Administrative Costs For US Doctors Four Times Higher Than In Canada

August 4, 2011 — Ron Chusid

Conservatives frequently blame costs associated with malpractice (including defensive medicine) for the growing cost of medical care in this country. While these are real costs which should have been addressed in the Affordable Care Act, there are two other costs to physicians which impact practice  the cost of providing medical care more than the cost of malpractice insurance. One is costs due to unreimbursed services involving patients without health care insurance. This problem should become minimal once we approach universal coverage but another problem will persist–the cost of dealing with multiple payers.

Health Affairs compared the overhead of physicians in the United States with those in Ontario where there is a single-payer system:

We estimated physician practices in Ontario spent $22,205 per physician per year interacting with Canada’s single-payer agency—just 27 percent of the $82,975 per physician per year spent in the United States. US nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans—nearly ten times that of their Ontario counterparts. If US physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year.

This cost added cost for dealing with multiple payers is over six times the cost of my malpractice premiums. While we should take advantages of saving money from malpractice reform, there are other changes in our health care system which could save far more.  Higher expenses such as these administrative costs also show why trying to cut reimbursement for medical care to that of other countries is not possible.

Posted in Health Care. Tags: , . 7 Comments »

Obama Attempts To Reframe Budget Debate Based Upon Reality

April 13, 2011 — Ron Chusid

Republicans, who ran up the deficit while claiming that deficits do not matter, have not been very serious about solving the problem they created. Paul Ryan’s proposal should be called the Banana Republican Budget as this is what it would turn the United States into. The Republican proposal primarily shifts wealth even more to the ultra-wealthy, does far less to reduce the deficit than claimed, and takes Draconian steps, including eliminating Medicare as a meaningful program. Barack Obama’s response lacked detail but was important for making an attempt to reframe the debate.

It is hard to do anything about the deficit is that the people who speak out the most against the deficit (such as those in the Tea Party movement) are totally ignorant about the actual causes of the deficit, blaming Obama rather than Bush, and are the ones who are also the most opposed to ending tax breaks for the ultra-wealthy. It shows the effect of Fox and the right wing noise machine that it was necessary for Obama to explain simple concepts like why we need to keep government functions going for the common good in his budget address:

From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America’s wealth and prosperity. More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.

But there’s always been another thread running through our history -– a belief that we’re all connected, and that there are some things we can only do together, as a nation. We believe, in the words of our first Republican President, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves.

And so we’ve built a strong military to keep us secure, and public schools and universities to educate our citizens. We’ve laid down railroads and highways to facilitate travel and commerce. We’ve supported the work of scientists and researchers whose discoveries have saved lives, unleashed repeated technological revolutions, and led to countless new jobs and entire new industries. Each of us has benefitted from these investments, and we’re a more prosperous country as a result.

Part of this American belief that we’re all connected also expresses itself in a conviction that each one of us deserves some basic measure of security and dignity. We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff may strike any one of us. “There but for the grace of God go I,” we say to ourselves. And so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, those with disabilities. We’re a better country because of these commitments. I’ll go further. We would not be a great country without those commitments.

In past years this has been  a great nation, as been able to accomplish great things. Now reckless Republican policies have created the current crisis. George Bush fought two wars off the books while Republicans practiced Voodoo Economics, claiming that tax cuts would increase rather than decrease tax revenue. He threatened to fire the chief Medicare actuary if he testified before Congress about the actual cost of his Medicare Plan, which was primarily designed to transfer money from Medicare to the pharmaceutical and insurance industries. Bush structured the tax cuts so that they would have the greatest impact on the deficit in the later years, attempting to transfer the blame to whoever his successor might be. The stimulus money spent by Obama, which kept the country out of a depression, represents a small amount of the deficit compared to these other factors. Obama pointed out who is really to blame:

But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program -– but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts -– tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.

To give you an idea of how much damage this caused to our nation’s checkbook, consider this: In the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.

Obama presented a view which is consistent with the values held by most Americans since the days of the founding of this nation, presenting a contrast to the Republican policies of destroying the economy and safety-net for the poor and elderly for the sake of transferring yet more of the nation’s wealth to the ultra-wealthy. He countered the pundits which have called Paul Ryan’s insane budget plan serious and courageous:

This vision is less about reducing the deficit than it is about changing the basic social compact in America. Ronald Reagan’s own budget director said, there’s nothing “serious” or “courageous” about this plan. There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. That’s not a vision of the America I know.

