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What Your Hospital CEO Is Thinking: A Reality Check and Rebuttal

 

Ms. Amy Schley made an interesting post that seemed to spur some conversation on cost-based health care services. Due to her increasing legal experience working on memos for a hospital, she let us in for a little behind the scenes peek at what some of her bosses’ emails had taught her. For one, I’m glad that people are thinking about healthcare once again.

On the other hand, I’m extremely disappointed in where this conversation inevitably goes. People with no experience in actual hospitals gather together to discuss how horrible it is that hospitals just can’t work as a business. “Why, outpatient facilities are able to do the same job for cheaper!” “Why should anyone pay more for something they can get for less?!?” “This is why healthcare is so messed up in this country!”

Please allow me to unveil (at great length) what your executive hospital administrators are thinking in response to Ms. Amy’s post, derived from actual budget meetings, sit downs that I have had with my own executive management team, and my experience as a hospital nurse (as well as conversations with my pharmacy COO sister and Ex-Accounts Receivable VP pharmacist father).


Hospitals are attempting to provide a service that is very human; unlike other service industries, people need health care. People need doctors. People need medicine. While a service is being provided, a hospital or other health care provider is providing necessary treatment even for the most simple of functions. These services simply cannot be provided by a machine. The services that infirm people require also require people to perform.

These people, these providers, also happen to be human. They require food and water and breaks in order to perform optimally. Health care providers usually work extraordinarily hard: they work unreasonable hours in difficult circumstances to provide care and indeed, service to people who are often ungrateful. These humans provide care for other humans’ bodily functions. They come into contact with biohazardous material unexpectedly and put their own health at risk.

New regulations in hospitals minimize the humanity in care and tend to emphasize numbers, goals, outcomes, and adherence to business models. This would advance health care exponentially if it weren’t for one thing: humans. Humans are unpredictable and the course of care is often complicated by patients with complex and multifactorial diagnoses with unexpected reactions to the interventions. That is only the patients. The providers are also human with all of the benefits and drawbacks therein.

This complicates matters further for the economic-model proponents. We cannot have services without payment. That is considered slavery. Yet many times, this is what is expected of health care staff. They are required to perform services beyond their job description as “part of the job”. If those services are not provided, hospitals are panned or maligned as being uncaring, patient-unfriendly facilities. Cost is never mentioned.

Let me answer Ms. Amy’s points:

First and foremost, hospitals are well aware that health-care is too expensive, too hard to get, opaque in its pricing, and often wasteful in its execution.

@AmySchley is right. Hospitals are aware the healthcare is too expensive, opaque in pricing, and wasteful. This is a point of conversation to employees on a near-constant basis. Posters are set up in the conference rooms and our break-rooms, once a brief oasis of normal human biological functioning, is now the new place to be accosted with economic data. Ever wonder what we are doing that is wasteful this week?

Don’t! There’s a new 70+ inch TV enveloping an entire wall of the break-room. It will let you know your failings any time you come in for a moment of respite. See our numbers? And don’t forget! There’s more continuing education on a new initiative for Patient Satisfaction that needs to be completed on the intranet prior to the mandatory inservice.

On a more serious note, health-care pricing opacity partially comes from the source of information. If you ask your nurse or your doctor how expensive things are, ethically, they cannot tell you exact prices. It interferes with your care and is a source of conflict. They are your providers, period. Most have divorced themselves from the pricing as much as possible in order to not have it prejudice their treatment decisions. Discussing costs and pricing is not conducive to building a relationship of trust. Many patients refuse care or leave against medical advice because they are afraid of the financial impact. If telling someone up front how much testing, treatment, or a procedure is going to cost would result in them not receiving medical care, there would be a civil suit immediately upon their demise.

Ms. Amy stated:

Further, they recognize that their options are either to improve themselves or be replaced by more consumer-friendly options. Chief among these ideas is the idea of moving away from “fee-for-service” models, where they are paid the services performed, to a “fee-for-value” model, where they are paid for improving the patient’s situation. Part of this is by reducing complications, a trend that Medicare is pushing by penalizing hospitals that have too many hospital-caused complications.

and later:

Activity-based costing is the crazy idea of figuring out how much things actually cost. This can literally mean getting guys with stopwatches to observe how long each person spends working on the procedure and how many supplies they use. And it’s completely necessary due to yet another development in the health care industry: Consumers actually paying attention to costs.

