Category: Health Care Issues

So Much Misunderstanding about Health Care

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As I was looking through Twitter yesterday, I came upon a meme that really grabbed me because, unfortunately, I think it accurately describes many people’s uninformed attitudes about the place of health insurance in their lives and how it is best managed. Yet, I don’t totally blame most people because the “health care” systems and insurance companies are putting in a great effort to deceive people and make them feel totally dependent on insurance “coverage.”

This meme showed two conflicting statements:

  • One guy states that a sonogram costs $150 if the payment is in cash.
  • The other guy replies, “I’d rather pay the $800 and get credit toward my deductible.”

How crazy is this?

Unfortunately this is a common attitude in our country today. Such an attitude may be the result of people’s natural fear that, somehow or another, they will incur some huge medical bill, and want to be at least partly paid up on their deductible when that disaster happens. However, what if that disaster does not happen in that same year? What if the sonogram is almost the only medical service one receives in the year outside of possibly the follow-up visit to the doctor for the results of the sonogram and a few other routine visits?

I would argue that if a minimal amount of health care is needed in the year that person paid $800 to have a sonogram go through their insurance “coverage,” they probably paid $650 more than necessary just to have that bill count toward their deductible. Not to mention, every year the deductible is wiped clean and starts at zero for the next year. One exception to that rule would be the situation in which some insurance companies allow deductibles accumulated in the last quarter of the year to apply to the next year. However, eventually, the deductible will be reset back to zero.

Another issue with this mentality is that the $800 sonogram paid toward the insurance deductible was most likely based on a negotiated reimbursement rate between one’s insurance company and the service provider. The trick in this negotiation is that the provider (hospitals are generally guilty of this one) charges some outrageous fee and the insurance company has contracted with that provider to pay a lesser amount that may still be fairly ridiculous. The actual charge to the insurance company for the sonogram that was costing the patient $800 is probably much more, and the $800 is considered a “discount,” but only in the insurer/provider universe.

According to an article by Jed Lipinski in the Times-Picayune entitled, “Can’t bring myself to give them that money: Finding out your $284 blood test costs $34 nearby,” (1) a woman found out how insurance companies operate with health systems, much to her chagrin. She had a blood test, a comprehensive metabolic panel for kidney and liver function, done and received a bill from Tulane University Medical Center for $323. The article reported that this patient’s insurance company determined that she owed $284 of that $323. The real clincher was that the same test was available at a nearby lab called Quest Diagnostics for $34.

Now this woman had not made a deliberate choice to pay a large amount instead of a smaller amount to count toward her deductible and clearly felt blindsided by the bill she received. However, I am guessing from my personal experience, that she probably had the blood drawn conveniently at the medical center where she saw her doctor and then analyzed by whatever lab is contracted by Tulane to perform that service.

Another issue here is that it usually all appears so convenient to have one’s blood drawn at the same location as the doctor’s office and patients can just show their card at the front so the insurance carrier is billed for all services. Of course, nobody at the medical center is going to tell patients they can get a better deal elsewhere.

I think that the mentality that one might as well apply all their medical care to their deductible is prevalent because most people assume that ALL health care services are expensive by nature. So why not? Surely they may end up getting their deductible paid off sooner or later in a year because every time they see a doctor or get a medical test, it is guaranteed to be expensive. I believe that is also the reason the Congressional Budget Office attempts to make people panic about repealing and replacing Obamacare – because all medical care is, by nature, expensive so everyone must be “covered.”

However, as the story I just related demonstrates, that is not necessarily true.

I think it’s time that we all become true health care consumers and not blithely stick out our arm or head to a large medical center’s radiology department when we get test orders from the doctor we just saw there. Besides the option of Direct Primary Care in which many common lab tests are available with the cost of a monthly membership, we can look around if the physician we want to keep doesn’t happen to be a DPC doctor. When we have that lab test or x-ray order in our hot little hands, let’s change our mode of operation and ask ourselves, “Can I get this test less expensively somewhere else?”

Maybe we can, maybe we can’t, but why not ask the question?

Better pricing is often available if we shop around, and let’s certainly re-examine our attitudes about paying higher prices just to work toward a deductible. Who knows? If enough people made a habit of shopping around for procedures, the big bad health systems and their crony insurance partners just might think twice about their ridiculous charges and charge something more in line with reality.

