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View Full Version : The cost of US Healthcare..... what is this, take 25?



George Jung
08-03-2013, 08:42 PM
An interesting perspective for those who believe the USA has the best healthcare anywhere.... and it's affordable, too!
WARSAW, Ind. — Michael Shopenn’s artificial hip was made by a company based in this remote town, a global center of joint manufacturing. But he had to fly to Europe to have it installed. Mr. Shopenn, 67, an architectural photographer and avid snowboarder, had been in such pain from arthritis (http://health.nytimes.com/health/guides/disease/arthritis/overview.html?inline=nyt-classifier) that he could not stand long enough to make coffee, let alone work. He had health insurance (http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/health_insurance_and_managed_care/index.html?inline=nyt-classifier), but it would not cover a joint replacement because his degenerative disease was related to an old sports injury, thus considered a pre-existing condition.
Desperate to find an affordable solution, he reached out to a sailing buddy with friends at a medical device manufacturer, which arranged to provide his local hospital with an implant at what was described as the “list price” of $13,000, with no markup. But when the hospital’s finance office estimated that the hospital charges would run another $65,000, not including the surgeon’s fee, he knew he had to think outside the box, and outside the country.
“That was a third of my savings at the time,” Mr. Shopenn said recently from the living room of his condo in Boulder, Colo. “It wasn’t happening.”
“Very leery” of going to a developing country like India or Thailand, which both draw so-called medical tourists, he ultimately chose to have his hip replaced in 2007 at a private hospital outside Brussels for $13,660. That price included not only a hip joint, made by Warsaw-based Zimmer Holdings (http://www.zimmer.com/en-US/index.jspx), but also all doctors’ fees, operating room charges, crutches, medicine, a hospital room for five days, a week in rehab and a round-trip ticket from America.
“We have the most expensive health care in the world, but it doesn’t necessarily mean it’s the best,” Mr. Shopenn said. “I’m kind of the poster child for that.”
As the United States struggles to rein in its growing $2.7 trillion health care bill, the cost of medical devices like joint implants, pacemakers and artificial urinary valves offers a cautionary tale. Like many medical products or procedures (http://www.nytimes.com/2013/07/01/health/american-way-of-birth-costliest-in-the-world.html?_r=0), they cost far more in the United States than in many other developed countries.
More here: http://www.nytimes.com/2013/08/04/health/for-medical-tourists-simple-math.html?hp&_r=0

wardd
08-03-2013, 09:30 PM
it's that darn aca driving up costs, that is if you get past the death panel

Nanoose
08-03-2013, 11:21 PM
I read of a similar, VERy positive experience for a hip replacement in India.
Nice to make a holiday of it! Go a bit early - see some sites, have a couple of nice meals, then get the surgery.
Pretty viable.
At what point does the cost of medical care in the US leave 'no-one' to buy it (supply and demand)?
That would be interesting!

hokiefan
08-04-2013, 12:31 AM
Intersting. According to the Healthcare Blue Book you linked the other day, a total hip replacement should cost about $25,000 in the US. I looked it up because at some point I need to have one. Was actually ready to pull the trigger several years ago in Jacksonville, then we had a reorg at work and it didn't seem a good idea to be out of work for 5-6 weeks right then.

One of the most frustrating aspects though was trying to figure out my cash costs after insurance. The doctor had no clue and referred me to his office manager. Talked to her and said I just needed to be able to make a plan. She said she could tell me the physician's costs, and offered to make some phone calls about the rest. She called me in about 3 days and said she didn't think it was possible to get a good answer. She thought that stunk and understood why people get so frustrated. Eventually I just decided to plan on the insurance policy's max out of pocket for lack of a better number.

Cheers,

Bobby

wardd
08-04-2013, 01:57 PM
Intersting. According to the Healthcare Blue Book you linked the other day, a total hip replacement should cost about $25,000 in the US. I looked it up because at some point I need to have one. Was actually ready to pull the trigger several years ago in Jacksonville, then we had a reorg at work and it didn't seem a good idea to be out of work for 5-6 weeks right then.

One of the most frustrating aspects though was trying to figure out my cash costs after insurance. The doctor had no clue and referred me to his office manager. Talked to her and said I just needed to be able to make a plan. She said she could tell me the physician's costs, and offered to make some phone calls about the rest. She called me in about 3 days and said she didn't think it was possible to get a good answer. She thought that stunk and understood why people get so frustrated. Eventually I just decided to plan on the insurance policy's max out of pocket for lack of a better number.

