Thursday, October 13, 2005

Bills Bills Bills

Why is healthcare such a mess in the states?

The NYT has another article on the nightmare that is patient billing. I can heartily agree with most of the things the article describes! Any simple visit to a doctor or hospital results in bil upon bill without indescribable and unclear codes and messages... and scary dollar values.

From the article:
"Walk into any drugstore, and the next few minutes of your life are fairly predictable. After considering the choices, you make your purchases and head for the cashier. Seconds after the transaction, you are handed a receipt that reports to the penny what you paid for each product, along with its brand, its size, and the date, time and location of the purchase. But become a patient, and you enter a world of paperwork so surreal that it belongs in one of Kafka's tales of the triumph of faceless bureaucracies. And although some insurers and hospitals are trying to streamline and simplify bills, the efforts have been piecemeal."

Another analogy:
'"Suppose you walk into a restaurant," he said, "and you don't get a menu, you don't get any choice of what food you'll eat, they don't tell you what it is when they're serving it to you, they don't tell you what it's going to cost."

"Then, weeks or months later, you get a bill that tells you all the food you ate and the drinks you had, some of which you remember and some you don't, and although you get the bill, you still can't figure out what you really owe," Dr. Brailer said.'

I just can't imagine what it would be like to have to deal with all of it if you are sick on top of it. How terrible!!!

Why can't everyone in the U.S. pay a set dollar amount per month for healthcare? And let the rest be free. Yes, yes, I know there is a problem with over-utilization, etc. etc., but most patients really *don't* want to be in the hospital and likely would prefer not to get more and more treatment. Who checks into the hospital for fun?

So I'd say patients incentives are not skewed towards over-utilization. Yes, patients probably want more tests, because they want to be sure they aren't sick. And maybe they just want to see their doctor regularly or see a specialist if they have a problem...

But doctors, while they are incented to make sure their patients get well, they have an incentive to sell more services too. What if doctors were paid fixed dollar amounts, regardless of the number of procedures they performed? I think that would create a dis-incentive to do an excessive number of procedures. But then, I guess you run the risk of a doctor not doing *any* procedures at all. Is this likely? Probably not, if you assume that individuals who choose to become doctors likely were motivated by factors other than compensation. (Wouldn't they have gone into investment banking? Or something?) And it doesn't make sense to compensate doctors based on patient outcomes -- or does it? I mean, it seems like there would be a lot of things influencing the outcome for a patient that outside of a doctor's control. Did the patient take the medicine he or she was supposed to? The list of outside factors goes on and on.

And finally for the payors -- the insurance companies -- they have an incentive to pay as little as they can. They want to make sure they are *not* overbilled, and probably having complex billing reimbursement procedures results in some lost "claims" which would definitely help their bottom line, right?

Is there a way to create an incentive structure which will result in a win-win for everyone?
  • Efficient and reliable care for a patient, at a set price
  • Decent salary for a doctor and less time devoted to admin and more time to seeing patients
  • A reasonable level of profits for managed care companies

Sigh, with so many opinions, it will be hard to come to an answer.

Oh, and I forgot another stakeholder. In the case of U.S. healthcare, a big stakeholder are U.S. corporations. And they are ones who pick the insurance company. What are the things they look for when choosing an insurance provider? Probably good service.. maybe price, although that in itself is confusing. Most likely a good partner to sort through the troubles of gaining access to a healthcare network and managing the billing process itself...