I wouldn’t hold my breath on that one though.

Sources for further reading:

  1. http://www.nola.com/health/index.ssf/2017/05/blood_tests_new_orleans.html

 

Photo courtesy of canstockphoto.com


Almost Everybody is Missing the Point

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Every day the American Health Care Act is discussed in the media, most of the dialogue I hear is about how many people will lose their “coverage” or have their “health care” literally ripped away from them if the AHCA is successfully passed by both houses of Congress and signed into law by President Donald Trump. That’s quite a picture!

Such discussion only hammers home one major truth to me – most people have become so accustomed to having the availability of health care defined as whether or nor we have insurance coverage with supposedly convenient copays. It seems that the conventional “wisdom,” if you could all it that, is those without health insurance coverage do not have health care.  After all, health care itself is WAY to expensive to pay for it ourselves. Right?

This impression becomes further entrenched when patients inquiring about what a medical or surgical procedure might cost them generally get a non-answer like, “Well that depends on your insurance plan.”  Let’s say that I am either unfortunate, or fortunate, enough not to have health insurance in the current environment of narrow networks and “non-profit health care” systems that are raking up huge surpluses (i.e. profits). What if I first tell someone at a typical hospital I am not covered by any insurance and then ask how much a procedure will cost? It’s a toss-up as to whether they will quote me the “Chargemaster” price (think grossly inflated) or whether they will say, “We have discounts for our cash-paying patients.” (Fat chance of that.) I am betting that they would quote me the grossly inflated price first. Then, when I balk in horror, and ask if I can get a discount for paying cash, they will quote me something much more doable.

I just saw (and actually retweeted) a tweet this week that was actually a short snipped of the movie, “The Matrix,” a movie I have generally said I did not like (amid gasps of horror from my husband and son). I am thinking I may have to give that movie another chance. But I digress. In this little snippet, Laurence Fishburne’s character (Morpheus) says, “You have to understand that most of these people are not ready to be unplugged, and many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.”

That is what I see happening as the efforts to repeal and replace Obamacare go forward … people protesting in the streets, pleading to keep their “health care” in town hall meetings, and Democrat representatives and senators howling about mostly “guestimates” from the Congressional Budget Office that as many as 24 million people (a very suspect statistic) could lose health “coverage.”

What if basic health care was so inexpensive for the average person that the only occasion for which the average person would need insurance coverage would be situations like a cancer or other horrible diagnosis or accident? Yes, those things can happen to anyone at anytime, and it is nice to feel that we could have some protection from the curve balls of life that we cannot control.

However, there is so much routine care that should not even require insurance to pay for it – the annual check up, a cold or flu visit, even diabetes management – the issues for which we usually see a primary care practitioner.

There is a type of medical practice that is continuing to gain popularity as primary care doctors get burned out and tired of the same old song and dance from Medicare, Medicaid, and commercial insurance. Many primary care physicians are ditching third party payers entirely and establishing Direct Primary Care practices. These practices are third-party free, which means they do not bill or accept payment from Medicare, Medicaid, or commercial insurers. Instead, they have very reasonable pricing for the services they offer, well below the standard Obamacare premiums and deductibles. Most of them offer a wide array of services for a low monthly membership.

For example, one doctor that I am interviewing for an article I am working on now has monthly service fees of $55 for adults 19-69 years of age, $35 per child 18 years of age and younger, and $75 for seniors aged 70 years and older. Additionally, families of four (2 parents and two dependent children 25 years of age or younger) can have a monthly membership for $130.

What do patients get for this pricing?

  • Communications (phone, text, emails) with doctor and nurse.
  • Clinic visits (regular hours) when necessary
  • Yearly wellness and prevention planning
  • Some routine labs and tests
  • Medical equipment lease (crutches, etc.)
  • Annual flu shot
  • Access to discounted wholesale pricing on other services (labs, medications, procedures, etc.)

Another DPC practice has prices in the same range, more or less – $50/month for adults 20-45 years old; $10/month for each child with at least one parent as a member; $75/month for adults 45-64 years of age; and $100/month for seniors aged 65 years and older. Benefits in terms of access to care are somewhat similar, especially in terms of free office visits, after-hours communications with the doctor, wholesale medication and lab costs.

