The Ideas Thread: Health Care (New) Ideas

[WFU71]

The text RJ posted said "In their review of malpractice payouts of more than $1 million", those claims were less than 1%. I'm sure adding in all the claims less than $1 million gets it up closer to that 2% number you're citing.

Crap, I was editing my comment when you posted this. The point still stands that rj originally said that malpractice awards were .3-.5% of HC costs and then makes uses bold, red text w/o a link to show that a portion of malpractice awards is two to three times higher than his original assertion of the total cost.

 

[RJKarl]

It was the first one i came across and is from The Insurance journal http://www.insurancejournal.com/magazines/features/2013/05/20/292085.htm

Here's another:

http://www.edwardsragatz.com/malpractice-payouts-amount-to-less-than-1-of-health-care-costs

Here's one that has graphs from 1985 that shows recoveries at under .5 of 1% like I said:

http://www.insurance-reform.org/pr/AIRhealthcosts.pdf

an one percent (0.38%)
2002 U.S. Health Care
Costs (100%)
Medical Malpractice
Premiums as Percentage of
Health Care Costs

Here's another:

http://gomedmalohio.com/medMalMyths.asp
"Medical malpractice payouts are less than one percent (1%) of the total U.S. health care costs. According to the GOA, all “losses” (verdicts, settlements, legal fees, etc.) have stayed under 1% for the last eighteen years. Health insurance companies continue to raise premiums, boasting record profits and denying patients coverage, refusing payment to doctors, enabling insurance companies to hoard profits at the expense of everyone else. The insurance industry’s price gouging of both patients and doctors to make up for their investment losses is what are driving up health insurance cost."

71 always demands that I say I'm wrong. Here are three sources that all confirm what I said is true and what he said isn't. Your turn to admit you are wrong.

 

[RJKarl]

Crap, I was editing my comment when you posted this. The point still stands that rj originally said that malpractice awards were .3-.5% of HC costs and then makes uses bold, red text w/o a link to show that a portion of malpractice awards is two to three times higher than his original assertion of the total cost.

You now have multiple sources saying it's less than 1% and even one pegging it at .38 of 1% from 1985-2001.

Eat your crow like a man.

 

[WFU71]

It was the first one i came across and is from The Insurance journal http://www.insurancejournal.com/magazines/features/2013/05/20/292085.htm

Here's another:

http://www.edwardsragatz.com/malpractice-payouts-amount-to-less-than-1-of-health-care-costs

Here's one that has graphs from 1985 that shows recoveries at under .5 of 1% like I said:

http://www.insurance-reform.org/pr/AIRhealthcosts.pdf

an one percent (0.38%)
2002 U.S. Health Care
Costs (100%)
Medical Malpractice
Premiums as Percentage of
Health Care Costs

Here's another:

http://gomedmalohio.com/medMalMyths.asp
"Medical malpractice payouts are less than one percent (1%) of the total U.S. health care costs. According to the GOA, all “losses” (verdicts, settlements, legal fees, etc.) have stayed under 1% for the last eighteen years. Health insurance companies continue to raise premiums, boasting record profits and denying patients coverage, refusing payment to doctors, enabling insurance companies to hoard profits at the expense of everyone else. The insurance industry’s price gouging of both patients and doctors to make up for their investment losses is what are driving up health insurance cost."

71 always demands that I say I'm wrong. Here are three sources that all confirm what I said is true and what he said isn't. Your turn to admit you are wrong.

You're linking stuff from ambulance chasers.

 

[WPDeac]

Found this article interesting: http://www.nbcnews.com/health/americans-live-little-longer-still-lag-other-rich-countries-6C10588107

“OECD countries are spending more on education and income support than we do and that is what is helping to create this healthier environment,” he added. “We need to really try to get at the social and environmental causes of these issues and really focus on true prevention, which is not managing in a clinical setting but creating the conditions where this doesn’t happen in the first place.”

Woolf says a lot has to do with public perception. “We are much more afraid of plane crashes and being struck by lightning and not afraid of the things that are far more likely to claim our lives,” he said.

“The other reflex people have is to say social programs are important but we just can’t afford it. We have plenty of money for it,” he added.

“If you look at how much money the United States spends on heath, our budget for health exceeds that of every other coutnry in the world.”

I enjoyed the county-by-county comparison map...
http://www.healthmetricsandevaluation.org/tools/data-visualization/us-health-map

 

[RJKarl]

NEVER EVER EVER ask me to admit I'm wrong. I will never do it for you.