The America I know is generous and compassionate. It’s a land of opportunity and optimism. Yes, we take responsibility for ourselves, but we also take responsibility for each other; for the country we want and the future that we share. We’re a nation that built a railroad across a continent and brought light to communities shrouded in darkness. We sent a generation to college on the GI Bill and we saved millions of seniors from poverty with Social Security and Medicare. We have led the world in scientific research and technological breakthroughs that have transformed millions of lives. That’s who we are. This is the America that I know. We don’t have to choose between a future of spiraling debt and one where we forfeit our investment in our people and our country.

To meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I’m President, we won’t.

Obama vowed not to allow the destruction of Medicare as proposed by the Republicans, along with preserving Social Security. He proposed a framework for restoring fiscal sanity which is quite different from the GOP proposals, perhaps finally giving the Democrats a message to carry into the next election. Democrats need the courage to counter the Republican philosophy that tax cuts for the wealthy are always good and government action is always bad.

Of course neither party has a monopoly on being right, even if the Republicans have been wrong far more often since being taken over by far right-wing extremists. While health care costs must be reduced, Obama is relying too much on the Medicare Payment Board, which does present a very real risk of having non-elected individuals concentrate too much on cost at the expense of quality. While it does make sense to take Medicare partially out of the political process, the final say on any recommendations should be left to our elected representatives in a democracy. I am also disappointed that, when speaking of reducing health care costs, Obama said nothing about malpractice reform. While the current legal system accounts for a small smaller percentage of overall health care costs than Republicans claim, these remain very real costs which we should recover. Of course Obama did initiate a process rather than provide definitive solutions, and this might be a bargaining chip to be played in the future.

 

Posted in Barack Obama, Economy, George Bush, Paul Ryan, Republicans. Tags: , , , , , . 2 Comments »

Questioning Simplistic Answers In Health Care Policy

April 11, 2010 — Ron Chusid

We often hear simplistic explanations as to why health care is so expensive. Conservatives dwell on malpractice which, while reform would be desirable, is only responsible for a small portion of health care costs. Others argue that the problem is with unnecessary procedures. While I don’t doubt that there are some unnecessary procedures performed, I doubt this is the real answer. I see far more examples of under-utilization as many people either do not have access to care or their physician fails to provide all recommended care for chronic diseases.

Mike the Mad Biologist shares this view, questioning the study upon the belief that the problem is unnecessary procedures in some areas:

First, unnecessary procedures do not appear to be driving cost differences. What is driving cost differences? Price gouging. That is, certain hospital systems and medical practices have de facto monopolies, either through consumer loyality or market share. For instance, in 2000, Tufts Health Insurance (this is not associated with the university), in response to Partners HealthCare’ (which includes the Harvard hospitals) demands for much higher reimbursement rates, announced they would no longer include these hospitals. After a day, Tufts backed down. This wasn’t about unnecessary care: Partners simply wanted to charge more for the same care. This type of thing is still happening: now Tufts Hospitals is butting heads with Blue Cross.

The second problem, as I’ve discussed before, is that the claims of unnecessary procedures, to a considerable extent, are overhyped, at least in terms of costs*. That assumption is based on an analysis that conflated high-income low-need patients with low-income high-need patients. In other words, the supposed evidence that regional disparities in costs reflect unnecessary procedures didn’t take into account the role of poverty.

Sure, we should not provide unnecessary care. But much of the problem seems to revolve around anti-trust and poverty. We need to fix those things.

Posted in Health Care. Tags: , , , . No Comments »

The Final Push For Health Care Reform Has Begun

March 3, 2010 — Ron Chusid

The word from multiple sources, including Tom Harkin, is that Congress plans to go ahead with having the House pass the Senate health care reform bill and then use budget reconciliation to pass some fixes. Barack Obama made it clear in a speech today that he plans on pushing for a full health care reform package (full text under the fold).

John Judis sees this as an example of Obama learning how to be president:

Obama’s speech represents a major departure from the politics of his presidential campaign and of his first year in office. In his campaign, Obama pledged to defy partisan gridlock and to “change the way Washington works.” During the campaign, some liberal commentators believed that he was merely employing a clever tactic to highlight the rigid partisanship of his opponents. “If we understand Obama’s approach as a means, and not the limit of what he understands about American politics, it has great promise as a theory of change,” Mark Schmitt wrote in The American Prospect.

