Thursday, February 5, 2009

Healthcare Reform = You pay for mine

Last weekend my daughter injured her foot while moving furniture. Seems she caught a step the wrong way and rolled the foot and ankle. She had no health insurance coverage. And now, for the rest of the story…

Her plan was to put ice on her foot and take ibuprofen for the swelling and pain. She strapped herself up in an airboot to stabilize the injury, and used crutches to take the pressure of walking off the appendage. Still, the next day, she was concerned that something was broken. She called me, and as a concerned dad, I told her to call around to these “urgent care” facilities that are springing up to see what an exam with an x-ray would cost her.

The prices ranged from $162 to $400 for the same services. She went with the $162 - money she was loathe to spend, expressing remorse for not having her own policy to pick up the bill. Her husband’s employer offers a “free” policy with a $2000 annual deductible. One can largely avoid the deductible by paying about $200 per month…so, let’s do the math: $2000 annual deductible, or $2400 “full coverage” premiums…hmmm. Either way, $162 won’t top the deductible, nor significantly offset the premiums.

Healthcare and its “affordability” are largely bogus issues. From street corner clinics and care centers to your doctor’s office and the nearby General Hospital, healthcare is readily available and expanding. To paraphrase Yogi Berra, “It’s always so crowded, no one goes there anymore.” Been to your doctor’s waiting room lately? Is it empty? Been to a hospital, especially its most expensive component, the emergency room? Is it empty? How can anyone afford it, you may wonder. The answer is that healthcare today thrives on volume, and there’s plenty of it.

Years ago, when steak was forty nine cents a pound, I recall my mother and aunts wondering how anyone could afford beef anymore. When gasoline jumped over thirty cents a gallon, the lines at the pump dropped off until a gallon dropped back to 29.9 or less. Those were days when a “five figure salary” was big money. And, like today, people wondered how they could afford to live. In those days people had “hospitalization” insurance. One paid the “family doctor” and the corner pharmacist with his own money. Because one did, your GP was subject to the market - his prices affected his patronage. Like the gas station, if his price hit a certain point, his patients might stop coming.

A few years ago the Baltimore Sun carried a column by a retiring “family doctor” from the Eastern Shore. He reminisced about how he did house calls, knew his patients well, was involved in all the area births and deaths. He told how his patients paid with chickens, eggs and oysters when they had no cash. And he spoke of how the family would gather as grandma neared death in her bed.

He then contrasted that to his contemporary practice, where he dealt with insurance companies for payment, and visited dying grandma in a hospital where the family clung to preposterous hopes of recovery. And when presented with the fact that grandma was nearing death, he said there was always one who demanded medical heroics to keep her alive. Heroics cost. On average, three-quarters of lifetime medical expenses are incurred in the last year of life. Average life expectancy at birth in the United States is 78.06 years - 79.96 years if you’re female, 74.83 years if male.

Our national response to the myth of runaway healthcare costs is to squander public funds, or force others to squander theirs. Why are emergency rooms always full? Because most seeking care there have no emergency, but realize treatment there can be free. It’s not because they’re necessarily indigent, unable to pay, but FREE is quite a draw. The costs are passed along to the paying customers, or absorbed by the hospital. Insurance companies are incentivizing use of alternatives, like urgent care, to avoid the added costs in hospital emergency room charges. And many hospitals nationwide are closing their emergency rooms.

The Los Angeles Times reported this week that in 2007 emergency room doctors provided more than $100 million in services to Medi-Cal patients because the state’s reimbursement often barely covers half the cost of treatment. Free, it turns out, is very expensive.

There’s the real healthcare crisis.

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