Stanley Feld M.D.,FACP,MACE
The hospital systems and the insurance industry have archaic and unscientific methods of determining price. The combination of the methods of pricing and the excess cushion built into the price leads to the excessive profits, salaries to executives and excessive building and remodeling. I look at this as creating a perfect opportunity for creating a competitive environment on pricing between hospital systems and between hospital systems and physicians practices. It also is a perfect environment for insurance companies to compete with each other. The result would be lower premium prices. If one insurance company made a move to lower prices, increase efficiency and decrease consumer grief, the others would follow. The insurance industry has some leeway on pricing because of their excess profits. Naturally, hospital systems and insurance companies do not want to give up this profit advantage. This is the reason hospital systems and insurance companies have lobbyists in State Governments and in the Federal Government. When consumers are in charge of their healthcare dollar and can profit from its wise use, they will force the insurance industry to lower prices.
All that is need is to pass a few rules and regulations by the politicians in government to create this price competition. The rules would include present price transparency, reporting on the methods used to determine the prices for hospital services and the price of premium creation, as well as the patients’ access to this pricing mechanism. If the politicians in government had the courage to act on these suggestions the mess in the healthcare system could clear up very quickly.
The people and not the insurance industry should have control of their healthcare dollar. If the people use the control over their healthcare dollar wisely, the money saved would grow in a tax free trust account each year to be used at retirement. This concept is embodied in my ideal medical savings account. The insurance companies would adjudicate the claim. However now it would be done instantly decreasing administrative costs for the insurance companies, the hospital system and the physicians. They would continue to negotiate the best fees for the patient. If they did it poorly the people would move to another insurance company. They would receive the privilege of holding the insurance premium and the trust account money. They would provide pure insurance if an illness cost more than $6,000.
Community rated group insurance would be available to all with pre-tax dollars. People would can not afford insurance would be supplemented by the government. This form of insurance would also apply to Medicaid and Medicare. It would be universal healthcare in a consumer driven and controlled system rather than universal health care in a single party payer system.
Doing all this at once would force the hospital systems, the insurance industry and physician to be more efficient. It would accelerate the development of the ideal EMR and decrease money wasting inefficiency in the healthcare system.
The most important stakeholder in the healthcare system is the patient. Somehow, the patient has been converted from a person with an illness and needs medical care, to a person who is a potential financial asset to the facilitator stakeholders. It is not uncommon, in the halls of facilitator stakeholders to hear patients referred to as clients, lives and eyeballs. “The more lives you have in your healthcare system, the greater the revenue and the greater the profit.
Without patients there would not be a healthcare system. The conversion of patients to economic entities is partly a result of the advances in technology and partly the dysfunctional evolution of the healthcare system. CAT scans, MRI scans, and stress echocardiograms and others have served to make the patient a commodity. All these test procedures generate revenue. The organization performing the testing generates the revenue. If patients owned their healthcare dollar, prices for services were transparent, and physicians’ offices were able to compete with hospital systems for procedures that are presently not permitted in the physician offices, all the stakeholders would be driven to more accurate pricing and more efficient care. The price of care would drop. The Lasik procedure is a perfect example of prices dropping in a consumer driven competitive marketplace.
At the same time, the government and the insurance industry are complaining that the physician does not practice evidence based medicine. Patients ought to have a mammogram once a year, a colonoscopy every five years, and a bone mineral density every two years, to name a few preventative screening tests.
The reality is that the increased technology has lead to increased accuracy in early diagnosis and early treatment. The result is a decrease in complications of chronic disease. The complications of the disease absorb 90% of the healthcare dollar. The technology has increased the diagnostic skills of the physicians. However, with the restrictions imposed by the facilitator stakeholders to not allow the physicians to do the testing in the office, and the inefficiencies of getting a hospital system scheduled procedure prevents the physicians from consistently practicing evidence based medicine. The implication is if the physician was permitted to do the test in his office, the physician would over test. This implies physicians are crooks and will take advantage of the patient. Ninety eight percent of physicians aren’t crooks despite what Pete Stark (D-Cal) says. It is easy to stop that 2%. However, the inefficiency in the healthcare system does not permit the physician to give appropriate preventive care to the patient.
Cognitive services are essential to accurate diagnosis and treatment. Yet, the skills these cognitive services have been devalued in recent years. In fact, if payment for cognitive services was the only revenue a physician could generate he would not be able to pay his overhead. This is presently a crisis Family Practitioners are now facing. It seems obvious, that in order to increase ones revenue, one must do indicated ancillary procedures. The counter argument is the physician will be given the incentive to over test. If a test is done in the hospital systems the cost of the procedure is usually higher than when it is done as an office procedure. (remember Dr.David Westbrock’s example). Physician office testing would drive the hospital system prices down if the hospital system wanted to be competitive. It is in the vested interest of the hospital system not to permit a competitive environment. If purchasing of healthcare services was in the hands of the patient they could choice the provider and force a competitive environment.
Physicians have the privilege of helping patients who are ill get well. They also have the obligation to prevent disease. It is not only a privilege, it is an awesome responsibility. Physicians are medical doctors that provide medical care. Medicine is a princely profession. Physicians must be given to tools to provide efficient and effective care at an affordable price. The marketplace through patient control should decide the price. Hospital systems and insurance companies arbitrarily made up the price in the past. This has to stop.