This makes it sound like hospital executives woke up one day and realized that their facilities were being replaced. Please let me disabuse you of that notion. Hospitals are not, nor will they ever, be replaced for “consumer-friendly options”. Hospitals are places for acutely ill people to receive hospital-level treatment. They should not be places for routine examinations. The move from locations with blended outpatient and inpatient services to truly inpatient acute care is happening now. Hospitals are realizing that they can save money and provide more services in an outpatient setting. If they want to cover their costs, hospital systems (because they are truly a delivery system) are beginning to provide imaging and sub-acute services on an outpatient basis. These services can be provided in a less expensive setting that is less likely to complicate the course of care.

One of the ways that outpatient settings reduce cost is avoiding Medicare penalties. The rules for Medicare are different for hospital licensing and procedures. Outpatient settings do not suffer from the same restrictions or expectations: less cost, more benefit. Additionally, in an outpatient setting, complications can be correctly attributed to the patient, rather than the facility. If a patient in a hospital refuses to move and gets a preventable pressure ulcer, this may be fined steeply. Should the patient receive one at home, the responsible parties pay accordingly.

Ms. Amy calls it “pay for value”, while the US Government calls it “value-based purchasing“. This is a misnomer. It is not paying for the value of the care, it is paying (or better yet, not paying!) for outcomes. This has increased defensive charting (overcharting) and certain medical tests that are unnecessary in order to document that the outcome was unavoidable. The repayment by Medicare, then, does not meet this new increased cost; the hospital tends to absorb the cost as a necessary evil for continuing to be a Medicare provider. Indeed, hospitals absorb much of the health care costs for underserved populations and for the patients who cannot conform to government guidelines.

Repayment by Medicare is now given, held, or restricted based upon performance. This is one way of controlling medical costs. As Medicare creates unreasonable benchmarks and withholds funds based upon results, insurance companies will follow. Early adoption of their strict rules, regulations, and outlines for treatment (which include antibiotic use, surgical guidelines, use of medical devices, ad nauseum) gives hospitals bonuses, whereas holding out, reduces payments until a defined time. Then it becomes a fine.

Yet another way that the government is controlling your care. Your Hospital CEO knows this and is playing the game as best they can in order to reap the benefits and stave off penalty. Your Hospital CEO also knows that it is reducing individuality in care and is leading to conveyor-belt medicine.

Your Hospital CEO is also having companies like Deloitte consult in expensive cost-analysis projects to determine what they can possibly do in order to make up for losses. These consulting firms often have no experience in real medical practice, but will advise hospitals as if they were any other business: the patient is always right, service is key, make sure the hospital is an exquisite experience they could not have anywhere else. Unfortunately, the patient is not right (or else many of them would not be there!), service cannot be swift, and Disney-like without consequences for other patients. My own hospital had Disney’s service gurus consult to help us become more patient-centered. This results in CEOs more concerned about satisfaction surveys and VBP (value-based purchasing) than the health or well-being of the staff. When the well-being of the staff suffers, sick calls go up, and staffing costs rise.

This cost is passed on to the consumer. Remember: the most expensive cost in health care is the cost of the staff needed to provide it. 

In another spot, Ms. Amy pointed out evidence-based improvements in hospital care:

For example, ventilator-acquired pneumonia effects ~2 percent of inpatients, and it can be completely eliminated by following proper procedures, like leaving the patient’s head elevated at 30 percent. Unfortunately for the patients, it’s a complication that is accepted as “just one of those things that happens” in far too many hospitals.

Even prior to Medicare’s new rules, this was a point of concern for all learning hospitals (hospitals that are University-affiliated or provide a teaching ground for medical education). The original study was released over 10 years ago and most hospitals (to my knowledge) began VAP-related reduction measures shortly after it was released.