Cheers,

Bobby

and the republicans say if the consumer shopped around health care costs would come down

ahp
08-04-2013, 02:31 PM
and the republicans say if the consumer shopped around health care costs would come down

Exactly, how can you shop around? Did anyone ever hear of sending out Requests for Quote for hip replacement, or anything else? I haven't, and don't think it would work today.

The myth of our free enterprise capitalistic system is that the vendors will really be competitive and provide the best product their little minds can think of at the lowest price. That is not our healthcare industry. It is a comfy, for profit industry, with no competition.

I have worked for competitive businesses, but, there is nothing so comfortable as a nice cartel or trust with dependable profits even for the least fit.

Teddy Roosevelt, where are you when we need you?

wardd
08-04-2013, 02:41 PM
Exactly, how can you shop around? Did anyone ever hear of sending out Requests for Quote for hip replacement, or anything else? I haven't, and don't think it would work today.

The myth of our free enterprise capitalistic system is that the vendors will really be competitive and provide the best product their little minds can think of at the lowest price. That is not our healthcare industry. It is a comfy, for profit industry, with no competition.

I have worked for competitive businesses, but, there is nothing so comfortable as a nice cartel or trust with dependable profits even for the least fit.

Teddy Roosevelt, where are you when we need you?

and of course after an accident you better shop around quick before you bleed to death

George Jung
08-04-2013, 02:53 PM
I do this for a living - and I've had no more success getting 'quotes'/ estimated costs before surgery for myself, than anyone else. On occasion, a personal phone call, identifying who I am/what I do has 'motivated' the hospital or surgical center to make a bit more effort - but oftentimes, not. When I had a colonoscopy at a GI docs office, they couldn't/wouldn't tell me, up front, what my costs would be. If I can't get the info, how can anyone else. The system - it is broken. But.... getting back to the OP - amazing this guy got the entire surgery, all fees/expenses/prosthesis/airfare/hotel/rehab - for less than the 'wholesale' price of the prosthesis here. That's insane. That should be criminal. A letter addressing just that, to your congressman with a CC: President Obama, are you paying attention?, might be fun, if likely ineffectual.

Keith Wilson
08-04-2013, 02:56 PM
He had health insurance, but it would not cover a joint replacement because his degenerative disease was related to an old sports injury, thus considered a pre-existing condition.Starting next year, this will be illegal in most cases.

wardd
08-04-2013, 03:04 PM
Starting next year, this will be illegal in most cases.

one of the things the right hates about aca

hanleyclifford
08-04-2013, 03:09 PM
I think doctors cost a lot here because they have to pay a lot for malpractice insurance.

Clarkey
08-04-2013, 03:14 PM
Having worked in the medical device design field for a number of years it never ceases to amaze me how happy people in the USA are to be totally shafted by their own healthcare industry. The GPO's, insurance companies and healthcare technology industry see to it that you pay 5-10 times the amount that the rest of the world pays for the same stuff, much of which originates in the USA.

George Jung
08-04-2013, 03:16 PM
Nice diversion Hanley Clifford - but not correct. And if you bother looking at the cost of these procedures, what you'll find is that the cost of the surgeon actually doing the procedure is a very small fraction of the total charges - most of the 'over charging' is from the hospitals.

hanleyclifford
08-04-2013, 07:06 PM
Nice diversion Hanley Clifford - but not correct. And if you bother looking at the cost of these procedures, what you'll find is that the cost of the surgeon actually doing the procedure is a very small fraction of the total charges - most of the 'over charging' is from the hospitals. I am aware that the lion's share of the cost of surgical procedures goes to the hospital, not the surgeon. On a $33,000 tab I had the surgeon got less than $6,000. This is especially true here where hospitals think they have a license to steal. Still, my comment about doctors costing more because of the exorbitant cost of malpractice insurance is correct - my surgeon told me so.

George Jung
08-04-2013, 07:15 PM
I am aware that the lion's share of the cost of surgical procedures goes to the hospital, not the surgeon. On a $33,000 tab I had the surgeon got less than $6,000. This is especially true here where hospitals think they have a license to steal. Still, my comment about doctors costing more because of the exorbitant cost of malpractice insurance is correct - my surgeon told me so.

:dHehehe.... well then.... it must be true! (Where's ol' Norman when ya need him?):p

hanleyclifford
08-04-2013, 07:23 PM
:dHehehe.... well then.... it must be true! (Where's ol' Norman when ya need him?):p Norm has been a little scarce of late...any theories?

McMike
08-04-2013, 07:27 PM
I am aware that the lion's share of the cost of surgical procedures goes to the hospital, not the surgeon. On a $33,000 tab I had the surgeon got less than $6,000. This is especially true here where hospitals think they have a license to steal. Still, my comment about doctors costing more because of the exorbitant cost of malpractice insurance is correct - my surgeon told me so.

