THE LIBERTARIAN ENTERPRISE
Number 281, July 25, 2004
"Was ... this ... really ... necessary?"
Special to TLE
This past week, I had surgery. Although the surgery itself went smoothly and my recovery is proceeding apace (thanks for asking!), events leading up to the actual operation weren't nearly so easily managed.
My particular problem wasn't life threatening, but it was serious enough that it cost significant dollars to fix and required advance approval from my health insurance carrier before I could go ahead. So I got all of the required paperwork together, and sent it along with the recommendations of both my doctor and my chosen surgeon for review and approval. The review process was to take six to eight weeks. How long did it actually take? Well, I first submitted paperwork in early October of 2003. I had surgery in July of 2004. You do the math.
It's easy to get mad at the insurance company in situations like this. After all, I did everything I was told to do and had ample evidence to back up my request. Yet I still ended up having to wait months before I could have my problem taken care of. Exorbitant insurance premiums should have, at the very least, ensured I got the attention I deserved from the carrier! But insurance companies are inundated with requests for unnecessary procedures ranging from medical tests to surgeries, and they're as careful as they can be not to spend one nickel beyond their contractual liability. Actually, they're sometimes careful not to spend one nickel even within their contractual liabilities, and typically demand a good deal of paperwork before they finally pay providers their due.
Why is it that insurance companies have become so difficult to deal with? Well, it's probably in part those unnecessary procedures I mentioned. At one time, hysterectomies were a very common operation. Now they're done on a far less frequent basis. That's not just because of the advances of modern medicine, but rather due to the fact that some doctors' solution to virtually every female problem was once to recommend she have a hysterectomy. Today, antibiotics are prescribed far too frequently and often for conditions antibiotics can't affect. But in the matter of hysterectomies some years ago, and antibiotics now, doctors are capitulating to patient demands on the premise that the hysterectomy or the antibiotics won't hurt the patient, and it will shut them up (this was before we really knew much about the dangers of hormone replacement therapy, of course, or began seeing bacteria that had evolved into antibiotic resistant strains due to the overuse of antibiotics).
So how come doctors give in to patient demands, despite the fact they're often not especially good medicine, or order myriad tests not all of which may be necessary? Well, the technical term for it is CYA (I trust most of you know what that means). Doctors are highly educated, and the vast majority of them are quite competent. But that doesn't mean that even the best of them doesn't occasionally make a mistake, and in medicine, mistakes can be extremely injurious or even fatal. When that happens, doctors are typically sued which in turn necessitates an expensive legal defense. And the potential for that situation is what makes doctors order every possible test just in case the one they miss is the one that would catch the one-in-a-million problem of a particular patient. It also, of course, does a nice job of CYA when the worst happens because no one can say, "Well, why didn't you perform the XYZ test?" or "Shouldn't you have considered the Alpha Beta procedure?"
Of course, a similar though less deadly argument can also be used to explain exactly why it is that medical providers' bills even for the most necessary of procedures are often so high by the time insurance companies get them. That's due to the fact that insurance companies typically only pay a certain percentage of even covered procedures, most reimbursements of which are not at a realistic level (the "usual and customary" charge described in many policies is frequently neither usual nor customary unless you happen to live in Appalachia in 1963). So in order to recoup their own costs as well as to pay high malpractice premiums, keep qualified staff, and incidentally make a living themselves, doctors and hospitals charge as much as they can for anything and everything they can. Aspirin at $3 each? I've seen similar on my own previous hospital bills. In fact, a small sample-size box of Kleenex once showed up as a $5 fee on a bill, as did a $25 charge for a plastic cup. Obviously, insurance disallows most of such charges, but does pay some of it. Since some is better than none, doctors and hospitals have absolutely no incentive to charge more realistic fees or to eliminate some charges all together especially when they're desperately trying to make up for the legitimate fees that have been denied or at least cut drastically.
Some instances of high charges would be far less problematic if so many doctors weren't so afraid of being sued. But they are, and they have every right to be. The blame for that falls squarely at the feet of the average litigious American. In a country where people sue because they burn their tongue on Burger King tea, or because they break their leg falling through a skylight during a night time robbery attempt (both those suits are, lest you wonder, real), doctors are prime targets. In fact, many obstetricians don't deliver babies any more because parents are strongly inclined to sue the doctor if anything goes wrong whether the doctor had anything to do with the infant's problem or not.
