Hospitals make profits. But where do these profits go? Not to doctors. Doctors bill separately. The facility fee is the major cost of care. If the hospital is paid for the profits go to share holders. If the hospital has a mortage, because of the amortization schedule all the profits go to pay interest on the hospital mortgage, which goes to the banks which goes to other shareholders.
Look at what banks can do. They barrow money for almost free from the US gov with no amortization. They lend 10x that amount due to fractional reserve lending, and they collect 90% interest due to amortization for 20 years on a 30-year loan. When you save money you don't get significant interest until 20 years off. This creates a natural division or class system. Only a few people can break through the wealth barrier.
Business profits, stock dividends, US gov debt interest and hospital profits all go to the same ultra-rich, ultra-elite. Smaller banks would have never failed had they not been dupped into trading their 1/10th fractional cash reserves for worthless mortgage-backed securities.
We need to change how we lend and borrow money. The current system enslaves families and workers. I am all for profits and a free market, but the current system is a monopoly favoring the envestment bankers and ultra-elite. Locking us into our current banking and lending system is the motivation behind plans for a world bank and the cap-and-trade legislation. Furthermore, our current lending systems is responsible for the current housing problems, rising healthcare costs, stress on families, and the failure of the 3rd-world to industrialize.
If you don't believe what easy capital and credit can do, just look at what micro-credit is doing in 3rd-world countries and what school loan programs in the US can do to make higher education affordable and accessible for all.
Friday, August 28, 2009
Wednesday, August 26, 2009
Banking: The Root of All Evil
I should have gone into banking. Think about what just happened in the banking sector. A few big banks printed worthless pieces of paper called mortgage-backed securities. This paper funny money and other securities are called derivatives because they derive their value from other pieces of worthless paper. In this case their value was based on US mortgages. How we let any banks or companies print their own money is beyond me. Next, these few banks convinced other banks that it would be a great idea for them to buy a bunch of these trash derivatives and trade real money for them. Then, when the housing market collapsed, all these banks who owned these derivatives lost all their capital reserves and could no longer lend. Many of these banks then went out of business or were purchased by the bigger banks that were too smart to buy these securities or who were selling them.
The next thing that happened is that the big banks not even hurt by the downturn or maybe only slightly hurt went to the US for help and got it. What did they get? Banks got free money from the government. Banks got zero- or near-zero interest loans. But its worse than that. Banks can operate on a system called fractional reserve banking. This means that for every $1 they barrow, they can lend $10 or even $50. Banks say fractional reserve lending makes it so that consumers won't have to pay for them to store money. But since money is all electric anyways, that kind of reasoning doesn't make any sense. What banks are doing is creating money out of thin air.
Then when banks lend us the money, they lend it to us together with an amortization schedule which requires the barrower to pay interest up front instead of principal. The result is a loan where the first 20 years of payment are just paying rent on the money, and the principle doesn't get paid until the last 10 years of the loan. On the other hand, when you save money with your bank, they only give a small rate of interest at first, and not until 20 years have past does that interest start to significantly capitalize. So, all of us average people making minimum house payments pay all the interest will those that inherited money earn all the interest. And we can't get past the first 10 years because that's about how often we get a stock market crash and our 401ks become 201ks.
The result of this system creates a gap in society between the have and the have-not's. Those that borrow money are paying 85% interest up front, and those that are saving money are only earning 5% interest. This is in contrast to the rich or the banks themselves who are earning the 85% interest and only paying the 5 % interest. Our lending system is a form of slavery or indentured servitude.
And when you can't pay and your house goes into foreclosure, the bank really doesn't loose much money. They have already collected a ton of rent money already. And then they repossess your house and sell it for 50c on the dollar. But don't feel bad, because remember that most all that money the bank lent you, was created by the bank itself. The only reason many banks were hurt by the housing collapse was because they had invested what little capital they did have into these worthless mortgage-backed derivatives. So, when they realized how worthless they were, they didn't have the money to pay regular customers, they became insolvent, and they were allowed to fail. Yet, other banks were given free money with which they could magically create more money to lend and enslave more and more people.
But enslaving individual homeowners isn't enough. Banks want to enslave businesses too. So, banks came up with plan. Since, businesses recognized it was a bad deal to borrow from banks, banks decided to offer only a slightly better deal. They convinced businesses to issue their own money in the form of stock. In this way, businesses could borrow money from the people at a better interest rate. The truth is that the people are too busy paying all their extra cash to the banks very few have the money to invest in business. So, the real people investing in business are the same people who own the banks. The result is that a majority of the profits of a company go to pay the shareholders. Year after year, shareholders skim off all the profits from a company and company employees become slaves to the shareholders.
The negative effects of fractional reserve banking are that it creates a glut of money in the system that drives inflation. The negative effects of banks lending money with an unfair amortization schedule is that borrowers are forced to pay rent first before they can pay back the loan, thus making homeowners slaves to the bank. This again drives up inflation and the cost of housing as the only way to gain equity in your home is for the price to go up because a home owner really doesn't gain principal until at least 20 years out. The negative effect of businesses issuing stocks is that businesses become slaves to the stockholders. Again, the pressure to pay dividends and maintain profits drives up costs. These influences are also the real reason healthcare costs are rising.
So, what should we do? Get rid of fractional reserve banking. Formulate another way to determine interest that is more fair. Or just charge a fee to borrow money and don;t charge any interest at all. The Federal Government should be the only agency allowed to print money. And since they print money, they could also lend it to banks who would lend it to businesses at a fair rate where the business could quickly pay the loan off with little penalty.
However, our government itself is stuck in debt just like the rest of us. And the only hope of the federal government is to hope for inflation, so that makes them interested in continuing these same banking practices hoping that inflation will somehow contract our overall debt burden. But right now, our federal government is enslaved to the world banks and foreign countries under enormous debt. We have become less self sufficient as a nation and depend on foreign companies for many necessities. Therefore, we are also dependent upon our dollar to be strong so that we can afford those necessities produced overseas. And since Nixon took our money off the gold standard, we are dependent upon foreign countries and the ultra rich to lend us money, buy bonds, and buy our excess dollars. Every year over 30% of our federal budget goes to pay rent on the national debt. None of this money goes to pay principle which itself is added to every years are our congress runs yearly budget deficits.
