Medical Economic Transparency – A Response to Scott and Laird

Disclaimer: These are editorial comments (pre national publication), and JO’s opinions do not necessarily reflect those of BCMS, CMS, AMA, USAF, DOD, NIH, USA, his civilian or military employers or anyone else for that matter…and vice versa!

I applaud Laird and Scott for their well-constructed ideas. A 3rd perspective is offered here…some of my ideas are sure to disappoint, but I see things somewhat differently.  I doubt Americans will ever have the stomach to abandon patients in the ER (nor should we), but the ACA and EMTALA put our society at risk of transforming our medical safety net into the metaphorical lifelong relaxation hammock for the unmotivated and self-entitled.  None of our founding documents guaranteed free health care as a right, thus in 2018 we still have no formal underlying mechanisms to finance such an expensive and broad entitlement for people under 65.

From a classic economic approach, if young (under age 65) people only pay their fair share defined as what they believe they should pay or might afford, then the services are for all practical purposes: charity. Tips and donations might be appreciated, but these do not insure sustainability. Fairness is another concern. Some consumers (patients) will predictably game the system, and that is unfair to the rest who pay in full. If healthcare is going to be a human right, then we must formalize funding for this entitlement.

Patchwork alternatives to single payer health care (such as what we have now) will be gamed and eventually exposed as unequal and unfair. Consider most of us as paying patients (especially the self-employed), we face exponentially accelerating health care premiums, deductibles, coinsurance and copays that we owe for our families and ourselves. As docs, we see both sides, as Providers, we face endless red tape seemingly unrelated to rendering optimal care. From where do these inefficiencies arise? It is unsurprising that a third of USA physicians have opted out of Medicare (May 2017 stats). Life is not fair. But exploiting the system in which one finds themselves is a predictable trait of human nature. It’s hard to fault any single person’s behavior. So we’ll analyze and deal with what we have.

Ground Rules: Respectfully Disagreeing

Contrary to a preceding blog comment as viewing other perspectives as coming from “haters”, I find hate speech labels unproductive and prefer competing viewpoints. To me, debates about real challenges are helpful, instructive and interesting. Emotion can enhance, it need not detract. Honest, heartfelt dialog among those who disagree is more productive than group-think echo-sessions or screaming matches where each sides shouts past the other (typical USA political discourse). Civil debate and disagreement is why I appreciate Scott, Laird and everyone else who makes BCMS discussions so productive and enjoyable.

A Micro-Economic Patient Perspective

Rational patients (including me) will try to learn and follow reasonable rules to obtain best-available care while minimizing out of pocket costs. It is difficult to get clear answers sometimes. Valid questions that health care staff often fumble include:

  • What will be my copay here, today?
  • What parts of this plan are considered “in network” for me, what is the cost/time differential for “out of network” alternatives?
  • What are some other diagnostic or treatment options, and what do they cost, how long do they take, what are the risks of delay?
  • How much will all of this cost?

Some consumers will be more able to understand sophisticated concepts than others, but no one should apologize for legitimate questions and then acting in self-interest. All money is fungible and health problems can be unpredictable, so we watch as some people conveniently find their healthcare budget is exhausted, yet these same people inexplicably locate sufficient funds for more discretionary activities including cigarettes, alcohol, and yes drugs.

This is the inherent problem when merging socialistic ideas with free market capitalism. Fairness breaks down and your fiscal discipline may not match mine. My semi-cynical but oft repeated observations could lead to despair, but as a physician, I don’t blame poor people for their priorities, they are simply taking advantage of our poorly designed, opaque patchwork healthcare system. I will propose a better solution.

The Medical Economic Fairness Question

To recap the question at hand from a prior blog thread, here’s my financially-struggling, hard-working ER night nurse’s standing question:

Why does she have to work so many nights to responsibly pay her skyrocketing coinsurance and copay bills while the indigent, unemployed Medicaid people she serves are driving better cars with better mobile phones. These patients seldom pay (or are even billed) a dime in copay but seem not the least concerned–why are they more entitled than is she?

