No Interlopers Welcome

I've had a very interesting and stimulating bunch of comments on my "The Market Is A Failure...Oh Really?" post from a couple of days ago. One commenter, MaineBob, had a great question, and I thought my response, which goes to the very heart of my whole reason for existence, should be a post in its own right...

MockBadOC you said at the end of your last post..."There are 2 ways to fix this, in my opinion:1. Socialize medicine...[OR]2. Make medicine free of interference, resulting in a price free-fall and a return of power to the patients."I don't understand #2... How would that work? I have been self employed since the late '80s and am "underinsured" with a $15K deductable because this catastrophic "health" insuranceeach year takes more of my financial pie. The US system with health Insurance is broken...and the grass certainly seems greener in other industrial countries. I look forward to your positive solutions for the USA. How would your proposal work if I got a bad "expensive" disease?In the mean time, I am incentivized to avoid the medical care system... I remain healthy, eat right and exercise...Thanks!MaineBob
May 29, 2009 9:08 AM

This question followed my statement that we had two ways to remove the destructive influence of private insurance companies from American Medicine. I had said that we could (1) trade one devil for another by trading the unresponsiveness, insensitivity, and inefficiency of the insurance industry for that of the notoriously unresponsive, insensitive, inefficient federal government, or (2) we could get rid of interference from both of them, allowing the market to work.

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I'm going to take this from sort of a reverse direction. Instead of telling you the rare horror stories that can result from our current health care system, I'm going to tell you about the everyday, mundane horror stories.

As you know, I am a family doctor at a local urgent care clinic. This means that we see between 50 and 100 patients each day, on average, divided between 2 to 3 providers.

When we see a patient, he or she has already signed in, payed a copay, had their insurance information verified, updated their records, had their vital signs measured, and had their primary and secondary complaints discussed and recorded by the nurse.

When I see the patient, I discuss the chief complaint, take a more lengthy past medical and surgical history, review systems for any clues to other problems or hints about what might be causing the primary complaint, perform a physical examination, document all of the above, answer the patient's questions, answer the patient's family members' questions, write prescriptions, write work and school excuses, and then discharge the patient. I also routinely will call the patient after a couple of days to check on their progress.

Now for all this work, I genuinely believe that my patients believe that their $25 co-pay is simply the tip of the iceberg with regard to my reimbursement for all the work I've described above. They sincerely believe that once I submit the appropriate paperwork to the insurance company, I am payed some phenomenal sum of money for a job well-done. I am told by my patients that they like and appreciate me very much. I believe them. I think that they believe I am worth the $75 to $100 I charge their insurance company for taking care of them and their families.

I think they would be genuinely shocked to learn the truth. The truth is that once they pay their $25 co-pay, that's it. I can submit whatever I want to Blue Cross or to Aetna or to whomever. The answer is always the same. "No". You heard me right. The co-pay is all I get paid. This is frustrating to me, of course. The people that really should be frustrated, if not downright outraged, are the people paying money for insurance.

How much do you pay each month for health coverage? And what are you expecting to get for that money? I would assume that you, like me, assume that if you get sick, the insurance will help to cover the costs of visits to the doctor, medicines, etc. Sadly, this is not the case. You are picking up the whole tab. You are paying several hundred dollars to the insurance company, who then gives you nothing back for the money. If you want a non-generic medicine? No. If you need an MRI? Too damn bad.

You are being robbed. In the end, what you're paying for is insurance against the unthinkable - the horrifying - the prospect that you or a loved one might end up in the hospital.

The thing is, there is already insurance like this - insurance that covers the "worst-case scenario". It has a high deductible and correspondingly, a low monthly premium. In my utopia, a world without insurance interference, this kind of insurance would be sufficient for most people's needs.

Now in MaineBob's situation, he has this type of insurance, but finds that the cost of paying for routine care out-of-pocket is untenable. There is a reason for this, and once again, I go back to the routine every-day experience at my clinic.

Let's say I see a patient for something easy - a case of hay fever, for instance. We still have to go through all the steps outlined above, or insurance will give us a slap on the wrist. I have to document that I've asked certain questions, looked at certain things, considered certain possibilities, or I'll get a slap on the wrist from the insurance people. Then, in an act that I find disgusting and demented, I have to charge $75 for a 99213 (a routine, medium-complexity visit).

