How Healthcare Works, and Why You Should Care

Sunday, March 14, 2010

I haven’t been able to keep posting to my blog for the last few months because I found one of those “non-existent” jobs… or rather it found me… and it has consumed all my time and energy.  This new job happens to be in the medical field, an area that I have never worked in before.  It has been interesting to be on the inside (in light of the healthcare debate now raging!) and to get glimpses of what is really going on.  Not only have I learned how to do my job, I have been exposed to the hierarchy of the medical world and can comment more knowledgeably than I once could.

I work for a physician and here is what I have discovered.  The physician can only charge fees based upon a CPT code, which is owned by the AMA (American Medical Association).  Interestingly, only a small percentage of physicians in the US are actual members of this organization, and I’ve been told that many of those are in the area of research or teaching rather than actual practice.  The physicians are required to pay a licensing fee for the use of the codes.  It is also interesting that there are no other options.  I believe that is called a monopoly!  (By the way, do you remember the backroom deal that Obama had with the AMA EARLY ON in the healthcare debate?  Don’t you wonder what was negotiated at that time?)

Then there are the insurance companies that come along and create “service networks” and recruit physicians to join the network by enticing them to take less than the AMA’s established fees.  The insurance companies get that portion of the cut, and I don’t know the percentage the insurance companies get, but you can bet your first born that they get quite a lot since insurance companies constitute a large portion of our economy.  And do you remember the backroom deals with Obama  on lowering premiums on healthcare.  Of course, they would negotiate on that.  It opens up the field for them to get more patients into their pipeline!)

Each negotiated network is different, but I believe that you can estimate that the doctor’s fees, as ascribed by the AMA, is cut by about 30 to 35%, sometimes as much as 80%, depending upon the procedure.  Then Medicare and Medicaid come in and chop the AMA fees right off the top by two-thirds.  What I found out over the past few months, especially in regard to the Medicare and Medicaid issue, is that in addition to that original chop, the rates they will be paid have been reduced by another 21% from their “regular rates”.  

What the Obama healthcare plan would do is, in essence, make all healthcare a Medicare/Medicaid program.  If doctors cannot make any money at 20% of what the AMA has determined as the fees, what doctor would want to remain in the profession?  And where is the incentive to continue their education, to remain current in the latest techniques and procedures.  That is expensive and time consuming.  They would not be able to afford the staff they need to run their practices.  There is a trickle effect in question here the same as there is an any business.  

So, as I have been observing the healthcare issue from an “inside vantage point”, I am beginning to see that it’s not the doctors who are the villains in the healthcare issue, but rather the victims.  Of course doctors make a good salary, but it’s due to volume of patients, not the cost to the patients, where they receive their salaries.  Another thing I’ve noticed in this particular doctor’s practice is that more than 50% of the patients are Medicare patients.  His income on these patients in only one-third of what he is supposed to make.  (And the government wants EVERYONE in the US on a Medicare/Medicaid-type system!  No wonder many physicians have threatened to leave their profession if this healthcare reform is passed.  Who could blame them?)

I could go on with the above explanation, but I don’t want to make this long and drawn out.  It does substantiate what I have said before in my blog, and what I’ve read in other blogs, the problem doesn’t lie in the “healthcare” provided.  The US still has the best  healthcare in the world.  Rather, the problem lies in the system.  Presently the system is a monopoly run by the AMA, complicated by the insurance industry, and though I haven’t touched on this part of the equation, inflamed by the legal profession who are so eager to litigate and courts who award unreasonable settlements.  These are the factors that contribute to the high cost of our healthcare and the issues that really need to be addressed.  So, do we want to trade that for a government-run system as based upon the Medicare/Medicaid model, which is broken and corrupt?

In my opinion to mess with  healthcare itself is a gross mistake.  But what really needs to be addressed, and yea, even fixed, is the problems which lie within the system that behind our healthcare.  That’s where the greed lies.  That’s where the problems are.  If the US government wanted to, they could get that under control, break the monopoly the AMA has on healthcare services provided, address the tort reform issue, then the whole issue of medical care would be just as the rest of the free market – healthily (pardon the pun) competitive.  The GOP has been saying, and people are beginning to listen, that the government isn’t interested in affordable healthcare in spite of what they’re saying.  They’re interested in controlling healthcare.  Healthcare is one of the more intimate and private areas of our lives.  So, we as voters MUST think long and hard about this issue.  Do we REALLY want to have the government involved in the most intimate and personal aspect of our daily lives?