From a personal health care provider perspective, I have never experienced any conditions in non-terminal patients that were accepted as “just one of those things that happens” – from hospitals I have been a patient in, worked in, or had a family member be in. I admit that I was at least a little offended by the supposition that preventable complications are blindly accepted.

@AmySchley goes on:

Bundling is the radical idea of selling the $35 oil change as one service with a fixed, up-front fee, and increasingly, insurance companies are insisting on bundling healthcare services, leaving the hospital with the risk of the cost of the procedure going out of control (which makes sense, as they’re the ones with the greatest ability to keep prices from spiraling out of control).

With new technology, complicated procedures, and patients sicker than ever, it may be difficult to ensure that costs stay within the bundled price. Surgical complications arise not only from the surgeon and the care provided post operatively, but also arise from the home preparation for the surgery and condition of the patient. More often than ever before, the condition of the patient is a concern. People want risky surgeries and they want perfect outcomes. As we attempt more complicated procedures, the cost will necessarily rise; the education and tools required demand it. Fewer people can perform these delicate procedures and their services will be expensive.

One of my most recent patients suffered from unforeseen operative complications; it could not have been prevented with even the most attentive, technologically advanced surgical team. The patient had presented in the hospital quickly after suffering a stroke. Treatment was provided and in the course of extraordinary measures, a bizarre complication occurred: there was an attempt at rescue which failed catastrophically. It could not have been avoided in the course of providing the desired treatment.A lawyer has, of course, already been retained by the patient’s family.

This brings us to one of the most important mantras of health care management: the people who have the greatest ability to keep prices from spiraling out of control are the consumers.

@AmySchley is right about one thing. It is interesting to know how the sausage is really made.

Published in Healthcare
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There are 63 comments.

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  1. Member
    TheRightNurse Post author

    TheRightNurse: Due to her increasing legal experience working on memos for a hospital, she let us in for a little behind the scenes peek at what some of her bosses’ emails had taught her.

    @amyschley, let me know if I’m wrong on the job. I think that’s what you said it was, but I could have misunderstood. Please let me know if I’m wrong on that and I’ll edit accordingly.

    • #1
    • February 11, 2018 at 5:37 pm
    • 1 like
  2. Thatcher

    Sorry, but you lost me when you stated that people need health care. No, people want health care, because they want to live longer. In fact, people’s “need” for health care is far less urgent than their need for food and water, and yet we manage to maintain a very competitive system of private food and nutrition delivery, even when it’s a public benefit. Even SNAP recipients get to pick (mostly) what they like at their favorite grocery store. There is a wide variety of food products to choose from, at various price levels, and there’s plenty of evidence that the cheapest food is the least good for you. Yet we don’t have a large population agitating for an organic caviar allowance to go with a personal chef from their nearest localvore five-star restaurant.

    Every bit of organizational complexity and expense you highlighted is largely a function of the government interference in health care, particularly in the existence of the Emergency Room “stabilization” mandate. All to give the illusion to the general public that everyone can and will get the healthcare they “need”.

    Yet premium healthcare still goes to those who can pay for it themselves, in precisely the way that those same people get their nutrition from premium suppliers. Every attempt to make healthcare more equitable merely lowers the quality of care available to the middle class (to that of the underclasses).

    • #2
    • February 11, 2018 at 5:57 pm
    • 6 likes
  3. Coolidge

    In general, I agree with all this.

    If you ask your nurse or your doctor how expensive things are, ethically, they cannot tell you exact prices. It interferes with your care and is a source of conflict.

    A lot of us didn’t know. Let me provide one example, which may be now out of date as Obama care decimated the hospitals I knew.

    In the days of merely “managed care” it was common to have insurance that included a “20% co-pay.” The patient thought that, if they paid 20% of the billed charges, the insurance would “pick up the other 80%.” In fact, most insurance companies had contracts with hospitals, that heavily discounted the payment but the “retail charges” were still presented to the patient for reimbursement. It was not unusual for the “20% co-pay” to be more than the “80% paid by the insurance.”

    Another factor is that constraints on doctors incomes, while popular with bureaucrats, including hospital CEOs, has led to much lower productivity. Medical staffing companies report that female doctors work 25% less than male doctors but it is worse than that. Male doctors trained in the past 30 years work significantly less hours and are less productive for the hours they work.

