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Beyond the Time Cover Story “Bitter Pill”

March 5, 2013

Where are these cost control ideas in the 2017 health care bill?

Key summary points:

1. The story spends extensive time on deciphering particular bills, the use of agents to get line items changed, and lowering the per-item cost. These steps will have no long term effect on capping/lowering the cost of health care. In my opinion, the bill is back calculated from the institution’s financial pro forma. In effect, the medical provider has global goals to collect and disperse X dollars. That revenue goal is equal to the sum of the number of patients N1 treated for condition Y1 for all typical treatments/services, summed for treatments 1 to a thousand plus. The target revenue value is then achieved when the bills are generated. The “chargemaster” cost codes and the line items, the tests and procedures sold to the patient, are then constructed as typical treatment for the patients with condition Y. If the government tries to micromanage the cost and set a “fair” payment for the thousand of line items, the medical provider only needs to add procedures to the list to get the revenue back up to the target goals. If you believe otherwise, then why do the total costs keep magically rising when the government keeps capping/lowering the allowed payment for each procedure?

2. The naming of highly compensated CEO’s is a step in the right direction. The naming of the Congressmen who vote for particular favors that keep medical revenues high is more valuable. The TIME story says that Democrats keep malpractice attorneys in the cash flow. Who are these members of Congress? The system effectively has legal payoffs to Congressmen for buying votes on legislation favorable to health care providers in exchange for campaign funding. The central command of the national party negotiates the deals and then requires the faithful party members in Congress to vote as they are told if they want to stay in office. The press is the only ally of the taxpayer/care consumer via getting highly compensated politicians to change their votes or go home.

3. The end-of-life medical care costs and the other people in the 10% “sickest” group are the source of 67% of the total medical costs. Understandably, insurance is designed to collect an average payment from everyone and payout the funds for the people who unfortunately become very ill. Most people, not just a few sick people, get old, have some decline in health and die from something. This is very different from the idea of insurance to cover any and all medical costs for the few who become seriously ill. An elder care clinic and hospital could be compensated with a per-patient fee that would cap the total cost. The “best practices” allocation of the doctor services and procedures for particular patients would be chosen by the doctors to stay within the budget of the available funds. By comparison most public schools get an amount per student and must pay teachers and all other costs from that money. The sickest among the elderly people are now treated with a per person cost that is many times the avergae cost with questionable benefits from extended life. The quality care of the elderly as they approach their death could be very good with fewer procedures and a much lower cost.

4. In the real world most people live off of the income they have. Away from the government there is no bottomless pit of dollars for check printing and electronic fund transferring,. If I have a middle class income and calculate that I can only afford $50,000 for a home, I have to buy what I can afford. In the medical care industry everyone is given the idea that any and all procedures selected by their “contractor”, the doctor will somehow fit into the health care budget of the government. By analogy with the home builder, the contractor adds in any and all new “bells and whistles” to your house. The cost is mostly driven by the add-ons to your home that the contractor selected and the bill comes out as “whatever” with you expected to pay it. The home buyer would not tolerate this practice and could not afford to pay for the add-ons, but if the government pays, no one complains.


The excellent television program by Fareed Zakaria on health care concluded that cost control was not due to a lack of the technology it was a political problem. Our elected officials in both political parties have not shown a willingness to act to implement cost control solutions. Only the public outcry and media support offer the possibility of changes in Congress.

So we can find hope if the press can effectively dissolve the present Congress and get representatives of the people into office. Do we need some constitutional change to have a NO CONFIDENCE vote or a national vote to remove the worst road blockers in Congress

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