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Why American Healthcare is So Expensive Part 3 – The Insurance System

March 10, 2017 4 comments

Today the GOP is deep in its discussions about how to take apart The Affordable Care Act and to replace it with some other kind of system to pay for healthcare.  So far, everybody in the healthcare delivery system hates it, and it may go nowhere.   But I will continue to argue this – whatever they are trying to do, it won’t work.

Why won’t it work?

Not because the system that are creating is the wrong system.  Sure maybe it is wrong.  But that’s not the real problem.

As we said before, THE PROBLEM ISN’T HOW WE PAY FOR HEALTHCARE.  THE PROBLEM IS HOW MUCH HEALTHCARE COSTS IN THIS COUNTRY.

So why is healthcare so expensive in this country?  Last time we talked about how there are incredible incentives to create and use expensive healthcare equipment, even when such equipment does nothing for patients.  Today we’re going to talk about something else: The Insurance System.1382375480209

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I think a lot of people don’t fully understand why we have health insurance.  Let’s start with why we have insurance for anything at all.

Insurance is needed when there is a potential future expense that you may not be able to pay for, but that may never happen.   Ie its very expensive to repair your car if you smash it, and there is also heavy liability involved in potential damage to another vehicle or people within it, so you insure that potential expense.  The vast majority of people who buy auto insurance do not have to make a claim, so insurance is relatively inexpensive relative to the potential size of the claims.  You do not insure buying groceries because a) it isn’t that expensive to buy groceries and 2) everybody needs to buy groceries so there is no grocery-buying risk to spread out between different insured entities.

So based on this idea, and the current costs of serious healthcare interventions, it makes sense to insure healthcare.

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Why Healthcare in America is So Expensive Part 2 – Surgical Equipment

February 27, 2017 5 comments

With this essay we embark on a journey through the world of medical cost.   In my last essay, I argued that while our government struggles to create a system that pays for the healthcare system we have, the true problem is the outrageou
s cost of that system, not how we pay for it.

Today, we will examine the surgical equipment industry, and how expensive i
nnovation and technology is valued over actual contribution to patient outcomes, and how every incentive exists to make medical equipment as expensive as possible.

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A few years ago, I was involved in a project with a number of students from Georgia Tech’s biomedical engineering department.   I had an idea to solve a basic problem in laparoscopic surgery, and these students were charged with cSurgical-Instruments-11.jpg
reating a prototype solution to the idea.  We came up with an elegant solution to an issue that occurred in every laparoscopic surgery in this country, and eventually the students presented this idea as their senior project for their degrees.

Subsequently, I approached my University’s Technology Transfer department (the group that helps faculty to commercialize their ideas.)  We went through a process of idea disclosure with the hope that the University would help me to bring this idea to market.  In the end, though, it fizzled.    They said they weren’t interested in developing the idea.  So I approached several industry groups.   Again, no interest.  Over time I talked with three different groups that develops ideas, and no one was interested.

The kicker of all of this is that the lack if industry interest had nothing to do with the utility of my invention.  In fact, all parties agreed that the idea was great and the solution was elegant.  They also agreed that they could imagine the device in practice.   The problem wasn’t that the device wasn’t a good one, it was that the device was too simple, and too inexpensive to manufacture.  I had imagined a device that would probably cost about 5 dollars in every surgical pack.  In the end, the development market had little interest in such a device, given what it costs to develop bring a device to market and the likely payout at the end.  This thing actually saved money in time and in replacement of more expensive equipment already in use in the OR.   But what I found out was that there wasn’t much interest in devices that causes industry to make less money.

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Healthcare Reform Has It Wrong: Why American Health Care is So Expensive Part 1

February 19, 2017 5 comments

Having been a physician now for 16 years, I have had a first hand view at the variety of healthcare reforms and regulation put into place over that time.   Most recently, the Affordable Care Act has been at the center of our attention, but it is by no means the only thing the government has done over that time.