But it is now evident that Obama’s approach was what he understood about American politics—it was the guiding light gleaned from his years as an Illinois state senator—and he planned to apply it to Congress. And it was, of course, nonsense. Republicans were able to use Obama’s naiveté about their motives to undermine his initiatives. As Noam Scheiber explains in his profile of Rahm Emanuel, the principal obstacle to getting health care reform through Congress last year was Obama’s dogged insistence last summer that Senate Finance Chairman Max Baucus continue to plug away at nailing down a bipartisan agreement. What Obama got was not an amicable agreement but a summer of discontent, highlighted by Senator Charles Grassley’s  denunciation of Democratic “death panels” and by the emergence of the Tea Party movement.

But it’s not an easy job being president. It took Bill Clinton most of his first term to figure out how to do domestic and foreign policy. Like Clinton, Obama has stumbled, but his slip-ups have been more dramatic because, with the economy cratering and two wars raging, the stakes have been higher from the first.

However, in Obama’s speech today, and in his artful performance at the health care summit last week, he showed that he has learned something from his first year in office. Obama is now using the rhetoric of bipartisanship as Schmitt and other liberals thought he was doing in 2008: He is using it to paint Republicans as intransigent. He clearly no longer believes that a bipartisan agreement on health care is possible.

The final push has begun with many believing the plan is to pass a bill in the next two weeks.

(more…)

Posted in Barack Obama, Bill Clinton, Congress, Health Care. Tags: , , , , , , , , , , , . 3 Comments »

Republicans Were For Mandates, Purchasing Pools, and Effectiveness Research Before They Were Against Them

February 15, 2010 — Ron Chusid

The Democrats were on the verge of passing health care legislation by reconciling the differences between the House and Senate bills before they were shocked by the loss of Ted Kennedy’s old seat in Massachusetts. The White House is now working on such a compromise health care reform proposal. Of course the Republicans will attack regardless of what they do, even if the proposal is similar to what Republicans have supported in the past.

I have previously noted how Republicans supported the individual mandate until they saw political benefit in coming out against mandates. NPR’s Morning Edition had a report today which discussed how similar the current plan is to the alternative which Republicans offered to the Clinton plan in 1993:

…while President Clinton was pushing for employers to cover their workers in his 1993 bill, John Chafee of Rhode Island, along with 20 other GOP senators and Rep. Bill Thomas of California, introduced legislation that instead featured an individual mandate. Four of those Republican co-sponsors — Hatch, Charles Grassley of Iowa, Robert Bennett of Utah and Christopher Bond of Missouri — remain in the Senate today.

The GOP’s 1993 measure included some features Republicans still want Democrats to consider, including damage award caps for medical malpractice lawsuits.

But the summary of the Republican bill from the Clinton era and the Democratic bills that passed the House and Senate over the past few months are startlingly alike.

Beyond the requirement that everyone have insurance, both call for purchasing pools and standardized insurance plans. Both call for a ban on insurers denying coverage or raising premiums because a person has been sick in the past. Both even call for increased federal research into the effectiveness of medical treatments — something else that used to have strong bipartisan support, but that Republicans have been backing away from recently.

Republicans are also being contradictory in both demanding that the health care proposal be posted on line and in attacking the Democrats for agreeing to post their proposal on line seventy-two hours before the planned health care summit. The Party of No will object to anything–even their own demands.

Posted in Congress, Health Care, Republicans. Tags: , , , , , . No Comments »

Republican Ideas on Health Care

February 10, 2010 — Ron Chusid

The main strategy of Republicans is to block any meaningful health care reform. Their overall plans would do little if anything to help the uninsured, increase the ability of insurance companies to avoid consumer protection laws by operating out of the states with the weakest regulations, and would increase out of pocket expenses for most people. However, when Republicans have made suggestions which could be considered as part of an overall health care reform measure many Republican ideas have already been included.

Newt Gingrich and John C. Goodman list several suggestions in an op-ed in The Wall Street Journal. This hardly represents a meaningful health care reform proposal but many of the Republican ideas are already included in the current health care legislation. The Wonk Room goes through many of these suggestions noting how many are now in the bill. I’ll just add comments on a few of the topics.

