Sunday, January 31, 2021

3.4 Times What Medicare Approves

hospitalbillrattlesnakeConservatives have figured out how to scare Americans with centrist or leftist leanings to their self-defeating, tax-savings-that-benefit-the-rich position: call anything you want to destroy “socialist.” Even if you misuse the word, those used to outsource their opinions to conservative proselytizers will look no further than that word to hate what is proposed. Forget that “socialism” really means government owns all the business/production and real estate values. That description would seem to better fit the one percenters. If you want a more detailed set of definitions, see my December 17th blog, Socialism, Communism and Social Programs.

Historically, the bugaboo over “socialism” was born in the growing American disdain for and the continuing threat from what became the “scourge of communism” that began in the first half of the twentieth century. Communism was, after all, a form of socialism, albeit imposition of socialism by brute force and annihilation of any opposition. For older Americans, the fear response is triggered by memories of “duck and cover,” the red “scare,” HUAC and the McCarthy hearings, the Korean War, the “domino theory” that hoisted us into the Vietnam war and the litany of “spy vs spy.”

For Americans born after 1991, “communism” is reflected in the skyscrapers towering over Beijing and Shanghai, rippling with economic power and a huge middle class, hardly the dingy gray uniform government-issued apartment buildings, drab clothing, food rationing and empty shelves in all forms of government-run retail that were associated with the Soviet Union and Maoist China. The word “communist” became such an anomaly in what sure looked like a capitalist China, that when challenged by this inconsistency, Jiang Zemin (PRC President from 1993-2003) was forced to say, “Communism is what we say it is.” Bottom line: to younger Americans, “socialism” just another word, to many a notion of egalitarian politics that actually seems appealing to many millennials and Z generation.

The only real fight against guaranteed universal healthcare in the United States, the only developed nation without such a program, is based on a notion that such a system represents “creeping socialism.” On average, compared with other developed countries, the per capita cost of medical care in the United States is double. Writing for the January 26th Los Angeles Times, David Lazarus, explains how absurd our healthcare system truly is: “Opponents of ‘Medicare for all’ and other single-payer insurance systems routinely decry what they call ‘socialized medicine,’ insisting that private companies can do a better job of providing affordable treatment than a government entity.

“If that were true, of course, Americans wouldn’t spend about twice per person what people in other developed countries spend for healthcare yet have less to show for it… Despite the $3.5 trillion we shell out annually on medical treatment, Americans have a shorter life expectancy and higher rates of infant mortality than our economic peers — two key measures of healthcare efficacy.

“But the real proof of the pudding can be found in the bills we receive from hospitals and insurers, which typically feature jaw-dropping charges and what patients are supposed to believe are significant savings thanks to the shrewd negotiating skills of their coverage providers… What they actually show are a system wildly out of touch with reality.” Funny how in Germany, that uniform, universal healthcare system, guaranteed by the government and absolutely loved by the German people, is actually administered through privately held German insurance companies. All prices are uniform, and all prescription drugs are approved and then priced by the government. There are no medical bankruptcies in Germany.

Lazarus drills down on one specific example, 82-year-old Tony Summers who had a successful, three-hour sinus surgery on an outpatient basis at San Diego’s Scripps Mercy Surgery Pavilion. Although his copay was slightly less than $1200, Summers was astounded at the breakdown of the invoiced services: about $5,000 for the surgeon and the anesthesiologist and $77,000 for “medical services” (“the facility, the surgical room, the equipment, the support staff”). Huh? Summers’ government retirement carrier approved, and Scripps “accepted the amount that Medicare or Medicaid allowed for this care,” which was $5,869.

Lazarus: “If Medicare has determined on behalf of its 68 million beneficiaries that a procedure should cost less than $6,000, how on Earth does a hospital cook up a bill approaching $80,000?... And if we assume that Medicare’s rate represents fair value — that is, the doctor or hospital isn’t losing money providing treatment for this amount — how is it even possible that a patient’s bill could be more than 1,200% higher?” Presumably what someone without medical insurance would be billed! While most hospitals generally do not top a multiple of ten times what Medicare will approve in their general invoicing – Scripps was particularly outrageous by any standard – the average mark-up is 3.4 times. All of these mark-ups are suspicious.

While the Biden administration is doing away with “surprise” medical bills – from doctors the patient did not choose who are assigned to a procedure but are outside the insurance carrier’s approved network – unless and until we can address the totality of our medical coverage to mandate uniform reasonableness, the billing horribles described in the blog will simply continue. When you get your vocabulary straight and look at the hard numbers, if we really want to spend vastly less as a nation on medical care today… yet improve the product… we better be marching towards a single payer universal healthcare model, one that has worked well in every other developed nation on earth. 

The United States watched US automakers shifting significant operations to Canada in the 1970s and beyond. The cost to manufacture a car was essentially the same, except for the $1500/$2000 per vehicle in US union-mandated healthcare coverage, coverage that was not required for Canadian workers who all had their government-provided medical services. Universal healthcare was good for business! For those who decry Canada’s system, where delays can happen (they happen here too in a private system), note that most Canadians would give up watching and playing ice hockey if that were the price to preserve their healthcare system.

I’m Peter Dekom, and for those who actually believe that the United States has the best healthcare system on earth, they must be thinking of the richest in the land who don’t care about costs… not average Americans who just get what they can.


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