Here's another one:

http://www.slate.com/articles/healt...ner/2006/07/the_medical_malpractice_myth.html

The best attempt to synthesize the academic literature on medical malpractice is Tom Baker's The Medical Malpractice Myth, published last November. Baker, a law professor at the University of Connecticut who studies insurance, argues that the hype about medical malpractice suits is "urban legend mixed with the occasional true story, supported by selective references to academic studies." After all, including legal fees, insurance costs, and payouts, the cost of the suits comes to less than one-half of 1 percent of health-care spending. If anything, there are fewer lawsuits than would be expected, and far more injuries than we usually imagine.

 

[Liquid Karma]

NEVER EVER EVER ask me to admit I'm wrong. I will never do it for you.

We know.

 

[WFU71]

Interestingly, CBO estimated in 2009 that tort reform would reduce HC spending by .5%. That's not eliminating lawsuits, just capping awards.

Apply that to the $2.7 trillion of HC spending in 2009 and you save $13.5 billion a year. Not an answer to all our problems, but $13.5 billion here and $13.5 there and pretty soon you're talking about real money.

 

[RJKarl]

Sad.....Even with a book from a law professor and a chart from a consumer group, 71 ignores them.

 

[bmoneydeac]

Isn't tort reform more than just reducing the costs of the settlements? More specifically the goal of reducing defensive medicine which is where you'd get some real savings. Between that and EOL care (as BBD and other alluded to), we can identify a lot of wasteful spending.

 

[Deacon923]

Isn't tort reform more than just reducing the costs of the settlements? More specifically the goal of reducing defensive medicine which is where you'd get some real savings. Between that and EOL care (as BBD and other alluded to), we can identify a lot of wasteful spending.

Very much so. See my post on page 1 regarding this.

 

[WFU71]

Getting back to new ideas, I'd capmanagement fees paid by hospitals, clinics, nursing homes to management companies - control these costs thru a % of sales formula. I've wrestled with this concept for 15+ years. Top level management in the mgt. companies make huge salaries/bonuses. When revenues are down, staffing and salaries at the provider level (hospital, clinic, NH) are clamped down on, but the mgt company employees are not immediately affected. If financial conditions don't improve, the mgt. co. eventually reduces their home office expenses, but the executive level is usually insulated. They might ultimately get fired, but most have a nice golden parachute. Capping mgt. fees wouldn't necessarily reduce costs, but it could improve care which saves future expenditures.

 

[2&2 Slider To Leyritz]

Interestingly, CBO estimated in 2009 that tort reform would reduce HC spending by .5%. That's not eliminating lawsuits, just capping awards.

Apply that to the $2.7 trillion of HC spending in 2009 and you save $13.5 billion a year. Not an answer to all our problems, but $13.5 billion here and $13.5 there and pretty soon you're talking about real money.

In my albeit relatively minimal dealings with MedMal cases, there already is is a huge resource burden and series of legal hurdles for the plaintiffs to overcome to get to a trial stage. So for someone to make it all the way through to getting an astronomical award, they probably have a case that deserves it.

 

[WFFaithful]

Getting back to new ideas, I'd capmanagement fees paid by hospitals, clinics, nursing homes to management companies - control these costs thru a % of sales formula. I've wrestled with this concept for 15+ years. Top level management in the mgt. companies make huge salaries/bonuses. When revenues are down, staffing and salaries at the provider level (hospital, clinic, NH) are clamped down on, but the mgt company employees are not immediately affected. If financial conditions don't improve, the mgt. co. eventually reduces their home office expenses, but the executive level is usually insulated. They might ultimately get fired, but most have a nice golden parachute. Capping mgt. fees wouldn't necessarily reduce costs, but it could improve care which saves future expenditures.

sounds good

 

[silk]

The problem with health care is that it costs too much.

Here in this Podunk county grads of the 2 year RN community college program start at 50K+ with 100% employment. Way too few existing nursing programs.

IMO MDs are over educated. One of my cousins is now in a 2d 3 year residency. He gonna send cameras up behinds. 10 years of medical education.

The county hospital has more administrators employed than health care providers (providers include the floor sweeper, garbagemen, laundry, cafeteria, etc).

 

[DeacinBama]

I find that doctors usually don't know, or conveniently forget, that the federal government paid 100% for most of their residency programs (nationwide 75% of all residencies are funded by Medicare). They don't have to pay it back in any way now. That's a huge gift to the medical community and has enabled tons of doctors to make a lot of money after being trained by the taxpayer.

Most physicians know this, but it's not considered a gift, at all. Resident physicians see only a small percentage of the total amount of money the federal government pays to a hospital system for their education. While these physicians are most definitely still in training, it's widely accepted, to include by the Supreme Court, that these residents are employees, not students. Recent work hour restrictions notwithstanding, the hourly rate paid to these residents is ridiculously low ($12.80/hr. in the case of my wife - pre-tax). Their presence and contributions allow a hospital system or university to avoid hiring more expensive attending physicians, physician assistants, and nurse practitioners. These doctors don't owe anything after their time in residency; they earn every dime that they get during those years.

