Saturday, March 1, 2014


It is a sad fact that those who propose a government run health care system, are misinformed about containment of health care costs.  They argue that ‘non-entrepenurial’ systems elimlinate abuse and misuse of health care resources. However,the end game of reducing costs to the  patient, and payor is offset by the increase in bureaucracy. Institutions, and provider groups will hire watchdogs as overseers to monitor the ‘quality’ of healthcare. The expense of this will be considerable to providers organization. The cost however will be absorbed and shifted to the ‘producers’ of the organization.  I was mistaken about this in my own ‘opinions’ about containing costs until I worked at a military hospital as a civilian contractor.  These organizations compete internally for allocation of ‘fixed dollars’ by ‘proving’ they produce. Departmental budgets are determined by ‘utilization, which is monitored by evaluating RVUs generated by providers. If RVUs diminish so too does there budget.  (or overall institution).  Coding experts regularly ‘train’ providers to ‘upcode’ their services. The military in particular has their own system of using
CPT codes. I would be honest in stating that this is not due to greed, but the fear that by not reporting every RVU nickel that department would be penalized. The emphasis is to ‘spend every dollar’ each fiscal year for fear of losing it in the next billing cycle.   I was amazed one day to see an emergency patient who came in with a ‘simple migraine headache’  The ER provider note’s treatment plan included a  “screening MRI”.  Perhaps this is the new paradigm for younger   providers who do rely much more heavily upon technology. Providers in this environment also seem to order more lab tests because they don’t think it ‘costs’ the system’ when a patient (or they ) never see a ‘bill’ to whomever supplies the services.  Particularly in the military these services are provided by ‘outside contractors’ who must be reimbursed as well. 

Many of the military functions are now provided by  outside civilian contractors, such as security or supply chain functions.  This also occurs for medicine and health. For the short term of needed services hiring a contractor also involves a human resources company who does the actual hiring. The intermediary company is often paid on the basis of the reimbursement for the contractor. These firms often charge an equal amount as to what the contractor is reimbursed.  Hidden in this cost if housing and transportation.

Those who observe “our system’ from 40,000 feet really have inadequate knowledge of how the systems work internally.  Those who regulate have little involvement in how and how much it costs to regulate. That is contracted out to third parties, whose costs are ‘hidden’  Congressman Pete Stark frequently tell us the overhead for medicare is 2-3%. That is just not true.  Medicare costs us much more due to cost shifting to private payors and hospitals because their rates are miserably low, and other payors pick up the difference.  Medicare and Medicaid do share in only a portion of the costs of the uninsured. This is passed on to County and State governments.  Statistic lie.

A loud rumbling is beginning in the Internal Revenue Service.  During 2013 complaints were filed by many organizations filing to become  non profit status. Delays have increased, telephone inquiries are answered less than 80% of the time by live personell, tax return and income verifications are not done in real time, as well as bizarre events such as over 2,000 refund checks being sent to the same physical address.  It seem automation and computerization can only go so far. Increasing public, national debit have resulted in sequestration, a budgetary fix that among other things has reduced the IRS budget by 10%, and IRS training by 87%.  Taxpayers can no longer obtain accurate or reliable information from the IRS.

Couple this with the  Affordable Care Act and the additional mandate for the IRS to administer compliance with the indivual insurance mandate and for enforcement…..this is an event and disaster waiting to happ

If you are upset about the government running General Motors, just wait….Is health care deemed “Too big to fail?” or Too big to suceed”?
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