Posted on 03/18/2013 8:35:03 AM PDT by Kaslin
Last week, the National Commission on Physician Payment Reform released its recommendations, calling for the elimination of fee-for-service healthcare within the next 5 years. This organization, funded by the Robert Wood Johnson Foundation, is populated by physicians from academia, the insurance industry and from the public policy world. Having former GOP Senate Majority leader and cardiac surgeon Bill Frist serving as honorary chairman gives the imprimatur of bipartisanship and legitimacy. However, Dr. Frist, a former academic himself, has long favored a government supervised healthcare system, and is therefore less than objective in this regard.
The Commission was formed to assess by what means and how much doctors should be paid. Their position is that payments to physicians are one of the key drivers of escalating healthcare expenditures. They want to pay for the sustainable growth rate (SGR or "doc fix") by cutting physician payments for services, just as they aspire to hasten the implementation of the Affordable Care Act by fast tracking new and unproven concepts such as accountable care organizations (ACOs), patient-centered medical homes and value-based purchasing.
Sadly, the objectivity of this group has been clouded by its ideology and perhaps itsself-interests. Although physician payment is one of the components of healthcare costs, it is hardly the major driver. According to a 2012 study from Jackson Healthcare, compensation to physicians was 8.6% of healthcare costs, or $216 Billion annually- amongst the lowest of the major Western nations. Germany spends 15% of their healthcare costs on physician compensation, Australia 11.6% and France spends 11%.
Placing blame for runaway healthcare costs solely on physicians is simply an attempt to divert attention from the real perpetrators. In his recent Time magazine feature story, Steven Brill painstakingly outlined how hospitals throughout the country are generating obscene charges and profits. Over 30% of healthcare spending is generated by hospitals, a large share of which goes to managers and executives; many taking home seven figure salaries. Ignoring this, the Patient Payment Reform Commission wants to give the hospital administrators, through the new ACO model, even more control by directing payments to them, effectively making them the gatekeepers of reimbursements. The false narrative that has been created for public consumption is that in doing so, savings are created by consolidating and delivering care more efficiently and effectively. So far this is simply false.
Two of the major drivers of out of control healthcare spending are medical liability and the 3rd party payment system.
Medical liability costs, both the money spent to defend claims and the awards, is greater in the United States than in all of the Western democracies combined. The largest contributor to these costs comes from extra tests ordered by physicians, to protect themselves from frivolous lawsuits-defensive medicine. A Harvard study in 2008 calculated these costs to be about 2.4% of healthcare spending or $65 billion annually. The 2011 newsletter of the American Health Insurance Plans (AHIP) reported that these costs were actually somewhere between $650-850B annually.
The 3rd party payment system is perhaps the most potent driver of runaway healthcare spending. Without any restraint on spending, largely because individuals are disconnected from the costs of their healthcare, patients routinely expect tests and procedures that may be unnecessary simply because someone else is paying the bill. Doctors have little incentive to dissuade this behavior since the cost is also opaque to them and the threat of malpractice always lingers in the background.
Physician compensation is not the reason that healthcare costs are out of control. Annual healthcare spending is estimated to be $2.7 Trillion. There are many parties uninvolved in direct patient care, who have devised ingenious ways to get a share of this limited pot of money. If one considers that the basic relationship in medical care is between one doctor and one patient, and that the physician is responsible for referrals, tests, hospitalization and x-rays, it becomes clear how others could profit by controlling physician behavior and reimbursement. When doctors have less discretion over their decisions, entities that have had a hand in imposing these controls stand to profit, and they currently are. As a result of current regulation and payment policies preventing physicians from competing against hospitals, doctors are often forced to direct patients to these institutions, where costs are often as much as 10X higher for the same services that could have been offered in a physician owned center.
It is easy to be swayed by "experts" who find it quite convenient to make scapegoats of doctors and their compensation; attempting to convince the public that fee-for-service is the problem while using worn out clichés such as "doctors are being paid for sickness instead of wellness". Physician compensation plays a minor role as a driver of escalating healthcare costs. Anyone who suggests otherwise is protecting their own interests and deflecting scrutiny away from the real culprits- the hospitals, the insurance companies, the federal government, and the trial bar.
As my tagline says, socialism is slavery.
One thing I learned last year when I had surgery for cancer is that the doctor makes relative peanuts on the deal.
In my case about $3500 out of $65,000 total bill.
Frankly I was quite surprised.