The Republicans are trying to portray themselves as the defenders of Medicare  after years of trying to destroy the program. The Medicare cuts being proposed are not serious cuts to the program. Most of the cuts would be to Medicare Advantage programs which use the bulk of the subsidies they receive to increase profits for insurance companies and sometimes use a small amount to provide extra benefits to entice customers. In addition, if there is near-universal health care it will not be necessary to fund as much money for Medicare to pay for added expenses due to cost shifting because of the uninsured.

The article is misleading when it says Medicare pays doctors by the task but  doctors “do not get paid to advise patients on how to lower their drug costs.” No, there is not a CPT code for advising patients on lowering drug costs but Medicare does pay for office calls in which such matters can be discussed, and does pay more when more time is spent counseling patients.

They also write that “Under Medicare, doctors are not paid if they communicate with their patients by phone or e-mail.” True, but the same is true of most private payers. This is an area which is just starting to be considered. It could either be added to health care reform legislation or could be added in the future.

Gingrich and Goodman advocate meeting the needs of the chronically ill but one of their key recommendations for doing this will not have this result. They write that “Having the ability to obtain and manage more health dollars in Health Savings Accounts is a start.” The problem is that when people with chronic diseases have to pay for more expenses out of money in their own account they tend to avoid many necessary tests and office visits to save money. In the long run this leads to poorer outcomes and higher costs. There is also the danger of these accounts being depleted leaving patients with chronic medical conditions without sufficient coverage.

They also advocate eliminating junk lawsuits. I agree, but Republicans tend to greatly exaggerate the effect of this. Malpractice suits and the resultant defensive medicine do result in wasted money we should attempt to recover but this is a small part of overall health care costs. The health care legislation does provide for state demonstration tests regarding tort reform. I would be happy to see some actual solutions included in the bill. Perhaps if the Republicans took an attitude of compromising to get their ideas included, as opposed to all deciding early on to vote against health care reform, they might have been successful in having more concrete solutions for tort reform included.

Posted in Health Care, Newt Gingrich, Op-eds, Republicans. Tags: , , , , , , , , . 5 Comments »

Obama Proposes Bipartisan Health Care Summit

February 8, 2010 — Ron Chusid

While it is important that health care reform be passed, I have been hoping for an alternative to ramming through the Senate bill, at least before more is done to explain the actual legislation to the public. It would be unfortunate if the political result of health care reform was to lead to the election of more Republicans who are hostile to health care programs.

Many people seemed to see the slow down in action after the loss in Massachusetts as a sign that the Democrats had given up on health care reform. I thought it was more plausible that they were taking a little time to reassess their strategy. Now we are beginning to see the results of this as Barack Obama is planning a televised summit on health care for February 25.

It is important at this point that Barack Obama takes the lead. He is more popular than either the Democrats or Republicans in Congress, and we saw that after he spoke out on health care in August that support for reform increased. We also saw how he is able to debunk Republican talking points last week.

Obama is inviting the Republicans to the health care summit. That is an excellent idea. So far they have shown no sign of willingness to offer any serious solutions yet they constantly repeat the same empty statements as if they made some sense. If Republicans are going to continue to do nothing more than obstruct legislation, let the voters see this.

Let the Republicans suggest that we open sales of insurance across state lines on television. Obama can explain that this is included in the health care reform proposals–but this can only be done if there are nation-wide regulations to protect consumers. Obama could go on to explain that the main reason the Republicans are pushing this for the insurance companies which are calling the shots is that this would allow insurance companies to all operate out of the states with the weakest insurance regulations. This might result in less expensive insurance being sold, but such policies would provide very poor coverage to those who are sick.

The Republicans can also push for malpractice reform. Obama could explain that this would only result in a very small reduction in overall health care costs. However, Obama has previously expressed willingness to consider malpractice reform and, while the potential savings are greatly exaggerated by Republicans, they should not be ignored. Malpractice reform is not possible in a health care bill written by the Congressional Democrats, who represent the interests of the trial lawyers as faithfully as the Republicans represent the  interests of the insurance and pharmaceutical industries.

Perhaps an open, televised health care summit could lead to agreements which get past these partisan differences. There is even a long shot that Republicans would be forced by such open coverage to agree to support a compromise bill which might correct some of the problems in the Senate bill. Even if nothing comes out out of the meeting, it is still of value to discuss these matters openly.