One person on a Twitter feed I frequent reported that their family premium is $1,600 per month with an annual deductible of $8,000. That family most likely has copays or coinsurance in addition to the frightfully high premium, so it is easy to see that access is much less expensive and available in a DPC practice.

So while many people fuss and whine about “losing their health care” and the Democrats go practically apoplectic over the AHCA, the real solution to health care access and costs is sitting right under our noses.

I would like everyone who reads this post to contact their senator (since that is where the bill is now) and tell them that the AHCA needs to be at least changed to allow free market access and cost solutions like Direct Primary Care. Please educate yourselves about Direct Primary Care, and other free market medical care solutions like ambulatory surgery centers with transparent pricing, because they can solve so many of our nation’s health care problems.

Photo Attribution:

<a rel=”license” href=”http://creativecommons.org/licenses/by-sa/4.0/”><img alt=”Creative Commons License” style=”border-width:0″ src=”https://i.creativecommons.org/l/by-sa/4.0/88×31.png” /></a><br />This work is licensed under a <a rel=”license” href=”http://creativecommons.org/licenses/by-sa/4.0/”>Creative Commons Attribution-ShareAlike 4.0 International License</a>.

 


Let’s Restore Common Sense to Medical Care Charges!

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As I was doing my usual scoping of Twitter posts the other day, and I came across one person I follow on Twitter (@StikNtheMud) whose Twitter feed has generally been dedicated to people expressing their disdain for their Obamacare insurance policies. I had actually not been on her Twitter feed for some time, so I figured it was high time to hang out there awhile.

There I found a veritable bevy of comments about the ravages of Obamacare on the average person. Here are a couple of quotes from commenters on this Twitter feed. The names have been withheld to protect the innocent victims of Obamacare.

  • “I don’t want Obama Care. It sucks for me. I lost my doctors, the cost for health care with it is so high. I don’t even go to the doctor anymore.”
  • “In Anchorage, premiums for a silver ACA (Affordable Care Act) plan for a 64-year-old couple making $82K a year =  $50,930 a year. That’s not a misprint.”

Believe me, these are only a couple of the many, many posts decrying the miseries of Obamacare.

So once again, I am beating the drum about so called “coverage” not equaling access to health care.

Wasn’t Obamacare enacted to make health care more affordable?

In the first post mentioned, the person wrote that health care costs are so high that she doesn’t even see a doctor now. Also, in looking closely at the second comment, this 64-year-old couple’s insurance premiums cost more than half their annual income. Clearly, with this annual income, this couple did not qualify for any premium subsidies, and they most likely have a deductible and co-insurance to pay in addition to that annual premium. A mortgage should not even be that much of a percentage of one’s income, much less health care costs.

The ultimate irony here is the name of the law that was supposed to bend down the cost curve for health care is the “Affordable Care Act.”

Posts like the ones above are a strong indication that our current health care environment remains generally Unaffordable, and has become even more Unaffordable each year since the implementation of Obamacare. I do understand that there are those who embraced Obamacare and its subsidies to reduce their premiums. However, if they have deductibles of $5,000 or more, how much use are those plans if they are not the kind of people who see the doctor more than once or twice each year?

Many people have been deceived into believing that if they are in a narrow Preferred Provider network, the contractual agreements between their health care providers and the insurance companies that “cover” them will result in less health care costs for them. NOT!

According to an editorial to which I often refer entitled, “Have PPO Networks Perpetrated the Greatest Heist in American History,” author Dave Chase (1) states that hospitals often charge 550 percent of the standard reimbursement by Medicare. Then the BUCA (Blue Cross Anthem, United Healthcare, Cigna, and Aetna) PPOs will discount such charges by about 50 percent. Well, a quick calculation reveals that 50 percent of 550 percent is 275 percent. Those are still very high charges, and I do not believe such charges actually reflect the cost of providing care.

I could not help but wonder why Medicare reimbursement is the benchmark for reasonable payments of medical costs because I often see complaints from doctors about how the low reimbursement rates by Medicare do not cover the costs of care. I do not think that a payment practice by insurers of reimbursing providers 275 percent of Medicare rates (regardless of whether those rates totally cover the cost of care) is reasonable either. Whatever happened to hospitals and other providers determining their costs (I’m sure they have some brains that can figure that out) and charging an amount with a reasonable profit margin over their costs?

