Interesting overview of American health care: present status, history and causes

[Jim Nickerson]

Re: Interesting overview of American health care: present status, history and causes

If you respond with the type of surgical procedure your child underwent I could give you a detailed breakdown of the costs.

In general, we charge for anesthesia services based on the procedure and the time we are directly and personally providing care. For example, an appendectomy is 6 base units to start the case and one additional unit for each fifteen minutes. So for an appy that lasted 75 minutes, I would bill for a total of 10 units 9rounding down on the time units). My charge is $70 a unit so the fee would be $700, before discounting. I have negotiated a discounted fee with nearly every insurance company that you can think of. Generally the discounted fee is around $50-55 per unit. By accepting a lower payment, I get a more prompt payment which is easier to collect.

So, if the patient is insured, my actual bill would be $500-$550. The insurance company pays me 80% of the fee and the patient is responsible for the 20% remainder. I have to bill the patient and they frequently stiff me. I send them to collections as a rule. If the patient is covered by Medicare, the gov't pays me $19.50 a unit and I am not allowed to bill the patient for the balance. My fee is therefore limited to $195.00. This is true for any Medicare patient, no matter their economic situation. Warren Buffett pays the same $195 as an impoverished elderly person. Since these patients are often very ill even before they come to surgery I have very little desire to provide anesthesia services to Medicare patients. Given half a chance, I usually try to go home early rather than work for that low of a fee. Medicaid is in the same ballpark.

As an anesthesiologist, I have many hours each week that are non-productive and unbillalble. Time between cases, time wasted waiting for surgeons, equipment, etc is simply lost to me. It isn't possible to increase my workload without leaving my current position and going back to doing much more complicated and risky cases. The only way to increase my income would be if I increased my fees but the fee is almost always discounted anyway. A few years ago, I decided to maximize my lifestyle rather than my income. I forego income and in exchange I limit my working hours and take a lot of time off. Like 12-16 weeks a year off.

I'm in private practice, handle my own billing, and pay all my taxes, practice expenses, fund my retirement, etc out of my gross receipts. Many anesthesiologists are in groups that can charge more because they have more negotiating power. I used to be in such a group. Our undiscounted fee was around $100 a unit (several years ago) so that is probably what you are dealing with in your case.

My contracts with the insurance companies specify that I can not negotiate a separate fee with their clients. I and you have to live by the rules. The patient who is uninsured is responsible for my full fee, which in the case of the appy would be $700. Needless to say, I rarely get anything at all from uninsured patients. They simply don't pay for services that have already been rendered. Nonetheless, I am an ethical person and I provide them the same excellent care regardless of their ability to pay.

I support the efforts to reform the health care industry. I think it is terrible that we have in this country, people who are unable to get the care they need, whether it is because they don't have insurance or whether the care is denied by their insurance company. At the same time, I think it is very important to recognize that health care expenses are largely due to lifestyle decisions that people make. For example, human diseases related to obesity account for about 10% of health care expenditures. That total knee replacement your neighbor had last month? Well, it was probably related to obesity; obesity related to junk food and soft drinks. Smoking more and enjoying it less? Well, society is paying for it! The ONLY way to decrease health care costs is to induce lifestyle changes that promote good health. Anything short of long-term lifestyle change is just shifting the costs around, from the patient to the government, from the insurance company to the patient, from the government to the taxpayer, etc. There is still no such thing as a free lunch!

This is a good thread, and, reallife, I appreciate your input into what truly are innumerable considerations.

I was and still at 68 y/o am naive about so much, but when I was 20 and applying to dental school I had no idea realistically what a dentist might earn, and at 28 in applying to oral surgical residency I had no idea as to what an oral surgeon might earn. I wanted to be a dentist because I thought, based on damned little I actually knew, that it would be interesting and could provide a better livelihood than that of my father, who was the rather much the equivalent today of a UPS delivery man.

I was attracted to oral surgery because it interested me much moreso than the prospects of practicing general dentistry or some other specialty. In both instances of choosing what to pursue, there was some notion that I would be my own boss--one actually never is, I don't think, when you are providing services for money to the people who pay you. I liked challenges and oral surgery offered me the greatest challenge. One supposedly learned how to do complicated things in residency and that continues in practice as the art and science progresses, and the best challenge was to get as many of the hard/challenging cases as possible and hopefully treat them successfully.

I was in a group practice of three people (in which I was junior and had little input), a two-man practice where I had equal input, and then a three-man department where I had some input, but only in the middle circumstance did I have to worry about the business aspects of running a practice, or at least worry much about that. The first and last experiences were the best in that it removed my having to focus on anything except trying to practice.

reallife, I believe you wrote you were a good anesthesiologist, and I don't believe all of any specialists or generalists are necessarily "good" at what they are supposed to be doing. Perhaps you'll consider yourself lucky if you live to be 65 and there exists something still equivalent to Medicare. If that happens and "good" anesthesiologists have rather much shied away from dealing with the old codgers on Medicare, then your needing a proven competent anesthesiologist will cause you a bit of worry (granted your answer might be you'll always know someone practicing your specialty and can get that person, but if you live long enough at some point that ploy might not be available, or might not be available in a trip away from your home town in the case of an accident).