Then, why on earth do you continue to perpetuate the lie?

George Jung
08-04-2013, 07:28 PM
Yup - I think he has a life! (sailing, correct?)

hanleyclifford
08-04-2013, 07:34 PM
Then, why on earth do you continue to perpetuate the lie? Which lie is that?

McMike
08-04-2013, 07:37 PM
I think doctors cost a lot here because they have to pay a lot for malpractice insurance.

This one . . . :(

hanleyclifford
08-04-2013, 07:47 PM
This one . . . :( That's not a lie.

hanleyclifford
08-04-2013, 07:52 PM
I'm lurking. Too much stupidity to comment on. Good plan - we wouldn't want you to get overwhelmed.

Keith Wilson
08-04-2013, 08:02 PM
Still, my comment about doctors costing more because of the exorbitant cost of malpractice insurance is correct - It's one factor among many, and my understanding is that it's not that significant, Overall, medical care in the US is about twice as expensive as the rest of the developed countries. The estimates I've seen say that liability insurance and the difference in malpractice laws account for about 5% of that difference. Not tiny, but not a major factor. (Sorry; can't find the link right now.)

It's not really a lie, but a pretty small part of the truth.

hokiefan
08-04-2013, 08:02 PM
I am aware that the lion's share of the cost of surgical procedures goes to the hospital, not the surgeon. On a $33,000 tab I had the surgeon got less than $6,000. This is especially true here where hospitals think they have a license to steal. Still, my comment about doctors costing more because of the exorbitant cost of malpractice insurance is correct - my surgeon told me so.

So how much of that $6,000 went to pay malpractice insurance?

hanleyclifford
08-04-2013, 08:40 PM
So how much of that $6,000 went to pay malpractice insurance? He didn't say; but he did tell me his annual premium was about $200,000.

hanleyclifford
08-04-2013, 08:46 PM
Hey guys; don't prove Norm right - there's links all over the place: http://www.ncbi.nlm.nih.gov/pubmed/19399772

MikeWinVA
08-05-2013, 02:30 AM
I hear constant complaining about the health system in the US. For what it is worth almost every hospital in the US has a CT scanner and higher end imaging equipment. More that 75% of hospitals have an MRI, multiple CT scanners, and catherization labs. So when you get that stroke or heart attack it is usually less than 15 minutes from the hospital door to clearing your arteries. Or if your doctor suspects cancer you don't have to wait 60 days to find out.

I know for a fact that on Prince Edward Island in Canada with an area of 2000 square miles has only 1 MRI machine and 2 CT scanners as of last year. The population is 150,000. The county I live in is about 250 square miles with the same population. There are 2 hospitals, a dozen medical clinics, 11 Cath labs, 4 MRI machines, 5 CT scanners, 5 mammography scanners and the list goes on.

Much of the cost of US healthcare is in capital expenditures. A typical CT scanner is $750K, an MRI $1 mill and a cath lab $1.5 Mill. You might complain about it now, but when you need it, it is there. In Canada the wait list can be 3-6 months for an MRI. Here if you need it, you can get it in the next hour - often "the golden hour" when you most need it. Yes the doctors are well paid, but a continuing push for high quality staff has most hospitals requiring the nursing staff to hold advanced degrees and additional training in specialty areas, this drives up the hospital costs that must be passed on or the hospital ceases to be. 30 years ago, an X-Ray tech could complete a 9 month course and be certified. Now many hospitals want a BS degree to work in specialties. That is not free.

Yes it is expensive, but your expenses are covering more than you treatment, it is covering the availability of that service. As of now, I know 5 doctors that have stopped accepting Medicaid and Medicare. If forced to accept them, they will just retire. I know one who sold his practice and bought a chain of pizzerias. Most doctors are intelligent, they went into medicine for noble reasons as well as for financial return. Most were the brightest among their peers going through school. If the financial incentive is taken away, why toil at academics until age 35, end up in $400k in debt if there is no light at the end of the tunnel? What is going to happen is the smart students will see this and pursue other occupations and the best and brightest will not be in medicine. The term is brain drain.

So be careful of what you wish for, you might just get it.

Waddie
08-05-2013, 02:53 AM
Don't worry, you'll soon be treated by a "physician's assistant" instead of a real doctor.

Next year I go on Medicare. My doctor no longer accepts new patients already on Medicare, and hasn't for some time, but he will if you are a current patient and turn 65.

regards,
Waddie

MikeWinVA
08-05-2013, 03:05 AM
What most don't understand is the depth of clincal experience and training between a PA and and MD. PA's usually only have a specialty and because of this don't have the experience to be "outside the box" where the MD has had a more thorough training. This is not meant as a slight on PA's as their title is Physician Assistant and they should not be expected to be as knowledgeable.