Imagine if our families, businesses, and country could spend its own money on its own needs. Imagine if money could be borrowed and easily repaid. It would be easy to do if we could only lend and borrow money in a more fair way.
The next thing that happened is that the big banks not even hurt by the downturn or maybe only slightly hurt went to the US for help and got it. What did they get? Banks got free money from the government. Banks got zero- or near-zero interest loans. But its worse than that. Banks can operate on a system called fractional reserve banking. This means that for every $1 they barrow, they can lend $10 or even $50. Banks say fractional reserve lending makes it so that consumers won't have to pay for them to store money. But since money is all electric anyways, that kind of reasoning doesn't make any sense. What banks are doing is creating money out of thin air.
Then when banks lend us the money, they lend it to us together with an amortization schedule which requires the barrower to pay interest up front instead of principal. The result is a loan where the first 20 years of payment are just paying rent on the money, and the principle doesn't get paid until the last 10 years of the loan. On the other hand, when you save money with your bank, they only give a small rate of interest at first, and not until 20 years have past does that interest start to significantly capitalize. So, all of us average people making minimum house payments pay all the interest will those that inherited money earn all the interest. And we can't get past the first 10 years because that's about how often we get a stock market crash and our 401ks become 201ks.
The result of this system creates a gap in society between the have and the have-not's. Those that borrow money are paying 85% interest up front, and those that are saving money are only earning 5% interest. This is in contrast to the rich or the banks themselves who are earning the 85% interest and only paying the 5 % interest. Our lending system is a form of slavery or indentured servitude.
And when you can't pay and your house goes into foreclosure, the bank really doesn't loose much money. They have already collected a ton of rent money already. And then they repossess your house and sell it for 50c on the dollar. But don't feel bad, because remember that most all that money the bank lent you, was created by the bank itself. The only reason many banks were hurt by the housing collapse was because they had invested what little capital they did have into these worthless mortgage-backed derivatives. So, when they realized how worthless they were, they didn't have the money to pay regular customers, they became insolvent, and they were allowed to fail. Yet, other banks were given free money with which they could magically create more money to lend and enslave more and more people.
But enslaving individual homeowners isn't enough. Banks want to enslave businesses too. So, banks came up with plan. Since, businesses recognized it was a bad deal to borrow from banks, banks decided to offer only a slightly better deal. They convinced businesses to issue their own money in the form of stock. In this way, businesses could borrow money from the people at a better interest rate. The truth is that the people are too busy paying all their extra cash to the banks very few have the money to invest in business. So, the real people investing in business are the same people who own the banks. The result is that a majority of the profits of a company go to pay the shareholders. Year after year, shareholders skim off all the profits from a company and company employees become slaves to the shareholders.
The negative effects of fractional reserve banking are that it creates a glut of money in the system that drives inflation. The negative effects of banks lending money with an unfair amortization schedule is that borrowers are forced to pay rent first before they can pay back the loan, thus making homeowners slaves to the bank. This again drives up inflation and the cost of housing as the only way to gain equity in your home is for the price to go up because a home owner really doesn't gain principal until at least 20 years out. The negative effect of businesses issuing stocks is that businesses become slaves to the stockholders. Again, the pressure to pay dividends and maintain profits drives up costs. These influences are also the real reason healthcare costs are rising.
So, what should we do? Get rid of fractional reserve banking. Formulate another way to determine interest that is more fair. Or just charge a fee to borrow money and don;t charge any interest at all. The Federal Government should be the only agency allowed to print money. And since they print money, they could also lend it to banks who would lend it to businesses at a fair rate where the business could quickly pay the loan off with little penalty.
However, our government itself is stuck in debt just like the rest of us. And the only hope of the federal government is to hope for inflation, so that makes them interested in continuing these same banking practices hoping that inflation will somehow contract our overall debt burden. But right now, our federal government is enslaved to the world banks and foreign countries under enormous debt. We have become less self sufficient as a nation and depend on foreign companies for many necessities. Therefore, we are also dependent upon our dollar to be strong so that we can afford those necessities produced overseas. And since Nixon took our money off the gold standard, we are dependent upon foreign countries and the ultra rich to lend us money, buy bonds, and buy our excess dollars. Every year over 30% of our federal budget goes to pay rent on the national debt. None of this money goes to pay principle which itself is added to every years are our congress runs yearly budget deficits.
Imagine if our families, businesses, and country could spend its own money on its own needs. Imagine if money could be borrowed and easily repaid. It would be easy to do if we could only lend and borrow money in a more fair way.
Tuesday, August 25, 2009
Secondary Preventive Care Does Not Reduce Health Care Costs
The saying goes, "an ounce of prevention is worth a pound of cure." And that is true when you are talking about primary prevention. Primary prevention is what your mom and dad taught you growing up, such as hygiene, proper diet, exercise, how to handle stress, and spiritual faith so as to not harbor an irrational fear of death. This health knowledge and these life skills can and should be reinforced at school and at church. But they are primarily taught at home to children so that they become habitual and part of a culture of health. Hopefully, these life skills are passed on from one generation to another from parents and grandparents to children and between siblings and neighbors. In case where there are gaps in proper health knowledge and behavior, a pediatrician or other doctor and help remind and reinforce these lessons with parents so that this culture can be perpetuated in the rising generation. However, in a healthy culture, it is the parents that are the primary providers of health skills and disease prevention and not the doctors.
Other than vaccines, which can be given by non-doctors, medicine is not in the business of primary prevention. Doctors really don't have the time needed to transmit information on diet, meal preparation, hygiene, exercise, emotional wellness, end-of-life issues, and substance abuse avoidance. And even when doctors discuss these issues with patients the discussion rarely results in a change of behavior. Furthermore, by the time the topic comes up, the patient probably already has whatever disease the health information would have prevented. And because habits are hard to break, very few people are able to make the changes in their behavior that may slow or even reverse the disease.
There is a myth floating around that more doctor-based prevention will lower health costs. While primary prevention does lower health costs, the truth is, that other than vaccines, doctors do very little primary prevention. Secondary prevention is what physicians do. What is secondary prevention? Secondary prevention involves early detection of disease--period. So, in actual fact, there really is no prevention in secondary prevention. Secondary prevention does nothing to prevent disease onset, it only detects that disease process once it has begun.
