age group?”
Two points to make sure this is clear. Elective surgery is in general a poorly used term. Most people who dont actually do surgery or just dabble in health care policy usually mean surgery that is not emergent in nature. In the trade we realize that there are gradations of need between emergent (GSW, ruptured aorta) and totally elective (cosmetic surgery, Lasik). Cancer surgeries, surgery for debilitating joint pain, surgery to relieve chronic infectious issues, repeat biliary episodes, etc. Actual true emergency surgery makes up a very small amount of the work in an OR. “Elective surgery” as commonly used makes up the huge majority.
Second, just to death this horse more, the profit comes from surgery/procedures on people under 65, ie non-Medicare. It comes from those who are well enough off to not need Medicaid. I have already agreed/said that it is an exaggeration to claim these are all rich people.
Steve
Now I see where you’re coming from, why you see my point as complaining about the source of the funding, and why you have responded in the way that you have to some of my observations in the past. You believe in the true value theory of pricing. I don’t think I can do anything with that.
” You believe in the true value theory of pricing. ”
Nope. I am telling you how and where hospitals make money. You were unaware of this, though I find that surprising since I thought it was pretty well known. Again, I forget that most people just kind of dabble in health care. Hospitals have cost centers and profit centers. Surgery is a profit center. Businesses make decisions that benefit profits. This is just reality. If you want to convert it into some theory feel free, but it is wrong.
Steve
https://physiciansnews.com/2006/11/16/how-does-a-hospital-make-money/
‘Again, I forget that most people just kind of dabble in health care.’
By that I assume you mean that most people only have a superficial understanding of how hospitals and healthcare systems generate billables, what portion of those are profitable and from what sources, and what aren’t but are still needed because of government mandates and/or because without them you can’t support the overhead for the profit centers and the whole thing goes down. I have to include myself in that category. I find attempting to make sense of a hospital bill to be a quick way to learn how far I can still throw things.
And at least from my most recent experience as a patient in a hospital the staff seemed to spend 90% of their time keying in data to satisfy the tabulation requirements of insurance companies and government agencies. This can’t be good for the efficiency, effectiveness, and profitability of the hospital. And that was before the ten-fold increase in condition classifications prompted by the upgrade to ICD-10.
I imagine a lot of the input is useful data, if it can be teased out through analysis; but does that really get done in a timely basis and do the conclusions from said analyses get back down to the field troops in time to do any good? I know from past posts of yours that you and your staff were able to react quickly and effectively on site to COVID-19. Had you been forced to rely on the government chain of command the death toll might have been a lot higher. If Harris gets in, I would expect in the near future you will have no choice (assuming also that you’re allowed to stay in business after the SJW’s and the Disparate Impact crew get through with you).
To respond to Dave’s point, no, America doesn’t need another hero or heroes on the order of the Logsplitter. What we need are people who not only can Git-R-Dun but are willing to do so without fear or favor. But I too doubt that will ever happen again. Political office has proven to be too lucrative and tempting for the greedy and unprincipled.
For a hell of a long time time America DIDN’T need heroic Presidents, because its political system was designed not to require them for the day-to-day operations of the country (it helped a lot that (A) government was small and (B) the US had oceans between us and the rest of the world). That started to break down when the Progressives with their impatience with the old outmoded Constitution started to take power. TR was the first Progressive; but Wilson had been pounding the pulpit for the Progressive program for decades before then. We had a reversion to the old system under Harding, Coolidge, and Hoover; but ever since then every President has either been larger than life or forced to ascend a pedestal to be either praised immoderately or vilified excessively. With the consolidation of money and power in DC, I don’t see that changing. The MSM with their Roman Arena mass cheering and booing sections haven’t helped.
“By that I assume you mean that most people only have a superficial understanding of how hospitals and healthcare systems generate billables”
I am mostly referring to how hospitals what services to offer and emphasize. Where they put their money into providing care. Maybe it will help if I give a specific example, pain care. Treating acute and chronic pain is an important issue, especially in the era of opioid addiction. So where have hospitals and providers put their efforts into this care?
It turns out that pay for pain when it is managed medically, meaning without the use of a procedure so primarily though medical treatment, physical therapy, counseling, etc, it pays much, much less that what people get paid when they do procedures like implanted stimulators, surgery like laminectomies, nerve blocks, etc. Then we know that public payers pay less that private insurance. Medicaid usually pays the least, then Medicare, then private insurance. (Setting aside that there is some variation here, these are generally true.)
So, depending upon the state the following will hold generally true. You get paid the least for a medical mgt of a public insurance pt, 2nd least for a medical pt getting medical mgt, third least for a pt getting a surgical type intervention on public insurance and you get the most money for pts having a surgical type intervention on private insurance.
So when it comes to treating pain hospital networks have emphasized hiring providers to provide surgical type interventions and they try hardest to capture pts with good insurance. But, what we really need if we are to address the pain issue and the opioid crisis are programs that provide medical mgt and especially for this on public insurance. It is hard to even find physicians with the requisite training and interest to do this, I know as I have been trying. So we are looking at training and then using nurse practitioners and PAs to do this. We will “overpay” physicians to participate. (Meaning we will pay them much more than what the insurers pay.)
Steve