Want To Cut Health Care Costs? Stop Focusing On The Prestige Of Our Doctors And Hospitals

America spends more on its military than all other countries in the world and the same goes for its health care. There are many complex reasons why we choose to be the lead spenders in these industries, but there's also one simple reason. Prestige. We want the world to know we have the biggest and best military and the greatest doctors using the best medical technology available. This is so important to us that we are willing to pay any amount of money for it. This attitude would be somewhat logical if we could support it with data showing our investments are paying off, but that is not the case with health care.

Health Care Should Be High Quality, Not High Status

We don't all have a direct connection to the military but we all need health care at some point in our lives. Health care is a universal need. Consequently, there's no reason why we can't or should not share the limelight and financial responsibility for medical and drug research and innovation with the world. And there is no reason why we should
pay our doctors so much more than other doctors around the world. Or equip every major hospital with the latest in medical tech... The goals of good health and healing are the same the world over. A doctor is a doctor and a hospital is a hospital? Right?

Americans Are Health Care Snobs

It's a well-documented fact that
Americans have shorter life spans than other industrialized nations despite the fact that we pay so much more for health care than any other country. Surprisingly, some Americans outright dispute this fact or believe they can explain most of the difference in life span and costs. Most of these explanations point the finger at different groups.

  • Blacks and Hispanics are a huge burden on our health care system because of their obesity, chronic disease and poverty issues
  • Violence in minority and low-income communities
  • Health insurance company profits
  • Big pharma profits
These defenders of our no bargain health care system are unwilling to point the finger at the real groups gobbling up our health care dollars. Hospitals and Doctors. Their defense is that we have the best doctors in the world, the best health care technology and the best hospitals. The price is immaterial because it is balanced by the prestige of being the best, the biggest.

Countering The Price of Prestige Continue Reading...

Good Health Plan Design Can Counter Overtesting, Overtreatment and Overspending

We know that the unsubstantiated charges for physician and hospital care are the main drivers of out-of-control health care costs. We also know that health care affordability cannot happen until we restrict what we pay these two groups. Pharmaceutical and health insurance company prices are also out of control, but they never really claimed to have care-focused business models. Meanwhile, there is an assumption that doctors and hospitals have our best interests at heart and are not trying to harm us. Our bodies or our bank accounts… However, that sentiment is hard to support when you read reports of bills for $15 per Tylenol tablet and $23 per alcohol swab.

So how can we reduce doctor and hospital charges since neither of these groups is willingly going to take a pay cut? We do have a few options:

  • Force these groups to reduce their prices via government regulation
  • Ask them to be more price-sensitive when dispensing medical treatment
  • Design health plans that discourage over-testing, over-treatment and, therefore, over-spending
My feeling is that American doctors would strike (withhold their services) at the hint of government regulation of their pay. And, by design, we do not have enough doctors who would put their patients’ welfare above their pay concerns. Enough said.

Asking doctors to consider the cost of care at the diagnosis and treatment stage is not asking too much. Ideally, no one should have to ask doctors to consider their patients’ pocketbooks when prescribing care; it should be automatic. If less expensive treatment options exist, doctors should always give patients an option. The same goes for testing: if it is not absolutely medically necessary, doctors should let patients know more testing won’t help with a diagnosis or improve their condition.

The unfortunate and unacceptable reality is that many doctors and hospitals don’t do this. They over-tests and over-treat on a daily basis. All that over doing it adds up to a ton of money spent on worthless “medical care.” Still doctors have a lot of excuses for providing unnecessary care.

  • Don’t know the cost of care
  • Don’t have time to discuss cost with patients
  • Afraid of offending patients if they talk about cost
  • Afraid of being sued by patients
  • Want to concentrate on treatment, not cost
  • Feel pressure from patients to provide unnecessary treatment
  • It’s big pharma and health insurers who drive up health care costs
We can’t lower health care costs if doctors hide behind excuses, blame others or refuse to acknowledge the huge role they plan in inflating health care costs. Specifically, the over-testing and over-treatment that they alone perpetuate is a big reason that health care costs are so out of control.

So knowing that we cannot count on doctors and hospitals to police their own financially self-serving behavior, we need to create options for patients that don’t want to be part of this scam. One option is to allow health insurers to design and offer plans that limit a doctor or hospital’s ability to over-tests and over-treat. Plan designs such as narrow networks, reference pricing and use of bundled payments (centers of excellence) by insurers or employers have the potential to reduce unnecessary care. Insurers, led by the expertise of their medical review staff, can decide what tests and treatments have value and those that do not.
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Don't Cry For Employers Being Sued For 401(k) Fees

Employers sold employees on defined contribution plans like the 401(k) by convincing them that the plans gave them more control over their retirement savings. They decided how much of their pay to contribute and what investment funds to contribute to. Also, when they left the employer, they could take their retirement savings account with them. This was in contrast to the defined benefit pension plans that preceded 401(k) plans and that the employer controlled 100%.

But they also downplayed or ignored the risks and challenges of 401(k) plans. Or, maybe, employers had no idea what they were getting into when they started dumping their pension plans for 401(k) plans. They purchased prototype 401(k) plans and hired third party vendors to design fund lineups and serve as record keepers. They disseminated plan information to employees, collected contributions that they then sent to their vendors and called it a day.

Of course, sponsoring a 401(k) plan is not as easy as what I just described, but my point is that
employers admittedly had no or very little idea how much these plans were costing workers. And there is little evidence that plan fees were ever something employers paid much attention to. Sure they were happy when their hired plan administrators offered them lower cost funds, but they were not the ones initiating the action. Continue Reading...


Health Care Price Transparency Will Just Happen

So far, so good could be the health care industries motto for thwarting demands for health care price transparency. Whether it's taking requesters to court or maintaining outdated systems that make it impossible to comply with requests, their position is crystal clear. They don't want the public or the competition to know what they charge for their services. This allows them to charge whatever they want regardless of the cost to provide care. But how long can they keep this up?

The same has been asked of Donald Trump's poll numbers in his bid to become the next U. S. President. When everyone kept saying his demise was imminent. That one more outrageous statement would end his popularity, he continues to hold his lead as the national Republican presidential front-runner. But as
Vox Media's Ezra Klein pointed out in a recent article, he still thinks Trump will lose and his loss will just happen.

That's how I feel about the health care industries efforts to stall health care price transparency indefinitely. It won't work. They've pushed the nation's and individual American’s pocketbooks to the brink and the long push back has started. Granted, they are still winning this tug of war, but the rope is fraying.

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