Some might think that a doctor's focus only on disease is wrong and doctors should do more disease prevention. However, the reality is, medical doctors are trained and equipped to treat disease. Treating and managing disease is what doctors do. Like Jesus Christ said, "they that are whole have no need of the physician, but they that are sick."
Think about what happens when an adult visits their doctor. Your doctor will likely conduct a series of medical screening tests such as a lipid profile, a fasting glucose challenge, prostate specific antigen, and a colonoscopy. The purpose of these tests are for one purpose only, and that is to detect the presence of disease. None of these tests prevent chronic diseases such as diabetes, hypertension, coronary artery disease, chronic lung disease, dementia, or depression from developing. Only an interplay of genetics, environment, and behavior lead to disease or lead to health. That said, newer genetic testing, and testing for vitamin D deficiency or high cholesterol can inform patients of their risk factors for developing certain diseases, still, the prevention of disease still rests with behavior. That is why real prevention needs to begin at home with parents and children.
But doesn't the early detection of disease like cancer save money? You think it would, but in reality, early detection of disease actually increases health care costs. You don't believe me? We all have been told that 2/3 of health care expenses occurs within the last 6 months of life. With this in mind, it really doesn't matter if you die 6 months from now or 6 years from now, those costs will be the same. What secondary prevention and early disease detection do is make it possible for doctors to slow the progress of disease and therefore extend lifespan. But eventually, one disease or another will progress, become expensive, and kill you. Yes, early detection and management of disease will result in longer life, but that longer lifespan comes at a cost. So, in reality the kind of prevention that doctors do increases health care costs instead of lowering them. This is especially true if you are retired and no longer contributing value to society. And even in the case where a disease can be cured or reversed, the curing of that one disease will only lead to you dying of some other incurable disease.
The cost of disease management and treatment has a name and is assigned a value. Doctors and epidemiologists refer to the cost of disease treatment in exchange for life as the QALY or Quality Adjusted Life Year. A QALY tells doctors, insurance companies, health policy bureaucrats, and patients the cost of a particular disease treatment vs. benefit in terms of quality and quantity of life gained. Every disease treatment and procedure in medicine has a QALY associated with it. The QALY is the cost to manage disease. To give you an idea of what the QALY is and its value, kidney dialysis is the gold standard. Historically, kidney dialysis for those who have suffered complete kidney failure has a QALY of $50,000 per quality-adjusted life year. That means for every good year a dialysis patient gets from being on dialysis, the treatment costs the medical system $50,000. Treatments and procedures less than this mark are considered a good deal, while interventions more expensive than this $50,000 mark are of questionable value.
You can view QALY values by entering the following term into Google: QALY League Tables
If you detect a disease early you may begin by instituting low cost/benefit interventions, but eventually as the disease progresses, the high cost/benefit interventions will follow. Therefore, the only real result of early disease detection is that the low cost/benefit interventions will get implemented before the high cost/benefit interventions. Again, while implementing low cost/benefit interventions will prolong life, it only adds to the bottom line.
Now, please to not misunderstand my intent in writing this post. I am not suggesting that medicine or government or anyone should advocate that disease should not be detected and treated early. My point is that when we talk about reducing medical care costs, we need to be clear about how our health care system is organized, how it operates, and what are its associated costs. Only by a clear understanding of the system can we hope to implement changes to maximize its efficacy and efficiency.
Other than vaccines, which can be given by non-doctors, medicine is not in the business of primary prevention. Doctors really don't have the time needed to transmit information on diet, meal preparation, hygiene, exercise, emotional wellness, end-of-life issues, and substance abuse avoidance. And even when doctors discuss these issues with patients the discussion rarely results in a change of behavior. Furthermore, by the time the topic comes up, the patient probably already has whatever disease the health information would have prevented. And because habits are hard to break, very few people are able to make the changes in their behavior that may slow or even reverse the disease.
There is a myth floating around that more doctor-based prevention will lower health costs. While primary prevention does lower health costs, the truth is, that other than vaccines, doctors do very little primary prevention. Secondary prevention is what physicians do. What is secondary prevention? Secondary prevention involves early detection of disease--period. So, in actual fact, there really is no prevention in secondary prevention. Secondary prevention does nothing to prevent disease onset, it only detects that disease process once it has begun.
Some might think that a doctor's focus only on disease is wrong and doctors should do more disease prevention. However, the reality is, medical doctors are trained and equipped to treat disease. Treating and managing disease is what doctors do. Like Jesus Christ said, "they that are whole have no need of the physician, but they that are sick."
Think about what happens when an adult visits their doctor. Your doctor will likely conduct a series of medical screening tests such as a lipid profile, a fasting glucose challenge, prostate specific antigen, and a colonoscopy. The purpose of these tests are for one purpose only, and that is to detect the presence of disease. None of these tests prevent chronic diseases such as diabetes, hypertension, coronary artery disease, chronic lung disease, dementia, or depression from developing. Only an interplay of genetics, environment, and behavior lead to disease or lead to health. That said, newer genetic testing, and testing for vitamin D deficiency or high cholesterol can inform patients of their risk factors for developing certain diseases, still, the prevention of disease still rests with behavior. That is why real prevention needs to begin at home with parents and children.
But doesn't the early detection of disease like cancer save money? You think it would, but in reality, early detection of disease actually increases health care costs. You don't believe me? We all have been told that 2/3 of health care expenses occurs within the last 6 months of life. With this in mind, it really doesn't matter if you die 6 months from now or 6 years from now, those costs will be the same. What secondary prevention and early disease detection do is make it possible for doctors to slow the progress of disease and therefore extend lifespan. But eventually, one disease or another will progress, become expensive, and kill you. Yes, early detection and management of disease will result in longer life, but that longer lifespan comes at a cost. So, in reality the kind of prevention that doctors do increases health care costs instead of lowering them. This is especially true if you are retired and no longer contributing value to society. And even in the case where a disease can be cured or reversed, the curing of that one disease will only lead to you dying of some other incurable disease.
