How Health Care Works in America, and Why It's So Bad

We all know in our hearts that a well functioning society should reward intelligence and hard work.  This runs counter to the thinking of those who consider this concept aggressively hurtful to the stupid and lazy, but it is something we know should be true. Merit should matter.  Similarly, we know that well functioning medical care should reward good care of the sick and the intelligent pursuit of seeking even better outcomes.  Many things are working against merit-based reward in health care, however.

Capitalistic principles should help reward the best medical practitioners.  After all, in the archetypical example, if you make the best basket, I'm more likely to part with my best pelt in trade.  Merit is rewarded most reasonably with the capitalistic model.  If the doctor is known to provide the best care, he will be the most financially successful.

As we all are aware, however, capitalism ceased to exist in medical care as soon as insurance companies set prices and the government interceded with the creation of Medicaid and Medicare.  In addition, a bubble of available money occurred with the advent of medical insurance.  Money was going out to these companies, and it was not being used, because health care had not evolved.  This created options in medical care that were completely unaffordable in any reasonable financial model.  Hardly anyone could afford chemotherapy or an organ transplant if this were offered for what it really costs.  But money was no object in the early years of insurance.

What grows out of this replacement of pure capitalism in medical care reimbursement is the type of "capitalism" that gets the most criticism; the most financially successful medical practices are the ones that discover how best to "play the system." They find out what elements in medical billing are reimbursed most successfully and make sure that patients with problems that can generate these billing elements are sought to the exclusion of patients with other health complaints.  Or they expand the well paying testing and procedural elements in medical care to patients who do not require these expenses.  These medical practitioners often achieve real merit when treating these particular health problems that generate them the most dollars.  But that leaves patients with less reimbursable illnesses to those who have no financial incentive to treat them, with less interest in the merit of their work as a result.

Skewed financial incentives contribute to the skyrocketing cost of health care.  Health care maintenance organizations were introduced in the 1990s as a reaction to the craziness of costs and the depletion of the insurance companies' economic reserves.  But HMOs have steadily evolved their own problematic issues.  They initially offered big businesses a promise of managing their health care costs.  HMOs did this by offering doctors a lower reimbursement per patient for the opportunity not to lose those patients.  Here in Atlanta, Georgia, those businesses and their employees worked for companies like Coca-Cola, Delta, and Home Depot.  Discounted payments of 93 cents on the dollar with time decreased to 85 cents.  Eventually, in fields like ear, nose, and throat, payment dropped to 18 cents on the dollar.  Predictably, the doctors raised their prices.  Now we have bills submitted to insurance companies that reflect these "negotiations."  Patients will see a $28,000 bill when the doctor is actually reimbursed $1,300.  Hence the rise of opaque billing and no one in a doctor's office actually knowing what anything costs.  Merit isn't a factor in these negotiations.

Interestingly, HMOs came to our medical practice in the early 1990s with a proposal.  Someone in their bureaucratic hierarchy decided that they needed to have tangible evidence that they were offering a superior product.  They thought they could define merit as how much it cost for a patient's cure based on his disease and the doctor's charges to get recovery.  Our large group did the comparisons among providers, illness, and cost.  What happened was that the doctors who managed other doctors' failures, the most respected ones to "clean up a mess", take the hardest cases and acknowledged to have the most merit, were the ones deemed the least desirable statistically for the HMOs.

Not too long ago, when HMOs and Medicare and Medicaid sought to find the "best hospitals," a similar conundrum resulted.  Hospitals were financially rewarded if they had fewer "bounce-backs" — repeat admissions for the same complaint.  The unfortunate result was hospitals discouraging their doctors from admitting the very sick.  Patients with multiple risk factors are the most likely to get back into trouble and need to be readmitted.  The consequence was that some of the best hospitals, those with the greatest ability to deal with the sickest of the sick, became "dumping grounds" from other hospitals.  Merit was not rewarded, again.

As physicians join large health care conglomerates, they are given merit pay based not only on how much they bill (a meritless activity), but how they manage the company's neurotic attempts at appeasing political alignment with leftist ideals.  Doctors whose only goal is a colorblind attempt at treating the sick are educated that they are living a delusion.  They are reminded that they are not able to be colorblind.  They are by definition of their race, sex, and economic class (and their patriotic alignment with a nation falsely defined) in need of re-education.

Google ratings are now thought to be the most critical judge of merit.  But there are companies you can hire that can change those ratings.  Competitors can employ others to tarnish your rating.  Yet your employer still uses this rating to establish your merit pay, even when the number of Google responses may be relatively small and non-representative of the quality of care.  The actual merit of a physician can become lost when pursuing this false idol.

When the inevitable federal takeover of health care ensues, money, merit, and doctors will no longer be mentioned in the same sentence.  This is probably fitting in a society that seems to be rewarding bad choices and victimhood over the traditional pursuit of the American Dream.

Image: Bru-nO via Pixabay, Pixabay License.

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