My point is there is some sort of disconnect, I believe, between what may be an important reason, hopefully, most people go into healthcare as providers, i.e. the challenge, that being to learn a hard discipline and practice it, and then at some point choosing to turn away from the more challenging cases because of reimbursement considerations. To me, it is like saying or thinking: I will only do hard things if I am well reimbursed, which if it were to simply boil down to that being a truth, it is not very admirable in my opinion, and, reallife, I am not attacking you for what you wrote.

Such considerations might not exist under a salary-based reimbursement system with salaries based on training, time in practice, and quality of care assessments, etc. and some bonus kicker for hard workers. From day one that I ever pulled a tooth (a surgical procedure of sorts) to the last case I ever did--a chin augmentation (osteotomy) on an orthodontic colleage under outpatient gen. anesthesia by an anesthesiologist, I would have donated 50% of what I collected to charity if it were possible to equate what I charged to freedom from complications. I don't think anyone can do anything medically or surgically that is free from complications, and I don't care how much you know, how long you practiced, how attentive to every detail that can be ennumerated, if you do enough, shit will happen, and it is not circumvented by the fees charged or collected by the doctor.

Patients who present difficult management problems require greater expertise, and I could argue that such would more likely be achieved to the greatest degree if there were oversight to who does what. Take the years you spent mostly treating healthy patients in the military and compare that to a young guy in a diversified anesthesia practice in a small or medium sized town. He does not get to get all of the more "rountine" cases under his belt that you did, before possibly coming exposed to the "old codger" population with more problems. I'll guess you'll agree no one comes out of training being the best of anything compared to how they will or should be in 5, 10, 20 years of practice.

bpr, suggested to lower the standard for medical school. Might or might not be necessary in order to have adequate numbers of providers. Take certified registered nurse anesthetists. I did several hundred cases using hypotensive anesthetic techniques that were admininistered by two CRNA's, granted all on healthy people and alway with anethesiologists available, and never fortunately had an anesthetic complication of any significance. There are doubtless many other examples of non-doctor provision of certain levels of healthcare.

[reallife]

Re: Interesting overview of American health care: present status, history and causes

i'm not going to dispute with my doctor how much he charged, I just wanted to let you know that there is a lot padding between the fee you receive and the amount the patient gets billed. Using your parlance above my son's procedure which was for insertion of sub dermal tissue expanders it was billed at 4 starting units + 3 additional units.

If we get obama care does that mean that you are going to get paid at somewhere near 19.95 per unit for all of your work? Could you run a business on that? That's the rate my mechanic charges me to replace my timing belt!!!

Nobody wants to talk about the nitty gritty of this plan they want to speak in platitudes. The devil is in the details. I have not heard anyone say that the gvt would be setting the costs for services. If the do there is big difference between setting the fee at 19.95 and 80!!.

What are my costs in this plan? my premiums, my max out of pocket, deductible no one talks about that either. I'm sure they will say we can't know that until the plan is set up. but how can I support something if I don't know the details?

I assume your outta there if you have to work for 19.95. How many other will follow?

In my case, I do know what the patient is billed for. I thought I made it pretty clear that I bill for my own services. I am not an employee. For your child's care I would have billed your insurance company a total of $490, seven units at $70 a unit. No more, no less. Your insurance company would have paid me about $350-385 after the discounting. Depending on your deductibles and co-pays you would have been responsible for between $100 and $150. I think that amount is very reasonable for my services, which after all, are no less valuable than the surgeon's skills. BTW, the surgeon probably billed for the neighborhood of $2500 for the procedure. Maybe you could clarify that?

As for comparing my services with your mechanic, most shop rates that I have paid have been at least $100 an hour. Of course, the mechanic is probably an employee and makes $20-25 an hour. But he probably also gets plenty of benefits in addition to his salary: health care, retirement plan, paid vacation, Workman's Comp, and the employer's social security contribution and so on. Your mechanic probably didn't spend 12-14 years in training at his own expense to learn his job, either.

If the government thinks I will be able to increase my productivity to maintain my income in the face of reduced reimbursements they are mistaken. As I described earlier, I am not able to increase my productivity. My time is dependent on how fast the surgeon can do an appendectomy, how long it takes to turn the room around for the next case, etc. These are variables that I cannot control. If I had to depend on $19 a unit I would not be able to pay my malpractice and other business expenses, let alone fund my retirement, purshase my own family's health insurance, and pay myself a decent after-tax income. I would probably have to join a big group and work for a salary again. At least until I reach retirement age, which isn't too far off. ;)

[Jim Nickerson]

Re: Interesting overview of American health care: present status, history and causes

Here's an anectdote from a former colleague with whom I maintain some contact. He is a dept. chairman in a large university medical school and clinic, and of I him, I always have said if there were anyone whose skills, knowledge, and dedication that I could take unto myself it would have been his. He was also rather much an atheist, or close to it. Two and a half years ago he wrote:

"In the last 10 years I have had 2 cases of negative pressure pulmonary edema (also referred to as “flash” pulmonary edema) in young orthognathic patients. One was a patient of REDACTED and the other REDACTED. The first example of this was a young girl brought to the OR for 2-jaw surgery. Anesthesia overdosed her on nasal neosynephrine at the time of induction. She became tachycardic and they treated this with a long-acting beta blocker and she went into fulminant cardiac failure in the span of 15 minutes! The beta blocker compromised LV [left ventricular] contractility in the face of high system resistance (they should have given her an alpha blocker for the tachycardia). A transesophageal echocardiogram was done and her ejection fraction was horrible. I can’t tell you how difficult it was to call her mother (who left to run some errands) and ask her to come back to the hospital. At that time I prayed very little but I left the room momentarily and made a feeble attempt to say a prayer for this young girl as she was swirling down the toilet bowl. With some intensive medical mgmt. she recovered completely from this insult overnight in the MICU. She came back for one visit and elected not to have the surgery. I won’t bore you with the second case but it was equally frightening, also with complete recovery and successful surgical outcome. These cases were wake-up calls for me with regard to the risk of catastrophic complications, something that I had had no personal experience with. Whatever pleasure I might have derived from performing surgery has not been the same since these cases and I did not need a law suit to dampen my enthusiasm."

[reallife]

Re: Interesting overview of American health care: present status, history and causes

Indeed. Anesthesiologists in particular are in a difficult position as many times they never actually meet the patients they care for. In emergency surgery, no one thinks to ask who administered the anesthesia. I think a patient is more likely to toss the bill from a doctor they've never heard of than they are from a doctor they met or heard was going to operate on them.



Interesting point. The question is, where will he go?

I'm surprised that there isn't much talk of reforming medical school to lower the barriers to entry into the profession. It is as most clearly a racket as, say, law school.

You are mistaken on one key point. Of course I meet the patients I care for. I do a preop evaluation, decide on an anesthetic plan, explain the plan and alternatives including the risks, answer questions and than I am present in the operating room from start to finish. Then I take the patient to the recovery room and transfer care to the nurses when the patient is stable.

As I explained above, if I am forced to participate in some form of governemt paid plan, my income would drop very significantly. I will retire. I would have no choice but to retire. It wouldn't make economic sense to work for less than my practice expenses. Every hour I would go deeper into the hole. No one is suggesting that my malpractice rates will decrease under health reform. My rates average about a $1000 a week for each week that I work. That translates to about $25 an hour.

On a Medicare case, I gross about $80 an hour. After subtracting $25 for medical malpractice insurance off the top, paying my taxes, paying my billing expenses, buying my own health insurance, disability insurance, etc, maybe there is some money left over to pay myself and fund my retirement. Not enough to make me want to take Medicare cases. I prefer to go home and clean my garage.

As for medical school admissions, are you suggesting that the standards be lowered? Should we accept less qualified applicants? The limiting factor isn't the number of applicants. The limiting factor is the cost to educate a medical student. When I trained at the University of Illinois back in the early 80s, my tuition was about $5000 a year, in state. But the cost to the University, and the state of Illinois, was $35,000 per student, per year. So my education was subsidized by the taxpayers to the tune of $120,000. When I applied to med school, there were 7 applicants for every position. I don't think tha has changed very much. But if we want to train more doctors to increase the supply, the training must be paid for. Who will pay? The students, of course, but also society will pay via increased taxes, increased health care costs, etc. So you see, there are no easy answers. Like I said: there is no such thing as a free lunch.

[Debt-freeTICer]

Re: Interesting overview of American health care: present status, history and causes

From the general to the nitty gritty:

I'm a board certified anesthesiologist with over twenty years of experience beginning in the military. I'm now in private practice. My patients have come from a relatively healthy patient population during my military based practice to a practice consisting largely of critically injured patients suffering from multiple traumatic injuries and or multiple serious medical conditions.

My fees are steeply discounted. I charge $70 every fifteen minutes, but I don't remember ever getting anywhere near that. My insured patients pay me around $50-55 dollars per fifteen minutes through their health insurance companies. I can bill uninsured patients for my full, non-discounted fee of $280 an hour, but I rarely collect anything at all from these patients.

Most of my current reimbursement is based on Medicare rates. I get $19.53 for every 15 minutes of service. I think $80 per hour to care for the elderly patient who often has multiple pre-existing medical problems is a tad undervalued. Try calling a plumber to fix a broken water pipe at 3 am. I wonder what they would charge for a call like that? I'll bet it would be a lot more than $80 an hour.

Around 20% of my patients have no insurance whatsoever. These 'self pay' patients virtually never pay me for their care, which often comes in the middle of the night. My hospital subsidizes me to the tune of around $36,000 a year to provide care to these patients.

My malpractice liability insurance costs me around $32,000 a year. I have been sued three times. I made the mistake of agreeing to mediation on one of these cases. That one cost me $50,000 plus about $100,000 in legal fees. The surgeon paid out $3.4 million. In my opinion, the surgeon was 100% responsible for the poor outcome but I got tired of explaining why I was unable to save the patient's life. I will never settle another case out of court again. I will have a jury trial. None of these cases had anything to do with my care; they could be regarded as 'nuisance' cases. The other two cases were dismissed in my favor but only after my liability insurance carrier and I myself spent well over $100,000 on each case. Neither case went to trial; both were dismissed after years of legal manouvers, depositions, etc.

