First and foremost fee for service (FFS), the primary payment arrangement for doctors in the U.S., should be abolished.

Doctor Feelbad
 
By JM Hamilton (3-31-12)

“Of course I’m respectable, I’m old.  Politicians, ugly buildings, and whores all get respectable if they last long enough.”  - John Huston (aka Noah Cross) from the movie Chinatown

It would appear that Mr. Huston left doctors off the list of items that become more respectable with time.  After all, the practice of medicine must be the second oldest profession (think about that – but only for a second).  As my readers know this blog is fond of taking on both the sacred and the profane; and this week we lance that most sacred of boils, the medical profession. Aside from the almighty herself – there is perhaps no group of individuals or body of professionals, we hold in higher regard than doctors and the industries that support same.  Perhaps it is because Americans place such a high value on life, and in particular our own, that we have a special fondness – call it near pagan idolatry – for the men and women wearing white coats.

How else can we explain why we would allow this industry/profession to run with double digit cost increases, perennially?  There’s no other industry like it.  Medical inflation is destroying our Federal and State budgets, and my guess is probably the single biggest reason why corporations and business are reluctant to hire Americans.

And as much as JMH is a fan of President Obama and his administration, replete with it’s many successes, one of its two greatest failures was the Democratic Party’s complete waste of 111th Congress, with the passage of the Patient Care and Affordable Protection Act, otherwise known as the healthcare reform.

Why my disdain for this legislation?   After all before it was derisively known as “Obamacare,” it was called “Romneycare” and was originally thought up by a right-wing think tank, the Heritage Foundation.  No, the goal of healthcare reform was perfectly acceptable: universal care via the private sector coupled with REFORM (read: cost containment).  But the appalling outcome was the complete lack of reform.  That is to say, in order to get this dog passed the Democratic leadership had to “suck up” to nearly every medical special interest known to man – but primarily Big Pharma, major corporate hospitals chains, and of course, doctors.  Meanwhile, Rome burned, unemployment soared, and the banking industry (the architect of our destruction) grew bigger and more powerful.

Had the 111th passed true health care cost containment, the Democratic Party very well might have addressed the unemployment issue, simultaneously; because employers would not then be confronted with this run away inflationary train.

Next time you look at your ever shrinking paycheck with it’s every shrinking purchasing power, don’t blame your employer — blame ever escalating healthcare costs (and several other predatory monopolies and cartels I enjoy writing about).  That’s where your annual pay raise has gone: to pay for double-digit medical care increases.  As we know real U.S. wages have been stagnant since the 90’s.

What might true reform have looked like then, so that you might actually enjoy a future payroll increase going forward, that is if both political parties weren’t so slavishly devoted to special interests and had the guts to take on same?

First and foremost fee for service (FFS), the primary payment arrangement for doctors in the U.S., should be abolished.  Doctors should be placed on a salary – based upon what the market will afford, and incentivized based upon outcome, cost containment, and preventive care.  In exchange for going to a salary, and committing to providing care within the U.S., doctors might be made immune from medical malpractice litigation and some percentage of their medical education paid for; in exchange for foregoing medical malpractice insurance, professional lapses/problems might be reviewed by a board made up of professional peers, and patients.

By placing doctors on salary, and eliminating medical malpractice costs for same, America would take one large step forward in controlling double digit medical cost increases, since doctors would no longer be incentivized to order superfluous tests and exams.  And not to get nasty, but if doctors become like any other class of worker in America, we would expect their wages to “flat line.”  For as we learned in the last couple of years some captains of industry collude to contain payroll expense, prevent the bidding up of worker income, and eliminate employee poaching  (witness the Justice Department settlement with Silicon Valley).  Hey if nearly every other industry or business class in America colludes, directly or indirectly, to set the wages of their labor- why should doctors be exempt?

But controlling FFS and doctor wages is just the first step.  America is probably the only Western Democracy that does not negotiate the price of medicine and drugs with major pharmaceutical companies (otherwise known as Big Pharma).  As a consequence, American labor is uncompetitive, and the drug cartel makes obscene profits.  The world, in turn, rides our coattails and benefits from the subsidy America pays Big Pharma.  The Washington Post estimates the mark up maybe as high as 20%; and we have all read about contrived shortages of key medicines daily, which further hike profit margins.  Right out of the monopoly play book.  Big Pharma – with its seemingly never ending patented medicines – is just another monopoly preying upon ordinary Americans and the system; as such it presents an enormous economic drag (i.e. tax).

Profits in America, in turn, finance Big Pharms’ dividends, stock buy backs, mergers and acquisition, with only a small percentage of Big Pharma profits going to finance R&D.  As a result, America is going broke, and Big Pharma has grown larger, less efficient and more politically powerful.

America then has one of two solutions:  either present a bill to the other Western democracies to pay their fair share of Big Pharma’s mark up (not a likely scenario); or two, negotiate – annually – lower drug costs and margins, like every other country.  As this Cartel has shown less productivity in recent years (with a slow down in new medicines), and diseconomies of scale, strong consideration should also be given to breaking up these companies to make them more competitive and more attuned to the free market principles the executives of Big Pharma subscribe to.

Finally, it appears that an absurd and disproportionate amount of annual medical costs are spent prolonging terminal patients last few months of life…. this clearly needs to change.  That is, here’s your morphine drip, go home, our prayers are with you, and we’ll see you in heaven.  Sound cruel?  No, what’s cruel is spending criminal amounts of money to keep Uncle Benny alive for the last three months of his existence, when that money could be spent on preventive care, or even education for our youth.  Perish the thought.

Perhaps the one positive that came out of healthcare reform was data collection, and the mandate for electronic records, which could ultimately lead to Artificial Intelligence within the medical field.  How many times in the last five years, have you logged onto Web MD and diagnosed your own health problem in advance of your doctor visit?  And how often were you, or rather WebMD, found to be correct?  Digital medical records, and the accumulation and analysis of medical data, may eventually solve escalating medical costs, w/out reform.  The advent of digital medical records and computer diagnostics and diagnosis … may make doctors obsolete, if nothing else certainly general practitioners. 


Let’s hope that arrival of medical AI appears before Big Pharma and our white coated friends bankrupt our country and make U.S. employment untenable.

P.S.

Until that day arrives… I just want to go on record as stating that I love my doctor.  She’s a wonderful person.

As for politicians who sit in judgment on this law within the Supreme Court (as flawed as it maybe)… I can think of no greater reasons to re-elect our sitting President than to replace these conservative judges, as they retire or shuffle off their mortal coil.  Republican governor Rick Perry of Texas did have at least one great idea, while on the campaign trail this year and last…. and that is Americans should not be held hostage by the political beliefs of the judges on the bench in perpetuity.  As Noah Cross might have said, some of the older judges on the court have earned our respect, and like any good politician/”jurist,” we wish them well in retirement.

 Copyright JM Hamilton Publishing 2013