Tuesday, October 7, 2008

Health Train Overhaul


Quote of the day:

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People that are really very weird can get into sensitive positions and have a tremendous impact on history. - Dan Quayle

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You can forget about major healthcare reform this election cycle. Our current and future elected leaders are hard pressed to correct the financial morass that has developed.  The media is misleading all of us when it places blame on the sub-prime mortgage market.  To hear responsible officials blame this on giving mortgages to people that should not have a mortgage is a blatant lie and misrepresentation of the facts. One of America's ideals has everyone should be able to buy a home. a chicken in every pot and a  car or two in the garage. Perhaps that was true in the 50s when the average home in suburbia was about 19,000-25,000 dollars. This is largely untrue now with average homes costing 250,00 dollars or more in a market where the dollar is almost worthless compared to it's value back then. The cost of gas was about 19-25 cents per gallon.  A MacDonald's burger was 19 cents.

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Healthcare will muddle along for the time being, unless we see large hospitals or systems threatened with bankruptcy or failure and then they will be bailed out if it affects millions of people.  Don't look for relief for the piddling masses of physicians, and primary care providers. 

You don't need a pile or ream of statistics to analyze our current situation.  Just look at your accounts receivable, and your check book balances.

In fact as William Brody states in the San Francisco Chronicle 

In case you missed it, Great Britain, in response to prolonged complaints from tourists, has decided to move its traffic from the left side of the road to the right, the same way we drive in the United States. But not all traffic. After taxi and truck drivers protested the cost of moving their steering wheels, a compromise was worked out. Cars will drive on the right and commercial vehicles on the left.

They call this the American Medicine Plan. image

None of that is true, of course. I offer this nightmarish fantasy to make the point that the United States has the world's only health care system where everyone plays by his or her own rulebook.

In fact, there is no American health care system. You can talk about the British Medical Service or the German medical system or the Canadian national health plan. But when you describe American health care, there is no one system you can talk about. Medicare is different from Medicaid is different from private insurance is different from no insurance.

Individuals in these different situations have different medical experiences - and often different health outcomes.  And for this mess, we Americans shell out $2.2 trillion a year, up from $75 billion just 38 years ago."

What troubles me, however, is that whenever Washington tries to overhaul something that involves a large universe of interest groups, it usually makes things not simpler, but more complex. And complexity is already one of the very worst aspects of American health care.

Has anyone been to a hospital for a procedure and not been confounded by the billing process that followed? No wonder hospitals are repeatedly asked, "Do you go out of your way to hire complete idiots for your billing office?"

In fact, just the opposite is true. Hospitals try their best to hire good people and spend a lot of time training them. But the outcomes are usually abysmal because every insurance plan has different rules, different eligibilities and different coding systems.

Not so very long ago, hospitals dealt with only a small number of organizations that paid for medical care. There was Medicare and Medicaid, Blue Cross/Blue Shield and a handful of private insurers. Recently, I asked my chief financial officer how many payers we deal with today. The number shocked even me. He said Johns Hopkins Hospital has to bill more than 700 different payers and insurers.

They are HMOs, PPOs, MCOs, IPAs and an alphabet soup of other organizations. Each one has its own set of rules for what services are covered, the level of reimbursement and the kinds of documentation and pre-approval required. It is an administrative nightmare.

This inefficiency costs patients tens of billions of dollars each year. Billing, collection and payment administration conservatively represent 20 percent of that $2.2 trillion health-care bill.

When Washington addresses health care reform, therefore, it needs to treat complexity as one of the major symptoms.

How? I don't pretend to have all the answers, but some points are clear. Start with a common format - a national standard for billing and coding - that all payers and providers can use to reduce costs and burdens and make medical bills understandable to patients.

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