I expend much energy privately trying to ramp down cynicism among my own staff (don’t take your frustrations out on patients…No, No, No!), but I concede their point. Exposing rampant extortions of ACA (Obamacare) is not hating on poor patients, and in practice we do not withhold expensive treatments while patients remain in our Emergency Departments. Indigent patients are using their brains and following their self-serving (or family-serving) human nature…I’d do the same.

Skin in the Game?

Rational health care consumers will predictably show up where they will get 24/7 unlimited care and face no immediate financial barriers. The majority of our clientele are responsible patients and concerned about their bills, but a small subset of ED patients never face any financial concern because in the past they never have paid bills, and they are still seen without resistance, so they have no future intention of ever paying medical bills (sorry left-leaning idealists, these people do exist and we care for them all the time).

But as a group, ACA-abusers end up harming the poorly designed system that was misguidedly designed to protect us all. Similar observations (repeated thousands of times through decades of experience) tempers my optimism for these imaginary great government “social welfare systems” designed to save those who do not expend effort and repeatedly choose to make poor decisions. We’ve all met people who believe they are forever entitled to free stuff, and they are barely bothered by or aware of their relative lack of contribution as they watch others work hard to provide goods and services. How to deal?

The Full Communist Approach

North Korea and other Communist Dictatorships address this by enslaving their populace and forcing everyone to work. A bilateral social contract. The Soviets did this, and Mao-era China did it. Paternalistic central governments provide the necessities of life (food, clothing, housing healthcare, etc), but citizens, not allowed to emigrate (Iron Curtain), are forced to work in their Workers’ Paradises with little input into career or domicile. Count me out. True Socialism would never work in the free-willed USA anyway. Can we learn from history and the experience of others?

ER Perspective

Emergency Physicians may have a unique bias ves other docs. EPs must abide by EMTALA law and EM ethics, so EPs don’t hold back services or turn people away from necessary services in an Emergency Department (this is a 1986 COBRA/EMTALA mandate). All patients will get their CT scans, etc with no money required upfront, no confirmed insurance or deposits are needed. EDs and EPs render care to all regardless of other unpaid ER bills which may be accruing for years. Unfortunately, this charitable stance has dire economic consequences that (to me) are sadly predictable. Although my colleagues and I enjoy our mandate of treating all patients, at all times without wallet biopsies, we know that rendering this service from Emergency Departments  24/7/365 is not efficient for society in the long haul.

The resultant cost shifting that finances our de factofree health care for all” is the least transparent, least efficient strategy for financing our actual (but unacknowledged) 2 tier system. When medical economics are opaque and obfuscated, the inevitable principle of Economic Darwinism dictates that some unknown destructive force will breed a layer of slimey middle men (sorry idealists, I hate it too, but this is human nature). Greedy opportunists can not resist. Swamp people and swamp institutions will be tempted to jump in and take a “commission” off all of these inflated cloudy behind the scenes transactions without adding any value to the system (see Aspirin Example Below).

As you know, we treat everyone (a third are treated for free) in the ED, and most of us EPs are not complaining. My colleagues and I chose EM because we enjoy this, and we are paid hourly and we work hard. But you may be surprised to discover how entitlement attitudes and economic awareness has change among the patients since the days when many of us trained pre-Obamacare. One need not be an economist to realize the numbers don’t work and the ACA strategy (though well intentioned) is unsustainable.

Aspirin and Why the Finances are Broken

For those trying to grasp why partial socialism leads to economic problems, consider this concrete example:

An aspirin from Amazon or Walmart costs much less than a penny per pill. Some hospitals charge $5 per aspirin.

Now we introduce greedy, slime ball swamp monsters who collude behind the scenes. Those large contracts are negotiated in private, remember. Swampsters are neither loud Republicans nor loud Democrats. These  bureaucrats quietly brand themselves as heroic “public guardians” if anyone inquires or notices.