One of the telltale signs of a pending MD shortage will be when you see many of the states loosen up the supervision requirements on PAs. Where I am most PA's work under the direct supervision of an MD. In the Midwest, due to an MD shortage, there are PA's that have their own free standing medical clinics and only need to phone consult with an MD who does not necessarily have a employee/employer relationship.

Keith Wilson
08-05-2013, 07:22 AM
Mike makes the familiar argument that medical care in the US costs so much because it's so much better. It's indeed very good, in many places as good or better than anywhere in the world, IF you either have a lot of money or good insurance. However, overall results are no better than the rest of the civilized world, and often worse. The point of medicine is not to have the latest machinery, nor the best-educated staff, nor the fanciest clinics, nor the shortest waiting time, it's to help people who need it and to improve people's lives. When one measures results, on average we don't do that well. You'd think if we spend twice as much, we'd get something for it.

That awkward chart again, just for Mike, since he's new here:

http://graphics8.nytimes.com/images/2009/07/08/business/economy/08economix.chart.2.jpg

Where the money goes. It's not equipment.

http://hspm.sph.sc.edu/Courses/Econ/Classes/nhe00/healthss05.gif

Paul Pless
08-05-2013, 07:48 AM
since he's new hereyou really think so?

Keith Wilson
08-05-2013, 08:30 AM
you really think so?I dunno. At least "MikeWinVA" is new here.

Peerie Maa
08-05-2013, 08:42 AM
I dunno. At least "MikeWinVA" is new here.

Is it possible to over write your join date?

John Smith
08-05-2013, 08:55 AM
Exactly, how can you shop around? Did anyone ever hear of sending out Requests for Quote for hip replacement, or anything else? I haven't, and don't think it would work today.

The myth of our free enterprise capitalistic system is that the vendors will really be competitive and provide the best product their little minds can think of at the lowest price. That is not our healthcare industry. It is a comfy, for profit industry, with no competition.

I have worked for competitive businesses, but, there is nothing so comfortable as a nice cartel or trust with dependable profits even for the least fit.

Teddy Roosevelt, where are you when we need you?

It's really a moot point. If you have insurance, be it Medicare and/or private, your insurance company contracts with medical providers in your area and it won't matter where you get your hip replacement, or what whomever does it charges. Medicare, and private insurance companies, contract with the care providers and only allow "x" amount for a hip replacement. As long as your doctor is in network, that is all he is allowed to charge you. Your insurance will pay their share and you'll be responsible for the balance. That amount depends upon your insurance.

I'd remind you my 2 hour ER visit a few months back was billed for over $9000. Medicare allowed $167. They paid 80% of that and my BC picked up the remaining 20%. As the long article in Time magazine back in March pointed out, the facility accepts the $167 because they are making money getting paid that amount. If I had no insurance, I would be expected to pay the $9000 plus billed.

This is an important point. The more people who have health insurance, the fewer people are asked to pay the "made up by the Charge Master" number that is billed.

John Smith
08-05-2013, 08:58 AM
I think doctors cost a lot here because they have to pay a lot for malpractice insurance.

Another right wing talking point. In the states of Texas and California malpractice suits were dramatically limited many years ago. The only people who benefited were the malpractice insurance carriers.

A couple of years ago, it was in California that an insurance provider increased rates nearly 40%. That shows you how effective limiting malpractice suits had been.

John Smith
08-05-2013, 09:00 AM
Having worked in the medical device design field for a number of years it never ceases to amaze me how happy people in the USA are to be totally shafted by their own healthcare industry. The GPO's, insurance companies and healthcare technology industry see to it that you pay 5-10 times the amount that the rest of the world pays for the same stuff, much of which originates in the USA.

There are a lot who are not happy. Sadly, there are a lot that don't want to change this. They are the "patriots" who believe if America does it this way, it must be the best way to do it, and they do not wish to be confused by facts.

John Smith
08-05-2013, 09:03 AM
I am aware that the lion's share of the cost of surgical procedures goes to the hospital, not the surgeon. On a $33,000 tab I had the surgeon got less than $6,000. This is especially true here where hospitals think they have a license to steal. Still, my comment about doctors costing more because of the exorbitant cost of malpractice insurance is correct - my surgeon told me so.

Of course, he'd not lie about that, would he? Are you sure he even knows what his malpractice premium is? I am sure he has a higher overhead because he needs staff to deal with all those different insurances. I'm also sure he contracts with all those insurance to accept what they decide is a reasonable charge for his services.

