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Health Care: How Can We Follow the Money?

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Headlined to H2 6/18/09

No matter where you stand on health care, you can agree on two intractable facts:

a) our health system costs much more than similar care in similar countries and

b) our care is statistically no better (and sometimes worse) than their cheaper care.

To learn why, you have to follow the money, as always: who plants it? Who tends it? Who finally harvests it and how does it end up in their particular barns?

Everybody has a designated villain: the docs are greedy fat cats; the drug companies are greedier and egregious liars to boot; the hospitals are insanely expensive and their bill items have no relationship to real-world prices; the medical records departments still use quill pens and eye shades; the insurance parasites suck appalling sums into paper pushing and even more appalling sums into their profit columns.

Needless to say, each of these worthy establishments blames the collapse of our medical system on one or more of the others. Each defends its own charges with the same pious assertion: “We absolutely need [some say deserve] every penny that we screw you for.”

Are they telling the truth? Where do those trillions of pennies go? “Research,” say big druggies; “Quality of Care,” say the hospitals; “Med school debt and malpractice suits,” say the Hippocrates. As for the insurance giants, they wrap themselves in red-white-and-blue free market bromides and hum the National Anthem. But when asked to break these costs down, nobody speaks up. Nobody answers commonsense questions, like:

Pharmaceuticals, why do the same drugs from the same companies cost so much less in Canada?

Hospitals, why are cheap over-the-counter medications charged at ten bucks a pill?

Physicians, why should you be worth more than everyone except rock, sport, and film stars (those indispensible social contributors)?

Insurance behemoths, why does paper work cost so much and -- disregarding your contorted accounting methods -- how much profit do you really make?

Hmm; I thought I just heard a pin drop.

I’m no expert in economics or health care (I was an English major, which accounts for my life-long genteel poverty) but I found one specific line item on one actual hospital invoice and decided, what the hey; why not give it a hypothetical, as Texans like to say? The item was a CT scan and was charged at just around 7K, give or take. That’s Seven. Thousand. Dollars.

Lemme see now: CT labs work 24/7 because of ER crises and emergencies among patients already hospitalized. Let’s say that a well-utilized facility averages ten scans a day. Move the decimal and you get 3,650 procedures per year at $7,000 a pop, or $2,555,000 per annum. (Move that decimal again to cover the, say, ten year life span of the equipment and the total charges come to $25.6 million.)

Where does all that good money go? A layman can only imagine:

Personnel: technicians to make scans and physician specialists to read them; nurses or orderlies to schlep the patients in and out; staff engineers to maintain the hardware; hospital cleaning, linen, and maintenance staff.

Hardware: the scanner, computer, and all the attendant equipment -- and don’t forget the ever-evolving software.

Overhead: the CT lab’s share of every kind of hospital expense from climate control to fire insurance.

Admittedly, my breakdown is ludicrously ignorant and simplistic because I can only guess at the individual expense items and I haven’t a clue about how much cash goes to each. Even so, I’m willing to bet my aging bippy that a CT scan does not truly incur $7,000 in out-of-pocket costs. However, the procedure is charged that way, and the difference between charges and costs is concealed someplace else.

Without knowing what the costs are and where they’re going, we have no way to judge whether any are excessive – or even justified. And without knowing how much is hidden in the charges and where it is hiding, we can’t tell the difference between “prudent accumulation of capital reserves” and grand larceny. In short, we can’t realistically assess the health care debacle because we cannot follow the money.

Or can we?

In areas close to my own field of knowledge I routinely dig up amazing stuff on the internet. How? By knowing that it should exist, how it just might be labeled, and where, approximately, to start excavating. I bet that many OpEd kindred spirits can do the same things with health care cost data.

So here’s the deal: please comment on this piece, but don’t weigh in with the pros and cons of this or that vs. some other. Instead, send URLs. Let’s find the sources of health care data and share them here and on whatever other forums you attend. Let’s give one another the tools to itemize different costs in the health care mess. Let’s empower ourselves to follow the money. Only then can we debate and decide what to do.

Speaking of Health Care Elephants…

President Obama wrapped up his major address to the AMA and the nation at large with these words:

“The other day, my friend, Congressman Earl Blumenauer, handed me a magazine with a special issue titled, "The Crisis in American Medicine." One article notes "soaring charges." Another warns about the "volume of utilization of services." And another asks if we can find a "better way [than fee-for-service] for paying for medical care." It speaks to many of the challenges we face today. The thing is, this special issue was published by Harper's Magazine in October of 1960.”

It was my wife, Sue Stinson, Portland OR retiree by day, who handed that magazine to Congressman Blumenauer, who handed it to Rahm Emanuel, who handed it to the president, who used it in his speech and then stashed it in his presidential archives.

Who says grass roots individuals can’t make a difference?

A career writer and media maven, Jim Stinson is the author of four mystery novels and a college textbook, Video: Digital Communication and Production. His newest novel, Tassy Morgan's Bluff, will be out from Penguin Books in June 2011. He lives with (more...)
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Probably you wanted a different kind of data, but ... by Jack and Kathie Hendricks on Thursday, Jun 18, 2009 at 1:33:35 PM
Your comment is a great start. If we get enough mo... by Jim Stinson on Friday, Jun 19, 2009 at 3:38:13 PM