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How About Some MSRP’s for Medical Care? (Posted 4/21/2015)

Posted in Medicare

Physicians and hospitals in the USA offer excellent medical care, in quality, quantity, and timeliness, to rich and poor alike. Of course there are exceptions, but, overall, on average, all things considered, we are the best. Please note that I said nothing about our “health care” system or our insurance. I am referring only to the medical services physicians and other trained providers offer their patients. Non-medical “Health care,” after all, consists mostly of advice and is now widely available at no cost on the internet. And, if what we have been doing had been effective, we would not have an epidemic of obesity, heart disease, kidney disease, diabetes, etc.

The US “health care” system continues financially stressed, and dysfunctional, even as Congress fiddles. It was reported last week (Fox News 4/15/15), for example, that the United States House and Senate have passed similar bills that will:

  • Stop a scheduled 21% cut in physicians’ Medicare fees (to keep Congress from having to deal with the traditional annual “doc fix.”)
  • Provide billions of “extra” dollars for health care for children and low income adults (with no explanation of the source of “extra” dollars.)
  • Provide additional money for community health centers, (great vote getters for members of the House of Representatives.)

The article goes on to say that 66% of the cost of the new legislation is unfunded so apparently must be covered by borrowing, creating additional federal debt. And John Boehner brags, “For the first time in nearly two decades – and without raising taxes – Congress has come together in a bipartisan way to pass meaningful entitlement reform.” That is an unbelievable statement.

About 16% of the cost of the new legislation will be covered with higher Medicare prescription drug premiums, and about 17% with lower Medicare reimbursements to hospitals. Given the current major trend of hospitals buying up physician practices and putting the doctors on salary, I can’t help wondering about the net effect on physicians of raising physician reimbursements while cutting reimbursements to the hospitals that are employing more and more of them. Is it any wonder that we see an increase in “concierge” practices?

What a mess! Here are some personal data to possibly shed some light on the issue and suggest a solution.

During the past year I had close encounters with a cardiologist, an ophthalmologist, and a dermatologist. In each case, the physicians, their staff, the services provided, and the processes used were excellent, and my level of satisfaction was very high. I paid nothing out of pocket, all expenses covered by Medicare. To top it all off, the news and prognoses from all three were very good. For myself, I have no reason to be unhappy. For the USA, I have deep concerns.

For all that wonderful medical care, bills totaled more than $27,000, a significant amount of money to most of us, enough to buy a new car. But a closer look reveals that those bills were fiction. Medicare informed the providers that their total compensation would be limited to $5,664, only 21% of what they were asking. Well, for that, I would have been glad to whip out my AMEX Card several times during the year and pay for services as received. Some folks must spend almost that much a year at Starbucks!

The reason I was not asked to whip out my AMEX card and pay is revealed in the referenced article: “Congress seldom increases costs on seniors, fearing retribution come the next Election Day from older voters.” What a bunch of cowards!

Here is the fundamental problem that needs to be fixed. We, patients and physicians alike, are held hostage by a complex, unfair, and burdensome system of government- and private- and employer-provided health insurance and medical billing based on a provider-payer tug-of-war that leaves us sitting on the sidelines with no reasonable choice but to submit all our health care expenses, large and small, routine and exceptional, preventive and emergency, to the insurers for negotiation and settlement. We, as individuals, cannot get medical care for anywhere near that $5,664 Medicare paid on my behalf. And that is why Medicare has to process “four million Medicare payments for doctors daily.” The processing, certainly a great “job creator,” is not free.

I would love to get a divorce from Medicare and free them of worrying about me, at least for a few years. I would love to have a major medical policy, government or private, that pays for my health care in full for all expenses above some reasonable percent of my income, say 20% or so, and pays nothing and requires no paperwork or claims below that point, except that I would be responsible for documenting expenses incurred. That won’t work in the current system of pricing because the only way I, or my insurer who is going to take over above a certain level of expense, can get a fair price is to let the insurer handle every little detail.

One pre-requisite to solving our medical care problems is transparent, fair, and competitive published prices, openly advertised, like cars, TV’s, iPhones, houses, food, furniture, and clothing. If we had that, lists of MSRP’s (Medical Suggested Retail Prices) would be compiled and published on the internet, allowing us to negotiate and pay our own bills until we could document that we have used up our deductible. If and when that happens, we could notify Medicare that we have serious medical expenses, or have lost our incomes, and need help. Of course low income people would have little or no deductible and would be fully covered. And, the rest of us can all pray that we never reach that point of having to call on Medicare because of either seriously high medical bills or diminishing incomes. I’m guessing at least half of us never would.

Medicare would shrink, government would shrink, debt would shrink, Congressional influence would shrink, and freedom and personal responsibility would increase. Those are the reasons my proposal is just a dream and that a much more likely scenario is nightmarish growth and expansion of the government-health care-industrial complex leading to increased spending, increased benefits for all, increased competition for limited medical care capacity, increased taxes for many, increased debt for the nation, increased size of government, increased rules and restrictions, increased conflict with personal convictions, increased congressional power, and reduced freedom and personal responsibility.

Well, at least we will be able to get an appointment when we need one, even if it is months in the future.