In his editorial, Chase’s interviewee Mike Dendy makes the following statement: “A well-run hospital can make money from Medicare payment schedules. The problem is that most hospitals are not financially well managed and have no reason to be when they can pretty much charge for services at will.” So I guess that is the explanation for Chase using Medicare reimbursement as a benchmark for reasonable payment.

There are so many nonsensical factors that go into heath care pricing, mainly by the large health care systems that also try hard to eliminate the competition posed by independent doctors. These doctors generally have reasonable charges for their services,  but large health care systems (including “non-profit” ones) often either employ them or buy them out. My guess for the motivation of the “health care” systems is that they want to continue unfettered with their ridiculous prices for medical services. (Please see my Expert Posts category for more information on this one.)

So what use is “coverage” when all these ridiculous games are being played by “health care” systems and insurance companies? This has to be stopped!

Further reading:

  1. https://www.forbes.com/sites/davechase/2016/09/05/have-ppo-networks-perpetrated-the-greatest-heist-in-american-history/#2e8cfdfa3330

Image courtesy of canstockphoto.com


How Can the U.S. Really Make Health Care Truly Affordable?

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In many of my posts, I complain about the way our Congress and President (not to mention the Congressional Budget Office and media) harp about how people will or will not be “covered” for receiving medical care. This outlook ASSUMES that it is just too darn expensive for the “average Joe” to just pay cash for his visit to the doctor or surgery. The ultimate irony is that plans within the Obamacare exchanges require quite a bit of out-of-pocket expense anyway – high premiums, deductibles, plus co-insurance, etc. Forking out all this money does not constitute my idea of “coverage.”

What if health (or should I  say medical care) wasn’t generally that expensive?

When someone proposes that thought, many others express incredulity at such an idea. It’s as if people asking the question, “Does health care have to be outrageously expensive?” could be compared to someone asking “Is the Pope Catholic?” While there are situations in which the provision of medical care can become very expensive as in the case of heart attacks, strokes, critical injuries, etc., those are situations in which huge amounts of resources are required to save a person’s life and help them recover. That is what catastrophic medical insurance was always intended to do.

Then there are surgical procedures that can be quite expensive, but they do not necessarily have to be. Let’s just use the example of a hip or knee replacement. These procedures are often needed when someone’s arthritic condition has deteriorated to being “bone on bone.” I know personally how painful this can be because I experienced it with both my hips and needed to have them both replaced. Fortunately, medical science has made great inroads to replacing the bad joints and giving those with that condition a new lease on mobility and life.

However, joint replacements are not known to be cheap, and costs vary wildly.

I recently read an article that was published in February of 2013, but not much as changed since then. The article is entitled, “How Much Will Your Surgery Cost? Finding Out Cost of Hip Replacement Surgery is a Confusing Uphill Battle: Study,” which was credited to the Associated Press (1). The study the article discussed was published in the Journal of the American Medical Association Internal Medicine.

According to this article, researchers conducted a study of 122 hospitals in every state to find out how much a hip replacement would cost if performed on a healthy 62-year-old woman who was not covered by any insurance, but could pay out-of-pocket. According to this study, 15 percent of the hospitals contacted never provided even an estimate of a price, even after as many as five calls. The article reported that researchers were able to obtain cost information from approximately half of the hospitals contacted that included both the physician and hospital charges.

The study found that costs for hip replacement surgery could be as little as $11,000 or as much as $126,000.

The Associated Press wrote that American Hospital Association spokeswoman Marie Watteau commented on the study published in JAMA. She is quoted as saying, “hospitals have a uniform set of charges. Sharing meaningful information, however, is challenging because hospital care is unique and based on each individual patient’s needs.”

Really? It seems as if, especially in these times when patients even face high deductibles along with a responsibility for what is known as co-insurance, if they are insured, that hospitals could look at typical charges on a hospital bill for a total hip replacement and at least provide a ballpark figure with a disclaimer that complications could increase that cost.