    Some might consider that a plus as there is a myth that doctors do too much, especially under fee-for-service. In fact, what is happening is that, as medical schools turn out more MDs, the shortage increases. It takes more doctors to do the work done by my generation. We had more incentive but we also had a work ethic that is not as strong as the present generation. This is not an old codger grumping about the new generation, but is the product of teaching medical students for the past 15 years. They know the income and working conditions will be worse. I talk to young primary care doctors and those I talk to hate the circumstances of their practice.

    • #3
    • February 11, 2018 at 6:23 pm
    • 6 likes
  4. Member
    TheRightNurse Post author

    Phil Turmel (View Comment):
    Sorry, but you lost me when you stated that people need health care.

    I didn’t say that they needed insurance. People do need some sort of health care, however, in order to maintain their health. Unless they do not want any sort of medical treatment ever, people will need health care of some kind.

    Though, I suppose that is an option. There are many people who believe in faith healing. It could work.

    • #4
    • February 11, 2018 at 6:23 pm
    • 4 likes
  5. Moderator

    TheRightNurse (View Comment):

    TheRightNurse: Due to her increasing legal experience working on memos for a hospital, she let us in for a little behind the scenes peek at what some of her bosses’ emails had taught her.

    @amyschley, let me know if I’m wrong on the job. I think that’s what you said it was, but I could have misunderstood. Please let me know if I’m wrong on that and I’ll edit accordingly.

    It would be more accurate to say I’m repeating what was in public articles that were in the inboxes of hospital officers as part of helping them prepare for a lawsuit. I was very specifically not repeating anything that they had actually written.

    TheRightNurse: This makes it sound like hospital executives woke up one day and realized that their facilities were being replaced. Please let me disabuse you of that notion. Hospitals are not, nor will they ever, be replaced for “consumer-friendly options”.

    I would quibble a bit here. Many small and rural hospitals are closing. There are plenty of reasons for why they can’t make ends meet, but the prospect of losing a price war for routine out-patient procedures against non-hospital providers who aren’t under a legal obligation to take in Medicare, Medicaid, or uninsured patients is one that they are specifically worried about. (In many rural areas the local hospital has been replaced with a urgent care center with the closest actual hospital 30 or more miles away.) e.g.

    Six rural hospitals in the state have closed their doors since the beginning of 2013. Two of those have been reopened as modified medical facilities, but no longer function as full-fledged hospitals.

    https://www.huffingtonpost.com/entry/rural-hospitals-closure-georgia_us_59c02bf4e4b087fdf5075e38

    • #5
    • February 11, 2018 at 6:23 pm
    • 1 like
  6. Coolidge

    Its a requirement in many cities, that restaurants post their menu outside the establishment – so those outside can see the price range and decide to enter or not.

    Why cant a hospital post the prices of its procedures? With after care and preparation times also priced and scheduled?

    Wouldnt that put the hospital into a cost accountability mode that would inevitably reduce costs?

    I mean a restaurant wouldnt sell you a plate, unless they understood how much it costs to prepare the meal and serve it.

    • #6
    • February 11, 2018 at 6:26 pm
    • Like
  7. Member

    RN, maybe I missed Amy’s point. I didn’t think she was advocating for what she was reporting, just giving a picture of what she saw.

    • #7
    • February 11, 2018 at 6:28 pm
    • Like
  8. Member
    TheRightNurse Post author

    Mike-K (View Comment):
    This is not an old codger grumping about the new generation, but is the product of teaching medical students for the past 15 years. They know the income and working conditions will be worse. I talk to young primary care doctors and those I talk to hate the circumstances of their practice.

    That’s very true. On top of that, the working conditions are transparent. It is no longer a badge of pride to work 36 hours straight and never see a doctor yourself. It is no longer a point of pride that doctors work longer than anyone else. People have seen the consequences of what happens with doctors that work too long and too hard: they drop dead at work, commit suicide in larger numbers than ever, or leave medicine altogether.

