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10/17/2006 We Need Health Cost Containment Before Fixing the Payment Method By Jack Lohman The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com. Let’s take a time out. As the nation struggles with how to pay for health care costs that are spiraling upward at an annual rate of 17 percent, five times the rate of inflation, we are virtually ignoring the reasons behind the escalating costs in the first place. We are engrossed in payment methods rather than cost containment, all while the industry seeks innovative ways of taking home a bigger piece of the national pie. Some see the “free-market” as our savior when, in fact, the slow conversion to a free market system that began a decade ago is the reason we are in trouble today. And it will get worse. Years ago it was considered fraudulent for hospitals to hire their own physicians, for physicians to own an interest in a hospital to which they referred patients, and for physicians to refer patients to an outside laboratory in which they had a financial interest. We also had a certificate of need program that prohibited hospitals from leap-frogging the hospital down the street, thus churning expensive high-tech imaging systems. Thanks to $100 million in annual campaign contributions from the health care industry to politicians, all of these cost-containment rules that protected the system from excesses have been eliminated, and the ensuing free-for-all began. It thrives today, but this maneuvering also promises to backfire and become the undoing of a once-proud medical profession. The only competition that resulted is between hospitals and clinics as physicians move expensive and profitable testing into their clinics. Hospitals that once used time-shared mobile MRI services -- and then bought their own in-house system because volumes justified it -- are now finding their local clinics adding the mobile MRI service and leaving hospitals without patient volumes to pay for their system. In the meantime patient testing is increasing in the clinic because of the added profit incentives. Is anybody watching the growth of these cash cows? Or are we totally blinded by the conflicts of interest that a free-market system demands? Don’t get me wrong. Physicians should be paid extremely well, but not on the basis of how many tests they order or surgeries they perform. Doctors should have the freedom to refer their patients to any hospital or independent lab for expensive tests, as long as they or their clinic do not have a financial interest in the service. Hospitals should be prohibited from employing their own physicians, and physicians should be prohibited from referring patients to a hospital in which they have a financial interest. What’s not to understand about these no-brainers? There is one axiom that has held for centuries: “He who has the gold, rules.” Currently that gold is held by the business leaders who provide employee health care and who are losing sales to products that are made in countries that have universal health care systems. Their competitors do not have to add health costs to their product price, thus some American companies are moving jobs offshore while others are preparing to take over the health care system. Physicians should look at how the dominoes will eventually fall. The current system is unsustainable and will eventually be taken over by the MBAs and CEOs and shareholders. If left alone the current system will transition to corporately-controlled HMOs, and independent physicians will be a thing of the past. We have two sustainable options: A Medicare-for-all system, but better than Canada’s, or a socialized system, like that in Britain and our own VA and armed services systems. The latter uses salaried physicians while the former still leaves room for fraud and overuse. In the end, health care can be either a social service or a market commodity, but not both. But make no mistake about it. Regardless of the system we choose, the public will bear the final costs. The important question is: How long will it take us to correctly fix it? We can fiddle with costly workarounds and ultimately settle on one of the above. Or we can fix it without delay and move on to other national policies that are critical to our nation. -- Lohman is a retired business owner from Colgate and founder of http://www.ThrowTheRascalsOut.org. He can be reached at jlohman@execpc.com. |
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