I have 14 years of education beyond high school. I was at the top of my high school class of 800 and graduated from college and medical school with honors. Back in the day, I used to help my roomates in college with their homework. Now they are plaintiffs' attorneys getting multi-million dollar settlements from medical malpractice settlements. I'm sure they earn their 40% 'share'. Meanwhile, I gross between $200,000 and $240,000 a year. I was lucky, I graduated from med school and residency with only $45,000 in debt. Recent grads average nearly $200K in debts. I am grateful that neither of my kids chose medicine as a career. I hope the bankers and lawyers choke to death on their bailouts and bonuses.

I have been self-pay for most of my working years (35). We have seven children. I have always paid the anesthesiologist. I have wondered why they all seem to bill separate from the other doctors and hospital charges, i.e. not able to participate in the payment plans to the hospitals or to negotiate much. I understand better now. If almost no one ever pays, when someone looks like they will, you need to get all that is your due. I always figured (or was it suggested by an anesthesiologist?) that I wouldn't have wanted the procedure without them.
Although, once again, I feel abused by the deadbeats who refuse to carry their own weight, not paying their bills.

[cindykimlisa]

Re: Interesting overview of American health care: present status, history and causes

About the trial by Jury business

I live in the sunny South.

About thirty years ago I served on several juries with some other local folks. We had an opportunity to see the system at play on several occasions.

Based on what we observed, we concluded if you were innocent and pleaded innocent then take the Judge.

If you were guilty and pleading innocent, then take the Jury. Judges have seen and heard a lot of stuff before. They also generally know and must go by the law. However, once in the Jury room the Jury can go around or over the law and vote based on "gut feelings" and or their own personal agendas.

[flintlock]

Re: Interesting overview of American health care: present status, history and causes

I think tort reform is mostly a red herring, and I would disagree that it has not been talked about very much. The talking heads rarely mention it, however almost all of the "angry mobsters" in the Town Hall circus have been mentioning it. My greatest fear would be that tort reform, and just tort reform, would happen to the extent that only the truly mega-rich can even afford the legal fees to have legal rights, or it otherwise takes the rights away from all Americans. However, since all three branches of government are dominated by lawyers, I do not see tort reform ever happening. I would agree that there should be some more well defined legal lanes to drive in, so to speak.

The real market manipulation is FIRE itself. Medical insurance is hardly an example of the free market in action; it's an example of corporate capitalism, aka textbook fascism. Unfortunately, the only type of health care reform that Congress would be allowed to do under the Constitution--which is the removal of state-border restrictions on insurance programs--isn't even being considered! So much for keeping interstate commerce regular.

I just think we will need a multi-pronged approach to reform. There is no one magic bullet that will fix this mess. Costs of care have to be addressed. A lot of that cost has more to do with fear of being sued than it does with any real care. But I agree any reform in that regard has to be carefully done.

The Insurance end of things is only one prong, but some think reform there will solve everything. It won't. But it could help.

Another prong nobody wants to discuss is that with ever advancing technology, comes advancing costs. To some degree, health insurance was cheap 40 years ago because we didn't have MRIs and as many other high tech yet expensive technologies. So thought needs to be put into how much care you get for your insurance. Call it rationing if you will, but that's just reality. And setting limits in spending is something we've forgotten how to do in this country. I'd like to drive a Lexus but can only afford a Ford. Does that mean the government is rationing autos? Go to most third world countries and I'll guarantee there is health care "rationing" going on. If you are poor, you don't get much. Most Americans should be glad for the care they do get, very often for free.

The Atlanta paper came out with a multi-page section on health care today. I didn't read it all, but it was the first effort I've seen to lay out some of the numbers involved in a clear manner. Nationwide, 47% of all dollars spent on health care came from government sources. So folks, you already have government healthcare. So no way is "free enterprise" going to sort this all out naturally. Government doesn't have to play by the free enterprise rules. And that skews the whole system.

In the article it also said the average insurance policy for a family of four is $12,680 year now. But the average portion the employees pay is only $3355. Sometimes I wonder if most employees realize how much their employer is paying, and if they did would it change their view on reform? Just for comparison, in 1999 the average family policy was $5791. Employee portion only $1544. At the current rate of increase, you can see how much trouble we could be in if we don't do something.

[Jim Nickerson]

Re: Interesting overview of American health care: present status, history and causes

About the trial by Jury business

I live in the sunny South.

About thirty years ago I served on several juries with some other local folks. We had an opportunity to see the system at play on several occasions.

Based on what we observed, we concluded if you were innocent and pleaded innocent then take the Judge.

If you were guilty and pleading innocent, then take the Jury. Judges have seen and heard a lot of stuff before. They also generally know and must go by the law. However, once in the Jury room the Jury can go around or over the law and vote based on "gut feelings" and or their own personal agendas.

It was lawyer cbr who wrote:

7) dont ever, ever let anything do away with the jury trial system; it is the last and only bastion of fair and equitable governance on the planet. It should be used much more broadly than just civil disputes and criminal charges; serving on a jury is YOUR **ONLY** opportunity to inflict rationality and justice on the world (Voting in the US now being a complete joke except occasionally at the local level). If you have not served on a jury you have no right to comment on anything the legal system does.