    There’s less respect for doctors and medical practitioners now (as there seems to be for most professions).

    I’m not sure what the solution is for that.

    I do think you’re right about EOBs and the stated costs. It’s hard to know what a contracted rate even is! I have had patients ask me and it isn’t only that it isn’t my business to know, but it is also that it takes a specialty in medical billing to know!

    • #8
    • February 11, 2018 at 6:30 pm
    • 4 likes
  9. Thatcher

    Amy Schley (View Comment): Many small and rural hospitals are closing. There are plenty of reasons for why they can’t make ends meet, but the prospect of losing a price war for routine out-patient procedures against non-hospital providers who aren’t under a legal obligation to take in Medicare, Medicaid, or uninsured patients is one that they are specifically worried about. (In many rural areas the local hospital has been replaced with a doc-in-a-box with the closest actual hospital 30 or more miles away.)

    This is a real incentive to focus on health maintenance as an individual.

    • #9
    • February 11, 2018 at 6:41 pm
    • 3 likes
  10. Coolidge

    OccupantCDN (View Comment):
    Why cant a hospital post the prices of its procedures?

    Because they differ depending on the negotiated rates with the various insurance companies that are not that same for all comers. The French System, which I favor as a model for US reform, does do that.

    • #10
    • February 11, 2018 at 6:43 pm
    • 2 likes
  11. Member
    TheRightNurse Post author

    Amy Schley (View Comment):
    It would be more accurate to say I’m repeating what was in public articles that were in the inboxes of hospital officers as part of helping them prepare for a lawsuit. I was very specifically not repeating anything that they had actually written.

    Yes. At no point did I say you were repeating any sort of confidential information of any kind. I was trying to describe the job where you have found yourself in the interesting position of being privy to an entire C-suite of exchanged emails.

    • #11
    • February 11, 2018 at 6:44 pm
    • 1 like
  12. Coolidge

    Mike-K (View Comment):

    OccupantCDN (View Comment):
    Why cant a hospital post the prices of its procedures?

    Because they differ depending on the negotiated rates with the various insurance companies that are not that same for all comers. The French System, which I favor as a model for US reform, does do that.

    Inst that an anti-competitive behavior?

    • #12
    • February 11, 2018 at 6:46 pm
    • Like
  13. Coolidge

    they drop dead at work, commit suicide in larger numbers than ever, or leave medicine altogether.

    I don’t think this is a result of long hours. I finally quit my surgical group after I worked 40 hours two long days without sleep in a row. It used to be fun but I was 50 by that time. The suicide and drop dead cases are probably related to unhappy practice situations and family problems. I was divorced twice and recently remarried my second wife after 25 years being divorced. She was an ICU nurse when we married and she could not believe how many times the telephone rang every night I was on call.

    Surgery was fun in those days. I think primary care was, too, but managed care and HMOs destroyed that.

    • #13
    • February 11, 2018 at 6:49 pm
    • 4 likes
  14. Moderator

    Mike-K (View Comment):

    OccupantCDN (View Comment):
    Why cant a hospital post the prices of its procedures?

    Because they differ depending on the negotiated rates with the various insurance companies that are not that same for all comers. The French System, which I favor as a model for US reform, does do that.

    And as the insurance negotiators are paid less on how good a price they get but rather how much discount off the list price they bargain for the insurance company, there’s not much incentive for the hospital’s chargemaster price to have much bearing on reality. It’s like the clothing prices at department stores — they mark them up to mark them down.

    Now, insurance companies are trying to promote provider competition by posting projected prices of routine procedures on the web, but one of the things I’m specifically looking for in this document review is correspondence where the hospital discovered that the insurer’s price on such a website was wrong.

    • #14
    • February 11, 2018 at 6:49 pm
    • 2 likes
  15. Coolidge

    I still think the French system is better and did an extensive analysis a few years ago that is posted at Chicagoboyz. When I retired, I went back to Dartmouth for a year and got anther degree to learn how to measure quality in medicine. At that time (1995), Jack Wennberg had done a better job than anyone. I thought I would have a second career but quickly learned that insurance companies were absolutely uninterested in quality.

