Shhh – I will let you in on a secret. Our health care system does not work on capitalistic principles. One of several problems with health care costs is the middle man design of health care payments.
If we had capitalistic principles, then I could charge fees for my expertise and you could decide whether to accept me as your physician or search for a different physician with a different fee structure. Patients almost never consider physician price when they choose physicians. I charge (and collect) the same fees as a brand new residency graduate (I finished 31 years ago.)
Patients only make financial decisions on medications. Amazingly, many patients now do want low cost generics (or the phrase that I use on the wards – Wal-Mart drugs.) Those who have no drug payment plan are generally quick to choose less expensive medications. But those same patients ask for an MRI even when they have no good indication for that test.
Now this is not the only problem in controlling health care costs, but it does contribute. We have too many expensive unfunded regulatory mandates. We have the ever present malpractice threat leading to unnecessary testing. We have patients using emergency departments because they cannot find primary care physicians. We have too many physicians treating patients too aggressively towards the end of life when those patients really need compassion and palliative care.
We do not have capitalistic answers because we are so removed from capitalism as to make Milton Friedman shudder. Our solutions will be complex because we have an unnecessarily complex "system."
{ 2 comments… read them below or add one }
I have a high deductible HSA, so I have a financial interest in finding the best prices. A few years ago I called around to 5 or 6 pharmacies (including Wal-Mart) to price a few prescriptions. They all were asking the same price within a few pennies for every drug. Just about every price in the U.S. health care system is controlled, so there are no price signals left to guide a true market based system.
Locally and nationally Target and Walmart have a nice $4/month, $10 for 3 months or $24 for 3 months generic medication list. Often the $10 for 3 months is cheaper than a 90 day mail order supply. This saves many of my elderly patients and patients with HSA/high deductibles costs. If an insurance company does not want to cover a medicine, they place it on a third Tier list where the monthly copayment is $40-$60, making it less than ideal for many patients. Even more fun is the preauthorization process to get a third tier or nonformulary medicine covered, often requiring a step therapy of generics. Often the $4 list is cheaper than the patient’s local $10 copayment for the same medicine at other pharmacies.
I have noticed that the office visit copay breaking point for primary care is $30. When copays are $35-$50 for a $55 office visit, it is like pulling teeth to get the patients in to monitor their hypertension or diabetes. The patient with the sinus infection or UTI requests phoned in antibiotics, even though the doctor is still liable for the care. Requests for telephone medicine are increasing each year. The patient with the $1,000 or even $5,000 deductible thinks twice about an office visit, even though the patient gets a discount on the care through the insurance company. Most of my patients gripe that in 09 insurance premiums have increased and copays have increased, yet I remind them that my private HMO/PPO contracts have not raised my office visit fees in 3 years.
ER copayments have hit $200 for 09 on many plans, which is the breaking point to keep patients from going to the ER for outpatient illnesses. Labs and immunizations are discounted but often have deductibles, often of $500/year or more. Inpatient care is starting to have $500-$1,000 annual deductibles.
When I started in private practice 7 years ago, most office visit copays were $5-$15, ER copays $25-$50, no inpatient deductibles, and medication copays were $5, $10, and $20. I see the insurance companies taking more from the patients and doctors and giving less in return for high premiums. Patients are paying more for insurance and getting less coverage, while physicians are spending more time trying to collect deductible and higher copayments.