The Cost Conundrum

[Prof Moriarty]

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The Cost Conundrum - by Atul Gawande
http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?yrail

This is being discussed elsewhere, but I'd like to see what this forum thinks.

Note the description of the anesthesiologist towards the middle...

 

[sweetalkr]

i stopped my subscription to the New Yorker for the hardcore liberal bias exhibited in this essay.

If we want to stop making doctors businessmen, pay residents more money during residency. allow residents to have money to ACTUALLY save! then we won't start our careers in deep debt with a baby crying and a wife sick of the hours and little pay we get.
hospitals get 100,000$ per resident, yet we get paid like 40,000$. maybe give us a financial chance from hell to make a living while we are out of medical school so we can focus on health care.
This also does not address frivolous lawsuits. Someone was telling me the classic horror story about an ER doc that missed a dissecting vertebral artery, with a pt presenting wtih sore throat, that is it. An "ER doctor specialist" took the stand and said "I routinely order CT scans on every patient with a sore throat." ER doctor loses case and millions.

First off, the article talks about all these extra tests. well if we don't order these extra tests, YES health care costs go DOWN. But 1 in a million patients will have something serious missed. so is it cheaper to order the tests and not get sued, not order the tests and get sued, or MAYBE *GASP* not order the tests, not get sued, and chalk it up to SOL if the patient had no other warning signs?

my first thoughts after reading it

 

[Seba]

Great article! The bottom line is that the health system in this country is broken and will have to be fixed one way or another. We can't grow govt to run it and the current system is sinking us. Physicians need to run healthcare. Not the govt and not the ins cos. These grand junction organizations sound somewhat like how, the way I understand it anyway, academic medical institutions run. I like the quality accountability ideas, I like cooperative atmosphere that these organizations foster. what is not going to be popular is the salary pay structure.

 

[RabbMD]

You get my reply from the other thread. I know Dr. Gwande, and he is a good guy and a original thinker, but he is fairly typical in his academic non-entrepreneurial mindset. Nothing wrong with that, but here is the flip side as a I see it.

Medicare "overutilization" I am willing to bet closely follows low private insurance payer mixes. Since medicare rates are so pathetic then the only way for doctors to make money in a area with say an 80% medicare/medicaid mix is to either collect the relatively much better reimbursement M&M pays in facility fees or do a lot of cases. In the McCallan case it is likely both. If a orthopedic surgeon is faced with the low medicare rates then the natural response is to try to open your own surgery center to collect facillitiy fees. Once that is open, you have a strong incentive (two sets of fees both professional and facillity) to over utiliize. These surgery centers and physican owned hospitals are a direct response to lowering medicare rates IMHO. I bet if you looked at payer mixes, and the areas with lower medicare populations are least likely to have multiple physican owned surgery centers/hospitals.

However, just like evolution requires environmental pressure on a species to start to produce change, I am arguing that lowering reimbursement rates in low private payer regions act as financial pressure on physicians to either become entrepreneurial or just sit and get paid whatever medicare decides to pay them.

To start up a physician hospital requires enormous time, and capital investment risk. Believe me, most physicians are far from the best entrepreneurs. However, if your choice is take that risk and continue to make the 300K you were before medicare cuts or face a government mandated pay cut of 33% (or 67% if you are an anesthesiologist, data listed right here http://www.gao.gov/new.items/d07463.pdf) there are strong incentives to explore other income options.

I just do not get why doctors for one second believe that if a universal single payer is brought on board that payments to doctors would do anything but decrease drastically by fiat at arbitrary rates. Central planning of markets with price fixing is what brought about empty shopping isles in communist Russia, why would health care be any different?

 

[G0S2]

i stopped my subscription to the New Yorker for the hardcore liberal bias exhibited in this essay.

If we want to stop making doctors businessmen, pay residents more money during residency. allow residents to have money to ACTUALLY save! then we won't start our careers in deep debt with a baby crying and a wife sick of the hours and little pay we get.
hospitals get 100,000$ per resident, yet we get paid like 40,000$. maybe give us a financial chance from hell to make a living while we are out of medical school so we can focus on health care.
This also does not address frivolous lawsuits. Someone was telling me the classic horror story about an ER doc that missed a dissecting vertebral artery, with a pt presenting wtih sore throat, that is it. An "ER doctor specialist" took the stand and said "I routinely order CT scans on every patient with a sore throat." ER doctor loses case and millions.

First off, the article talks about all these extra tests. well if we don't order these extra tests, YES health care costs go DOWN. But 1 in a million patients will have something serious missed. so is it cheaper to order the tests and not get sued, not order the tests and get sued, or MAYBE *GASP* not order the tests, not get sued, and chalk it up to SOL if the patient had no other warning signs?

my first thoughts after reading it

In TX, however, there is Tort reform. Yet there was still a huge difference between El Paso County and McAllen in term of expenditures per capita.

 

[RabbMD]

And I have no data on this aside from living in the state previously, but what percentage of the patients have private insurance in El Paso (large engineering and mining base) and in McAllen?

Its the payer mix stupid is something I am betting on but do not know how to prove.