It is interesting that a number of ambulatory surgery centers have begun to post transparent bundled pricing for many non-emergent surgeries. For example, at Cedar Orthopaedic Surgery Center, the cash price for the replacement of one hip joint is $17,500 (including the surgeon’s, facility, and anesthesiologist’s fees as well as the cost of the hip implant, initial consultation, and in-surgery radiology). This price is posted on COSC’s website. At Surgery Center of Oklahoma, the cost of a hip replacement is posted as $25,000 (which also includes the surgeon’s, facility, and anesthesiologist fees as well as the initial consultation). Each facility has a clear pricing disclaimer that enumerates any possible charges that are not included as part of the cash package as well as what is included, so there should be very little in the way of surprises. And yes, both of these facilities treats each patient as a unique individual.

So why is it so difficult for hospitals to provide at least a reasonable ballpark figure for costs? Well, I’ve given you quite enough to digest for today so I will cover that subject in my next post on health care issues.

Further reading:

  1.  http://www.nydailynews.com/life-style/health/surgery-cost-article-1.1261818

More Calling Out High Health Care Costs

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Update on this video interview: Apparently it has been removed from YouTube. I tweeted Tucker Carlson to find out why. I hope he actually answers. I have this fear that there may have been some crony insurance company/health care system pressure on Fox News to remove it, or maybe the copyright really did just run out, which is the original claim when I looked into it. It’s weird though. In all this time I have been posting videos and articles on different platforms, I don’t remember seeing one disappear. This is definitely a first for me.

Upon discovering the removal of that video, I found an article/editorial by Steven Weissman about the way health care cost discrepancies and manipulations between insurers and “health care” systems are the real problem with insurance coverage (in terms of premium costs). It is the same information that Tucker Carlson covered with Weissman in the video interview that got removed. Better yet, there is a petition you can sign to get some action regarding pricing practice changes. Here’s the link.

https://www.change.org/p/end-predatory-healthcare-pricing

When Congress (hopefully) debates the repeal of Obamacare, I hope they consider this situation, which is one of the drivers of the high cost of health care. It’s not the only one, of course. I felt it was very important to link this video on my blog because it is so timely and goes right to the heart of our problems.

I have posted this interview just about everywhere I have a platform – my blog, my Facebook page and my Twitter page. Now I will let everybody chew on this over the weekend and I will be back next week to write about what should happen in the repeal of Obamacare.


More Taxpayer Theft by Non-Profit Hospitals

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I have discussed a couple of facets of the ride on which Americans are being taken as they have had the impression drilled into them that non-profit hospitals are these innocuous, charitable, caring organizations dedicated to the health of their patients and surrounding communities. I believe that many of the people who work in these facilities – doctors, nurses, radiology technicians, etc. – ARE truly dedicated to helping to restore health to the patients for whom they are caring. It’s the leadership of these facilities that, I would contend, have less than ideal motivations. And if their motivations are so altruistic why are they content to feed at the tax-exempt public trough while overcharging patients?

In my last post, I referred to a very notable article in Time Magazine by Steven Brill entitled, “Bitter Pill: Why Medical Bills Are Killing Us.” This article was HUGE when it was originally published in 2013. One of the the major points that Brill made was the extreme overpricing of medical services.

He used the example of a man who came to MD Anderson Cancer Center for cancer treatment. Although he had an insurance policy, it was not the kind that MD Anderson accepted, so this man was required to pay cash up front for his assessment and treatment.

Here are just a couple of examples of the money he was expected to fork out for his treatment because he was a cash patient.

  • According to Brill’s article, laboratory testing charges for this man totaled more than $15,000, and if he were old enough to be a Medicare beneficiary, Medicare would have paid MD Anderson only a few hundred dollars for those same tests.
  • Then the cost of the cancer drug to treat him – Rituximab- was billed to this patient at $13,702 for an injection of 660 mg. Brill explained that the average cost of the drug to hospitals in general was $4,000 for the same dose of the drug. Brill also mentioned that he believed the hospital probably got a volume discount for the drug which would have made the hospital’s cost closer to a maximum of $3,500, which means there was markup of approximately 400 percent for this lifesaving drug.

These are only a couple of examples Brill provided regarding the markups for services and medications that this cancer patient had to pay for in advance before receiving any treatment. However, Brill reported that while this unfortunate cancer patient was being milked for his lifesaving cancer treatment, MD Anderson Cancer Center, which is a “non-profit” institution, managed to take in a “profit/surplus” of $531 million in one year.