Some on the left have been attacking Obama for trying to appeal to Republicans, claiming it has been a failure because no Congressional Republicans are giving him any support. What they fail to recognize is that seeking bipartisan support does not only refer to members of Congress. It also refers to people who have voted Republican in the past but either voted for Obama in 2008 or are open to voting Democratic in the future. The way to secure these votes is to show a willingness to consider Republican ideas, along with showing their failings if Republicans do not come up with any better ideas than they have to date.

Posted in Barack Obama, Congress, Health Care, Republicans. Tags: , , , , , . 33 Comments »

Health Care Reform Critical But Not Dead

January 26, 2010 — Ron Chusid

The prognosis for health care reform is rather guarded at the moment. House majority whip James Clyburn is saying that the House will pass the Senate bill if there are assurances that fixes will be made through a separate budget reconciliation bill. It is far from certain that the Senate will be able to do this. Reports coming out of the Senate do not sound like they are prepared to make such an arrangement to pass such fixes even though only 50 votes (plus Joe Biden as tie breaker) are needed.

Two conservative Democrats, Blanche Lincoln and Evan Bayh, have already stated they will not support a reconciliation measure. The two Senators from Connecticut, Chris Dodd (Democrat) and Joe Lieberman (Schmuck) are suggesting that President Obama use the State of the Union Address to “re-invite” the Republicans back to negotiate on health care legislation. So far the Republicans have not shown any interest in negotiating, preferring to block any legislation trying make the Democrats look like failures regardless of how much they harm the country. So far their strategy might be working.

While I am extremely pessimistic about the Republicans being willing to negotiate in good faith, if they should shock us all there could even be one benefit. Perhaps a deal could be made in which the Democrats do concede one point to the Republicans and proceed with malpractice reform. This will have a far smaller impact on health care costs than Republicans typically claim but we should not overlook any source of savings such as this which does not require reductions in care provided.

Posted in Barack Obama, Congress, Democrats, Health Care, Joe Biden, Republicans. Tags: , , , , , , , . 7 Comments »

Republican Folly Harms Both The Country And Conservative Interests

January 1, 2010 — Ron Chusid

In December I concluded a post by saying, “The Republicans cannot be taken seriously when they refuse to participate responsibly in the process when there is need for the government to act.” The post discussed the need for a meaningful opposition party which would present opposing solutions to problems, as opposed to the GOP which pretends problems do not exist and opposes any action. Bruce Bartlett, a former adviser to Ronald Reagan and George H.W. Bush, makes a similar argument about the problems, including interfering with achieving conservative goals, arising from Republican rigidity.

For example, their position on health care reform is that it’s pure evil–it’s unconstitutional for the government to force anyone to buy health insurance, to tax anyone to pay for someone else’s coverage or interfere with the free market in any way, even if people die as a consequence.

The right-wing solution to the uninsured is simply to define them out of existence. As Dr. John Goodman, one of John McCain’s health advisers, explained to the Dallas Morning News last year, “The next president of the United States should sign an executive order requiring the Census Bureau to cease and desist from describing any American–even illegal aliens–as uninsured….So, there you have it. Voila! Problem solved.” His Orwellian logic is that hospital emergency rooms are by law available even to those that cannot pay; therefore, everyone by definition has health coverage.

Putting aside the stupidity of this position, it’s unrealistic to elect 219 Ron Pauls, Michele Bachmanns or John Goodmans to the House of Representatives, plus 60 more in the Senate and a president who won’t veto their efforts–that’s what it would take to repeal the coming health reform legislation. Nevertheless, right-wingers insist that this is what they will do after the next election–and any Republican not on board can expect someone from the tin-foil-hat brigade to run against them even if it means electing a Democrat instead, as was the case recently in New York’s 23rd Congressional district.

There is no question that there are at least a few sensible conservative ideas about health reform worth considering; malpractice reform is one. And I believe that Democrats desperately wanted a bipartisan bill and would have given a lot to get a few Republicans on board. This undoubtedly would have led to enactment of a better health bill than the one we are likely to get.

But Republicans never put forward an alternative health proposal. Instead, they took the position that our current health system is perfect just as it is. I’m told that the respected health policy analyst at a major conservative think tank was prohibited from offering any criticism of the current system lest it undermine the Republican position that no change is needed.

While conservatives do greatly exaggerate the effect of malpractice on health care costs, it does not make sense to promote plans to cut health care costs while ignoring such costs. If Republicans had participated in the process as opposed to making it clear that, other than perhaps for the Senators from Maine, there was no chance to pick up any Republican votes, they could have influenced the final bill. This would have also decreased the ability of Lieberman and Nelson to demand virtually anything for their vote.