Now the hospital raises the cost of aspirin to $100, then the guardian’s inner “efficiency watch dog” leaps to action and heroically decries this charge as excessive! The aspirin should not be $100 per pill, our hero exclaims, it should be no more than $20 per pill. Wow, that brilliant watch dog saved consumers and tax payers $ millions. We should be grateful. The artificial savings are $80 per pill.

Whether there coexists illegal collusion or not, much of the imagined savings reclaimed by our privately negotiating health care intermediaries are derived from ridiculous cuts on non-market prices. (Check out “vouchers” for Epi-pens and Albuterol MDIs 2015-2018 if any lingering doubts). These shenanigans do not help Insurers or other 3rd party payers fulfill their risk sharing or indemnity mandates. Whenever these fake cuts occur, slimey swamp dogs “earn” a portion of the $millions of fabricated savings. It doesn’t take much math wizardry to extend this example and see how corruption gets quickly out of hand when the government tries to meddle in economic transactions.

Welfare States
Obesity, especially in childhood, is a first world problem.

The safety net problem in rich, partial welfare states is obvious: The U.S. lacks a voluntary or mandatory work ethic. Of course, we value liberty and refuse to enslave our populace or our workers, so are we stuck? Compare to the other economic systems. Pure Capitalism lets the lazy fend for themselves but can neglect the truly disabled. Pure Communism does not tolerate sloth (zero unemployment in USSR and almost zero childhood obesity), but even Socialism (Communism-lite) is antithetical to hard work and innovation (no incentives, no equity, means of production are controlled by gov’t).

Essentially entire societies can suffer from “Government Worker Syndrome” , which roughly equates to reduced motivation because of a fixed pay scale and no real upward mobility. We seem stuck in the middle. For those cocooned with a coddled subset of entitled American patients, I invite you to think differently and venture away from the private practice setting for a day and spend 1 shift among the most diverse patient sample of U.S. society: the ED. Together we will devise a better plan.

What to Do — All hope is not Lost

Watch carefully, but don’t watch forever — especially when much of the system is intentionally hidden from our view. Multiply the aspirin example by thousands of opaque CPT and cryptic ICD-10 billing codes (prices negotiated privately and unavailable to the actual supplier or consumer), and you quickly see why healthcare costs are out of control and unlikely to be corrected with added complex governmental paternalism. This is the main reason I am not as Liberal as Laird. Swamp dogs will out-scam the naive intentions of the government…always have, always will.

Bad actors will remain years ahead of slow governments (GOP or Dem), and the gap increases as the Information Age takes off. The best approach is enhancing economic transparency. We need simple, capitalistic style cost transparency (think Dentist, Optometrist, Veterinarian, Amazon, overseas healthcare). This encourages fair competition, holds bad actors accountable and exposes layers of fat middle men who add no real value.

The US values freedom, and even though I agree with some of Laird’s general socialistic ideas, I agree more with Scott because freedom from a work ethic must not be coupled with no strings entitlement. That is the classic problem with a Communist style welfare state that effectively enslaves workers to serve the loafers. The Tragedy of the Commons is a well known flaw in Communism and it can happen in Medicine. But the alternative is not without problems. I learned a new vocabulary word from Scott, “Crapitalism” (Crony Capitalism), and it definitely exists.

To me supply and demand pricing almost always works better than price rigging. The government’s simple role must be limited to a temporary safety net for the truly needy (not the chronically needy). Gov’t must permanently enhance transparency (level playing field, prosecute false advertising, etc). Let the market do the rest. Remember the embarrassing need for ACA Navigators? That was sadly predicted and predictable because unneeded complexity almost always breeds fraud, waste and corruption even in a well-intentioned bureaucracy.