Referencing the Time article again, The insurance carrier takes into account the area, the patient traffic, the overhead, etc. and then comes up with a number that allows what they believe is a reasonable profit for the services provided. The doctors and hospitals accept these amounts because they do make money. If they were losing money they would not contract to accept them.

hanleyclifford
08-05-2013, 09:04 AM
Another right wing talking point. In the states of Texas and California malpractice suits were dramatically limited many years ago. The only people who benefited were the malpractice insurance carriers.

A couple of years ago, it was in California that an insurance provider increased rates nearly 40%. That shows you how effective limiting malpractice suits had been. Thank you, John, for helping me make the point!

John Smith
08-05-2013, 09:05 AM
That's not a lie.

Then how do you explain health care costs going up fastest in the states with limited malpractice suits?

hanleyclifford
08-05-2013, 09:08 AM
This is an example of a single anecdote distorting the truth.

You might want to do a little Google research on the whole issue of malpractice insurance.... what you might find could surprise you:

1) The extraordinary malpractice premiums that too many people think are typical, are actually only typical for extraordinary doctors whose specialties are especially risky: neurosurgeons, heart surgeons, etc. The premiums for general surgeons are also high, but not extraordinary. The premiums for general practitioners are nowhere near as onerous.

2) The extraordinary premiums for those high risk doctors are frankly not all that high... relative to income. It's not what you gross, or what you pay in overhead and expenses, it's what you're left over with after the year ends. If you're grossing $500K annually, a $150K malpractice premium really isn't all that extraordinary.

3) Most genuine malpractice is committed by a very small percentage of doctors. Many doctors may get sued for malpractice at some point in their careers, but that doesn't mean they have committed malpractice. The problem is that insurance companies would infinitely prefer to settle these cases rather than go to trial, considering the costs of litigation. Some folks have suggested that frivolous or unjustified malpractice suits should be operated under a 'loser pays' system, where a plaintiff who doesn't prevail would be forced to pay a defendant's legal expenses.... but this ends up essentially denying an injured plaintiff the right to sue for redress, if the case isn't ironclad.. and few cases are. A better system is a malpractice tribunal, where a panel of objective experts can block a suit which is frivolous or unjustified. There is such a system in Massachusetts, although my own doctor thinks they let far too many malpractice cases proceed to trial or settlement. So as a surgeon grossing $500,000 I pay a mere $150,000 for malpractice insurance? A paltry 30%? Norm, you should have insurance to post in the Bilge.:D

John Smith
08-05-2013, 09:09 AM
Don't worry, you'll soon be treated by a "physician's assistant" instead of a real doctor.

Next year I go on Medicare. My doctor no longer accepts new patients already on Medicare, and hasn't for some time, but he will if you are a current patient and turn 65.

regards,
Waddie

I don't know why that is. My wife still has our federal blue cross as her primary. I'm on Medicare. We go to the same doctors. Whatever our primary doctor charges for a visit, both Blue Cross and Medicare allow $85. Blue Cross sends the doctor a check for $65. Medicare sends a check for $74. I doubt the doctor herself knows this, as the staff handles the bills.

I also believe a lot of doctors listen to right wing tv/radio and are reacting to misinformation.

John Smith
08-05-2013, 09:11 AM
Thank you, John, for helping me make the point!

You might want to re-read the posts. The state that implemented limits on malpractice suits has had the highest rate of health care cost increases. Under your logic, their costs should go down.

As a point of information, as Obamacare is being implemented in CA health care costs ARE coming down. Something else the right got wrong.

John Smith
08-05-2013, 09:13 AM
So as a surgeon grossing $500,000 I pay a mere $150,000 for malpractice insurance? A paltry 30%? Norm, you should have insurance to post in the Bilge.:D

Can you actually link to reliable documentation of these numbers?

ccmanuals
08-05-2013, 09:21 AM
Yep, tort reform was passed in Texas based on argument that medical costs and procedures would go down. They went up. But the insurance companies like it.

Concordia 33
08-05-2013, 11:30 AM
An interesting perspective for those who believe the USA has the best healthcare anywhere.... and it's affordable, too! More here: http://www.nytimes.com/2013/08/04/health/for-medical-tourists-simple-math.html?hp&_r=0


Interesting. At 67 he qualifies for Medicare which has not pre-existing illness clause.

hanleyclifford
08-05-2013, 12:38 PM
*shrugs* Yeah, maybe $350K net is a poverty wage.