The cost of disease management and treatment has a name and is assigned a value. Doctors and epidemiologists refer to the cost of disease treatment in exchange for life as the QALY or Quality Adjusted Life Year. A QALY tells doctors, insurance companies, health policy bureaucrats, and patients the cost of a particular disease treatment vs. benefit in terms of quality and quantity of life gained. Every disease treatment and procedure in medicine has a QALY associated with it. The QALY is the cost to manage disease. To give you an idea of what the QALY is and its value, kidney dialysis is the gold standard. Historically, kidney dialysis for those who have suffered complete kidney failure has a QALY of $50,000 per quality-adjusted life year. That means for every good year a dialysis patient gets from being on dialysis, the treatment costs the medical system $50,000. Treatments and procedures less than this mark are considered a good deal, while interventions more expensive than this $50,000 mark are of questionable value.
You can view QALY values by entering the following term into Google: QALY League Tables
If you detect a disease early you may begin by instituting low cost/benefit interventions, but eventually as the disease progresses, the high cost/benefit interventions will follow. Therefore, the only real result of early disease detection is that the low cost/benefit interventions will get implemented before the high cost/benefit interventions. Again, while implementing low cost/benefit interventions will prolong life, it only adds to the bottom line.
Now, please to not misunderstand my intent in writing this post. I am not suggesting that medicine or government or anyone should advocate that disease should not be detected and treated early. My point is that when we talk about reducing medical care costs, we need to be clear about how our health care system is organized, how it operates, and what are its associated costs. Only by a clear understanding of the system can we hope to implement changes to maximize its efficacy and efficiency.
Thursday, August 20, 2009
Support Romney Care not Obama Care
PerspectiveI am an Emergency Medicine Physician who practices in South Carolina and Georgia. Working in an ER and on the front lines of our health care system. I hope that through my few years of working in the field that I have gained somewhat of a valuable perspective on health care issues. ER doctors are trained to be "big picture" kind of people. We don't get down to the nitty gritty like Internists but hopefully we recognize the elephant in the room. But, it is also possible I may be too close to the elephant to see it as an elephant.
Ideal Society and Plan A
So in my opinion, what is the 10,000 pound elephant in the emergency room, and what do I think of Health care reform? In a perfect world no one would ever have to visit an Emergency Room and the Federal Government would not be in the business of administering any social programs. The Founding Fathers specifically commented that they did not want the US to follow in the foot steps of Socialist Europe. The Constitution granted express rights to the Federal Government, and if those rights were not specifically stated in the constitution, they were reserved to the States and the individual. But over the last 200 years we have seen a weakening of States rights and the strengthening of the overreach of the Federal Government and the slow Federalization of America starting with the National Parks and Forests and continuing on with FDRs "New Deal" and LBJs "The Great Society" which began both the Social Security and Medicare.
Reality and Settling for Plan B
The other side of the issue is the human side. Yes, in a perfect society all accidents and ER visits would be preventable, everyone would have access to health care, and have their own doctor, and everyone would be able to pay for it all. But the reality is we don't live in a perfect society. While our laws should reflect and protect our ideals, we cannot and should not prohibit Plan B when we fall short of Plan A. What do I mean? I mean, when a patient comes into the ER and I recommend the optimal treatment plan, some patients reject that plan. While, because of my ego, it is very tempting to tell the patient, "It's my way or the highway buddy." In reality, It is my duty is to help the patient accept the next best Plan B or even Plan C if that is all they will or can accept. In the same way, while federal social plans are not the ideal, if that is what is required then limited programs should not be rejected without consideration. We just must always never loose sight of Plan A and that some form of limited social program may be a Plan B and may be better than the Plan C we currently have.
Right to Life and Health care
So, how does acceptance of Plan B apply to health care reform (as well as many other issues)? It is the most sacred duty of the Federal Government to protect life. And health care and access to health care is a large part of that protection. Currently, I am convinced that all Americans have a right to health care access. And the fact of the matter is that there is a shortage of primary care doctors in this country and there are millions of American citizens and illegal aliens living and working in the US who do not have insurance and therefore do not have access to doctors. This lack of preventive and specialty care is a violation of basic human rights. Therefore, a Plan B is needed.
Plan C and Our Current Universal Healthcare System
You may not realize this, but the United States has Universal Healthcare. ER doctors are federally mandated by EMTALA legislation to evaluate and treat every single patient that comes through the door and provide for them every resource available for any emergent condition or transfer and/or refer them to someone who can provide that emergency care. And ER doctors do this all over the country regardless of your gender, race, ethnicity, insurance status, or ability to pay, and even when we know you aren't gonna pay and even when you lying about your intentions to pay. It doesn't matter. In the ER we see everyone. And because we get a lot of non-ER business, instead of screening people and sending them away, all ER doctors do a lot more general medical care and urgent care then we do emergency care. In fact, we even build Fast Track, Urgent Care, and/or Express Care treatment areas staffed with PA's to focus on administering this non-emergent care. And because it is way more convenient, people and doctors themselves depend and abuse the ER like crazy.
Fractional Reimbursement
Why don't ER Doctors medically screen patients and just send them away to see their own doctors if they are not emergent? We don't send patients with non-emergent complaints away usually because so many serious illnesses start out with common complaints. Anthrax or N.Meningitis can start out with just simple cold and sore throat. Without talking to the patient, and getting their whole story it's impossible to tell if someone is just a cold or if they are at risk for something deadly. And because people can't get in to see their own doctor the very next day for followup, the risks of sending out patients to die, and the risk of getting sued for tens of millions of dollars is too much risk. And besides, once you have the history, that is the part that takes the longest, and since you have to fill out the same amount of paperwork anyways, you might as well treat their runny nose symptoms and charge them hoping that you some of them will pay you or that you can collect 35c on the dollar for Medicaid and 65c on the dollar for Medicare. Only the government can steal a $1 of services for 50c and get away with it. Try that Walmart . We aren't taking about haggling here. Instead, imagine walking into Walmart brandishing a police badge and a gun and tell the person at the register that they will give you the $1000 plasma screen TV for $500. That is the kind of thing the federal government does everyday in healthcare.