If we aim to reward effort, it must be socially obvious that our people, when young, must be students who work to learn and exercise discipline to learn how to think critically, then seek relevant training (it won’t be easy in the video game Era). Later, our people must be rewarded when they produce meaningful goods and services with reasonable concession for the disabled. If you love the arts but aren’t gifted…make this your avocation or hobby not your lifelong pursuit. Those who don’t expend effort commensurate with their ability (ouch…Communism) should not get a medical free ride in my ideal society.

We need the right socialism/capitalism balance in US health care delivery. Like Scott, I am a Libertarian, but unlike Scott I disagree about the relative pitfalls of a single payor (by practicality the government). I see no alternative, and what we have now is hard broken. To me a safety net is appropriate in health care, and since the scammers will always out-think the well-intentioned government bureaucrats, I reluctantly conclude that the best incremental approach (lesser of all evils) will be Medicare for All.

Medicare For All — Can it Work?

To avoid Soviet style problems, we must soberly acknowledge what we already have a 2 Tier system and we have always had it (at least since 1986), so we can actually build around our now acknowledge 2 Tier system. This does not conflict with a U.S. Universal (socialized) health care system or Medicare for All for our citizens (not for visitors or illegals, sorry bleeding heart open-borders types). A New Zealand-inspired socialized approach coming from a personal responsibility advocate like me may be a surprise, but we have a giant system already in place, and expanding Medicare retains some choice.  People still have the option to upgrade their health plans (supplementals or a la cart at their own expense).

This will allow those who can afford it to pursue elective, costly or more timely medical services. This means not everyone will receive liver transplants or even Ledipasvir and sofosbuvir (Harvoni) for their Hepatitis C ($100k per patient) unless/until society weighs in. Rationing is real because resources are always finite…just wait ’til the new rounds of genomics and biologics hit the market. Sorry Bernie Sanders, those who respect math realize we can’t afford to do everything for everyone with blatant disregard to affordability. I would be OK with a slight tax increase (sorry Scott, but Mary would approve).

Concrete Steps to Improve Medical Transparency when Prices are Hidden

Here is a recent (July 2018) Colorado effort towards improving medical transparency effort.

A Bright Future

Swamp creature cronyism can now be exposed and expunged. A simplified approach can produce fair/stable social contracts where rule sets are clear, and we offer no free lunches for your favored pitied class of able bodied adults. You don’t want to wear a motorcycle helmet…fine…my tax dollar will not be paying your medical bills.

My idea is a medical Effortocracy where citizens are rewarded for effort, and society indemnifies the truly unfortunate (childhood cancer, etc). Unfortunates do exist, and they deserve our charity. This is best seen at the pediatric cancer camp I volunteered  for last month. We all have our favorite causes, but one of the key lessons I learn from Camp WapiYapi and my truly suffering ED patients, is the ability to more quickly distinguish the truly needy from the coddled and rotten apples.

Of course, there are always doubts and the patient must get the compassionate benefit of the doubt, but after years in an ED, we learn to spot spoiled trust fund babies early and differentiate the cyclic vomiting potheads from those with peritonitis, and that remains our primary job.

My solution follows the tenets of Effortocracy and the Professional Principles of Medicine, we must:

  • First do no harm
  • Keep up with Technology and Innovation
  • Avoid burnout
  • Work hard
  • Play hard
  • Think for yourself, Remain Skeptical, Don’t drink the Koolaid
  • Forgive Mistakes
  • Reward Effort

Serious physicians, whether they lean Left or Right, all want:

Optimal, affordable healthcare that balances liberty with personal responsibility

An improved system can be fair and compassionate without breeding, encouraging or subsidizing any protected class of freeloaders. This can happen by exposing actors who take mysterious chunks from of our impossibly complex medical bill. Intermediaries will be identified and purged. With economic transparency, the market will trim fat and we’ll stop rewarding parasites who steal from our transactional system without adding  value.

We will simplify our convoluted, over-priced system. For now, my vote is to expand Medicare to include  all citizens.

I can’t wait for Leto to weigh in!

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