Note: After the Supreme Court releases its ruling on the Affordable Care Act, OHPM will be publishing analysis and commentary on what the decision means for key subgroups of the population. Come back to this site early and often for writing that will cut through the noise!
Just before he was forced out of his job as a senior Florida
public health official – joining thousands of his colleagues across the country
who have recently met the same fate – Daniel
Parker commented that “we are victims of a false portrayal of public services
as waste.”
He is so right.
 |
| Source: CMS Data, Health Affairs, June 2012 (online) |
Last year, we spent over $86 billion on public health services.
That may seem like a big number. But it represents only 3% of our nation’s
total health spending.
For that 3%, we have doubled our life expectancy over the
last century. We’ve immunized our
children, improved the quality of our food and water, and gotten dangerous
chemicals out of our homes and neighborhoods.
We have prevented cancers and heart attacks, and wiped out
once-frightening diseases like polio.
Does this seem wasteful
to you?
If not, just imagine what public health might have done with
6% of the nation’s health budget. Why
6%? That’s how much we pay for the “net
cost of health insurance” every year.
The “net cost of health insurance” doesn’t include any
payments for actual health care. It
refers to what’s left over after payers pay the bills – mostly administrative costs
and profits, better known as health insurance bureaucracy.
If you find it as troubling
as I do that public health professionals are losing their jobs while insurance bureaucracies
are bloated, then you’re about to get really irritated.
According to new
national health expenditure projections released last week through Health
Affairs by representatives of the Centers for Medicare and Medicaid
services, our spending on the net cost of health insurance doesn’t just dwarf
what we spend on public health. It dwarfs
what we spend on a lot of other essential health services, too.
In 2011, the $152 billion we spent on health insurance bureaucracy
was:
- 41% more than what we spent on all of our nation’s dental care;
- 49% more than what we spent on our veterans, active duty personnel, and children’s health insurance programs combined; and
- 108% more than what we spent on home healthcare services for everyone in the country who used them.
As public officials bring
down their budget cleavers on the people and services that protect our health,
mental health, and well-being, they might want to think about two other things.
- Health insurance bureaucracy alone costs us more than we pay for all the nursing home care everyone receives in the United States each year.
- The cost of private health insurance bureaucracy alone is roughly equal to the total state and local share of every state Medicaid program combined – which are, according to public officials, the biggest fiscal burdens breaking the backs of our state budgets.
Does anyone – including health insurance bureaucrats –
really believe that health insurance bureaucracy is more needed than all the public
health, dental care, children’s health services, nursing home care for elders, and
home care for people with physical and mental disabilities we provide in this
country?
Or that health insurance bureaucracy is more important to
the health and well-being of our country than all the health care we
give every year to every living person who has ever served in our
armed forces?
Is it any wonder that some people feel strongly that they
shouldn’t be forced to contribute to this monstrosity by purchasing private health
insurance?
Certain politicians
this year may sing the praises of an unfettered insurance marketplace as a
health care panacea and an alternative to the Affordable Care Act. But the numbers don’t lie.
It is hard to imagine a less productive health system than
the one an even less regulated health insurance marketplace could deliver to us.
But too many public officials are doing the worst possible things,
and too many people like Daniel Parker – and all of us he was pledged to serve –
are paying the price.
They are ignoring the value of public health.
They are forgetting their history, and why they expect to live
longer than their great-grandparents did.
They are cutting the services we need – dental care, nursing
home care, home care, veterans’ care, mental health care, and children’s health
programs – thinking that no one will mind.
And they are turning public services over to some of the
very private companies that are already draining our health system dry with their
“net” bureaucratic costs.
What a waste.
If you have questions about OHPM or this column, please email gionfriddopaul@gmail.com.
This assumption is somewhat biased. It assumes the other 94% is spent correctly. Why not discuss how much the fractured medical records system costs the US system instead of outright demanding one medical records and billing system and fiating it into existence? Why not discuss New Zealand style tort reform?
ReplyDeleteBecause that falls squarely on the politicians and their game of industry warfare that demonizes insurance companies and coddles trial lawyers (hint many politicians are trial lawyers ) and inefficient AMA and hospital systems and their fiefdoms. Politicians went so far as to pass HIPAA in part to protect the fractured fiefdom of individual records under the guise of personal privacy.
Massachusetts is learning the hard way that 94% Medical Loss ratios do not lead to lead to cost containment. Eventually they will end up with a state medical records system and strict tort reform. In CT, we are still in the caveman era where pork-barreling industry sectors (including public sector health care management types and their non-profits) wields the biggest club over the health care sector demonization issue.
Look! Look! It's that guy over there! It's not me!
Then we have the manifest problem of government reimbursement rate setting based on political pressures which only serves to increase costs: Here's the cycle:
ReplyDelete1) CT sets reimbursement rates.
2) Tests and procedures are miscoded on the ICD-9/10 to curve fit the new reimbursement system
3) Costs and revenues are shifted to right-size operations at the expense of the private sector.
4) ICD-9/10 records are of questionable value, which results in over-testing as doctors don't trust the records and need to protect themselves from tort.
5) The rate setting is divorced from reality and results in the creation of alternate realities in the delivery and fulfillment system due to an imbalance between reimbursement and real costs.
I used to teach medical billing and ICD-9 coding. The common story is that coding and billing are a war zone of maladministration and inaccuracy driven by an attempt to set rates from the top down and the fractured records system which no one really trusts. A common billing system that automatically adjusts for co-pays and joint coverage and co-insurance situations would save billions.
Single payer as it is proposed now is a joke.
If HIPPA was rewritten to be the imposition of a Federal Medical Record system we would be light years ahead. If single payer really meant single electronic billing system we would be light years ahead. I can't even begin to talk about the visibility that consolidated accurate records would provide and the various data mining opportunities for measuring Return on Investment and efficacy of treatment.
Government is barking up the wrong tree again. Letting Kevin Lembo set rates and pushing processing of state policies to a non-profit might appear to save some money before the cost-shifting but it misses the real reforms completely. The real reform is modern supply chain management techniques which will only a standardized medical records and billing system can offer.
I'll avoid discussion of the proposed electronic Gateway system or electronic interchange which is basically a 1980s idea that is finally getting some traction in CT. Yawn. A glorified decentralized fiefdom-driven EDI system. How quaint.