    • #15
    • February 11, 2018 at 6:54 pm
    • 4 likes
  16. Member
    TheRightNurse Post author

    Mike-K (View Comment):
    I don’t think this is a result of long hours.

    There’s a lot of factors, but I think part of it is the long hours. When you’re at a hospital for that long, there’s more of a chance that you’ll make a medical error or see something/be involved in something traumatic. Over time, that stress wears on a person. I think that people aren’t willing to endure that kind of stress and those who do often bear the consequences (the aforementioned list).

    • #16
    • February 11, 2018 at 7:07 pm
    • 1 like
  17. Member
    TheRightNurse Post author

    Mike-K (View Comment):
    I thought I would have a second career but quickly learned that insurance companies were absolutely uninterested in quality.

    Yeah. And yet people still love Kaiser (which has fewer layers between the provider and the insurer!).

    • #17
    • February 11, 2018 at 7:08 pm
    • 1 like
  18. Member
    TheRightNurse Post author

    Patrick McClure, Mom's Favori… (View Comment):
    RN, maybe I missed Amy’s point. I didn’t think she was advocating for what she was reporting, just giving a picture of what she saw.

    I’m not used to people giving a plain-news report without advocating a position here. Truly there are people who like to play devil’s advocate, but I’ve not seen Amy be one of them. She does seem to reflect positively upon some of the things she’d stated, which were her opinions based upon what she had read. She pretty explicitly did not give us a picture of what she saw because that would be a little too revealing on direct opinions of the C-level execs.

    I understood it to be her treatise on health care as a business after having read through emails and talking to her parents. I’m responding to that because I think many people who work in business really do view health care this way and need to see a different perspective that aligns with the experience from within.

    • #18
    • February 11, 2018 at 7:13 pm
    • 4 likes
  19. Member
    TheRightNurse Post author

    OccupantCDN (View Comment):
    Why cant a hospital post the prices of its procedures? With after care and preparation times also priced and scheduled?

    Wouldnt that put the hospital into a cost accountability mode that would inevitably reduce costs?

    I mean a restaurant wouldnt sell you a plate, unless they understood how much it costs to prepare the meal and serve it.

    Okay. Point for point:

    1. They can. Some do post them as guidelines, however, it must be made clear that it is only the facilities cost, not the cost of the doctor. I suppose some people would consider that to be a price-locked guarantee. Unfortunately, things happen mid-surgery and a once viable option is no longer viable, etc, etc. People are people and it does not always go like the idealized textbook version. This adds cost and recovery time. As a hospital, I can’t say how someone will recover. I do not know them. I do not know their co-morbidities or how they will heal. I cannot give an exact time. This is another point that comes down to litigation: promising results, time in recovery, or even costs could come back to haunt the hospital. I’m not saying they’re right, but I am saying that it’s a big fear.
    2. Hospitals already try to save costs. I have never seen a hospital that is super wasteful just because they can be. It’s possible that I haven’t seen some really wealthy facilities that overcharge on everything and then feel free to use all the bath wipes they want, however, I’ve seen facilities that lock away gauze. They actually make you charge each piece to the patient. It’s madness.
    3. The difference is food service versus health care. If you told me that I had to make dinner for three for $20, I could do that. But you can’t tell me to make dinner for three for $20, then complain that it wasn’t filet mignon. You asked for dinner for three. I gave you dinner for three. Really, it is more that people aren’t just people sitting at a restaurant. People are complex and things happen. Mid-surgery, do you want someone to wake you up to point out that they’re going to have to consult another surgeon to take care of something they never saw in imaging? Do you want someone to wake you up if the brand replacement knee they had originally intended to use won’t fit right or provide the movement you need? It just is not the same.

    All that said, I think hospitals should be able to provide a cost estimate. The problem is that insurance companies and consumers are cushioning the cost for people who cannot afford care. Cost shifting is what has kept hospitals afloat for ages. I’d rather pay more for a room at a hospital that charges in a bundle rather than itemizes each piece of gauze.