Until sometime after age 52 I never was called for jury duty because of being in school, military, residency, or practice. Had no idea what it was all about. Got called twice or maybe three times between 52-65 years of age. First thing you are told is how fortunate you are to participate in the US system of justice, and you should be proud--this was through a progaganda video for about 350 people. It didn't mention that for your day(s) off work assuming employment, you'd get ~10$/day, maybe more under some circumstances of being picked as a juror, and that there is no "job" in the country that pay less for something that is supposedly important--important enough to make one feel fortunate and proud. It is slave labor mainly for the purpose of keeping trial lawyers in business, and is the best effort to get people who probably are guilty found "not guilty."

What you have in jury trials in some cases may involve two areas of professional expertise 1) the intricacies of the law and in some cases 2) other higher level areas where expert testimony way outside the realm of the laity is given and disputed, and probably others things about which I don't know. The court and the system set about in a brief period of time to bring jurors up to "speed" in dealing with these issues. That is pure nonsense.

My experience with lawsuits was an "expert" in some cases in which I was deposed in my office, and in two cases as an "expert" where I testified in court. One case was won and one was lost by the side for which I testified, and to what degree the verdicts were seriously related to my testimonies I have no idea. In the case that was lost, it was out of state, and I was offered a first class flight there and back (not that I would have asked for that, much less demanded that), put up in nice hotel, fed, and then got to testify during which at least one of the jurors was asleep. F*cking asleep!! with a judge on the bench watching the bastard. Had I been the defendent doctor in that case I would never have gotten over being found "guilty" from a jury of which one was asleep at any time.

I strongly agree with cbr that doctors can really rip off the system in treating injury patients particularly those with soft tissue "injuries," or allegedly injured patients (again particularly soft tissue injuries) in which civil liabilities are at play, as well doctors can rip off the system in depositions and in offering expert testimony. Some are professional "experts" and from I pieced together years ago, some of the guys made more being "experts" / hour or per day than whenever they practiced whatever was their usual healthcare practice.

As time goes on probably neither legal proceedings and the law will become simpler nor will the technical issues involved in some cases. In my opinion, every day the jury system in the US become less adequate and more a relic.

In my opinion, a system more as the French have with a panel of judges would be better--only assumption to success with such in honesty in the judges. Such would at least involve people who know the intricacies of the law and should more readily recognize bullshit drama that seems so important when appealing to jurors.

Doctors, I don't think, are not the only ones who can rip off the system. I got sued just before I quit full time practice and the case went on for 5 years and 10 months, during which I got kicked around between three defense attorneys because of contracts the insurance companies had with various law firms, and over the time til the suit was finally settled, I went from having no insurance companies behind me, to finally having the three that all had an obligation to cover me. Though the defense attornies apparently all worked for discounted fees, it was my distinct impression by allowing this crap to drag on for 70 months, they bled the companies for all they could possibly have.

[flintlock]

Re: Interesting overview of American health care: present status, history and causes

If you respond with the type of surgical procedure your child underwent I could give you a detailed breakdown of the costs.

In general, we charge for anesthesia services based on the procedure and the time we are directly and personally providing care. For example, an appendectomy is 6 base units to start the case and one additional unit for each fifteen minutes. So for an appy that lasted 75 minutes, I would bill for a total of 10 units 9rounding down on the time units). My charge is $70 a unit so the fee would be $700, before discounting. I have negotiated a discounted fee with nearly every insurance company that you can think of. Generally the discounted fee is around $50-55 per unit. By accepting a lower payment, I get a more prompt payment which is easier to collect.

So, if the patient is insured, my actual bill would be $500-$550. The insurance company pays me 80% of the fee and the patient is responsible for the 20% remainder. I have to bill the patient and they frequently stiff me. I send them to collections as a rule. If the patient is covered by Medicare, the gov't pays me $19.50 a unit and I am not allowed to bill the patient for the balance. My fee is therefore limited to $195.00. This is true for any Medicare patient, no matter their economic situation. Warren Buffett pays the same $195 as an impoverished elderly person. Since these patients are often very ill even before they come to surgery I have very little desire to provide anesthesia services to Medicare patients. Given half a chance, I usually try to go home early rather than work for that low of a fee. Medicaid is in the same ballpark.

As an anesthesiologist, I have many hours each week that are non-productive and unbillalble. Time between cases, time wasted waiting for surgeons, equipment, etc is simply lost to me. It isn't possible to increase my workload without leaving my current position and going back to doing much more complicated and risky cases. The only way to increase my income would be if I increased my fees but the fee is almost always discounted anyway. A few years ago, I decided to maximize my lifestyle rather than my income. I forego income and in exchange I limit my working hours and take a lot of time off. Like 12-16 weeks a year off.

I'm in private practice, handle my own billing, and pay all my taxes, practice expenses, fund my retirement, etc out of my gross receipts. Many anesthesiologists are in groups that can charge more because they have more negotiating power. I used to be in such a group. Our undiscounted fee was around $100 a unit (several years ago) so that is probably what you are dealing with in your case.

