Leonard Rodberg PhD, penned an article in July of 2013 discussing why Healthcare in America costs so much. His take on the system boils down to an often overlooked glitch that is required for a market to thrive the way we are told the Healthcare market should:
The customers have no idea the cost, the options or the necessity of the products they are being sold.
Imagine you are going in to buy a television. The clerk in the store has only 1 and there is no price listed. He tells you there may be other TVs, but this one is the best fit for you. You’d be out of that store in a heartbeat looking for a store with more choices, pricing information and make an informed decision.
Healthcare overall is still being treated like a product to be sold instead of a service to be delivered. The Marketplace set up to handle payments for service can not work if the end user is purposefully being kept in the dark about pricing, options and alternate methods of care.
I’m not talking about healing crystals, but instead trying to focus on the actual end game for healthcare: Healthy people.
A healthy population is more productive and costs far less in the long run in regards to care so why aren’t we making a difference?
Shouldn’t our goal be to prevent larger problems early? What ever happened to an ounce of prevention being worth a pound of cure?
Turns out an ounce of prevention means a loss of billable services later on.
Jeffrey Brenner, Physician and co-founder of a group researching new methods of delivering care called the Camden Coalition of Healthcare Providers, was recently a guest on Freakonomics, a show about the hidden meaning of everything.
On that program he discusses his group’s efforts to find high users of healthcare and address their problems head on. By making them healthier, they use less of the system.
From the show:
“So we learned that 1 percent of the patients is 30 percent of the payments to the hospitals, and that 5 percent of the patients is about 50 percent of the payments to the hospital. So a very small sliver of patients are driving all of the revenues to the system. … And you know, the question really is this the fault of the patients or is this a system failure? And I think our journey over the last couple of years has really demonstrated to use that it’s a system failure and that we could be doing much, much better for these patients.”
If we suddenly improve the health of 5% of the people visiting the hospital, just 5%, that hospital will lose 50% of their revenue. There is no incentive to cure these people. The same can be said for EMS. If we actually start telling people they don’t need an ambulance we lose our revenue stream and can’t operate when someone does need it. Of course that logic only holds if you consider EMS a product and not a service. (Here’s a hint…the word Service is actually in EMS.) Until EMS is considered a service just like police, fire, animal control and the courts it will be driven by profit and profit alone. New methods of care will be challenged with “What is the reimbursement model on that?” instead of “How many people do you think we can reach and improve?”
Sounds a lot like some programs sprouting up recently, doesn’t it? Community Paramedicine needs to be that tool for EMS, but may get cornered into simply visiting folks post discharge.
In the meantime we need to change the way we deliver care.
We need to start educating our patients.
Ever been told by your managers or Chiefs not to discuss billing, costs or any other financial aspects of care? Why do you think they do that? Could it be that finding out the cut finger will be billed $1700 may impact the patient’s ability to make a good decision or is it that the manager and Chief need the $355 State payment for the transport to keep the system afloat?
You know it’s the latter but will still tell patients, like I used to, that worrying about money should be the last of their worries.
Or should it?
If patients knew the cost of the service they requested, were given options at various levels of cost that fit the situation and were able to choose a solution that met their needs, that would be a true marketplace and the cost of healthcare would fall dramatically while maintaining the same levels of care to those who need it.
We operate in a marketplace that hides cost, reduces choice and intentionally restricts access to services.
That is an irrational medical marketplace indeed.