He also discussed how Republicans have lost the opportunity to have a significant decrease in the estate tax by demanding a complete repeal and making it all or nothing:

By 1997, this group was successful in raising the estate tax exemption from $600,000 to $1 million and carving out a special exemption of $1.3 million for family businesses. But this achievement did nothing to even slow down the effort for total repeal. Democrats offered to permanently reduce estate tax rates by 20% across the board, which would have reduced the top rate from 55% to 44%, increase the regular exemption by 15% and the special exemption for family businesses to $2 million.

This proposal was rejected out of hand. It was all or nothing, the Republicans demanded. In 2000, they sent a repeal bill to the White House, where it was promptly vetoed by Bill Clinton. He made it clear that he would have signed a more modest reform bill, as he had signed the 1997 measure, but was opposed to completely exempting great wealth from the estate tax–if only for revenue reasons, since the estate tax contributed $50 billion per year to the Treasury…

In the years since 2001, Democrats have repeatedly made it clear that they were open to some sort of permanent fix to the estate tax. The current situation is absurd and makes it almost impossible to do competent estate planning. As recently as Dec. 3, Democrats passed a bill in the House that would permanently raise the estate tax exemption to $3.5 million and reduce the top rate to 45%. Every Republican voted no. Republicans in the Senate also blocked an effort to enact this legislation there as well.

Republicans claim to be defending the small family business in their demands to abolish the estate tax. If they rejected these limitations they make it clear that their goal is purely to protect the ultra-wealthy, not the small businessman.  Similarly, Republican opposition to health care reform is designed not to promote conservative policies but to protect the health insurance companies. The policies of the Republican Party are not only destructive to the country. They are also counterproductive for those who legitimately support conservative principles as opposed to the actual Republican policies of using government to protect the ultra-wealthy.

Posted in Bill Clinton, Congress, Democrats, Economy, Health Care, Republicans, Ronald Reagan. Tags: , , , , , , , , , , . 7 Comments »

Ezra Klein’s Absurd Explanation For American Health Care Problems

December 4, 2009 — Ron Chusid

The complexity of health care shows the problem of people becoming “experts” on topics in the blogosphere by reading and writing about a topic without actual first hand experience. Ezra Klein has written many excellent posts analyzing health care legislation but sometimes, such as yesterday, he posts total nonsense. (He does admit in another post that “I’m a policy guy, arguably to the point of myopia.”) He presents some misleading data in a chart which falsely suggests that health care costs in the United States are so difficult to control because physician office call charges are apparently around five times those in other countries.

The cost amounts he provides are simply not representative of actual real world numbers. The numbers he provides come from an association of health plans. Since when does he show such trust in data from health insurance companies? The numbers he presents are not representative of the real world range.

Even if he had more accurate numbers for office call charges, any analysis based purely upon charges would be misleading. Under our flawed system it is typical for charges to be well above what insurance companies actually pay. Charges are not an accurate reflection of actual payment and health care costs.  Office call charges can also range tremendously based upon the time involved and complexity of the problem. Charges also vary tremendously depending upon whether you are referring to a GP or a subspecialist. Pulling out a single number for office call charges is meaningless.

Looking at charges also must take into account the differences in overhead expenses. It is not as if the doctor pockets these amounts as profit. Among other differences, overhead is much higher in the United States due to the need to hire additional office staff to handle a variety of insurance plans. In this case, any real differences in office call charges are a consequence of doctors also being a victim of our flawed system, not the cause.

Payment to physicians accounts for about twenty percent of health care costs, with around half of this going to overhead. Cutting payment to physicians will hardly bring health care costs in the United States in line with other countries. Blaming overall health care costs on physician office call charges is around as nonsensical as the conservatives who place most of the blame on malpractice expenses. Physician income has also been pretty flat in recent years while overall health care costs have been rising, further showing how it makes no sense to place the blame for problems in the United States on physician office calls.

Klein also believes that eliminating payment based upon fee for service is the solution. We already have tried capitation in the United States and it was a miserable failure. Other countries such as France provide high quality care at a lower cost while paying fee for service.

There are many problems with the health care system in the United States. Pointing to virtually meaningless numbers on office call charges does not provide the answer.

Posted in Blogs & Social Media, Health Care. Tags: , , . 1 Comment »
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