And one other thought on drugs. Drug development costs billions, and many drug developments go nowhere (or worse have side effects that kills customers as well as profits). But much of the world doesn’t pay for this drug development. Countries routinely sidestep the development investment by making unlicensed generics. Nobody in China pays $199 retail for Windows 7 O/S, and just the same much of the world does not pay the true cost for the drugs that keeps them alive. And so the cost burden falls on the US and other western countries that respect intellectual property and the rule of law.

Its funny, its open enrollment now and my (large) private employer, which offers about 6 different health plans. Over the years they have added many plans that give the consumer more insight and control of their health care spending. Either high deductible plans that have a low/zero monthly paycheck deduction. Or Consumer driven plans where the employer puts cash in a health savings account for the employee to use as they deem fit, and the cash can rollover from year to year.

Yet Congress seems to be going completely the other direction right now with healthcare, pushing for government plans where by definition the true market driven cost gets completely lost in the in the legislation and bureacracy. I tend to beleive Americans are better off when actual costs are more transparent, whether is car repair, health care, war etc.

It seems the market forces have been so upended by government intervention, that nobody has any idea of what the actual, market driven cost would be for the care given Scott Hawkins.

1. Hospitals don’t often know where they are wasting money.
2. Governments often make the problem worse by not doing accurate cost-analysis of Medicare/MediCal services
3. The average person is not given any care/cost options once they go through the hospital’s doors (Try getting away with that at Acme Body Shop).
4. All the people we assume are getting rich from the medical system, are not. It is those who manufacture equipment, produce medications, and initiate lawsuits that are making all the money. Hospitals, doctors and nurses many times are going broke. So is the general public.

It’s completely unclear to me how health-care reform as currently being considered would change the amount on this bill, other than transferring it to high earners instead of the actual guy needing the care. I agree there is a huge need for health care reform, and maybe someday some president can make it happen because what we are seeing in Washington is a huge entitlement program, not a reform bill. 28% of Medicare dollars are wasted, so I wouldn’t be holding my breath for costs to come down when the feds take over.

Secondly, check out the “funding sources” graph at this UCDavis link. Only 0.2% of MedCenter funding comes from “self-pay”. If 1/6th of America is uninsured, it sure isn’t being reflected in the “self-pay” bottom line at UC Davis!. Either these people never pay their bill, the bill gets picked up by state/county agency, or these people never get sick. And remember, hospitals charge much higher rate to self payers as compared to the rates they have negotiated with insurers or the rates defined by Medicare/Medical.

http://www.ucdmc.ucdavis.edu/newsroom/facts_figures/

My guess is that because the rates are locked in tight with insurers and govt agencies, they only area the hospital can raise rates are on the self payers. The graph clearly shows where the money is (and isn’t). So Scott Hawkins bill probably reflects his care with a few other non-payers mixed in.

To me, this is where actual health care reform (not the fake reform in DC right now) would consist of 3 things to start off:
a) Catastrophic coverage so that nobody loses their house due to medical bills. Maybe over $20K? Its pretty cheap, and this is something the government could actually manage well.
b) Health savings account where consumers actually are involved in the “buying” process. This makes it more like a Les Schwab transaction, and less like a faceless bureacracy that magically pays the bills.
c) Savings from actual reform (such as 28% medicare waste) would be used to put money the the health accounts for those unable to obtain insurance otherwise.

O U T R A G E O U S

You know the response to us though, right? Change your diet, they’ll say. Change your habits, they’ll say. Reduce violence. Put people to work. The problem is not at the hospital, it is inside the American homes, they’ll say. And indeed, they will be right; the health care problem is a SYMPTOM of a much deeper root cause. BUT…,

The reality here is that we can not solve this problem by simply educating people. That is ludicrous. We have progressed (actually regressed, but that’s another article) too far to turn back overnight and reverse the course we’re on. Unfortunately we need to address the bleeding before we can address the underlying cause of it. Health care professionals–especially those who work in intensive care and surgery!– should understand that concept better than anyone.