The Federal "Mercy" System
The ER is the safety net of the US Healthcare system. We see everyone. If you can't get into see your doctor, the ER will see you. Middle of the night, the ER will see you. No insurance, the ER will see you, No money, the ER will see you. Picked up drunk staggering down the street, the ER will see you. Demented nursing home patient with family who haven't visited you in months, the ER will see you. While my brother-in-law, who is a Federal Attorney, represents the Federal Justice System, the ER represents the Federal Mercy System. I feel like such an enabler some days doing my job. ER staff joke amongst ourselves that we are no friend to society, Darwin, or Natural Selection. The majority of people we help have emergent problems they they brought upon themselves by a series of poor decisions and we help many patients just so they can go on to make the same mistakes again. But, I always try to remind myself that I represent Mercy and I need to leave the Justice part to my brother-in-law. Although, it would be nice to have a Judge in the ER to provide some legal backup when I want my patients to stop smoking or eat right. Patient noncompliance has been determined to be a major contributor to healthcare costs and inefficiency.
Incentivize or Outsource
However, handling everything through the ER is not a good Plan B. Treating people in the ER is more like Plan D or Plan F. If there is one area on my medical boards that I could improve on it was in the area of Preventive Care. Doesn't the motto go "an ounce of prevention is worth a pound of cure." Accordingly, our health care system should encourage, incentivize, and enable more college graduates to go into medicine and healthcare-related fields. Our system should encourage, incentivize, and enable medical students to go into primary care specialties like family practice, pediatrics, internal medicine, and OB/Gyn. And our system should encourage, incentivize, and enable preventive care, along with quality and efficiency. But if we take the wrong steps, we can make the mistakes of Europe and punish doctors and then be forced as England does to outsource and import doctors from developing countries.
VA System vs. Fee-For-Service
There are a number of problems with our healthcare system that leads to its many problems and inefficiencies. The US currently operates both a Canada/French-like single-payer system called Medicare, and an England-like national healthcare system known as the VA system. You many not be acquainted with these systems unless you have been in the Military or their dependent. For the most part, they work okay. But much of their success I believe is that they are supported by the private sector. Many private doctors work in the VA system for extra money and bring some of their energy, motivation and ingenuity with them from the private sector. And further more what people don't understand is that when people in the Canadian system or the VA system cannot wait for urgent care, both go directly to the private US system to get exactly what they want and need when they want and need it. In this way the US private system is propping up the Canadian and VA systems.
Disincentives
Don't be fooled into thinking that the VA operates in a vacuum. If there were no private influence, I believe the VA system would run much more inefficiently then they already do. What do I mean? If you want to experience Canada-like wait times for procedures just get involved with the VA system. While the system does do a great job with primary and preventive care, I believe it lags far behind in specialty care. Some of that has to do motivation. Many doctors in the VA are salaried and do not operate on a fee-for-service basis. That means they get paid the same whether they see 30 patients or 5 patients. Consequently, it is routine that VA operating rooms and surgeons perform less procedures and operations. Doctors get to the hospital late and leave early. And why not? Why work more if you're not getting paid more. Surgeons who work at Private Out-patient Surgery Centers are well-compensated for each procedure. In fact, recently news sources reported a surgeon in India set a record for performing 24 knee replacements in a single day. While records for the sake of records is not the goal, quantity as well as quality is a factor in overall system efficiency.
Physicians or Technicians
Internal Medicine Doctors such as "House" on FOX are the "detail guys" and have historically prided themselves on focusing on all the subtle intricacies associated with the human body, health and illness. Surgeons have always been the "OR Jocks" of medicine. They get paid more for what they do with their hands more then the time they spend thinking about a problem and discussing treatment plans with the patient. But the issue is the trend in medicine has been to compensate procedures more and office visits less. That means that clinic-based practices have been forced to see more and more patients for the same compensation. Accordingly, Doctors have adapted by hiring mid-level providers like PAs (Physician Assistants) to see the routine stuff. But what this means in the end is that a patient is less likely to see his or her doctor at all, and it mean that if they do see their doctor the time they are able to spend with them is much less.
Facility Fees
Surgeons have had gone through some evolution as well. When a Doctor performs a procedure or test, they get a certain amount of money for doing the procedure or interpreting the test. If that doctor also owns the testing equipment, then the doctor can bill and collect an additional fee for the equipment. And if the doctor owns the hospital building where the procedure or test was performed, then that doctor can charge and collect what is known as a facility fee. Over the years, the reimbursement for many operations has gone down. A surgeon who takes out an emergent gallbladder or appendix at the hospital may only get $50 or less for the procedure if anything at all. Now Doctors and Surgeons are building their own Surgery Centers, Specialty Hospitals and purchase their own MRI scanners so the doctors who own the buildings and machines and can collect the facility fees. Hospital have responded to this and many times will build the out-patient surgery centers and will settle with being part-owners (49/51) with the surgeons. According to them, its better to have half the pie then no pie at all. The point of all of this is that the majority of healthcare costs are not going to doctors or even to maintain and expand the facilities. The majority of healthcare costs (the facility fee, and profits) are going to stock and bond holders. If you want to reduce costs, then we need to change how the US borrows and lends money at least to raising captital to build hospitals.
Same-Day Surgery
Out-patient surgery centers affect the ER patients because Surgeons are not very enthusiastic about covering the ER at night and coming in to do an emergent surgery in the ER that they wont get paid for. Also, when it comes to gallbladder surgeries. Because, surgeons don't make any money doing the operation in the hospital's OR, surgeons tend to prefer that the patient get discharged home and follow up to have the gallbladder removed in the Surgery Center. Many other operations that required one or two-day stay in a hospital are now being done as a same-day procedure. Now, it seems like this could result in greater risk to the patient, but actually, I have to admit, I am not seeing complications coming into the ER very often, and I think staying out of the hospital prevents many complications like infection with hospital superbugs and medication errors.
Consultant vs. Primary Doctor
Cardiologist used to be the quintessential internists. Cardiology still is the most competitive sub-specialty of internal medicine. But now-a-days cardiac cauterization and coronary stents are replacing bypass surgeries and putting Cardiothoracic Surgeons out of business. Cardiologist don't get paid well to consult with patients but to be technicians. Consequently, many cardiologist have become increasingly uninterested in admitting patients for anything other than what will require a heart cath. They are happy to consult on patients because it turns out that consulting on a patient is worth more than being the admitting physician and doing the work of an initial history and physical.