 

[Deacon923]

Most physicians know this, but it's not considered a gift, at all. Resident physicians see only a small percentage of the total amount of money the federal government pays to a hospital system for their education. While these physicians are most definitely still in training, it's widely accepted, to include by the Supreme Court, that these residents are employees, not students. Recent work hour restrictions notwithstanding, the hourly rate paid to these residents is ridiculously low ($12.80/hr. in the case of my wife - pre-tax). Their presence and contributions allow a hospital system or university to avoid hiring more expensive attending physicians, physician assistants, and nurse practitioners. These doctors don't owe anything after their time in residency; they earn every dime that they get during those years.

I'm not denying that medical residents work hard, some would say too hard. But re-read your post. That government funding not only provides training, it also subsidizes the rest of the hospital's operations by providing low-cost (no cost to the hospital, actually) worker bees. Like I said, a huge gift to the medical community.

Also, consider this: a residency is a requirement for a medical license. A medical license is a golden ticket to make money far in excess of the average wage in this country, and for a sizeable minority of practitioners in certain specialties, a golden ticket to be in the top 1% of income earners. If the government didn't regulate residencies and require residents to be paid, and fund that payment, where do you think the market would set the price of a medical residency? I think that in a free market environment, hospitals could actually charge for the privilege of being a resident and have plenty of takers. Further, if that were the case, we'd have an even bigger primary care gap than we already do.

I can and do recognize the hard work put in by residents (my brother and sister in law are both doctors) but that doesn't prevent me from recognizing the very significant role played by federal regulation and funding in their training.

 

[DeacinBama]

I'm not denying that medical residents work hard, some would say too hard. But re-read your post. That government funding not only provides training, it also subsidizes the rest of the hospital's operations by providing low-cost (no cost to the hospital, actually) worker bees. Like I said, a huge gift to the medical community.

Also, consider this: a residency is a requirement for a medical license. A medical license is a golden ticket to make money far in excess of the average wage in this country, and for a sizeable minority of practitioners in certain specialties, a golden ticket to be in the top 1% of income earners. If the government didn't regulate residencies and require residents to be paid, and fund that payment, where do you think the market would set the price of a medical residency? I think that in a free market environment, hospitals could actually charge for the privilege of being a resident and have plenty of takers. Further, if that were the case, we'd have an even bigger primary care gap than we already do.

I can and do recognize the hard work put in by residents (my brother and sister in law are both doctors) but that doesn't prevent me from recognizing the very significant role played by federal regulation and funding in their training.

Let's correct some factual points:

-A residency is not required for licensure. All states require an internship, while a handful require additional years of training, but none require a residency - by which I mean completion of training. There are no federal standards for licensure.

-The federal government has no role in regulating graduate medical education (GME). I mean, I suppose one could argue that it's conspicuous in its absence, but the regulation of GME in this country falls squarely on a private organization - the ACGME - and its sister osteopathic group. This golden ticket to which you refer is almost exclusively the product of private organizations granting and/or recognizing board certification (ACGME), reimbursements (insurance companies), and hospital privileges (credentialing committees).


As to the rest:

-You're not going to get any physician - outside of an administrative one - to care that federal government is subsidizing hospital operations. The two groups have a very adversarial relationship, and helping out the hospital's bottom line isn't going to translate to more money for physicians. This "medical community" that you reference doesn't really exist.

-I can't say I know enough about economics to know how salaries would play out without 1) federal funding and 2) the Match. I can tell you that there have been innumerable attempts to get residents to unionize and to dissolve the Match based on anti-trust regulations. The conventional wisdom is that the system puts downward pressure on salaries, but it also creates much more uniformity in pay.

I think my overall point is that most physicians would tell you that their time in residency is a net gain for the system at the expense of the individual. The individual accepts this loss for exactly the reason you cited - the "golden ticket", but that no one feels particularly indebted to the federal government for this ticket because 1) they feel they've more than paid back the funding that made it to their pocket, 2) the hospital - not the physician - is largely benefiting from the funding, and 3) non-governmental organizations are almost exclusively responsible for all of the mechanisms of operate this "golden ticket".

 

[Deacon923]

OK, thanks for that information. It is very helpful and it appears I was wrong about some things.

A couple points in response. The feds do regulate residency, if only remotely, by requiring that residents be paid (you mentioned Supreme Court precedent finding that they are employees, not students). They also provide the funding.