On the other hand, if, as a surgeon, I cut off the wrong leg, it's pretty unreasonable for the patient to bitch... I mean,everyone makes mistakes, right? Yeah, I think I made one getting on this thread. Malpractice insurance and litigation costs clearly affect some doctors more than others, so the discussion gets squishy just as it gets started. You were right the first time - this is a stupid argument.

John Smith
08-05-2013, 01:16 PM
Yeah, I think I made one getting on this thread. Malpractice insurance and litigation costs clearly affect some doctors more than others, so the discussion gets squishy just as it gets started. You were right the first time - this is a stupid argument.

The facts simply don't back that opinion up. In NC, where my brother wanted to sue his doctor, he was told you cannot sue a doctor in NC. Period; they are insulated. It hasn't brought their healthcare costs down.

This was another right wing talking point that has become a widely accepted myth. We have a lot of those. It's really sad.

John Smith
08-05-2013, 01:31 PM
I've not the time to do the research, but I read that very few medical malpractice suits are for a lot of money.

We hear about the big ones.

Years back Bob Novak argued for a $250k cap. His opinion was based on that being a lot of money. I made numerous efforts to ask him if he would support that cap as NET to the plaintiff. He never responded.

I had hoped the TIME article back in March would have changed this debate a bit. I know it was based on boring facts and research, but those things should have some place in this discussion. Health care providers submit bills using numbers MADE UP by the Chargemaster. These are very high numbers.

I'll reference some blood work my wife had done a year or so ago. LabCorps billed $1200. BC allowed $110. Labcorps accepted that. They contract for this because they make money with the $110. It is the Chargemaster numbers that are insane, but they are what the uninsured get billed and are expected to pay.

I really wish more would consider this situation as the part of the problem it is.

Waddie
08-05-2013, 02:44 PM
It isn't necessarily the direct cost of the malpractice insurance, or even the expense of litigation, it's the CYA medicine that every doctor must practice to steer clear of malpractice suits. That's why they order every test in the book for your minor ailment. That is the "major cost" of high malpractice premiums.

And maybe we should keep in mind that other countries systems pay for doctor training, and for others in the field. They also buy the pricey MRI and Catscan machines, have limits on litigation and their own version of death panels. Do you know why no newly minted doctor ever hangs out a shingle anymore? NO ONE can afford to set up a new practice - so they try to join a "group" or work for a Kaiser type of company. How much do you think it costs to open the doors everyday at a modern doctor's office? You would be astounded.......

regards,
Waddie

MikeWinVA
08-05-2013, 04:16 PM
If an MD in NYC makes $500,000, his net after taxes will be somewhere around $280000. Lop off $150,000 for medical malpractice insurance and his income is $130,000. Servicing student loans is another $30-50k/year for 10 to 15 years. So his net income is nowhere close to what you would expect for for the gross income he has.

Typically most specialists complete medical school for their basic MD training, spend some time in residency at low wages, continue schooling for their specialty, have a residency for that, and that is usually followed by a fellowship. Most interventional radiologists, interventional cardiologists, neuro vascular surgeons, and cardiac thoracic surgeons do not start making this kind of money until they are in their mid to late 30's. They have foregone 12 to 15 years of their income producing lives to attain the level of expertise required. Any screw ups on their part along the way and they are on the hook for all the loans they have taken. So they assume a fairly large risk entering medicine by loss of income productive time and the loans for education.

Lets say you took most of the income you made from the age of 22 until age 32 didn't spend it, invested it wisely and opened a business at that age with an additional $500k in business loans. With the amount you have in the business, you would expect about a $3-400k annual income. So do you deserve this income, after living on soup and bread for a decade of hard work and diligent savings? What MDs do is essentially the same thing, they trade valuable earning time and forgo an income for a bigger piece of the pie later. Many of these MDs are on perpetual call, and will work 70+ hours a week and have a lousy quality of life despite the income. I have owned and run a business making a similar gross income to some of these doctors. It is amazing how fast a million dollars of gross income can become $150k after overhead and expenses.


I dunno. At least "MikeWinVA" is new here.

Keith, by the way I have been here since 2006, I usually just lurk on the building boards and rarely climb down into the bilge.

Waddie
08-05-2013, 04:36 PM
Norman Bernstein; Malpractice, and the associated defensive medicine, still constitutes only a very small part of health care inflation.

Not so fast. Here's a different analysis;


Defensive medicine—the ordering of unnecessary tests and procedures to reduce the threat of malpractice litigation—has long been a lightning rod in the debate over health-care spending. Many physicians maintain that fear of lawsuits significantly affects the practice of medicine, and that reform of the malpractice system is crucial for containing costs.