Although, I am not sure I agree with all of Brill’s conclusions in this article, I would strongly agree with this statement by him.

“Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere on earth.”

In another article entitled “The Five Things Hospitals Don’t Want You to Know About Obamacare,” by Nigel Jaquiss, that ran on April 12, 2016 in the Oregon publication “Willamette Week,” the majority of Oregon hospitals are non-profit. However, they are making huge “profits/surpluses,” whatever you want to call them. The article reports that Providence Health & Services has managed to accrue $5.8 billion in cash reserves.

This article quotes a representative of the Service Employees International Union Local 49 as saying the union would prefer that rather than stockpiling all that cash, the health system would lower its prices, improve access and the quality of its services. Wow! I agree with a union. Will wonders never cease?

I never tire of pointing out that the hospitals with these “profits/surpluses” are non-profit and tax-exempt. Is this right? Is this good for our country? I would say “no.”

My question is – what would happen if non-profit hospitals lost their tax-exempt status? Would they continue to overcharge and rack up huge surpluses or would they be forced to lower their prices for patient care? I think it might be worth a try. After all, look how much they have been getting away with, and at the expense of taxpaying citizens.

Sources (and further reading):

http://www.uta.edu/faculty/story/2311/Misc/2013,2,26,MedicalCostsDemandAndGreed.pdf

http://www.wweek.com/news/2016/04/13/the-five-things-hospitals-dont-want-you-to-know-about-obamacare/

Image courtesy of canstockphoto.com.


Why Do Non-profit Hospitals Pay Their Administrators Huge Salaries?

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As I seek to expose the less humanitarian side of non-profit hospitals, one subject that has come up quite a bit in my reading is the ridiculous salaries paid to chief executive officers and other administrators in these hospitals that are supposedly so dedicated to their communities.

Say What?

I’ll give a few of the more egregious examples of of highly paid administrators at non-profit hospitals in the U.S. The first one would be Jeffrey Romoff, the CEO of University of Pittsburgh Medical Center. According to an article in the Pittsburgh Post-Gazette (May 13, 2016), his total compensation that includes salary, along with bonuses and incentives, totaled $6.43 million in the fiscal year that ended June 30, 2015, which is the fourth consecutive year his compensation has topped $6 million.

The Post-Gazette article goes on to say that Romoff is not the only administrator at UPMC who is enjoying remarkably high compensation for his work. Others who received large compensation packages include James Luketich, chairman of the Department of Cardiothoracic Surgery who earned $2.48 million. Then Diane Holder, president and CEO of the UPMC Health Plan earned a total package of $2.46 million. Just so I don’t bore you to death with a laundry list of others making more than $2 million in a year at UPMC, I will just say that there are four more of them.

The Post-Gazette article states that a total of 31 administrators, including the aforementioned, made at least $1 million at UPMC in 2015.

These high salaries are not localized to UPMC, but are widespread in non-profit “health care” systems throughout the United States.

Another Example

An article in NJ.com dated September 22, 2016 reported that Joe Trunfio, the CEO of Atlantic Health System, which is the parent company of Morristown Medical Center in New Jersey, was making close to $5 million a year in total compensation before his retirement shortly after 2014.

The article further states that State Tax Court Judge Vito Bianco ruled that Morristown Medical Center should lose its tax-exempt status because of Trunfio’s excessively high pay.

The NJ.com article quotes Bianco as saying that today’s non-profit hospitals “generate significant revenue and pay their professionals salaries that are competitive even by for-profit standards.”

Morristown Medical Center has managed to wiggle out from under that judgment through a settlement in which the facility agreed to “pay out” a total of $15.5 million over the next decade to “help offset property taxes.” The interesting part of this story is that it does not specifically state to what agency Morristown MC will be making that payment. I would assume that it is to the state.

Wow! Morristown must be pretty desperate to hold onto its tax-exempt status if they were willing to pay the state (or whoever) a little more than $1.5 million a year for the next ten years. Since Trunfio has retired, I wonder what his successor is making.

This article made the statement, in its introduction, that non-profit hospital CEOs would say that they are not earning too much money because “their compensation packages are based on what other CEOs are making in a highly competitive market.”

