PERRYGRAPHS 4/10/17

AMERICAN HEALTH CARE

To bring down the cost of health care, someone will have to lose money. We forget that. Somehow the arguments mostly do not deal with that – with one exception. Most of those who like the single-payer option favor much of that financing comes from high taxes on the wealthy. Indeed, in Canada, England, and Europe taxes seem to average 35%. A figure I saw today said in the US the current average of income tax plus Social Security is 25% of income. After WWII, the top rate was 95%!

But who else would lose money? Would it be the doctors? With office calls running often to $150, would physicians drop them to $100 and take longer to pay off their student loans? Would they hire less staff? Would they charge less for surgery?

How about hospitals? Most hospitals are running hard to break even. Small, rural hospitals are gradually disappearing. Two regional hospitals in my area have in the last few years transferred from public to private hospitals. The first thing the new companies did was cut staff. In one specialized unit a nurse told me the head nurse quit because they wouldn't give her enough staff to feel the patients were getting adequate post surgical and crisis care. One doctor moved from that same hospital to a Catholic hospital that was also beleaguered, but didn't reduce quality.

Specialty hospitals are cropping up, especially surgical units and rehabs. The advantage they have is they are not required to have Emergency Rooms. In case you missed it somehow, ER's always lose money, because many indigent – or supposedly indigent – people use this as their only source of medical care. Thus they come in to get sinus prescriptions instead of paying a doctor. The hospital has to eat the cost. Why don't they refuse them? Because the law requires them not to turn them away. Further, if they do turn someone away, and they die, the family can sue them for millions – and they have! I would favor Congress and legislators reworking the law to protect the ER and their staff and allow them to decline to treat patients who are clearly having minor needs.

At this point, the legislators also need to consider reworking the liability law among health professionals. Liability insurance in case they are sued is extremely high, according to what several doctors have told me. But most legislators are lawyers, and lawyers make a good deal of money on both sides of a lawsuit. (Did I say someone has to lose money?)

Another source of high expense is the pharmaceutical companies and skyrocketing drug costs. Someone on Facebook recently commented that he required an epinephrine pen that cost him $ 600 whenever he needed a new one. For the three or four months I'm in the “donut hole,” I must pay close to that amount before I hit the “catastrophic” stage in July or August and only pay 5% for the rest of the year.

Big Pharma excuses the high cost due to Research and Development expense that requires three rounds of testing before any drug can be released. Then they are patented for many years. While the patent lasts, they can set prices pretty much at what the market will bear. Meanwhile, their spread sheets do not publicly say how much is actually spent on R &D.

NOTE: Often there are cheaper drugs, even generics available for ten bucks or less. But generics are those whose patents have expired. Thus to use a generic means to lose the cutting edge drugs to older drugs. True, some of these are very effective, but many don't come close to matching breakthrough drugs in effectiveness.

So far, there are only two partial solutions I have thought of The first is government regulated prices. Medicare already does this. When I get a Medicare report, it shows what the doctor or institution charged, how much of that Medicare allowed, and 80% of the latter figure that Medicare pays. I'm left with 20% of the allowed amount. Possibly Congress can authorize a branch of the Medicare system to regulate prices – at least by capping them. Thus a regular office call might be capped at $75 for an FP and $100 for some specialists. I recognize that regulation is anathema to some people, but by definition bringing down the cost of medical care means someone has to lose money. Until now, only the patients lose money.

The second concept that would bring down costs is aimed at drugs. Many have already suggested that Medicare and Medicaid be allowed to conduct an auction or bargaining for drugs. If they know they will pay for a million prescriptions of superbiotic next year, they could allow competitive drugs to bid. So far the drug industry sets its prices with little outside interference.

Finally, I have a personal prejudice against lobbyists and PACs. We have set up rules for them, which seems to me to be regulating corruption. With the Supreme Court decision recently, I have no hope to outlaw them anytime soon.