On the other hand, several economic studies (including work by us) have found that states that have enacted malpractice reforms experienced a mere 2%-5% reduction in health-care spending compared to states that have not. This has led to a loose consensus among most economists and policy makers that defensive medicine is not an important contributor to U.S. health-care spending—and therefore that malpractice reform is not of much significance for containing costs.

There are reasons to believe this consensus understates the amount of defensive medicine. The relatively minor reductions in health-care spending that have been observed in comparative studies might result from the fact that, even in reform states, doctors continue to practice defensive medicine. The changes in the malpractice system may have done little to change physicians' perceptions of the risk of being sued, and thus of the way they care for their patients.

Using data from the most recent Health Tracking Physician Survey (2008), which asked physicians about their beliefs and attitudes towards malpractice risk, we found that 68% of physicians in the five states with the highest malpractice risk reported "ordering some tests or consultations simply to avoid the appearance of malpractice." Yet 64% of physicians in the five states with the lowest malpractice risk reported doing the same thing.

There are several implications of the high rates of defensive medicine self-reported by physicians in this survey. One concerns the nature of the changes in the malpractice system. As shown in a 2010 Health Affairs study by Emily Carrier and others, traditional reforms such as caps on noneconomic damages haven't been successful in eliminating or reducing much self-reported defensive medicine. Such reforms focus more on restricting the size of damages awarded without necessarily targeting the frequency of malpractice claims. Physicians can insure against the payment of damages, but they cannot insure against the emotional, reputational and work-related costs of litigation. This suggests that reforms intended to reduce defensive medicine should focus on attempting to reduce the frequency of claims.


One type of reform that has had some success in reducing defensive medicine is the adoption of national rather than local standards of medicine for juries to judge malpractice claims. The use of local standards of care drove large variation in tests and procedures across the many jurisdictions of the United States. In the 1960s and '70s, however, the majority of states adopted national standards for judging malpractice. Michael Frakes of Cornell University found that this change has reduced variation in patterns of health care across states by 30% to 50%.


Going forward, physician associations concerned with malpractice reform might do far better by their membership if they focused on things such as "disclosure-and-offer programs." Here providers voluntarily disclose adverse events to affected patients and, when appropriate, make offers of restitution prior to the filing of any lawsuit. These goal of these offers, like payments from no-fault compensation funds, is to reduce the frequency of claims and avoid costly litigation.


It may be that we can only learn the true extent of defensive medicine by conducting a large-scale, rigorous examination of a "safe-harbor" program that exempts physicians from liability in cases where they could demonstrate that they followed accepted clinical guidelines or best practices.

Reforms that make the malpractice system less onerous to physicians while protecting patients who have suffered from true negligence could be critical to earning physicians' support for other cost-reducing health-care reforms, such as those intended to replace fee-for-service reimbursements.

The medical-malpractice system is dysfunctional in many ways that harm both physicians and patients, and there is a limited association between litigation and the quality of patient care. Moreover, even though many states have adopted reforms limiting malpractice liability, these efforts have as yet done little to address defensive medicine.

By;



AMITABH CHANDRA,
ANUPAM B. JENA
AND SETH A. SEABURY


Mr. Chandra is a professor of public policy at Harvard's Kennedy School of Government. Dr. Jena is a professor of health-care policy at Harvard Medical School and an internist at Massachusetts General Hospital. Mr. Seabury is a professor at the Schaeffer Center for Health Policy and Economics at the University of Southern California.

http://online.wsj.com/article/SB10001424127887323701904578280112638373302.html

regards,
Waddie

Keith Wilson
08-05-2013, 04:44 PM
Again, the estimates I have seen say that somewhere around 5% of the difference between US costs and other countries' is attributable to the tort system in the US - including defensive medicine. I have no way of judging their accuracy. That's not utterly insignificant, but not nearly as large as, say, the cut taken by private insurance companies. And I fail to see the point of the article; if even after reforms, doctors continue to practice defensive medicine, what's the solution? Eliminate the possibility of suing for malpractice entirely? That doesn't seem like a good idea.


. . . . and rarely climb down into the bilge.'Slither' is the word. Down here we slither. Those of us who are really good leave slime trails behind. ;)

MikeWinVA
08-05-2013, 05:01 PM
Keith,

You would be surprised at the cut the insurance companies take. The majority operate at a premium loss (underwriters loss). For every $1.00 they take in they may pay out $1.05 to $1.15. A minority operate at an underwriting profit. They make their money on the spread of time investing the money before it is paid out. Additionally, they reinsure, ie buy insurance from a reinsurer for high losses, so they can remain solvent if they "misguessed" the amount they would pay out over the term of the policy. This is why, AIG took such a big hit several years ago, they reinsured lots of bad risks.