Observation Unit
Additionally, Cardiologist prefer not to even admit patients with chest pain unless it is going to lead to a heart cath. Many patients with chest pain don't need a heart cath and just require a treadmill or nuclear stress test to rule out the heart as the cause of their chest pain. However, stress tests are a test that cardiologists can do in the clinic and therefore make more money in the clinic because the own that machine. Consequently, cardiologist prefer the ER to be very disciminatory and send as many patients at possible home to follow up in clinic instead of being admitted and not going home until they have been stressed and completely ruled out. Sending patients home without a stress test means more money and less work of the cardiologist and more risk for the ED doctor and patient. Because internal medicine and cardiologist do not want to admit all these chest pain patients, many ERs operate what we call on Observation Unit adjacent to the ER. This is a unit where ER doctors admit patients overnight and can repeat blood work and obtain a stress test in the morning and have their chest pain completely ruled out as cardiac before leaving the hospital. The advantage of the Observation Unit is that the ER doctor can bill for the admission, the cardiologists can charge for being a consultant, and the patient gets their stress test. However, operating an ER-run Observation Unit has it's own issues and is not always possible.
For-Profit Hospitals and Debt
Hospitals can be big money-makers but at the same time are expensive and require a lot of capital investment. It is very unwise to go to a bank for a loan because of the unfair amatorization schedule makes paying off a large loan nearly impossible. So, what happens is companies print their own money in the form of stocks and bonds. This is almost worse than borrowing from the bank. Instead of being a slave to the bank you are a slave to the bond and stock holders. All the profits doctor's labor to earn go to nameless and faceless people to pay dividends on these investment. Consequently, very little money gets invested back into the hospital and into doctor's salaries. If people want to know the reason for higher healthcare costs, doctor salaries have not gone up significantly relative to inflation, the truth is that there are many non-doctors skimming off all the profits from hospitals. Not anyone can be a doctor. You have to have at least an above-average intelligence. And if you want more doctors, and considering the high costs of medical education, then you have to be willing to pay a reasonable compensation making medicine worth doing. But, if there is a place to find cost-savings, I think it a hospital owned by the doctors who work there would run much more efficiently and economically. But that would require physician groups being able to obtain loans at special subsidized rates making paying off the loan much easier. And if the doctors owned the facility and the equipment, they could collect those profits now escaping into mysterious pockets and they would not be tempted to own their own duplicate MRI scanners and same-day surgery centers but fully utilize the ones that are jointly owned by the hospital.
Debt, Family, and Vice
I would be very remiss if I did not discuss a huge contributor to ER abuse. The sexual revolution, resultant illegitimacy, borrowing and lending, and consumer debt are factors destroying families. We already know that sex and money are the main causes of divorce. But these problems affect families in other ways. Debt put a lot of burden on families. The home mortgage is an extreme hardship and with increasing costs of housing requires both mom and dad to work to pay the bills. With both parents working, spouses are not as emotionally available to each other or their children. When people experience stress and they do not have a person in their life to talk it out with, these people tend to turn to inappropriate mechanisms to escape the stress such as emotional eating, impulsive shopping, smoking, illicit drug use, prescription drug use, alcohol abuse, and sexual promiscuity.
Illegitimacy and Poverty
The sexual revolution following the discovery of birth control promised sexual liberation to women. But it turns out that many women don't get pregnant because they don;t know how to use contraception. According to my wife, many high school girls don;t feel valued in their own families and consciously or unconsciously desire to get pregnant because becoming a mother is an instant way to feel real important and find identity and purpose in life. If an unwanted pregnancy ends up in abortion, the guilt of having an abortion can lead to sever stress and depression and result in further damaging coping behavior. If a young woman keeps the baby, the mother and child will require additional social services and in many cases we see the culture of poverty and illegitimacy perpetuated throughout multiple generations. Illegitimacy is a major contributor to poverty, gang activity, crime, drug use, and all of those things lead to ER visits.
Life Skills
The pressure on the family due to debt and illegitimacy is preventing major life skills from being transmitted from one generation to another. Maybe I just cannot remember what I did and didn't know before I learned medicine, but many people are just so clueless about their bodies and when anything unusual happens them them physiologically, they have no one to explain it to them and invariably they are in the ER for reassurance after extensive expensive testing. People get up from bed and twist their knee a little and come into the ER thinking their leg is going to fall off or wanting an immediate fix. A woman who was breastfeeding developed a clogged milk duct and had to be instructed on how to treat it to prevent a breast infection which she had never heard of. Her mother;s generation didnt breast feed so she had no one even if they were home from work, to discuss it with. And her anxiety over her health prompted an immediate ER visit. This is just one of many examples of ER visits that could be prevented if families were the repositories of some basic health and diet knowledge.
Work Excuses
Busnesses and Schools need to stop requiring doctors to write these work excuses. If they want them, they should hire their own doctor to do them. People come into the ER all day long to get these because they are required, or the employee is skipping out on work and they want to provide falsified evidence of an illness.
Perscription Drug Abuse and Disability
One of the major abuses of the ER is people who come in lying about pain to get perscription pain medicine to take themselves or sell. There is no monitor for pain. It is a completely subjective experience. Therefore, doctors try and trust the patient and base their treatment of pain based on how the patient is experiencing it. Unfortunatly, some patients intentunatly lie about their pain. How do I know patients lie? I know because these same patients come back suicidal or wanting drug rehab which requires an additional ER visit, and confess to me they lie to get pills. While these patients may only represent 1 in 10 patients. Their impact on the ER is much more than just the lying and phych visits. Studies have shown that the major reason people go to the ER is that they cannot be seen by their doctor. But, having worked in the clinic, I discovered that the same drug seekers and disability scammers in the ER are the same ones in the clinic. So, instead of the clinic doctor seeing a legitamate patient, the doctor is seeing a drug seeker and the legitamente patient is forced to be seen in the ER. State programs that monitor prescription drug dispensing by pharmacies is a great tool to identify patients who doctor shop to abuse or sell pills.