    • #19
    • February 11, 2018 at 7:44 pm
    • 3 likes
  20. Moderator

    TheRightNurse (View Comment):

    Patrick McClure, Mom’s Favori… (View Comment):
    RN, maybe I missed Amy’s point. I didn’t think she was advocating for what she was reporting, just giving a picture of what she saw.

    I’m not used to people giving a plain-news report without advocating a position here. Truly there are people who like to play devil’s advocate, but I’ve not seen Amy be one of them. She does seem to reflect positively upon some of the things she’d stated, which were her opinions based upon what she had read. She pretty explicitly did not give us a picture of what she saw because that would be a little too revealing on direct opinions of the C-level execs.

    I understood it to be her treatise on health care as a business after having read through emails and talking to her parents. I’m responding to that because I think many people who work in business really do view health care this way and need to see a different perspective that aligns with the experience from within.

    Well, it’s definitely not my studied and comprehensive treatise — I wouldn’t have been able to jot it down in 30 minutes after work if it was. It was probably the most plain-news reporting I’ve ever done, with perhaps of editorializing because some of these things do seem so incredibly obvious to someone outside medicine that it’s mind-boggling that they are revolutionary in medicine.

    People see the stuff I crochet and ask why don’t I do it for a living. I don’t, because I did a simple activity based costing and charging even $5/hr for labor means that my prices would be too high for the market. I fully grant that everything in medicine is orders of magnitude more complex, but I don’t understand how you can make the business decision to sell something — whether a crocheted Cthulhu product or a baby delivery service — without figuring out how much it will cost you to provide it and then comparing that number to the market to see if you can make money doing it. Medicine is a service, but it also a business. As the memos I read put it, “No margin; no mission.” If the hospital doesn’t make money, the hospital will close and therefore won’t help anybody.

    • #20
    • February 11, 2018 at 7:44 pm
    • 5 likes
  21. Member
    TheRightNurse Post author

    Phil Turmel (View Comment):
    Every bit of organizational complexity and expense you highlighted is largely a function of the government interference in health care, particularly in the existence of the Emergency Room “stabilization” mandate. All to give the illusion to the general public that everyone can and will get the healthcare they “need”.

    Yet premium healthcare still goes to those who can pay for it themselves, in precisely the way that those same people get their nutrition from premium suppliers. Every attempt to make healthcare more equitable merely lowers the quality of care available to the middle class (to that of the underclasses).

    I agree with you, mostly. I think there’s a certain moral responsibility to provide immediate life-saving care to people most in need without concern for cost. But that is a topic for a different post!

    People who can pay for premium care generally get what they pay for, if not what they want. This is not always to people’s benefit (Michael Jackson, Prince, Tom Petty…). Money may not buy happiness, but it does buy more time and more options on how to get there. This is doubly true when it comes to health care. It pays for quality, privacy, and immediacy.

    • #21
    • February 11, 2018 at 7:51 pm
    • 1 like
  22. Member

    Okay, after having read the posts, I’ve made my decision.

    America’s health care system should be remade by women. But they should be Ricochet members.

    • #22
    • February 11, 2018 at 7:55 pm
    • 8 likes
  23. Member

    Because of my limited consumer experience with healthcare I certainly can’t weigh into the details of the health care sausage making. But the economics is very screwy.

    During MEPS physical it was discovered that my son had a pilonidal cyst. We visited our local family practice who referred us to an outstanding general surgeon to have it removed. He operated both at the local hospital or a surgery center about 30 minutes away. When I mentioned we were self-pay he recommended we avoid the hospital because the surgery center was cheaper.

    The regular price for just the use of the surgery center was over $6000. Where did this price come from? Is this was the insurance companies are billed? Our self-pay discount was around $1500. 75% discount?!! What business can give that large a discount and stay in business? I have not idea?

    Add in the 60% discount for the anesthesiologist and about 50% discount for the surgeon and one gets the impression our healthcare is way overpriced. Then I remember that anyone paying the regular price is also paying for the deadbeats who don’t ever pay their bill.