Much of the expense is legal defense. Most insurers cannot use in house counsel and have to hire outside firms for defense. At $300/hr this is expensive.

Waddie
08-05-2013, 05:04 PM
Again, the estimates I have seen say that somewhere around 5% of the difference between US costs and other countries' is attributable to the tort system in the US - including defensive medicine. I have no way of judging their accuracy. That's not utterly insignificant, but not nearly as large as, say, the cut taken by private insurance companies. And I fail to see the point of the article; if even after reforms, doctors continue to practice defensive medicine, what's the solution? Eliminate the possibility of suing for malpractice entirely? That doesn't seem like a good idea.

'Slither' is the word. Down here we slither. Those of us who are really good leave slime trails behind. ;)

The article does provide some answers;

"One type of reform that has had some success in reducing defensive medicine is the adoption of national rather than local standards of medicine for juries to judge malpractice claims. The use of local standards of care drove large variation in tests and procedures across the many jurisdictions of the United States. In the 1960s and '70s, however, the majority of states adopted national standards for judging malpractice. Michael Frakes of Cornell University found that this change has reduced variation in patterns of health care across states by 30% to 50%.


Going forward, physician associations concerned with malpractice reform might do far better by their membership if they focused on things such as "disclosure-and-offer programs." Here providers voluntarily disclose adverse events to affected patients and, when appropriate, make offers of restitution prior to the filing of any lawsuit. These goal of these offers, like payments from no-fault compensation funds, is to reduce the frequency of claims and avoid costly litigation.


It may be that we can only learn the true extent of defensive medicine by conducting a large-scale, rigorous examination of a "safe-harbor" program that exempts physicians from liability in cases where they could demonstrate that they followed accepted clinical guidelines or best practices. "

regards,
Waddie

wardd
08-05-2013, 07:14 PM
With respect to Texas, two debunkable doozies tend to dominate. One is that doctors’ malpractice insurance premiums magically went down after the state’s 2003 patient rights restrictions were adopted—and the other is that doctors, particularly OBGYNs who had supposedly fled the state for fear of lawsuits, have since returned in happy droves.

First of all, in the last few years Texas malpractice rates dropped—but so did rates in every single state in the country! We’re in a soft insurance market. It’s industry wide! That means rates have stabilized irrespective of whether “tort reform” was enacted in a state. Take a look at the Americans for Insurance Reform (http://www.thepoptort.com/2009/07/new-study-by-air.html) definitive report on this.

Moreover, after Texas insurers fought to take away patients’ rights in 2003 “reforms,” (after arguing this was the way to reduce rates) they requested ratehikes—as high as 35 percent for doctors and 65 percent for hospitals (http://www.centerjd.org/archives/issues-facts/MB_TexasRates.pdf). And this naked profiteering on the part of insurance companies so enraged Texas lawmakers at the time that they threatened to institute mandatory insurance rate rollbacks if doctors didn’t get substantial cost relief. But even then, there was no significant drop in costs until the insurance market rate cycle shifted (http://www.centerjd.org/archives/issues-facts/MB_TexasRates.pdf). Meanwhile, patient safety in the state is abysmal (http://www.thepoptort.com/2009/08/hearst-report-texas.html), and health care costs (http://74.125.93.132/search?q=cache:tdMVy7-uLCMJ:www.thepoptort.com/health-insurance/+over+utilization&cd=1&hl=en&ct=clnk&gl=us) havegone through the roof (http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande).



As for the Texas/OBGYN nonsense, in 2007, the Texas Observer (http://www.texasobserver.org/article.php?aid=2607) found:

“The campaign’s promise, that tort reform would cause doctors to begin returning to the state’s sparsely populated regions, has now been tested for four years. It has not proven to be true....Those doctors are following the Willie Sutton model: They’re going, understandably,where the better-paying jobs and career opportunities are, to the wealthy suburbs of Dallas and Houston, to growing places with larger, better-equipped hospitals and burgeoning medical communities…

So while Texas patients lost significant legal rights and many unsafe health care providers are now unaccountable, rural communities that were exploited during the “tort reform” campaign have seen no improvement in access to physicians.


http://www.thepoptort.com/2009/09/medical-malpractice-myths-debunked.html

Keith Wilson
08-05-2013, 08:14 PM
this change has reduced variation in patterns of health care across states by 30% to 50%. Yes, but it doesn't say how large the variation between states was before the change. If the state-to-state variation was only 10%, and was reduced 50%, that still not much of a difference.

The refund checks now being sent out under the ACA belie the claim of narrow margins for insurers.