Private Insurance vs. Medicare
The federal government already controls much of what goes on in healthcare. Since 2/3 of medical costs are paid in the last 6 months of life, it is not a stretch to realize that Medicare is paying for most of everyones health costs. And because Medicare is paying for a majority of all healthcare costs already, it is not a stretch to realize that they determine how much everything costs. Private insurance base much of their reimbursement policy on Medicare policy. Private Insurance is partly to blame. Private Insurance companies are the last people that want to insure the elderly. Private Insurance are only interested in people who are employed because they know people who are actively employed are generally very healthy and very unlikely to incure major medical costs. But once a person gets seriously ill, that person will generally lose, their job, lose their insurance, and then end up on Medicare, Disability, and Medicaid. When a person retires at age 65, then they are again dropped right at the moment when they can expect to need the majority of their healthcare costs. And who then is left to pick up the lab? The Federal Government Medicare program. It just doesn't make sense that a person who pays a company for insurance coverage over a lifetime can get dropped by that company and picked up by the taxpayer. It seems to me that private insurance should cover a person for their lifetime and money should be put away in medical savings account to be used later on during that last 6 months when 2/3 of the costs will be required.
Tort Reform
ER Doctors are under enormous pressure and we are federally required by EMTALA to see everyone. While people should be compensated for medical mistakes, doctors and especially ER doctors should never be sued for tens of millions of dollars especially considering the constraints of the job. I have poeple come into the ER all the time either threatening to assault me, kill me, or sue me. Believe it or not, we have enough pride in our work that the drive to help people is enough to be motivated to do our very best for the patient and be as diagnostically accurate as possible. No doctor likes to see a patient come back worse then before. If a doctor is guilty of medical negligency, that doctor should go to jail if intentional, or his medical licence should be suspended or revoked if he is incompetent, but no doctor should be the victim of obsene jury reward of mega-millions for emotional damages because of a human mistake.
Government Option
Pres. Obama and many Democrats have made it a priority that all Americans have health insurance and access to medical care. Accordingly, Pres. Obama has followed the tradition of the Democrat Party and LBJ in proposing a huge government-run insurance option to compete against private insurance. While there may be 45 million uninsured in America, I think that a government-run program would end up eating up a much larger market share than that. You can bet small businesses will drop insurance coverage when employees are able to get it for free. You can bet Private Insurance companies will find ways to drop the most sick patients when they know that the government will be there to pick up the tab. Also, Pres. Obama says people can keep their doctor. Well, if reembursement drops, you can bet there will be many doctors who decide that they will not accept governement insurance. Private Doctors are not required to see everyone who walks into their office like the ER. Government intrusion into the Private Insurance arena will have very negative effects on the natural market's ability to operate. I think government needs to and should regulate Private Insurance but not compete against them.
Romney Care
CNN ran an article yesterday from an NH doctor criticizing the Massachusetts healthcare reform plan affectionately known as Romney Care after Previous Governor and Presidential Candidate Mitt Romney. Instead of a bloated beurocratic Governemnt Insrance plan, Massachusetts is simply subsidizing the poor to buy their own private health insurance. State law determines what plans meet specific standards to be eligible for the state plan. The result is that Massechesettes has the highest rate of insurance than any other state. Consequently, the article on CNN.com yesterday complained that there were more people going to the doctors and ERs and that was somehow a big negative of the plan. Well, Im not sure that that kind of complaint is logical. If what you want is people to see their doctor and get preventive care, then when you insure everyone you are naturally going to get more people seeing their doctors, and more people seeing their doctors means longer waits, and longer waits means more ER visits. So, I guess I can anticipate that the ER business is going to be busy, but this time, I might actually get paid for what I do.
Preventive Care and Cost
Secondary Preventive Care does not reduce healthcare costs. When I say secondary preventive care, I am talking about the kind of prevention your doctor does which detects disease early instead of late. The real teacher of primary health prevention involving proper nutrition, diet and exercize is the family, church and school. I hear people talking about wanting to pay for doctors to talk to patients about psych issues, addiction, diet, exercize, smoking, and end-of-life issues. Don't get me wrong, I'd love to get paid to talk to people. But, a lot of this stuff should be handled in a family setting by parents and children. This is the kind of prevention that is worth a pound of cure. The kind of prevention that doctors do is called secondary prevention. Secondary prevention is about detecting a disease early. But if you detect it early, that means you were already doing all the bad stuff in the first place leading you to get the disease. And chances are that you wont change any of your lifestyle, exercize, and diet habits that led you to that point.
Secondary Prevention
So what does secondary prevention do? It allows you to live longer with your disease state. But one you have the disease, you have it and will likely die from it or a related complication. But the issue here is that while secondary prevention catches the disease early you are still going to die, and the cost of dying of a particular disease is going to be the same wether you die of that diesease now or later. But as far as cost go, it is actually cheaper if you die younger. I am not advocating anything like that. I am just saying that studies show that smokers actually may cost less than non-smokers as far as overall healthcost because they die younger. I mean the expensive last 6 months are going to be expensive at 55 or at 95. But if you die at 55, then you save all the intermediate costs associated with daily managing and treating all the many exacerbations of that chronic condition. So, the issue is not about saving money, but how much we are willing to spend in return for what kind of quality of life.
QALY
This stands for quality-adjusted life year and is a medical cost-utility analysis measurement. This is the kind of calculation that medical statistitions, epidemiologists, and masters of public health people come up with to put a number value on how much a particular procedure or treatment cost vs. how much benifit the patient receives. There are some interesting factors that go into obtaining these values. After the costs of a procedure or treatment is obtained, to determine the benifit of that procedure or treatment to the patient you do make a Time Trade Off or Standard Gamble assessment of their health. That is, you ask patients with and without the treatment if they could expect to live 10 years in their current state of health, if they could trade 1o years for X number of years of perfect health, how many years would they trade 10 years for. The lower the number X is the poor quality of health the patient is experiencing. Either that or the patient didn't understand the question. Standard Gamble involves asking the patient to imagine a scinario in which a certain proceedure carried the risk to restore them to perfect health or kill them. With regard to their current health, what level risk of immediate death would they accept to be restored to perfect health. The higher the risk the poorer the patients health. Therefore, using these two mechanisms and others like it, a cost-benifit value can be calculated and assigned to any procedure or treatment.
