Health Care Economics I

One of my readers, Max, asked me to write about a recent Time news article by Steven Brill entitled "Bitter Pill: Why Medical Bills Are Killing Us." Thanks for your comment, Max! I read this article when it came out because my social media kept bringing it up. It is quite a long investigation into why health care costs so much, focusing in particular on a discrepancy between the cost of something to a hospital and the line itemization bill sent to a patient without insurance. It traces the stories of several patients who, due to lack of insurance or insurance with a payout limit, got stuck with a staggering bill. Although the doomsday message becomes a little repetitive after a while, it does bring up a lot of questions about health care economics.

Interestingly, physicians get taught nearly nothing about health care economics. As a medical student and a resident, I have probably had an hour of teaching total on the business aspect of things. Next year, as I get close to finishing residency, we have a couple didactic sessions. But the truth is, this is a big black box to us. And, I would say, to most physicians who do not own and operate their own practice. Maybe this is a throwback to the idealistic physician who cares not for money, who treats patients out of the generosity of his heart. There's the old joke: Which one doesn't belong: a radiologist, an ophthalmologist, a pediatrician, and a large pepperoni pizza? The pediatrician - the others can feed a family of four.

But jokes aside, you don't want a doctor who's only watching the bottom line. This is the whole issue with doctors owning MRI scanners; if you own an MRI machine, you're more likely to order MRIs because you make more money. This is supported by studies on the Medicare database. Similarly, you don't want a doctor who cuts corners and uses single-dose vials of medications on multiple patients because it's cheaper. Epidemiology outbreaks have traced infections to this problem.

Yet it seems almost unbelievable that residency graduates who have been in school for their entire life come out without an idea of how to manage finances, negotiate a contract, interact with insurance companies, hire and fire employees, and run a business. That's how it seems to be. As a result, I'm probably not the most appropriate person to comment on this article; I knew about most of the issues raised, but I have no magic solution, vilifying declamation, or stalwart defense. But the whole purpose of blogs is to ramble, raise discussion, learn, and challenge.

I will write more in the days to come, but I will start with a story. I had a personal experience with these broken health care economics when one of my closest friends went to the emergency department. She runs her own business and has insurance that she negotiated for her small company. That insurance policy has a payout limit which her 8-hour emergency department stay exceeded. When I went to see her in the E.D. (as a friend, not a provider), I was quickly reassured because medically, the diagnosis and treatment were straightforward. I didn't realize the finances were far more complicated, and scary.