    • #23
    • February 11, 2018 at 7:58 pm
    • 5 likes
  24. Member
    TheRightNurse Post author

    livingthenonStarWarslife (View Comment):
    Add in the 60% discount for the anesthesiologist and about 50% discount for the surgeon and one gets the impression our healthcare is way overpriced. Then I remember that anyone paying the regular price is also paying for the deadbeats who don’t ever pay their bill.

    That is a large bit of it, actually. It’s the cost of billing and payment retrieval. There are interesting stories from my dad about insurance companies not paying up. One very big name insurance company had over $900,000 owed to the company for over a year.

    It’s remarkable that hospitals manage to function at all.

    • #24
    • February 11, 2018 at 8:19 pm
    • 6 likes
  25. Member
    TheRightNurse Post author

    Amy Schley (View Comment):
    As the memos I read put it, “No margin; no mission.” If the hospital doesn’t make money, the hospital will close and therefore won’t help anybody.

    The mantra of all finance departments for any non-profit!

    • #25
    • February 11, 2018 at 8:23 pm
    • 4 likes
  26. Member

    Mike-K (View Comment):
    Some might consider that a plus as there is a myth that doctors do too much, especially under fee-for-service. In fact, what is happening is that, as medical schools turn out more MDs, the shortage increases. It takes more doctors to do the work done by my generation. We had more incentive but we also had a work ethic that is not as strong as the present generation. This is not an old codger grumping about the new generation, but is the product of teaching medical students for the past 15 years. They know the income and working conditions will be worse. I talk to young primary care doctors and those I talk to hate the circumstances of their practic

    The dirty little secret that must not be mentioned is that with 50% of med school classes now women, there is far less bang for the buck for each graduate. Women work fewer hours and have shorter careers then their male counterparts.

    Donning my asbestos suit.

    • #26
    • February 11, 2018 at 8:32 pm
    • 8 likes
  27. Thatcher

    Re: 23, LTNSWL, hope your son is on the mend…and that his family is okay after undergoing his procedure and recovery, too. :-). S/F….

    • #27
    • February 11, 2018 at 8:48 pm
    • 4 likes
  28. Member

    TheRightNurse (View Comment):
    All that said, I think hospitals should be able to provide a cost estimate.

    Do people sue their mechanic when the bill inevitably goes over the estimate? It’s trite to repeat it, but if you don’t know what something costs, how can you make a decision about it?

    Another example mentioned, inability to provide answers to patients for fear of lawsuit. When I was in the hospital late December I asked the nurse lady how long she expected recovery to take on my broken arm. One of my convictions in life is that the nurses know quite a bit more than they’re generally given credit for. She demurred. I asked again “No really, off the record, how long?” She still didn’t answer. Unlike Senator Warren, I didn’t persist when it was obvious it was unwanted.

    I understand that the human body is non-deterministic. I understand that the off the cuff answer you’d give is necessarily going to be vague and not necessarily correct. Even so, a simple “Three months, plus or minus three months” would have given me information I didn’t have.

    My mother, retired nurse, said to me afterwards. “It was against the rules. Of course, I probably would have told you.” Among the other things I inherited from my parents, a certain lack of respect for the bureaucracy.

    • #28
    • February 12, 2018 at 2:15 am
    • 9 likes
  29. Member

    TheRightNurse: There’s a new 70+ inch TV enveloping an entire wall of the break-room. It will let you know your failings any time you come in for a moment of respite. See our numbers?

    And suddenly I’m picturing my boss like General Turgidson in the War Room. “Gee I wish we had one of them 70 inch TVs”

    While I just said how knowing what things cost is essential, I’m less sold on the kind of high level information those things provide. “Wasteful spending went from 10 to 12 percent this period? Well I’d better cut down that wasteful spending I was planning after lunch.”

    • #29
    • February 12, 2018 at 2:31 am
    • 3 likes
  30. Member

    Gary McVey (View Comment):
    Okay, after having read the posts, I’ve made my decision.

    America’s health care system should be remade by women. But they should be Ricochet members.

    More female Ricochetti. That’s your answer to everything.

    Still, long as I’m quoting Dr. Strangelove, the Russian Ambassador: “I must confess you have an astonishingly good idea there.”

    • #30
    • February 12, 2018 at 2:32 am
    • 3 likes
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