One-Dollar-Bills.jpgToday, President Trump and the Republicans are working to repeal the Affordable Care Act, and possibly replace it with something else (Something Great if you listen to Trump.)  I have mixed feelings about this.  I think that the ACA did some good things, but also got some things wrong.  At its fundamental core, by forcing all people to buy healthcare through a private insurer (albeit through a government funded network), it was trying to create universal coverage.  Unfortunately, the ACA struggled to get healthy people who would pay more than they consumed to enter the system, thus creating a system where there were often more claims than premiums.

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Three Problems, One Solution: A New Way to Pay for Medical Education

September 10, 2016 2 comments

 

Case 1:

A middle aged man named called Joe decided in mid life that he would become a doctor.  A former boxing instructor, Joe felt compelled to learn medicine to help his fellow man.   Already in his 30s, he worked hard to develop the prerequisite education to enter medical school, which he did in the late 1990s.

I met Joe in my first year of medical school.  He was a very bright guy and had a great sense of humor.  He was a bit different than most of us, and not just in age.  I remember him asking me once “why would we use anti-hypertensives to treat hypertension.  I mean, if a person’s blood pressure is that high, maybe that’s what their body needs it to be at!”.  I remember thinking it was a strange way to think, given that allopathic medicine pretty much presumes that letting the body do whatever it will may not actually be the best course for long term health.

Joe did reasonably well through the first two years of medical school.  In his third year he had moderate success, and sometimes struggled with having a different outlook on what medicine should be that the attending physicians that were instructing him.  Over time, this became a bigger problem, and Joe eventually made the decision that being an allopathic physician wasn’t what he wanted to do for the rest of his life.

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On the Funding of Endometriosis Surgery

January 23, 2016 5 comments

As many of my readers know, I spend a fair amount of time online. I love interacting with other docs that do what I do, and even more so, I love interacting with women that have the conditions that I treat. Even though I have left academics, I am a teacher at heart, and enjoy the opportunity to pass on what I have learned when I can.

One of the biggest questions I see is about how endometriosis care is paid for.Cash-Loan

Unlike typical care, many endometriosis physicians are not under contract with insurers for care. This creates a whole different system for payment of medical care that is confusing to many patients – so let me explain it here. Read more…

Decoding your Medical Bills….

A reader recently send me this graphic on the costs of healthcare, which is interesting in many ways.
Decoding Your Medical Bills
Created by: Medical Billing and Coding Certification

Some of this diagram I agree with, and some I do not, or at least what is implied by the information contained therein.    Overall, the diagram is correct – American’s can’t afford healthcare.  At least not the kind we try to provide.  However, I don’t feel that the diagram really addresses why Americans can’t afford healthcare in an accurate way.

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A New “Model” for Electronic Medical Record Systems

January 14, 2012 10 comments

As a physician formally trained in computer science, I have the opportunity to look at today’s computerized medical record systems both from the perspective of a end user and as a software designer.  It is perhaps because of this that I have been so persistently disappointed with the current state of clinical record software.  

I am disappointed because despite all the fancy hardware and expensive software, our clinical records systems aren’t that much better than paper.  We would think that a patient could go to any doctor and present their medical records the doctor could read them, but they can’t.  We would think that it would be easy for me to get a CT scan report that was done at an outside hospital, but no.  It actually has to be printed out and faxed, requiring not only human intervention and time, but if reentered into the receiving provider’s system actually converts a digitally stored report into a picture of a piece of paper, completely breaking the idea of an electronic record system.  While information can be digital in one system, if it ever is passed on to someone working in another system, it becomes just another piece of digital paper.  The sad truth is that despite our incredible investment in EMR systems, we have only created a massive collection of information silos, and have almost no way to transfer information between them – a system little better than the paper charts we sought to eliminate.  And sadly, because these silos are hard coded and massive, innovation is stifled.

There is a very specific reason why our system operates like this, and it is that EMRs as a whole lack a common way to represent information.  Each system represents medical records in its own proprietary format, and thus lack the ability to speak to each other.  An thus no matter how wonderfully a EMR system represents information to its users, if information has to get out of the system, it can only be through pictures of pieces of paper.

So is there a solution to these problems?  I would argue yes.   But it requires a fundamental change in our paradigm – a change to a common “Model” for representing data.
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Categories: Business of Medicine
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