Healthcare Costs and Waste
Propublica has a story on waste in the medical industry:
Experts estimate the U.S. health care system wastes $765 billion annually — about a quarter of all the money that’s spent. Of that, an estimated $210 billion goes to unnecessary or needlessly expensive care, according to a 2012 report by the National Academy of Medicine
Having visited doctors in the past decade or two a few times, I can believe the 25% figure. The billing structure alone creates massive amounts of waste. But some see Propublica as overly liberal, so why not check their figures? followed the links to the National Academies of Science, Engineering and Medicine and clicked on this slideshow from 2012. Slide seven was particularly interesting. It included the following bullet points:
• Health care costs constitute 18% of U.S. GDP
• 30% increase in personal income over the past decade effectively
eliminated by a 76% increase in health care costs
• $750B in waste
Now, in 2012, the year the report was published, GDP was $16.16 trillion. If healthcare spending was 18% of that, it amounted to about $2.91 trillion. And $750B, the amounted wasted is a bit more than 25%. Which is to say, Propublica’s numbers are in line with the National Academy’s numbers from 2012.
Which raises a question… wasn’t the point of not moving to a single payer regime that the private sector would eliminate waste such as this?
I see some analogies between the current situation in the health industry and collision insurance problems (especially quality and inflated cost problems). Treatment of patients became completely inhuman as if they are cars and hospitals are mechanical shops.
In both cases, just the existence of private insurance companies inflates prices as there is some unhealthy symbiosis between enterprises that fix cars and insurance industry, despite the in theory they should have somewhat adversarial relations.
A similar unhealthy symbiosis exists between insurance companies and hospitals. One example is widespread abuse of stent procedures in the USA (probably one-third operation is unnecessary and remaining half are questionable)
I wonder if “medical tourism” will increase, as one day of hospital stay (just under observation) can be several thousand dollars. And the quality of this (computerized in case of cardiac patients) observation is often questionable at best.
Also, quantification of procedures plays bad jokes with medical costs, inflating them instead of reducing and creating another type of insurance fraud. Not only hospital routinely play with those codes trying to inflate costs. They also understand that checking is difficult is included non-existent procedures as the matter of fact. That means useless procedures performed on “guinea pigs” (often with negative effects on their health) but also that “guinea pigs” are routinely billed procedures not performed. I estimate that that “overhead” is around 10% of the total costs.
In other words, you no longer can trust that hospital has your needs before their financial needs. And that’s scary and anti-christian. Forget about Hypocratic oath — it is anachronism under neoliberalism. There is a category of doctors that now routinely perform unnecessary surgery to fatten their pockets. Some of them go to jail, but that’s just a tip of the iceberg to the abuse of the Hippocratic oath.
It looks like under neoliberalism, there is a propensity to destroy any existing and more or less working system in the name of efficiency and cost-cutting.
This is actually a complex topic and as it is related both to neoliberalism as a social system and to so called “collapse of complex systems” problem.
A family member of mine had an emergency medical expense while overseas last year. Aetna agreed it was an emergency and thus covered by our plan. We sent them the bill, which was a mere one page long despite involving a five night hospital stay. They rejected the claim, saying we didn’t provide sufficient documentation. EVEN THOUGH THIS WAS ALL THE DOCUMENTATION. They simply refused to let it sink in that other countries, with their single payer systems, do not bother to bombard everyone with a mountain of billing paperwork. Did they expect us to travel overseas again and badger the provider to gin up some extra paperwork just for Aetna?
Contact the provider again. That is not unusual for them to do so and it has happened for decades. I assume you have contact information? Like all insurance claims, it has to be on a proper format. Ask Aetna what they want and they should tell you. You can appeal to the ACA also.
” wasn’t the point of not moving to a single payer regime that the private sector would eliminate waste such as this?”
Not in any way, shape or form. Had absolutely nothing at all to do with wasteful spending.
Correct and thanks.
Walk over to desk. Open second drawer. Pull out binder. Slip to page 17. On first blank line, write: “# 382: Sarcasm.” Close binder. Return “List of Things EMichael Cannot Grasp, 2017H2” to open desk drawer. Close desk drawer. Walk away and resume normal operations.
I would suggest you stay far away from healthcare. Run knows more than most people in the country about it. I have read everything he has written, along with Maggie Mahar.
I think I will take his comments over yours.
Start your health care education with:
Arrow, Kenneth J. 1963. Uncertainty and the Welfare Economics of Medical Care.