My contracts with the insurance companies specify that I can not negotiate a separate fee with their clients. I and you have to live by the rules. The patient who is uninsured is responsible for my full fee, which in the case of the appy would be $700. Needless to say, I rarely get anything at all from uninsured patients. They simply don't pay for services that have already been rendered. Nonetheless, I am an ethical person and I provide them the same excellent care regardless of their ability to pay.

I support the efforts to reform the health care industry. I think it is terrible that we have in this country, people who are unable to get the care they need, whether it is because they don't have insurance or whether the care is denied by their insurance company. At the same time, I think it is very important to recognize that health care expenses are largely due to lifestyle decisions that people make. For example, human diseases related to obesity account for about 10% of health care expenditures. That total knee replacement your neighbor had last month? Well, it was probably related to obesity; obesity related to junk food and soft drinks. Smoking more and enjoying it less? Well, society is paying for it! The ONLY way to decrease health care costs is to induce lifestyle changes that promote good health. Anything short of long-term lifestyle change is just shifting the costs around, from the patient to the government, from the insurance company to the patient, from the government to the taxpayer, etc. There is still no such thing as a free lunch!

Great post reallife. Thanks for educating so many of us on how this works.

Its funny, reading a lot of it you could substitute a few words and almost any self-employed business person could relate. I know I could relate to this:

I have many hours each week that are non-productive and unbillalble. Time between cases, time wasted waiting for surgeons, equipment, etc is simply lost to me.

and this:

A few years ago, I decided to maximize my lifestyle rather than my income. I forego income and in exchange I limit my working hours and take a lot of time off. Like 12-16 weeks a year off.

People think when I bill out $70 hour( electricial contractor, small service jobs) that you take 40 hours X $70 and I'm netting $2800 week!. In reality, most weeks I'm lucky to bill out half that, despite actually working 40-50 hours. I used to work more but had to cut back due to health problems. The only reason I can get that rate is that I bust my ass and don't rip people off, so my customers are very willing to pay it. But as you can see, it's about as much as Medicare wants to pay you for far superior skills. Which is bullshit. And what is happening, and why I get pissed off, is that physicians are forced to charge more to the non-medicare/medicaid patients to offset the Medicare rates, so they can make a decent living. And yes, I think $250k year is about bare minimum for someone with that kind of investment in education and the opportunity costs that went along with it.

Sorry Jim, but I see nothing wrong with someone doing a difficult job mainly for the money. When I have to belly crawl across a damp crawlspace for 60 feet, through rat feces and spider webs, in 98 degree high humidity heat, I'm not ashamed to say that the only thing that keeps me going is the money. That's not to say I don't like my job, and take pride in it. And I do take the good with the bad. But in my specialty, most of the work is "the Bad". Some aspects of some jobs are more unpleasant, and unless you want to get stuck doing only the shit jobs, you have to either charge more for them or stop doing them altogether. In reallife's case, he is limited by insurance and medicare what he can charge. So I don't blame him for saying " I won't do it if the money is not there". That seems like common sense to me.

[Jim Nickerson]

Re: Interesting overview of American health care: present status, history and causes

Great post reallife. Thanks for educating so many of us on how this works.

Its funny, reading a lot of it you could substitute a few words and almost any self-employed business person could relate. I know I could relate to this:

and this:

People think when I bill out $70 hour( electricial contractor, small service jobs) that you take 40 hours X $70 and I'm netting $2800 week!. In reality, most weeks I'm lucky to bill out half that, despite actually working 40-50 hours. I used to work more but had to cut back due to health problems. The only reason I can get that rate is that I bust my ass and don't rip people off, so my customers are very willing to pay it. But as you can see, it's about as much as Medicare wants to pay you for far superior skills. Which is bullshit. And what is happening, and why I get pissed off, is that physicians are forced to charge more to the non-medicare/medicaid patients to offset the Medicare rates, so they can make a decent living. And yes, I think $250k year is about bare minimum for someone with that kind of investment in education and the opportunity costs that went along with it.

Sorry Jim, but I see nothing wrong with someone doing a difficult job mainly for the money. When I have to belly crawl across a damp crawlspace for 60 feet, through rat feces and spider webs, in 98 degree high humidity heat, I'm not ashamed to say that the only thing that keeps me going is the money. That's not to say I don't like my job, and take pride in it. And I do take the good with the bad. But in my specialty, most of the work is "the Bad". Some aspects of some jobs are more unpleasant, and unless you want to get stuck doing only the shit jobs, you have to either charge more for them or stop doing them altogether. In reallife's case, he is limited by insurance and medicare what he can charge. So I don't blame him for saying " I won't do it if the money is not there". That seems like common sense to me.

reallife didn't respond and I don't think he has to defend how he chooses to practice, but what I believe we have is a lot of highly motivated people choosing medicine, trying to be educated enough to practice a very difficult discipline, looking for challenges, and then ultimately abandoning them because of financial considerations. There are so many problems with the system, but part is there is no incentive of pure fairness when it comes to treating simple cases vs. complicated cases except to the degree one can come up with various coding variations to possibly charge and then collect more. Doing anesthesia for any appy on a healthy 20 year old should in a fair system should not be worth more than anesthesia for a 70 -80 year old having the same operation (if people that old still get appendicitis) regardless of who is paying the bill.