Gold Standards
The Gold Standard when it comes to the QALY is hemodialysis. When Medicare decided to cover hemodialsysis for those who have suffered kidney failure, the cost vs. the quality of life of this procedure was $100,000/quality-adjusted life year. Treatments and procedures more expensive then HD are considered by some to be too expensive and not worth it. However, you have to be careful with this data because even this kind of data can be fudged. Looking at a paper comparing hemodialysis, peritoneal dialysis vs. kindney transplant, the paper showed that the current cost of HD was 55k/yr, while PD was 35k/yr and KT was 45k/yr. But this was only the first year. If you read the paper closer, they confess that KT over the rest of the patients life end up to be 150k/yr being much more expensive than regular HD. Why is kidney transplant end up more expensive? This may be because kidney transplant patients take powerful cancer and immune drugs to avoid rejection and can get serious blood infections. Also, all kidney transplant patients eventually go into rejection and end up on dialysis eventually. But it seems for the first few years.
Decision Makers
Another brother-in-law who is very talented when it comes to residential and office remodeling work I think expressed the correct view that the QALY should not be used by government and insurance companies. QALY data is useful only for the doctor to explain and educate patients and families on what they can expect from the particular intervention. And then it should left up the individual and to the family to decide if the benifit is worth the risk and the cost to obtain the proceedure or treatment. But this is exactly the kind of thing government and insurance beaurocrats shouldn't get involved in.
CNN ran an article yesterday from an NH doctor criticizing the Massachusetts healthcare reform plan affectionately known as Romney Care after Previous Governor and Presidential Candidate Mitt Romney. Instead of a bloated beurocratic Governemnt Insrance plan, Massachusetts is simply subsidizing the poor to buy their own private health insurance. State law determines what plans meet specific standards to be eligible for the state plan. The result is that Massechesettes has the highest rate of insurance than any other state. Consequently, the article on CNN.com yesterday complained that there were more people going to the doctors and ERs and that was somehow a big negative of the plan. Well, Im not sure that that kind of complaint is logical. If what you want is people to see their doctor and get preventive care, then when you insure everyone you are naturally going to get more people seeing their doctors, and more people seeing their doctors means longer waits, and longer waits means more ER visits. So, I guess I can anticipate that the ER business is going to be busy, but this time, I might actually get paid for what I do.
Preventive Care and Cost
Secondary Preventive Care does not reduce healthcare costs. When I say secondary preventive care, I am talking about the kind of prevention your doctor does which detects disease early instead of late. The real teacher of primary health prevention involving proper nutrition, diet and exercize is the family, church and school. I hear people talking about wanting to pay for doctors to talk to patients about psych issues, addiction, diet, exercize, smoking, and end-of-life issues. Don't get me wrong, I'd love to get paid to talk to people. But, a lot of this stuff should be handled in a family setting by parents and children. This is the kind of prevention that is worth a pound of cure. The kind of prevention that doctors do is called secondary prevention. Secondary prevention is about detecting a disease early. But if you detect it early, that means you were already doing all the bad stuff in the first place leading you to get the disease. And chances are that you wont change any of your lifestyle, exercize, and diet habits that led you to that point.
Secondary Prevention
So what does secondary prevention do? It allows you to live longer with your disease state. But one you have the disease, you have it and will likely die from it or a related complication. But the issue here is that while secondary prevention catches the disease early you are still going to die, and the cost of dying of a particular disease is going to be the same wether you die of that diesease now or later. But as far as cost go, it is actually cheaper if you die younger. I am not advocating anything like that. I am just saying that studies show that smokers actually may cost less than non-smokers as far as overall healthcost because they die younger. I mean the expensive last 6 months are going to be expensive at 55 or at 95. But if you die at 55, then you save all the intermediate costs associated with daily managing and treating all the many exacerbations of that chronic condition. So, the issue is not about saving money, but how much we are willing to spend in return for what kind of quality of life.
QALY
This stands for quality-adjusted life year and is a medical cost-utility analysis measurement. This is the kind of calculation that medical statistitions, epidemiologists, and masters of public health people come up with to put a number value on how much a particular procedure or treatment cost vs. how much benifit the patient receives. There are some interesting factors that go into obtaining these values. After the costs of a procedure or treatment is obtained, to determine the benifit of that procedure or treatment to the patient you do make a Time Trade Off or Standard Gamble assessment of their health. That is, you ask patients with and without the treatment if they could expect to live 10 years in their current state of health, if they could trade 1o years for X number of years of perfect health, how many years would they trade 10 years for. The lower the number X is the poor quality of health the patient is experiencing. Either that or the patient didn't understand the question. Standard Gamble involves asking the patient to imagine a scinario in which a certain proceedure carried the risk to restore them to perfect health or kill them. With regard to their current health, what level risk of immediate death would they accept to be restored to perfect health. The higher the risk the poorer the patients health. Therefore, using these two mechanisms and others like it, a cost-benifit value can be calculated and assigned to any procedure or treatment.
Gold Standards
The Gold Standard when it comes to the QALY is hemodialysis. When Medicare decided to cover hemodialsysis for those who have suffered kidney failure, the cost vs. the quality of life of this procedure was $100,000/quality-adjusted life year. Treatments and procedures more expensive then HD are considered by some to be too expensive and not worth it. However, you have to be careful with this data because even this kind of data can be fudged. Looking at a paper comparing hemodialysis, peritoneal dialysis vs. kindney transplant, the paper showed that the current cost of HD was 55k/yr, while PD was 35k/yr and KT was 45k/yr. But this was only the first year. If you read the paper closer, they confess that KT over the rest of the patients life end up to be 150k/yr being much more expensive than regular HD. Why is kidney transplant end up more expensive? This may be because kidney transplant patients take powerful cancer and immune drugs to avoid rejection and can get serious blood infections. Also, all kidney transplant patients eventually go into rejection and end up on dialysis eventually. But it seems for the first few years.
Decision Makers
Another brother-in-law who is very talented when it comes to residential and office remodeling work I think expressed the correct view that the QALY should not be used by government and insurance companies. QALY data is useful only for the doctor to explain and educate patients and families on what they can expect from the particular intervention. And then it should left up the individual and to the family to decide if the benifit is worth the risk and the cost to obtain the proceedure or treatment. But this is exactly the kind of thing government and insurance beaurocrats shouldn't get involved in.
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