If I had good sense, I would be very grateful to Medicare and the AARP supplemental coverage. These insurance schemes have seen me through two knee replacements, several back surgeries, and all sorts of other medical services. This great privilege has certainly saved me thousands upon thousands of dollars. Yet I am not happy with Medicare. It costs us collectively too much.
As seen on a recent broadcast of 60 Minutes, the U.S. Controller General David Walker has been running around the country saying that unless we face up to the facts, the U.S. will go bankrupt by 2040. One of the biggies leading to this mess is the Medicare system. Walker points out that the first baby boomers become eligible for Medicare in 2011. As he puts it “when those boomers start retiring in mass, then that will be a tsunami of spending that could swamp our ship of state if we don’t get serious.”
It has often been said, and it is worth saying again, our politicians have been avoiding this problem. It is the elephant in the room in Washington. One only had to look at the recent Democrat debate to see the candidates come out in favor of more and better medical coverage for all. Actually, I am in favor of that, but certainly attention must be paid to paying the piper. In practically every other democracy in the world there is some form of universal health coverage and the piper is paid. We don’t have universal health coverage and the piper is not paid even for partial coverage.
Those looking for some profound solution here will be disappointed. Instead, I offer two of my favorite gripes. They both have to do with cutting down the amounts the pipers demand for their services. And both have been effectively used by the other major democracies to cut their medical costs.
First, I think doctors are overpaid as a class. I realize that getting to be a doctor is hard work. They had to run a straight “A” in practically all the undergraduate schools they attended and then they had to go through four years of medical school in which they have to memorize the names of all the bones in the body starting from the hallax (the big toe) through the cranium and all 204 bones in between. They also had to learn a medical jargon that describes, for example, a pain in the stomach as diverticulitis.
Thereafter they spend one or two years as an intern. Finally, depending on the specialty chosen, they are in for several more years of training. All of this costs money. By the time they go into practice, they have debts to pay and a desire to start living high on the hog. Maybe they even deserve it.
And high on the hog they live. There are excellent doctors and not so excellent doctors, but there are very few poor ones.
It is a rough guess that at least one out of four mc mansions in Lower Saucon is owned by a doctor. Our community is not unique. Doctors patronage of high class restaurants is rivaled only by businessmen on expense accounts.
They are the new car dealers’ best friends as well as the wine merchants’. And generally speaking, their kids don’t incur a lot of debt to go to college or, for that matter, medical school if they follow in their parents’ footsteps.
A lot of what doctors are paid has to do with Medicare and other insurance plans. In the old days, when there were still house calls, doctors’ fees were determined more or less by negotiation between doctor and patient. The law of supply and demand worked. Nowadays, the law of supply and demand has all but been repealed. Fees are set by what Medicare or the insurance companies will allow. Patients who are covered by insurance basically don’t care what the charges are. Why should they? They are not paying. Insurers in general are not crazy and have no great desire to overpay doctors. They do fight the medical inflation to some extent. But what the doctors have got going for them is two things: First, they are assured of getting paid. The American Medical Association (AMA) fought furiously against Medicare. How lucky doctors are that it didn’t succeed. Often, before Medicare was adopted, getting paid was not a slam dump. Indeed many doctors found themselves having rendered services because they were human beings and did what was medically necessary even though, as it turned out, the patient could not pay. So though insurance may not have raised the rates, it certainly raised the collections. Second, they nickeled and dimed the insurance companies in a way they would never have done to a paying patient. My dermatologist, for example, charges only forty dollars for an office visit which usually involves about three minutes of his time, but if he so much as touches a pimple the service will be reported to Medicare as an operation. (see below). My back surgeon, who I love dearly and think a genius, charged somewhere in the neighborhood of $5,000 for my operation. He did three that day. Sure he, and the other docs, pay high malpractice insurance, but no question the fees cover it all and leave enough for more than one Mercedes in the driveway.
My surgeon is a very skilled fellow a plumber would have cost a lot less. But who does he think he is to be paid like a CEO of a major corporation? (In fairness to my particular surgeon did take six weeks off last year to volunteer his services to the poor folk with backaches in India and he probably makes no money at all from the various payoffs offered by the drug companies.) My second gripe has to do with hospital charges. Last week I received a printout from AARP of what Medicare had paid for services rendered to me and what AARP had paid a hospital doctor as part of my “gap” coverage. I have been visiting a pain center at a local hospital in connection pain resulting from my various skeletal problems. The charge from the hospital for the doctor, who seemed at least twenty-five years old and saw me for no more than five minutes, was $100. To add insult to injury, there was a charge of almost $500 for an operation. The AARP’s print out contained a number to call if you suspected fraud. I called it. I told the lady at the AARP that there had been no operation. Nobody had so much as touched a scalpel during the visit in question. She asked whether I had received a shot. When I said yes, she said there was no fraud, a shot was an operation for Medicare purposes. When I said that was ridiculous, she said I was ridiculous and we hung up. The knee replacements and the back operations I have had have been fantastically expensive (to Medicare and AARP). The big back operation which damn near killed me amounted to about one hundred thousand in hospital charges (those aspirins are not free, you know). Room charges were so high that I might have happily recovered in any five star hotel in New York and probably received prompter service.
Hospitals, of course, make their money from patients who are covered by insurance or Medicare and lose it to some extent on patients who come in through the Emergency Room and are uninsured. Hospitals as a group have played their violins to the swooning public about their desperate plight. Indeed, some hospitals are or were on the edge of bankruptcy for this very reason. On the other hand, there seems to be a general building boom in hospitals and very competitive advertising campaigns to fill the beds. Non-profit maybe, but someone must be making big bucks.
The quality of treatment in this country for those who can pay is generally excellent. The insurance companies may get screwed by doctors and hospitals but they do a lot of screwing of patients in return, so don’t cry for them. Medicare, however, is really us and we are the ones being screwed by these ridiculous prices. Fixing them, is one small step in the right direction.
I end by saying that some of my best friends are doctors. I hope they don’t read this piece.
[Arthur Joel Katz is a retired lawyer and former executive producer for Paramount Pictures. He lives in central Pennsylvania.]