Take wisdom teeth, oral surgeons charge (or did) the same for taking out four on a healthy 17 year old as they used to charge for four impacted teeth on a 50-70 year old person, and I'll guarantee you it ain't the same operation between the two age groups. Young are generally easy, and old are generally much harder removing and getting over the removal with usually more after care. But dental insurance used to pay the same limit, and it was not a fair and honest system on the part of doctors or the insurance companies--younger's should have been cheaper and older's more costly.

Wife had a hand explored for what was thought to be, and turned out to be, a nerve that for unknown reasons had become constricted and was causing her to lose dominant hand function. Incidental to that altered hand function she developed a "trigger thrumb" which is a painful catch in the distal joint of the thumb when it flexes. Surgeon added the trigger thumb release to the operation on the morning she had the nerve exploration.

Hospital OP OR charge nearly doubled from what had been quoted for nerve exploration, though the thumb diagnosis and release of the impediment did not require more instrument trays, more redraping, or but probably 15 more minutes of surgery. The exploration of the palm of her hand to look for, find, and fortunately in her case release the nerve entrapment is perhaps comparable to a 45 foot jump shot with the buzzer going off, compared to the trigger thumb release which is perhaps comparable to a layup on the opening tip. Surgeon's fee for nerve exploration $1050, for the trigger thumb release $1000. Now get this: insurance company allowed $504.59 for the nerve exploration, and allowed $904.31 for the trigger thumb release. Now if you can make any sense out of that, I'd say you have the mental capacity of an idiot. But that is the system to which we have evolved, and it is crazy.

Incidentally, the anesthesia of sedation, an axillary nerve block (needle in correct place in armpit to inject local anesthesia), and monitoring was $890. First, the insurance company denied entire charge because anesthesiologist was not a participating member of BC/BS, but then we argued we were given no choice about who did anesthesia--it was never discussed. BC/BS reneged and allowed $601.47, and paid $451.11, and we the rest and anesthesiologist agreed to accept the cut of his fee.

In our lives we have fortunately so far been minimal consumers of healthcare and utilizers of health insurance. From what I know, if we were chronically ill and had to have one operation after another, just trying to sort through what I expect would be instances of overcharges by someone would drive me to some greater level of mental instability I do expect.

I think we can have a simpler, more cost effective, and perhaps even an improvement in some levels of care in the US. Unfortunately I think it will be a long time happening because of a lot of reasons (various vested interests) having to do with things beside serious effort to improve the system

[santafe2]

Re: Interesting overview of American health care: present status, history and causes

...I am present in the operating room from start to finish. Then I take the patient to the recovery room and transfer care to the nurses when the patient is stable.

I've been lucky to have a few medical professionals among my friends in this small town. Whenever I find myself taking my business or career too seriously I'm reminded by these associations that some people spend nearly half their productive life learning their trade so they might make a difference to us when we need it most.

In all our years on this earth we've only had one serious medical emergency in our family and it was with our then 3 year old daughter. As a serious illness will do, it arrived on a Friday. Her primary care physician and his 2nd both communicated with us several times over the weekend, finally telling us to take her to the state's university hospital as they were out of options.

Within a few minutes of arriving, the hospital had assigned a lead physician who communicated symptoms with CDC and we received probable causes and procedures. While it was a long recovery, she was at a crossroad. Without a correct diagnosis from people who were deeply concerned, she had 1-2 days left. As we learned later, it was the first case in our state in 5 years. Celebrity is not always something one seeks.

As I move through my life and we're all back to our usual healthful selves I wonder if we'll ever need the services of medical professionals again to save one of our family. I would not discourage either of my children from entering the medical profession if they have that calling.

I appreciate your on the ground reporting. I've tried to do this from my venue as have others on iTulip. Don't give up or feel the need to respond to all your detractors. This is an excellent forum, you'll find many supporters here.

[reallife]

Re: Interesting overview of American health care: present status, history and causes

...... Surgeon's fee for nerve exploration $1050, for the trigger thumb release $1000. Now get this: insurance company allowed $504.59 for the nerve exploration, and allowed $904.31 for the trigger thumb release. Now if you can make any sense out of that, I'd say you have the mental capacity of an idiot. But that is the system to which we have evolved, and it is crazy.

Incidentally, the anesthesia of sedation, an axillary nerve block (needle in correct place in armpit to inject local anesthesia), and monitoring was $890. First, the insurance company denied entire charge because anesthesiologist was not a participating member of BC/BS, but then we argued we were given no choice about who did anesthesia--it was never discussed. BC/BS reneged and allowed $601.47, and paid $451.11, and we the rest and anesthesiologist agreed to accept the cut of his fee.
....

