Radical Ideas to Improve the House of Medicine #2

Question: Who cares most about the cost of medical care?
Answer: The ones that have to pay for it.

Idea #2 for improving the House of Medicine:

Force patients to “Get some skin in the game“

Providing all patients with any available medical care all the time will result in nobody getting much of anything most of the time. Free medical care for all is a sure way to bankrupt our system and our country.

If medical care is provided at no cost to everyone, several things will happen:
1. Rationing will occur
No entity, not even our powerful government, can afford to provide costly care at no cost to everyone that asks for it. Expensive diagnostic testing and treatments will be cut back, then they will be eliminated. As more people get older, demand will increase, and rationing will become more pronounced. It is inevitable and I guarantee it will happen if we head down this road.
2. Quality will decline
Just like with the government-run systems now, there will be no incentive to improve the quality of the hospital rooms or the medical care. If it costs money, why bother paying for it? Remember, our country’s checkbook has is overdrawn to the power of 10 right now.

Goes back to the engineer’s triangle. These market forces will never change.

Patients have to become consumers. Educated consumers.

The funny thing is that patients are already educated consumers. We just have to expand that education a little. Look at a couple of examples of how things work now:

1. Patients with commercial insurance will do whatever testing they or the physician believe is “necessary” … that is … until they find out that someone else won’t pay for it. If a patient can’t get a pre-authorization for an MRI, the patient won’t get the MRI done.
2. If physicians write for a prescription that isn’t covered under Medicaid, we will get a call from the pharmacist asking to substitute another medication that is covered – otherwise, the prescription isn’t filled. In fact, it has been my experience that patients would rather receive a free prescription for an essentially useless medication (Amantadine) than have to pay for a more effective prescription (Tamiflu – although even the effectiveness of Tamiflu is now waning).
3. Then there’s the classic example of the patient who would rather wait three hours to be seen in the ED than pay $1 for a pregnancy test. When the care doesn’t cost anything, why shouldn’t you take advantage of it? The only thing that the care “costs” you is the time you spend waiting.
4. For all of you with insurance who met your deductibles last year – think of your mindset last month. Didn’t you want to get all of your medical testing and treatment done before the end of the year so you didn’t have to pay the deductible?

Happy Hospitalist is dead on with his FREE=MORE mantra.

How do we fix the problem?

Make patients pay for their medical care.

Free market, people.

The free market can’t work if we don’t know the prices of a product, though. You can’t bargain shop at a grocery store if the prices aren’t there. Before we force patients to pay for their medical care, we have to force medical providers to post the prices they charge … for everything … in plain English. Now THAT would actually be a useful “Hospital Compare” web site.

From bypass surgery down to a box of Kleenex. Level 1 through Level 5 including examples of what I get for each level charge. Anywhere you want to stick a scope – I want to know what it’s going to cost me before I see you. Yeah, consultants included. The embarrassment of charging $129 for a box of Kleenex will bring down the price immediately. If providers charge more than their posted prices, they get fined/sued for consumer fraud. For major surgeries, let patients shop around for the best price – if price is important to them. Heck, go overseas and do the medical tourism thing if you want.

We look through 6 different grocery circulars each weekend so that we can save 10 cents on a head of lettuce. We do days of research to find out which flat screen TV gives us the best picture at the lowest cost. There is a whole industry in valuing cars based upon their make, model, mileage, accessories so that buyers can comparison shop. Yet, we think nothing about paying widely disparate prices all over the country for a fairly standard hip replacement surgery.

Why? Because we have NO idea what the surgery costs and we don’t care because someone else is paying for it.

If it was coming out of my pocket and I could pay $10,000 less for the same surgery by flying to a less-populated medical center in the US, I’d be booking the next flight. Want to stop all this saber rattling going on in Boston hospitals right now? (hat tip to Kevin, MD) Start a pricing war. Post a newspaper ad showing the prices that Massachusetts General and Brigham and Women’s Hospital charge, then compare those prices to Tufts and other hospitals in the area. Sure, there will be some that will pay a premium for the “name brand,” but I bet there will be a lot more patients that would opt for “generic care” at a “generic”price.

With educated consumers making responsible decisions all over the country, some medical centers would notice that their volumes are down for certain elective surgeries. If their prices were public knowledge, the medical centers would then have to go back to the engineer’s triangle. Do they try to increase their volume by advertising a lower price, higher quality, or faster service? Those that offer lower prices will have more business. A hospital may have a “pioneer” that performs a newfangled surgery, but if the outcomes are the same as with the old fashioned surgery, the hospital is going to have to do one heck of a marketing job to get people to pay extra for it.

Forcing patients to have some skin in the game would cut back a lot on repetitive testing and futile care, as well.

Family members want futile care (i.e. “everything done”) on the 102 year old contracted great great grandfather with metastatic cancer and decubitus ulcers galore? No problem. Just provide the hospital with a retainer of $25,000 – kind of like a lawyer gets. Grandpa will get the latest and greatest ventilator with all the bells and whistles on it. “Everything” really will be done. He’ll get preoperative clearance from the best of the best. He’ll get daily surgery to debride the decubiti. He’ll get a colonoscopy to make sure that he doesn’t have a colon cancer that someone might have missed 65 years ago. Did you say he looked like he was having trouble breathing? That demands an immediate CT scan of the chest because he might have a pulmonary embolism. Actually, make that a 64 bit coronary scan to check for calcifications in his heart vessels as well. Bypass surgery could be in his future. The hospital could even do daily PSA tests to assess how quickly his cancer is spreading. You want futile care, folks? You got it. But YOU’RE the one paying for it. Heck, a hospital could probably burn through that $25,000 retainer in a day or two. But … once the retainer runs out, you have three days to find another hospital or the nonsense stops, great great grandpa gets put in hospice care, and they make him comfortable so he can die in peace.

Want an unnecessary ultrasound done every week to assess how your 10 week old fetus is coming along? You got it. That will be $500 in cash up front. You want daily ultrasound scans? Won’t make any difference in the management of your pregnancy, but you can probably get a 9AM appointment every day of the week. In fact, hospitals might just get those cards like they give out at Dunkin’ Donuts – buy 5 fetal ultrasound scans, get the 6th one free. That will be $2,500. Yes, hospitals take Visa. Oh, forgot to tell you, though – you will have to pay extra for the radiologist to read the test results.

Of course, once people start noticing that testing and care is cheaper elsewhere, prices would come down rather quickly. Hospitals can’t keep the doors open without money from patients to pay their bills.

One example – an MRI in the US costs an average of $1200. An average MRI in Japan costs $98. Most of us would probably skip an MRI of the shoulder to figure out what was causing all that pain if it cost $1,200. If you could get the MRI for $300, would you do it? What if the MRI only cost $100? How about if the MRI cost $50?

How we get consumers to have an interest in cost-cutting doesn’t really matter.

Maybe it’s forcing insurance companies to have a minimum copay of 25% for all care provided on any insurance policy.

Maybe it’s just someone taking the time to compare the costs of “comprehensive” insurance versus “major medical” insurance with people paying “out of pocket” for basic medical care and generic medications.

Maybe it’s offering consumers a “reward” of a 10% rebate cash for any money they save in obtaining less expensive medical care. You’re on dialysis? Instead of hemodialysis three times a week, do peritoneal dialysis at your home and save the government $10,000 per year. At the end of the year, the government will send you a check for $1000 in cash – no strings attached. Then, in addition to the grocery ads, patients would be searching through the health care ads for the cheapest prices.

Win-win situation.

Wouldn’t it be odd to hear a patient ask “do I really need that CT scan done?”