Thursday, May 15, 2014

Unintended Consequences

From News of the Weird:

-- While Medicare continues to be among the most costly federal services, and U.S. doctors continue to drop out of the program because of paltry fees for some procedures, other specialists are rewarded with such outsized compensation that almost 4,000 physicians were paid $1 million or more for 2012 and about 350 of those totaled nearly $1.5 billion, according to Medicare records released in April 2014. Ophthalmologist Salomon Melgen of West Palm Beach, Fla., took in more than $20 million and treated 645 Medicare patients with a total of 37,000 injectable doses of Lucentis (a much more expensive drug than the popularly regarded equivalent, Avastin), according to Business Insider. (In fact, taxpayers could have saved more than $11 million with Avastin on Melgen's billings alone, according to an April Washington Post analysis.) [Washington Post, 4-9-2014; Business Insider, 4-9-2014]
Here's something that's been bugging me since way back when HMOs were the new trick to reign in healthcare costs: if you slap limits on high earners, won't they immediately start looking for ways to get their income back up?

HMOs looked at the doctor who billed $100.00 to treat my sore throat and decided that to be part of the system, that doctor would only be paid $55.00 for the job. The doctor realizes that with office expenses, insurance, and supply costs unchanging; he'll have to make some changes to keep from going broke at those prices.

So he cuts my 20 minute visit down to 15 minutes. He also orders an extra blood test for which he will get some form of referral fee. He has an arrangement with the radiology firm down the hall, so he sends me for an x-ray to rule out Ethiopian throat spiders... see where I'm going with this?

And when all is said and done, my sore throat cost much more than before we decided to punish the high earning doctor. He isn't getting as much money as before but the cost of healthcare hasn't gone down; it's gone up.

Doctors offer a very valuable commodity, and they deserve to be well paid for it. Sure, there are crooks in any profession. Seems some people aren't happy unless they're "getting over" in some way. But Punish-the-Rich hasn't worked with doctors, and (here's my point) it won't work anywhere else you try it.


Gino said...

the state regulates how much bail bondsman can charge for premium. cant make any profit on the majority of small bonds written at that low level. and most bonds are small.
that is why there are 'court costs' added. hehehe

OMMAG said...

Most doctors attend conferences that feature presentations on how to maximize income. These are essentially training sessions on up-selling services and protracting the patient treatment cycle to include more contact events (visits) while keeping the actual time spent with patients to a minimum.