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Solutions to
the Rising Cost of Healthcare
Seeking the Cause of
the Problem
SOURCE: Information gathered by the American Policy
Roundtable
Compiled by Professor Charles McGowen, M.D. and Chief
Medical Advisor to the American Policy Roundtable; August
11, 2008.
The average American
citizen is utterly unaware of the multiple levels of
bureaucratic managers and their respective underling work
force that siphon off the dollars that he, she or
their employer spend on health care. Even if one happens to
be fortunate enough to work for a company that pays the
premium, at the end of the day, every worker eventually
shells out because the healthcare dollars spent by industry
are monies that could otherwise have gone toward the
take-home income of the employees; whether they are salaried
or hourly wage earners.
There used to be an
assumed, unspoken patient/doctor contract in force whenever
we had to seek medical care by making a visit to a
physician’s office. There were few, if any complaints about
the $7.00 office fee that I charged back in 1967. But when
the so-called Health Maintenance Organizations (MCO) took
over the healthcare system, the patient and his or her
doctor were suddenly out of the loop. The MCO negotiators
met with the business executives and their employee’s union
representatives and the healthcare contract was settled to
the satisfaction of the union, the employer and the MCO. The
patient and the physician had no voice in the matter
what-so-ever and furthermore the patient’s personal
physician may not have even been included in the HMO’s panel
of “primary caregivers,” as we ultimately were called. The
patient was thus forced to seek medical care elsewhere,
attended by some unfamiliar physician who did not know them
as well as their personal doctor had.
A large survey of
companies, performed in September of 2007, indicated that
that the average healthcare plan for a family of four costs
an employer $12,100, with payment almost evenly divided
between the employer and employee. The price tag of an
insurance plan for a single employee was $4,400. Average
premiums increased 7.2% for all plans in 2007. That was at a
time when the median, net income of physicians was dropping
due to the increasing costs of practice without a subsequent
increase in reimbursement from Medicare or the HMOs. The
7.2% increase in dollars spent by the combined efforts of
the employer and worker obviously went to fund the multiple
layers of bureaucratic management. In fact, since the
institution of the MCOs, that were allegedly put in place to
stem the rising cost of medical care (which at the time had
been erroneously attributed to the wasteful misappropriation
of monies by those of us in the practice of medicine), the
costs of medical care have risen in a logarithmic
progression while the net, take home pay of physicians has
steadily fallen. The cost of a medical practice continually
rises due to increased malpractice fees, cost of goods and
office supplies, utilities and employee salaries, while the
reimbursement for physician services has been gradually
pared away by both the federal government‘s Medicare plans
and the MCOs.
For example, when I retired
from active practice in 1998, having never been sued, my
malpractice premium was $7,000 per annum; when I started
practice in 1967 it was less than $300/yr. As an internist I
and my fellow internists were at the bottom of the risk
scale; while plastic surgeons and obstetrician/gynecologists
lead the pack and paid 10 times that much in annual
premiums. Now an internist pays $25,000 per year, while
remaining at the bottom of the scale of risk and an
obstetrician in Dade Florida paid as much as $270,000/yr in
2004. My employees expected and received an annual increase
in salary and that also involved an increase in my
contribution to their 401K plan which was based upon their
base salary.
There has been a perpetual cost shift in the medical
economic paradigm. The physicians who invested many years of
their lives to learn the art and science of medicine and
surgery, who do the tireless, conscientious, dedicated
hands-on care in their attempts to point the health of our
citizens in a positive direction, have been deprived of a
portion of their income while that fraction, plus the steady
increase in insurance premiums every year, go to line the
pockets of the MCO administrators and their employees. As
long as that trend continues, we will see the cost of
medical care parallel the cost of driving our cars to
receive that care. Furthermore, fewer young men and women in
our nation will seek entrance to medical school and study to
practice in the profession I love so dearly.
MCOs, being bureaucrats,
have to find a way to justify their existence. They do that
by adding rules and regulations that have little or nothing
to do with the quality of care that you and I receive. If
the truth be known, given the time those rules and
regulations take from a physician’s work day, they may
actually have the opposite effect. Physicians and hospitals
have had to hire additional help to handle the paper work
and address the countless regulations which have been built
into the MCO and Medicare plans. When I entered into a year
of internship and three years of residency in internal
medicine at what was then known as the Youngstown Hospital
Association, that fine institution had 1000 beds and
residencies in internal medicine, surgery, family practice,
pediatrics, radiology, anesthesiology and pathology. It also
had a school of nursing and training for radiology
technicians. We were the tenth largest, teaching, community
hospital in the country. During my intern year, 1961-62, we
had one chief administrator and a medical director and they
shared the same secretary. The hospital ran like a clock and
medical care was excellent. After two years on active duty
with the USAF and during my residency in 1964 through 1967,
I saw more and more administrators added to the mix and when
Medicare finally impacted the hospital in 1967, with all of
its rules and regulations, the three piece suits
(administrative staff), records clerks, secretarial help,
etc. rose in direct proportion to the increasing number of
people who signed up for the federal government health
program. Needless to say, when the MCOs began there was a
concomitant and exponential rise in numbers of
administrators and clerical help. Even the nurses, who used
to spend most their time attending to the patients with
tender, loving care, were required instead to spend a
majority of the work shift filling out paper work. Where
once we saw registered nurses assisting patients in their
rooms, we eventually saw them spending more time writing in
the patient’s chart while sitting at a desk. National health
care will further exaggerate all of the current bureaucratic
interference without improving our medical care one iota.
While I have entitled this
series “Solutions to the Rising Cost of Healthcare,” being
an internist I have learned to seek the cause of a problem
(that’s called diagnosis) before prescribing the means to
evoke its cure; I.e. the solutions. The recommendations for
curing the problem will be forth coming but first we must
identify the disease process that got our system to be as
sick as it obviously is. Next week, we will look at that
Obama plan for nationalizing healthcare in more detail and
as you will see, it is not a solution. If anything it will
exacerbate the issues that caused the best medical care in
the world to suffer from its debilitation in the first
place.
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