Tuesday, February 26, 2013

We're asking the wrong healthcare question: Part 1

"One night last summer at her home near Stamford, Conn., a 64-year-old sales clerk whom I'll call Janice S. felt chest pains. She was taken four miles by ambulance to the emergency room at Stamford Hospital, a nonprofit institution. After about three hours of tests and some brief encounters with a doctor, she was told she had indigestion and sent home. That was the good news."

"The bad news was the bill: $995 for the ambulance ride, $3000 for the doctors and $17,000 for the hospital--in sum, $21,000 for a false alarm."

The above is a quote from a remarkable cover story by Steven Brill in Time magazine this week. Its title is "Bitter Pill: Why Medical Bills are Killing Us." At 26,000 words and 36 pages it is the longest feature story Time has ever published, and probably one of the most important.

I'd like to think that every reader of this blog will take the 2-1/2 hours or so required to read the entire article, but I doubt that will be the case so I will hit the important points for you over the course of several posts.

Unfortunately, situations like that of Janice S. are the norm. A WNY retiree recently appeared at a nearby hospital for his angiogram appointment at 6 AM. (Angiograms check for the amount of blockage in blood vessels feeding the heart.) By 1 PM he was eating lunch at a local restaurant. The bill for the morning's activities: $18,000.

Brill posits that we have been arguing about the wrong healthcare question: Who should pay our healthcare bills? Instead, he addresses a more important question: Why are our healthcare bills so high?

"What are the reasons, good or bad, that cancer means a half-million-or million-dollar tab? Why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester of college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car? And what is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?"

Long-time readers of this blog know that I think a lot about healthcare and have devoted many posts to the American system and others around the world.

Personally, I have wondered why it is that 10 ml (about 2/3 of a tablespoon) of an eyedrop I use every day costs almost $300 if purchased without insurance at the Walmart pharmacy. Do these drops contain the tears of real angels?

Ten years ago, my father spent the last month of his life in a Buffalo hospital. The bill for the month came to almost $40,000. Medicare would pay a little less than $10,000 and the hospital was happy to receive that amount. A hospital happy with getting 25-cents on the dollar of its bill--what's happening here?

It turns out that the healthcare marketplace is not a marketplace at all. What I learned from Brill astounded me and gave me a totally new picture of healthcare costs. You may be surprised to find that while you are powerless in what Brill describes as "the ultimate sellers' market," health insurance companies are increasingly finding themselves in the same position.

I'll share some of what I learned over the next few posts, but I urge you to get ahead of me and read the article. You can get it by clicking on its title above. Let me warn those of you with high blood pressure that what you learn will make you mad enough to make your medication necessary!

Sunday, February 17, 2013

We're two weeks away from killing the kids.

Imagine that your family has a dispute with a neighboring family that has gone on for years. In order to force a settlement of this dispute, both families agree to do something so stupid as to be beyond belief if the dispute hasn't been settled by a certain date: One child from each family will be killed. How could this not force a settlement?

We're about to play out this scenario on a national scale. Welcome to the "sequester." We're two weeks away from killing the kids!

If you've lost track of the history of this little gem, here's a quick refresher: The last fight over authorizing an increase in the debt ceiling ended with an agreement to turn deficit reduction over to a congressional "supercommittee." If this group could not reach a deficit-reduction solution, a set of cuts to both defense and non-defense spending would automatically go into effect.

These cuts--known as the "sequester"--were purposely designed to be so insanely stupid that neither left nor right would ever let them happen. The supercommittee could not reach an agreement so the cuts are due to go into effect on March 1.

How stupid are these cuts? This morning's NY Times, in an editorial titled The real cost of shrinking government, deals in specifics:

" About $85 billion will be cut from discretionary spending over the next seven months, reducing defense programs by about 8 percent and domestic programs by about 5 percent. Only a few things will be spared, including some basic safety-net benefits like Social Security, as well as pay for enlisted military personnel."

"The sequester will not stop to contemplate whether these are the right programs to cut; it is entirely indiscriminate, slashing programs whether they are bloated or essential. "

"NATIONAL SECURITY: Two-week furloughs for most law-enforcement personnel will reduce Coast Guard operations, including drug interdictions and aid to navigation, by 25 percent. Cutbacks in Customs agents and airport security checkpoints will “substantially increase passenger wait times,” the Homeland Security Department said, creating delays of as much as an hour at busy airports. The Border Patrol will have to reduce work hours by the equivalent of 5,000 agents a year."

"AIR TRAFFIC: About 10 percent of the Federal Aviation Administration’s work force of 47,000 employees will be on furlough each day, including air traffic controllers, to meet a $600 million cut. The agency says it will be forced to reduce air traffic across the country, resulting in delays and disruptions, particularly at peak travel times."

"CRIMINAL JUSTICE: Every F.B.I. employee will be furloughed for nearly three weeks over the course of the year, the equivalent of 7,000 employees not working each day. "

Looking for something specific to teachers and education? "EARLY CHILDHOOD EDUCATION: About 70,000 children will lose access to Head Start, and 14,000 teachers and workers will be laid off, because of a $424 million cut. Parents of about 30,000 low-income children will lose child-care assistance."

"DEFENSE PERSONNEL: Enlisted personnel are exempt from sequester reductions this year, but furloughs lasting up to 22 days will be imposed for civilian employees, who do jobs like guarding military bases, handle budgets and teach the children of service members. More than 40 percent of those employees are veterans."

"MILITARY OPERATIONS: The Navy plans to shut down four air wings on March 1. After 90 days, the pilots in those air wings lose their certifications, and it will take six to nine months, and much money, to retrain them."

"TRAINING AND MAINTENANCE: ....Air Force pilots expect to lose more than 200,000 flying hours. Beginning in March, roughly two-thirds of the Air Force’s active-duty combat units will curtail training at their home bases, and by July will no longer be capable of carrying out their missions."

These are just a few examples of cuts which are expected to cost the economy more than one million jobs.

To paraphrase Thomas Friedman--NY Times columnist and Pulitzer-prize winning author--"You can grow an economy without a plan, but cutting it without a plan by indiscriminate hacking risks cutting not only fat but muscle, bone and nerves as well."

If we kill our kids in two weeks, everyone will feel the effects. 

And where is Congress? They took a vacation and will return to work when there is only one week left to avoid what was originally designed to be an insanely stupid action that nobody would ever dream of allowing.