Sky high malpractice insurance premiums alone (it seems a good time to point out that only about 5% of medical professionals cause about 80% of malpractice claims, but that all doctors must bear the penalty for those few) mean that office visits can't be $10 or a basket of eggs any more. After all, somebody's got to pony up for premiums that can be upwards of a quarter million dollars a year! And that somebody is us. And since most of us can't afford high medical bills on our own, the majority of us have insurance.And our insurance is billed high dollar figures it pays little of because doctors are probably padding their bills, which means doctors raise their fees still higher and so on, ad infinitum. Exasperated by this vicious circle, more than a few doctors have decided they're not going to wait for malpractice reform (they also say that Medicare reform is another issue that very much needs to be addressed, by the way) and they're retiring or going into other careers [link] leaving more than a few regions of the country facing significant shortages of medical care providers.
There are some who believe that the best "fix" for the medical system in America is to nationalize it. Let the federal government take charge, and prices for drugs and treatments will go down; every American will have insurance (government sponsored insurance, of course), and all will be right with the world. This solution is, of course, demonstrably a bigger problem than the problems we've got now. Under socialized medicine, the program quickly goes broke if it doesn't draw a line between which procedures are covered and which are not. And then, in the most discriminatory way imaginable, the rich will get better care than the middle class, who will in their turn be bankrupted by taxes to pay for care for the poor who, despite somebody else footing the bill, won't get the level of care they deserve, either. In addition, without significant financial incentives, drug companies won't work as hard to develop new drug therapies; researchers won't have the wherewithal to study as many medical problems deserving of study; doctors won't develop high endand expensivetechniques that will save previously doomed patients; and so on. Lots of countries in the world have such socialized medical care. That's how we can know for certain such a plan won't work. And the final straw against nationalized health care is this: guess where the rich people in those countries come for treatment?
But there is, without a doubt, a Catch 22 that must be broken. Doctors charge more than they need to because insurance companies reimburse less than they should; insurance companies reimburse less than they should because hospitals pad their bills; and insurance companies and medical providers alike live in fear of medical malpractice awards that juries have handed out to the tune of multi-million dollar settlements. What to do, what to do?
One of the first things that must be "fixed" is the tort system. It's ironic that, even as I was undergoing surgery, the Senate couldn't stop arguing about legislation [link] that would have provided the bare beginnings of some reform in that it would have placed some limitations on class action lawsuits. Eventually, if it were ever to actually happen, real tort reform could reduce malpractice premiums to realistic levels, and damage awards to figures based on the grievousness of injury rather than the capriciousness of a jury (perhaps we should also demand that doctors see their Sixth Amendment rights honored, and let their cases actually be judged by a jury of their legitimate peersgood doctors aren't any more fond of bad doctors than you and I are, but they have the added ability to actually understand all of the testimony in such cases).
Another thing that will have to be "fixed" is the burdensome regulatory system in this county. New drugs and therapies are approved in Europe much more quickly than they are here. The substantial time and myriad hoops drug companies or researchers must jump through to get past the FDA is a very significant expense that must somehow be recouped, and can really only be paid for via high charges for the finally approved drug or service (and don't forget that all of those unapproved things cost money, too, which can only be recovered by charging even higher prices for those that do get approval).
The bottom line is that getting rid of the regulatory snare that's got the medical industry in a stranglehold would mean that there's nothing about medicine that the free market couldn't handle (with the possible exception of hospital food). In much the same way the free market has already given America such top notch medical facilities, it would also ensure we'd have relatively reasonably pricedand workingdrugs and therapies; that insurance premiums would be more realistic and competitive because procedure charges would be more realistic and competitive; and that providers would face malpractice sanctionsprofessional, financial, and/or criminalonly if they actually committed malpractice.
My own surgeon was extremely competent. The anesthesiologist was not only good at what he did, but could probably have a second career as a stand-up comic if he really wanted to. The nursing staff in the recovery room, both before and after my operation, was both cheerful and professional. And nobody, not even for a moment, patronized me (something that I personally am far more likely to try to sue over than anything trivial like an infection or a misplaced surgical sponge). Each and every one of those that cared for me deserves the money that he or she is paid for the job (actually, they probably deserve more because the truth is that I'm a lousy patient). Thanks, guys!
It is unfortunate that the money they get will be so much less than the fee they'll have to charge, and that I and my insurance company are probably going to battle back and forth more than once just to get the financial end of things settled. It could just be the pain pills talking, but I'm convinced that we can do better. The sad part is that I'd have to be seriously under the influence to think that very many politicians are presently inclined to do what's necessary to try.