Perspective Time

I believe heavily in capitalism and the free market, and that everyone should have the opportunity to make the money they want to make if they have the skills and drive to accomplish that. However, I have some major reservations about high administrator salaries in non-profit health systems.

These systems are paying no taxes, and yet they claim to be serving their local communities. Let me take you back a moment to my last post about whether non-profit hospitals really lower the cost of health care. I referred to a list of non-profit hospitals in which Gundersen Lutheran Medical Center in Lacrosse, Wisconsin reported an annual profit/surplus (whatever you want to call it) of $302 million.

An average hospital bill for a surgery or major illness can cost upwards of $100,000, and the average person rarely has that much money. Hospitals, whether they are non-profit or for-profit, charge excessive amounts of money for services (although I am learning that some physician-owned for-profit hospitals provide better pricing). One of the most notable investigative articles regarding outrageous charges, “Bitter Pill: Why Medical Bills Are Killing Us,” was published in Time Magazine about four years ago. In this article, Steven Brill discusses the ridiculously high charges for medical care at non-profit hospitals, the high salaries of non-profit hospital administrators and the large profits/surpluses these non-profit facilities drag in.

I will share some of the insights from this article, and others, in my next post about non-profit hospitals. I am on a roll here!

If you too are concerned about why health care costs are so high, please sign up to receive emails from me and continue to join me on this blog. We still have a lot of ground to cover. The sign-up is to the upper right of this post.

Sources:

http://www.post-gazette.com/business/healthcare-business/2016/05/13/UPMC-CEO-Jeffrey-Romoff-earned-6-4-million-in-fiscal-2015/stories/201605130194

http://www.nj.com/healthfit/index.ssf/2016/09/non-profit_hospital_ceo_pay.html

(Photo courtesy of www.canstockphoto.com.)

 


Do Non-Profit Hospitals REALLY Control Costs?

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Non-profit hospitals have appeared to be socially conscious, humanitarian institutions for a long time. I say, “have appeared to be” because that is the image they have sought to project. However, many (not necessarily all) of these non-profit medical facilities have a dark side.

According to an article in Becker’s Hospital Review (July 23, 2013), there are 5,724 hospitals in the United States (information obtained from the American Hospital Association). Of those hospitals, 2,903 are non-profit hospitals, and 1,025 are for-profit.

 

 

 

Some Basic Facts

U.S. News and World Report states, in a May 2016 article, that researchers from the John Hopkins Bloomberg School of Public Health as well as Washington and Lee Universities conducted an analysis of data from 3,000 hospitals, 59 percent of which were non-profit, 25 percent for profit, and 16 percent public.

Disturbing Conclusions

The study was published in the journal Health Affairs, and the U.S. News article referred to those published statistics that out of 10 of the most profitable hospitals in the country, seven of them were non-profit with the most “profitable” hospital being non-profit Gundersen Lutheran Medical Center with an annual  “profit” of $302 million. The U.S. News article quoted a lead researcher who drew the conclusion that the most profitable hospitals in the country established monopolies in their communities that gave them the power to  mark up the prices they charge private insurers. ALERT: Driver of high health care costs!

Remember that non-profit hospitals pay no property or income taxes, and the monopolies they grab hold of can drive independent physicians out of business, or at least put a huge damper on their local business. This is not necessarily because the independent physicians have higher prices. In fact those physicians may actually have better pricing, but the hospitals’ relationship with insurers may prevent those insurers from doing business with other providers that are, in fact, less expensive … and for one reason – they are competition to the non-profit hospitals.

Think About It

I feel such arrangements are a rip-off to taxpayers because they are then paying more than their fair share of taxes to have their health care dollars bilked from them by entities that pay no taxes.

There are a lot of facets to this situation, and I don’t want to overwhelm you, my readers, with information overload. I don’t want anybody’s head exploding! Instead, I plan to write a series of posts about the way that many non-profit hospital systems drive up the cost of health care while actually making profits that they supposedly sink into the community, but not without the cost of harming the local residents’ choices in physicians and facilities.

This is a complex, but harmful situation, and I want to make sure this is fully understood with the hope that I can inspire some political activism (peaceful only) to encourage my readers to contact their elected representatives on the local, state and federal levels, asking them to take a fresh look at the implications of how these hospital power centers harm citizens in this country.

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(Photo courtesy of www.canstockphoto.com)