Why does it cost so much here? My father is an anesthesiologist that retired early, here's an editorial he wrote back in 1992 that shows some of the beginnings of what we see today:
I'm a businessman. I used to practice medicine but now I'm in the business of medicine. I wasn't crazy about the change, but you and the government made me do it. Now you're complaining. I can't see why.
Since time began physicians have charged those who can pay in order to provide free care to those who cannot. When I began practice I did this. Many of my patients were well off. I charged them. Many were poor. I didn't charge them. If the poor wanted to pay me they usually gave me a gift, something like the proverbial chicken. I thanked them and went on practicing medicine. They got medical care and my family got fed. Now the government tells me I can't accept the chicken unless I figure out what the fair market value is and then report that as a tax liability. Which is subject to audit. I'm not sure how the government audits the chicken part of my taxes and I'm not sure what to keep in the way of records. Maybe the bones, but I have no idea how long to keep them. I'm supposed to keep regular records seven years, but the office gets a little gamy keeping poultry remains around that long.
As I said, I used to be able to render free care by charging those able to pay. The rich (you) paid for the poor. That way I could pay off my medical training loans (for twelve years of college, medical school and specialty training) and have something left to pay my secretary and rent.
I used to tell my secretary what to charge, and she told you, and you paid her, or you didn't pay, and that was the end of it. Then the insurance guys got involved and I had to hire another secretary to figure out all the forms and send them in, and that cost more so I raised my rates. Which made some of you, those without insurance who had been barely able to pay before, unable to pay at all and so you didn't pay, or didn't pay much. So I raised my fees to the insured patients to cover my increased losses on the uninsured. Fair enough. The rich pay for the increasing number of the poor. As it has always been.
Then lawyers and patients discovered that doctors weren't perfect, and began calling this to the doctors' attention. The insurance guys were delighted to help. They sold us malpractice insurance to ward off the financial ruin promised by the lawyers. The fees were small at first, but soon began escalating at about the same rate as inflation in the third world. So I raised my fees every year to cover the latest increase in the liability premiums. This caused more patients to be unable to afford my services, so they didn't pay. Some of them who still had insurance kept the check, since times were hard and they felt they needed it more than I did. So I raised my rates even more to the insured patients who did pay, to cover my losses on those who didn't.
Then the government got involved. They didn't like paying those high rates I was now charging so they passed a law saying that the government, through Medicare and Medicaid, didn't have to pay the health care providers (that's what they call the doctors) as much as everyone else had to pay. So in order to pay the bills and hire yet another secretary to deal with the inevitable government regulations I raised the rates on those not covered by government plans. And I began sending my patients who could pay, but didn't, to the collection agency. You (the insured) complained to me, to your insurance companies, to your congressmen. You felt you were being forced to carry more and more of the burden of medical care for the elderly and the poor. You were right.
Your congressmen, keenly aware that raising taxes to pay for the increasing numbers of citizens on government programs means losing jobs (theirs), have held the increasing costs and the decreasing votes at bay by reducing the amount the government pays the doctors and hospitals each year. So I've had to raise my rates again for those who can pay, in order to cover my losses from those who can't, or, in the case of the government, won't pay. This has caused consternation among the insurance companies, since they're now the only ones left paying the bills, and they have to charge you more and more to do it, and you don't like that. Which makes you less likely to buy their insurance, so there are more and more people who are uninsured, who can't pay, so I have to raise my rates on the diminishing number of insured patients in order to pay for the increasing number of unfunded and government patients. This makes the insured patients testy and more likely to sue should my high-priced remedies fail.
With the rise of malpractice suits the nature of patient-physician relationships has inevitably changed from cooperative to adversarial. When I saw you in the past I saw a friend in need. Now I see someone who will surely sue me if I miss the smallest detail, so I order lots of expensive tests and procedures so I won't look like an idiot just in case you have that one-in-a-million disease I've never seen before. These tests cost money. Your money. It doesn't matter that I've been in practice for fifteen years and have never been sued. You and the lawyers have me on the run.
The hospitals are in a similar crunch. The increasing government regulations require more staff, and more committees with more and more physician participation, none of which is reimbursed. In the past all my working hours were devoted to patient care. Now a third of my time is spent on useless committees and paperwork. With only two-thirds as many patients to see I have to raise my fees again on each patient to cover the time lost to the bureaucracy.
Your insurance company has responded to its need to control rising costs by cutting your benefits. So you won't be mad at them, they tell you that it's the doctors who are the bad guys. They threaten the doctors with participation agreements, telling us that if we sign on with the insurance company we'll be paid at a reduced rate, but if we don't participate we'll be paid at an even lower rate and will have to go after the patients for the balance. The government has joined this movement with similar participation plans which pay less each year. The net effect is that hospitals and physicians are working more and more for less and less. New Hampshire Medicare allowable charges for anesthesia, for instance, already the lowest in the nation, decreased 38% in 1991 and will decrease another 6% in 1992. This has enormous impact in poor rural areas like ours. Five physicians in Lancaster and Whitefield threw in the towel and moved out of New Hampshire in 1991.
Medicare rates will continue to decrease until at least 1996. This means that I will have to charge the insured patients (that's you) even more, to cover the government shortfall. The bottom line is this. In order to pay my office staff, my accountant, my professional liability insurance premiums and all the other people and expenses involved in running a business I need your money. I'm counting on you to cover your share of the costs of providing free medical care for the indigent, the elderly, the welfare recipients, the deadbeats and the bureaucracy. If you don't pay I'll have to take you to court. I wouldn't have done that fifteen years ago, but I was a doctor then. Now I'm a health care provider. I'm a businessman
