How Much Will You Pay for Health Care in 2015? What You Need to Know About Healthcare Inflation

Then there is the increasing transparency of who is making the money in medical provision as in the recent release of medicare payout information. Slowly but surely the process of giving the providers a haircut is going forward.

Hospitals in major metropolitan areas are making a lot of money whether they are organized as non profits or otherwise. Many, though hardly all, MD’s are making a lot of money too and the medicare information recently released suggests that many are doing just fine on medicare rates.

What I am saying is that medicine is going through what law has already gone through, being squeezed on profits by institutional, in this case government, leverage. In law, the leverage was largely corporate. The result is the same: less profit for the same amount of work. The doctors and hospitals will put up with it, just as the law firms did, because they need the market in order to make any money at all. In medicare, the concern that doctors would turn away medicare patients has been largely exposed as a myth.

Low income job providers get away with their low wages because people need the jobs. The same principle applies at higher wage and profit levels. Those folks and institutions need the jobs too. There isn’t enough private wealthy customer base to support them independent of the institutions.

Bruce–

You are very right. Even in Manhattan, where there is a large base of wealthy customers virtually all doctors take Medicare patients. They have no problem getting access, even though Medicare pays significantly less than many of these doctors charge their younger patients.

All but a very few doctors need Medicare patients to keep a practice afloat.

In rural areas access can be a problem for all patients–even those with private insurance, because there is a shortage of doctors in
many rural areas. They simply don’t want to live in rural Alabama.

Most U.S. doctors come from wealthy families–families in the top 10%. These are the families that can afford to send their children to the schools that lead to med school admissions.

When these med students graduate they want to live in places like the places where they grew up– wealthy suburbs and wealthy cities with all of the amenities.

Jack D.

Yes, most doctors are doing well economically–unless they are
family doctors or pediatrician serving a poor population with many Medicaid patients Palliative care specialists also are not nearly as well paid as most doctors. The Medicare data makes this clear: the majority of a palliative care specialists patients are likely to be over 65, but compare their Medicare reimbursements to an eye doctor’s.

Academic medical centers and other large private hospitals are doing well—even though they are extremely wasteful. But some public hospitals are struggling.

In other words, we see the same inequality in our health care system
that we see in the rest of our society.

I agree that the most profitable (which is to say most doctors and hospitals) are about to be “squeezed by institutional, which is to say government, leverage.”

The release of data on Medicare reimbursements is telling. It’s going to be harder for doctors to complain to their patients that Medicare just doesn’t pay them enough. (Many patients believed this.)

Going forward, when people read that Medicare is cutting fees for cardiologists and orthopedic surgeons (who are probably next on the list because they do too many unnecessary surgeries), they are not going to be as upset as they might have been in the past. They now know how much these doctors are earning from Medicare alone–not to mention the higher fees they receive from insurers.

Though private insurers will be following Medicare’s lead. As Medicare trims fees, they will too. Under reform, new regulations make it much harder for insurers to turn a profit while over-paying providers.

In addition, my guess is that Medicare also will begin negotiating with
drug-makers and device-makers for discounts. And more hospitals will be using medical evidence to decide which artificial hips, knees and other devices to use. The newest and most expensive is not necessarily the best. In a piece titled “Big Medicine” published in the New Yorker Dr. Atul Gawande writes about how his own hospital now uses one or two hips for all surgeries.

Government is paying more and more of our medical bills, and as the population ages the share paid by govt’ will grow. As a result , government will have more leverage, and will using it.

Healthcare in the U.S. is so expensive in part because we over-pay for almost everything. In other developed countries, the government regulates prices in various ways. Over treatment also inflates our health care bills, but under reform, as we move away from fee-for -service payments, this will be less of a problem.

Peak Trader-

The Medicare Payment Advisory Commission has done extensive research which shows that when hospital revenues fall (because insurers have the market clout to cut reimbursements or because their patient mix changes and they have more Medicaid patients and more patients who can’t pay their bills), hospitals are forced to tighten their belts and become more efficient. There are a great many ways for them to become less wasteful and more productive.

See this post: http://www.healthbeatblog.com/2011/09/medicare-spending-slows-proof-that-providers-can-trim-fat-part-3/ (Scroll down to “How providers are trimming the fat from the bills they send to Medicare’

And as other people on this thread note, hospitals will not take fewer Medicare patients. No hospital could keep its doors open without
Medicare patients.

Maggie, “tighten their belts” does not necessarily mean they “become more efficient.”

And, “ways for them to become less wasteful and more productive” may mean keeping and finding patients that pay more and reducing and discarding patients that pay less.