Thanks for the comment, Jim. So the surgeon was paid $1400 and the anesthesiologist was paid $451 for the same amount of time. i rest my case....;)

[bpr]

Re: Interesting overview of American health care: present status, history and causes

The limiting factor is the cost to educate a medical student. When I trained at the University of Illinois back in the early 80s, my tuition was about $5000 a year, in state. But the cost to the University, and the state of Illinois, was $35,000 per student, per year. So my education was subsidized by the taxpayers to the tune of $120,000. When I applied to med school, there were 7 applicants for every position. I don't think tha has changed very much. But if we want to train more doctors to increase the supply, the training must be paid for. Who will pay? The students, of course, but also society will pay via increased taxes, increased health care costs, etc. So you see, there are no easy answers. Like I said: there is no such thing as a free lunch.

My concern was not the standards, but the cost; sorry I wasn't clear. When doctors are telling their children that med school isn't worth the cost, that's a major problem, to which I don't have an answer.

EDIT: I brought this up because I went to school with so many sons and daughters of doctors and lawyers, most of whom went on to med school. When I speak with them now (early-thirties), they are all deep in debt (six-figures). I remember this every time I delay payment on a treatment denied by my insurer... I'll get around to it.

[santafe2]

Re: Interesting overview of American health care: present status, history and causes

I brought this up because I went to school with so many sons and daughters of doctors and lawyers, most of whom went on to med school. When I speak with them now (early-thirties), they are all deep in debt (six-figures).

We have a program locally that supports medical doctors. No debt for anyone who will practice in NM for 10 years after achieving a degree.

[Ghent12]

Re: Interesting overview of American health care: present status, history and causes

I just think we will need a multi-pronged approach to reform. There is no one magic bullet that will fix this mess. Costs of care have to be addressed. A lot of that cost has more to do with fear of being sued than it does with any real care. But I agree any reform in that regard has to be carefully done.

The Insurance end of things is only one prong, but some think reform there will solve everything. It won't. But it could help.

Another prong nobody wants to discuss is that with ever advancing technology, comes advancing costs. To some degree, health insurance was cheap 40 years ago because we didn't have MRIs and as many other high tech yet expensive technologies. So thought needs to be put into how much care you get for your insurance. Call it rationing if you will, but that's just reality. And setting limits in spending is something we've forgotten how to do in this country. I'd like to drive a Lexus but can only afford a Ford. Does that mean the government is rationing autos? Go to most third world countries and I'll guarantee there is health care "rationing" going on. If you are poor, you don't get much. Most Americans should be glad for the care they do get, very often for free.

The Atlanta paper came out with a multi-page section on health care today. I didn't read it all, but it was the first effort I've seen to lay out some of the numbers involved in a clear manner. Nationwide, 47% of all dollars spent on health care came from government sources. So folks, you already have government healthcare. So no way is "free enterprise" going to sort this all out naturally. Government doesn't have to play by the free enterprise rules. And that skews the whole system.

In the article it also said the average insurance policy for a family of four is $12,680 year now. But the average portion the employees pay is only $3355. Sometimes I wonder if most employees realize how much their employer is paying, and if they did would it change their view on reform? Just for comparison, in 1999 the average family policy was $5791. Employee portion only $1544. At the current rate of increase, you can see how much trouble we could be in if we don't do something.

I find myself mostly in agreement with you. However, I must disagree with the technophobia. The cutting edge of anything is usually going to be the best available, but as the market for it starts to get situated, costs go down. In spite of the cost often charged for X-rays, they are actually quite cheap to perform, and have been around for decades. Technology costs might create some "upper limit" in terms of how old the population gets and how expensive health care becomes, but I think we are a long ways off before we see such a phenomenon.

The analogy about cars is a bit flawed, but we would all be lucky if it applied to health care! The 2009 Mustang GT I recently got for under $30,000 with lots of the options (leather seats, a glass roof, the overpriced upgraded sound system, etc.) is light years ahead of, say, the 2002 model, or the 1992 model, etc. I've taken a ride in a couple recent luxury cars, and they blow my Ford out of the water, for sure. Yet, I would have to say that my Mustang is probably more luxurious than most of the Luxury cars from the '90's and at a far lower price (in terms of purchasing power).

We also disagree with the power of market forces upon the health care system. You are right that the government subsidizes a huge portion of the cost, but that is also a huge part of the cost problem. Subsidized employer-side insurance is the cause of the horror stories of losing health care with employment. The lack of freedom to choose services, especially across state lines, creates multiple localized monopolies which is artificially maintained through policy.

The aspect of debt after medical school is big, but again, I think applying more free market principles there will help more than hurt. One primary cause of rising education costs is the enormous amount of government subsidies on student loans, grants, scholarships, and etc.

Fundamentally, I think that once people start to care about costs personally and from a policy perspective, they will come down. Unfortunately, we have something very much unlike that being considered for "nuclear Senate options" or whatever they want to call it.


You're right though, that the government doesn't have to play by free market rules, and that that skews everything. However, economic law is still in effect, and while the government might not feel the effects of its ignoring economic law, we are on iTulip because we recognize that the effects of government action will be felt elsewhere. Balance of payments crisis and inflation and all that.

Health care reform will probably be as successful as No Child Left Behind. Another unfunded or underfunded mandate that doesn't really accomplish what it is supposed to do. Except, as with seemingly every major policy decision President Obama does, it will be a bigger version of a mistake made by President Bush.