Why do I have to charge $75? Is there something intrinsic about a visit for hay fever that makes it worth $75? Of course not. And I'd better hope not. I only make $25 for it. No, the reason I charge $75 is that this is the way to get insurance to approve a fee of $25. Makes perfect sense, right? No, I don't think so either.

So what if insurance disappeared altogether? Wait just a minute while I relish this sweet thought....

Okay. I feel better now. If insurance disappeared, then I could charge what it really is worth to me (and what I think I'm worth to my patients) for a routine visit. I personally think that $50 is reasonable for a routine office visit. Shots and x-rays cost a bit more, of course. And I think that most people would find $50 to be a very doable amount of money for an occasional doctor visit. But wait! It gets better!

What is the most expensive part about a trip to the doctor's office, usually? The medicines. It's the meds that cause the most consternation on the part of patients. What they don't realize is that medications are subject to the same market forces as doctor visits - at least when they're left the hell alone.

Some of the more complicated, "inside-baseball" reasons for the high prices of prescriptions will be addressed in a future blog, but for now, let's just look at the big picture. Why does it cost $125 for a month's worth of Drug X? Because that's what insurance has agreed to pay for it. It has little or nothing to do with the cost of manufacture of the drug or anything else.

So if insurance was out of it, drugs would have to compete with each other on the open market for shares. Augmentin and Avelox would duke it out mano a mano. If people found the increased cost of Avelox to be worth it because of the decreased number of stomach upset cases, for example, then Avelox might win. Or maybe Augmentin would. Regardless, the doctors and patients would have the final say on what drugs were best - this just makes sense. Are doctors perfect? Of course not. But I dare say we have more experience choosing drugs that work for people than $8/hr employees at Blue Cross, or professional politicians in Washington.

This is simply the beginning of how a reduction in interference, rather than an increase in it, could result in the very best outcomes for patients, doctors, etc. You'd still have your insurance safety net, but for the vast majority of us, it'd be like our car insurance - we'd rarely if ever use it. This is how insurance ought to be, right?

Finally, you should know that the "greener grass" in the "other industrialized countries" has been greatly exaggerated, MaineBob.

• In France, for instance, over 90% of their citizens have to have supplemental insurance, purchased at their own expense, over and above their massive taxation for a health scheme that's supposed to pay for everything.
• In the U.K., the socialized health service has such long waiting lists for routine necessary procedures and appointments that the government has had to stoop to enlisting the help of the very private health industry they demonized in order to get the NHS going in the first place. They've discovered the awful truth that the government can never come up with enough money to take care of all the people all the time.
• Canada has long been a favorite of health care Utopians like Michael Moore. What they don't tell you is that people have been extremely unsatisfied with waiting lists and poor care. The government, having originally outlawed the use of private, cash-only clinics, has had to look the other way now, allowing their use to clean out the back log of patients they have neither the money nor the facilities to see.
• Another interesting fact about our frozen northern friends. Two of their loudest and most vitreolic opponents of the so-called "two-tier" system described immediately above (because, they said, it was unfair to the poor and everybody should float or drown together in the same boat) were members of the Canadian parliament. When they each got cancer, they left Canada to seek treatment in the U.S.
• Canadian women routinely cross the border into the U.S. to have babies because of the critical shortage of facilities in Canada. You see, when the government runs health care, there are only two ways to cut costs: Cut services or cut the numbers of people you cover. Canada has chosen the former, of course. It'd be inhumane to leave anybody out of their superb health scheme.
• Germany can't hold on to doctors because of the crappy pay and lousy working conditions. There is such a "brain drain" that patients have to wait weeks, months, even years to see a doctor.

These are just a few examples of how socialized health care fails to solve the problem - it just (a) compounds it or (b) trades one set of unacceptables for another set.

I hope this has been helpful. It has certainly helped my feelings to write it. Best wishes to you and your family, MaineBob. I hope and pray that we will someday live in a country where I am free to provide health care to people like you without interference - even giving it away to needy people when necessary. That's why I became a doctor in the first place.

Your pal,

MOCKBADOC.