The nongovernmental organizations you mention are basically a manifestation of old rich physicians putting up obstacles to competition by young poor physicians. I'm sure some of them do play a role in protecting the public but at their core, they and trade groups like them are protectionist organizations. To some extent it's beside the point of what we're discussing here, but these kinds of organizations increase the cost of health care by requiring physicians to get extra training and jump through extra hurdles before they are allowed to compete with the established, old, expensive physicians. So here's a new idea for the ideas thread: Let's get rid of some of these protectionist NGOs and allow young physicians to compete in the marketplace on price.

And finally, reflect for a moment on this statement: "most physicians would tell you that their time in residency is a net gain for the system at the expense of the individual." The reason the physicians are willing to serve out residencies is precisely because they want to become a part of that system. That system has historically provided very nice financial rewards for those who get past the various hurdles the profession erects for itself - all of which act to constrain supply, which increases cost. I recognize that primary care providers, ER docs, and others are not making as much as their predecessors of 30 years ago but the fact remains that "the system" provides very nice financial rewards.

In any case getting back to the original point of this discussion, JHMD's idea is still a good one - on top of the existing system, provide an option for docs to get medical school and residency free, no debt, in exchange for an 8 year commitment to provide low-cost care to underserved/uninsured populations. Increase supply.

 

[DeacinBama]

OK, thanks for that information. It is very helpful and it appears I was wrong about some things.

A couple points in response. The feds do regulate residency, if only remotely, by requiring that residents be paid (you mentioned Supreme Court precedent finding that they are employees, not students). They also provide the funding.

The question of employee vs. student was about whether hospitals were required to pay their half of payroll taxes on behalf of the residents. The courts said they did, de facto designating residents as employees. I wouldn't make the leap that - in the absence of federal fundings - residents would go unpaid. The hospitals would still come up with the money, which is exactly what happens now with the handful of training programs that operate outside of the ACGME. As I mentioned before, it introduces variance into the system - with some highly competitive programs getting away without paying people, while others are forced to pay substantially more.

The nongovernmental organizations you mention are basically a manifestation of old rich physicians putting up obstacles to competition by young poor physicians. I'm sure some of them do play a role in protecting the public but at their core, they and trade groups like them are protectionist organizations. To some extent it's beside the point of what we're discussing here, but these kinds of organizations increase the cost of health care by requiring physicians to get extra training and jump through extra hurdles before they are allowed to compete with the established, old, expensive physicians. So here's a new idea for the ideas thread: Let's get rid of some of these protectionist NGOs and allow young physicians to compete in the marketplace on price.

I can't tell if you're conflating the organization I mentioned (ACGME) with politically active groups, like the AMA or specialty-specific groups. Either way, we're wandering a little from my original point on this topic, which was that it's not the federal government who's regulating this. You're right though, the industry restricts entry and costs would come down by removing these hurdles. I do think you're undervaluing the "protecting the public" element though. Even after 3-7 years of residency, most physicians will tell you that there's a steep learning curve once beginning independent practice, and removing these hurdles will make that curve even steeper. If we tear down these obstacles for economic reasons, then we need to be prepared to accept the consequences it has vis-a-vis standard of care and outcomes.

And finally, reflect for a moment on this statement: "most physicians would tell you that their time in residency is a net gain for the system at the expense of the individual." The reason the physicians are willing to serve out residencies is precisely because they want to become a part of that system. That system has historically provided very nice financial rewards for those who get past the various hurdles the profession erects for itself - all of which act to constrain supply, which increases cost. I recognize that primary care providers, ER docs, and others are not making as much as their predecessors of 30 years ago but the fact remains that "the system" provides very nice financial rewards.

I feel like I've already acknowledged this. Your original point seemed to imply that physicians should feel thankful that they don't have to "pay back" the federal government for their GME funding. I've just been trying to explain that I think that's a strange position to take because 1) hospitals - not residents - are not the primary beneficiaries of that funding, 2) the money would come from somewhere, if not the federal government, and 3) residents do "pay back" the time funding by being underpaid for 3-7 years. Why they do it is largely tangential to the discussion.

In any case getting back to the original point of this discussion, JHMD's idea is still a good one - on top of the existing system, provide an option for docs to get medical school and residency free, no debt, in exchange for an 8 year commitment to provide low-cost care to underserved/uninsured populations. Increase supply.

Lots of programs like this already exist, at both federal and state levels, and usually for an obligation significantly shorter than 8 years. Lots of my wife's fellow residents took U.S. Public Health Service scholarships in exchange for 2-3 years of working in places like Detroit, American Samoa, etc. Hell, even the military will pay for medical school in full for only a 4-year post-training commitment. Pre-medical and medical students know the calculus, and they're still choosing to go massively into debt rather than use these programs.