So doctors could work for free without making a large impact on the total cost, at least in that case.
Can’t wait. Soon there will be all union staff in the health care system! How cool is that?
(Until the system crushes itself under it’s own weight.)
About 20% of nurses are unionized already. I’m sure this will increase fairly quickly in non RTW states because nursing will be one of the areas that gets pressured under BaraqqiCare.
Frist sold out conservative principles years ago....This group of nattering nabobs delude themselves and provide fodder for the ‘single payer’ nightmare of Europe and the Soviet Union (oops I mean Russia).
We must fight back hard against this type of nonsense. We waited too long on O care and are now trying to catch up
“Well, a right can’t require anything from anyone else other than they not infringe upon yours. Nothing anyone claims as a right can require property or labor from another.”
What about a contract right? If I have a contract with someone do I not have the right due to the contract to require property or labor from them according to the terms of the contract?
What about property rights? If your personal property in the form of a cow strays onto my real property, do I not have the right due to my real property ownership to require you to put forth the labor to remove the cow from my real property? Or, do I not have the right due to my real property ownership to take your personal property, the cow, for my own?
andyk,
I understand your exact use of language.
I agree with you.
If we allow them to take some of our paycheck, what stops them from taking it all? It's a question of magnitude... the basic premise is that they are already deciding what we get to keep. If we accept that premise, we have to accept when they decide it should be nothing.
Great question. It is not a binary step function. The greater the level of taxation the greater the servitude.
In the first case, you entered into a contract voluntarily. In the second case, your rights were violated. Presumably, the offender would be given due process before being deprived of life liberty or property. More than likely, s/he would voluntarily take care of the problem so it doesn’t come to that.
To say this is the creme de la creme of elitists would be understating the extremely obvious.
“In the first case, you entered into a contract voluntarily.”
I’ll take that as a “Yes, I have the right due to the contract to require property or labor from them according to the terms of the contract”.
But I think that, at least in part, negates the statement “Well, a right can’t require anything from anyone else other than they not infringe upon yours. Nothing anyone claims as a right can require property or labor from another”.
I have to step out for awhile. Maybe I’ll address the rest of the post later. Maybe.
If Congress has authority to establish a minimum wage for certain classes of employment, it certainly has authority to establish a maximum wage.
Why not just establish a maximum wage of, say, $50/hour for the entire healthcare industry?
Fewer and fewer people will want to engage on the supply side of this industry, and shortages will naturally occur. However, healthcare is unlike other industries in that current shortages are automatically resolved by unsatisfied market demand: that is, patients die off. Voila! Herein lies the ultimate solution to the entitlements problems.
This same argument should apply to politicians, police, fire and all government workers.
“Out with the old doctors. In with the new!” - Stalin
Kind of like the only way we’ve been able to talk about reining in the government is the sequester.
What happened to sequestergeddon anyway? Weren’t we all supposed to die by now of lack of government? Did they forget to do it?
There is your problem, right there. My husband was in private practice and is now in academia, Those who have never been in private practice have no clue where the money in their paychecks come from, at least the liberals, and they are in the majority. During the Hillarycare debacle one of his colleagues was on her task force. He described this person as a trust fund baby who felt entitled and was clueless to the realities of reimbursement. Just the type of person Hillary would deem an expert.
No, it’s not a yes, lol. You have a “right” to someones services because they agreed to it! That is a simple concept. You do not have a right to their services because you claim a right to health care.
It negates no statement I’ve made. In case it wasn’t obvious to you, we’re talking about intrinsic, natural rights. You have no intrinsic right to the fruits of my labor, unless I hand that over to you of my own free will. It’s not complicated!
"From each according to his ability...to each according to his needs."
Why should doctors "need" to live a better lifestyle than anybody else?
It was called the Kremlin ration. It was paid in special, non-inflated rubles linked to gold. And it carried with it the right to shop in special shops that carried goods unavailable to your average Rooskie.
Leonid Brezhnev's mother was still alive when he assumed the top job in the Soviet Union. This gave rise to a joke in which she visits her son:
"This is my house," said Brezhnev, showing her around. "And this is my car. And that's my swimming pool. And this" — he shows her some photographs — "is my second house. And this is my aeroplane. And this is my villa on the Black Sea. And this is my yacht!" His mother gasps in wonder."You do live well, Lyonechka," she says. "But I am nervous for you. What if the Bolsheviks come back?"
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